SUFFOLK, Va., Oct. 22, 2020 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2020 of $34.46 million, or $0.48 per diluted share, compared to $37.66 million, or $0.52 per diluted share, for the quarter ended September 30, 2019.
“Our third quarter results were highlighted by strong performance across our fee-based business lines. Total revenues exceeded $192 million despite challenges from historically low interest rates. Credit metrics remained stable reflecting our relationship-based credit culture. Once again, strong deposit growth led to TowneBank earning the top spot in Hampton Roads market share according to recently released FDIC data,” said G. Robert Aston, Jr., Executive Chairman.
Highlights for Third Quarter 2020 Compared to Third Quarter 2019:
- Total revenues were a record $192.14 million, an increase of $46.26 million, or 31.71%.
- Pre-provision, pre-tax, net revenues (non-GAAP) were $73.90 million, an increase of $27.05 million, or 57.74%.
- Loans held for investment were $9.77 billion, an increase of $1.59 billion, or 19.40%, from September 30, 2019, but a decrease of $0.03 billion, or 0.32%, from June 30, 2020. The balance at September 30, 2020 and June 30, 2020 included $1.10 billion and $1.09 billion, respectively, of loans originated under the Small Business Administration’s Paycheck Protection Program (“PPP”).
- Total deposits were $11.70 billion, an increase of $2.27 billion, or 24.02%, compared to prior year and $0.44 billion, or 3.91%, from June 30, 2020.
- Noninterest bearing deposits increased by 47.31%, to $4.46 billion, representing 38.14% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 5.63%.
- Annualized return on common shareholders' equity was 7.91% and annualized return on average tangible common shareholders' equity was 11.79% (non-GAAP).
- Net interest margin for the quarter was 2.70% and taxable equivalent net interest margin (non-GAAP) was 2.72%.
- Nonperforming assets were $28.74 million, or 0.19% of total assets, compared to $31.04 million, or 0.26%, at September 30, 2019.
- Effective tax rate of 18.53% in the quarter compared to 16.95% in the third quarter of 2019.
“Despite the many headwinds impacting the nation in 2020, our team at Towne has been working diligently behind the scenes to enhance and improve our member experience through our Towne 20.20 initiative. In early October, as part of that initiative, we implemented a new robust banking system that sets the stage for new and innovative technology, enhanced digital solutions, and a greater variety of financial services,” stated J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to Third Quarter 2019:
- Net interest income was $96.76 million compared to $91.10 million at September 30, 2019.
- Taxable equivalent net interest margin (non-GAAP) was 2.72%, including accretion of 5 basis points, compared to 3.43%, including accretion of 11 basis points, for third quarter 2019.
- Average loans held for investment, with an average yield of 4.22%, represented 68.38% of average earning assets at September 30, 2020 compared to an average yield of 5.02% and 76.35% of average earning assets in the third quarter of 2019. Excluding PPP, loan yields were 4.30% in third quarter 2020.
- Interest and fee income on PPP loans was $9.82 million in third quarter 2020, compared to $5.83 million in the linked quarter, and zero in third quarter 2019.
- Total cost of deposits decreased to 0.46% from 1.01% at September 30, 2019.
- Average interest-earning assets totaled $14.26 billion at September 30, 2020 compared to $10.60 billion at September 30, 2019, an increase of 34.49%.
- Average interest-bearing liabilities totaled $9.21 billion, an increase of $2.18 billion from prior year.
- Interest expense on the FRB PPP lending facility was $0.91 million in third quarter, compared to $0.54 million in the linked quarter, and zero in third quarter 2019.
Quarterly Provision for Credit Losses:
- Recorded a quarterly provision for credit losses for on-balance-sheet loans of $28.26 million compared to $1.51 million one year ago and $25.99 million in the linked quarter. This increase is primarily attributable to a heavier weighting given to adverse economic forecasts in our credit loss models due to expectation of continued economic weakness driven by a number of uncertainties impacting the local and national economy. These macroeconomic forecasts were impacted by the notable weakening of small businesses in the wake of the extended COVID-19 pandemic, major layoff announcements, and the deterioration in the U.S. trade relationship with China. Expected loss estimates consider various factors including the impacts of the decreased economic activity and higher unemployment rates, customer specific credit information, and the potential mitigating benefits of government stimulus and industry wide loan modification efforts.
- Net loan recoveries were $0.33 million compared to charge-offs of $0.61 million one year prior. The ratio of net loan charge-offs (recoveries) to average loans on an annualized basis was (0.01)% in third quarter 2020 and 0.03% in third quarter 2019. The Company has proactively supported members by providing payment deferrals when needed, which, combined with government stimulus, has prevented a significant deterioration in asset quality metrics. We will continue to closely monitor credit quality as the effects of government stimulus lessen and the economic impact of the pandemic becomes clearer over time.
- Recorded a provision for credit losses on off-balance-sheet commitments of $3.50 million compared to $1.08 million in the linked quarter.
- The allowance for credit losses on loans represented 1.22% of total loans compared to 0.92% at June 30, 2020 and 0.68% at September 30, 2019. Excluding PPP loans, which are fully government guaranteed, the allowance for credit losses (non-GAAP) was 1.37%, compared to 1.04% at June 30, 2020. The allowance for credit losses on loans was 7.31 times nonperforming loans compared to 5.34 times at June 30, 2020 and 3.95 times at September 30, 2019.
Quarterly Noninterest Income Compared to Third Quarter 2019:
- Total noninterest income was $95.38 million compared to $54.78 million in 2019, an increase of $40.60 million, or 74.12%. Residential mortgage banking income increased $18.68 million and real estate brokerage and property management income increased $1.86 million. Also included in noninterest income are net gains on investment securities of $1.70 million as compared to net losses of $0.07 million in the prior year and a gain of $17.63 million on the sale of Red Sky Travel Insurance ("Red Sky"), a travel insurance joint venture.
- Residential mortgage banking recorded income of $37.53 million compared to $18.86 million in third quarter 2019. Loan volume in the current quarter was $1.79 billion, with purchase activity comprising 61.18% of that volume. Loan volume in third quarter 2019 was $0.96 billion, with purchase activity comprising 68.83%. Though still an increase over the prior year, refinancing activity has declined compared to the linked quarter. Increased volume and a continued low mortgage rate environment coupled with improved margins were the drivers of improvement compared to the prior year quarter.
- Total Insurance segment revenue increased 95.11% to $38.27 million in the third quarter due to the sale of a joint venture, organic growth, and expense control measures. The Company sold Red Sky mid-third quarter 2020. A gain on the sale of Red Sky totaling $17.63 million was recorded in other income. After distributions to noncontrolling interests, Towne retained $6.52 million of the pre-tax gain. In 2019, Red Sky contributed $4.09 million to insurance revenue, with an annual net income after noncontrolling interest of $0.94 million.
- Property management fee revenue increased 16.02%, or $1.05 million, compared to third quarter 2019. The lifting of local travel restrictions in second quarter related to COVID-19, coupled with businesses and schools continuing to operate remotely, has resulted in an extended vacation season and increased reservation activity during the quarter.
Quarterly Noninterest Expense Compared to Third Quarter 2019:
- Total noninterest expense was $101.98 million compared to $97.29 million in 2019, an increase of $4.69 million, or 4.82%. Increases in salary and benefits expense of $5.62 million, data processing expense of $0.58 million, and software expense of $0.36 million, offset the declines across most other expense categories.
- During the first three quarters of the year, the Company has been focused on its Towne 20.20 initiative which centered around our early October core conversion. This core conversion will allow the Company to provide a greater variety of financial services to our members through new technologies and enhanced digital solutions. Preparation for this conversion began in 2019 and necessitated long hours and dedication from team members, which the Company chose to recognize through one-time bonuses and vacation carry-overs of approximately $2.84 million in the quarter. Other conversion expenses in the quarter totaled $0.71 million.
- Other infrastructure enhancements and market expansion, that occurred in 2019, have resulted in generally higher levels of salary and benefits expense and software expense, while quarantines, travel restrictions, and other decreases in business activity related to COVID-19 have resulted in lower general spending.
- Write-downs related to a Company-owned building and lots in North Carolina totaled $1.06 million in the quarter.
Quarterly Income Taxes Compared to Third Quarter 2019:
- Income tax expense was $7.84 million compared to $7.68 million one year prior. This represents an effective tax rate of 18.53% compared to 16.95% in the third quarter of 2019.
Consolidated Balance Sheet Highlights:
- Total assets were $14.80 billion for the quarter ended September 30, 2020, a decrease of $0.78 billion, or 5.04%, compared to $15.58 billion at June 30, 2020. Total assets increased $2.77 billion, or 23.08%, from $12.02 billion at September 30, 2019. The year-over-year increase was driven primarily by growth in cash and cash equivalents and loans held for investment tied to PPP lending activities.
- Loans held for investment increased $1.59 billion, or 19.40%, compared to prior year but decreased $0.03 billion compared the linked quarter. Excluding PPP loans of $1.10 billion in the third quarter, and $1.09 billion in the second quarter of 2020, loans held for investment increased $484.60 million, or 5.92%, compared to prior year, but declined $44.47 million, or 0.51%, compared to the linked quarter.
- Mortgage loans held for sale increased $212.30 million, or 46.48%, compared to the prior year and $58.65 million, or 9.61%, compared to the linked quarter.
- Total deposits increased $2.3 billion, or 24.02%, compared to the prior year and $0.44 billion, or 3.91%, compared to the linked quarter.
- Total borrowings increased $0.37 billion, or 54.23%, from prior year but decreased $1.29 billion, or 55.39%, compared to the linked quarter. During the third quarter of 2020, the Company repaid $1.11 billion in borrowings under the FRB PPP lending facility, which had initially been used to facilitate funding of the PPP loans. Additionally, we restructured our FHLB borrowing facilities for future reductions in borrowing costs of approximately $2.66 million over the life of those borrowings.
Investment Securities:
- Total investment securities were $1.38 billion compared to $1.36 billion at June 30, 2020 and $1.41 billion at September 30, 2019. The weighted average duration of the portfolio at September 30, 2020 was 4.1 years. The carrying value of the AFS debt securities portfolio included $61.43 million in net unrealized gains compared to $19.73 million in net unrealized gains at December 31, 2019. During the third quarter of 2020, we sold $81.8 million in AFS debt securities at a gain of $1.70 million to reposition the portfolio.
Loans and Asset Quality:
- Total loans held for investment were $9.77 billion at September 30, 2020 compared to $9.80 billion at June 30, 2020 and $8.18 billion at September 30, 2019.
- Nonperforming assets were $28.74 million, or 0.19% of total assets, compared to $31.04 million, or 0.26%, at September 30, 2019.
- Nonperforming loans were 0.17% of period end loans, unchanged from September 30, 2019.
- Foreclosed property decreased to $11.70 million from $15.52 million at September 30, 2019.
- Expected loss estimates are subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix which could result in material changes to the reserve in future periods.
Deposits and Borrowings:
- Total deposits were $11.70 billion compared to $11.26 billion at June 30, 2020 and $9.44 billion at September 30, 2019.
- Total loans to deposits were 83.47% compared to 87.01% at June 30, 2020 and 86.70% at September 30, 2019.
- Non-interest bearing deposits were 38.14% of total deposits at September 30, 2020 compared to 37.52% at June 30, 2020 and 32.11% at September 30, 2019.
- Total borrowings were $1.04 billion compared to $2.33 billion at June 30, 2020 and $0.67 billion at September 30, 2019.
Capital:
- Common equity tier 1 capital ratio of 11.75%.
- Tier 1 leverage capital ratio of 8.89%.
- Tier 1 risk-based capital ratio of 11.91%.
- Total risk-based capital ratio of 15.33%.
- Book value was $23.83 compared to $23.50 at June 30, 2020 and $22.38 at September 30, 2019.
- Tangible book value (non-GAAP) was $17.06 compared to $16.68 at June 30, 2020 and $15.44 at September 30, 2019.
About TowneBank:As one of the top community banks in Virginia and North Carolina, TowneBank operates 42 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Greensboro, Greenville, Moyock, Grandy, Camden County, Southern Shores, Corolla, Duck and Nags Head in North Carolina. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group’s President and Board of Directors. With total assets of $14.80 billion as of September 30, 2020, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.
Forward-Looking Statements:Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank’s future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” or “project” or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: the impacts of the ongoing coronavirus (COVID-19) pandemic, changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank’s loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market area; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Media contact:G. Robert Aston, Jr., Executive Chairman, 757-638-6780J. Morgan Davis, President and Chief Executive Officer, 757-673-1673
Investor contact:William B. Littreal, Chief Financial Officer, 757-638-6813
| TOWNEBANK | ||||||||||||||||||||
| Selected Financial Highlights (unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||
| Income and Performance Ratios: | ||||||||||||||||||||
| Total Revenue | $ | 192,135 | $ | 162,656 | $ | 137,696 | $ | 139,671 | $ | 145,879 | ||||||||||
| Net income | 50,715 | 37,222 | 27,605 | 35,948 | 39,400 | |||||||||||||||
| Net income available to common shareholders | 34,464 | 34,605 | 26,384 | 35,075 | 37,659 | |||||||||||||||
| Pre-provision, pre-tax, net revenues (non-GAAP) | 73,903 | 69,014 | 39,587 | 46,462 | 46,851 | |||||||||||||||
| Net income per common share - diluted | 0.48 | 0.48 | 0.36 | 0.49 | 0.52 | |||||||||||||||
| Book value per common share | 23.83 | 23.50 | 22.77 | 22.58 | 22.38 | |||||||||||||||
| Book value per common share - tangible (non-GAAP) | 17.06 | 16.68 | 15.91 | 15.69 | 15.44 | |||||||||||||||
| Return on average assets | 0.89 | % | 0.97 | % | 0.88 | % | 1.16 | % | 1.26 | % | ||||||||||
| Return on average assets - tangible (non-GAAP) | 0.97 | % | 1.07 | % | 1.00 | % | 1.30 | % | 1.40 | % | ||||||||||
| Return on average equity | 7.85 | % | 8.18 | % | 6.37 | % | 8.44 | % | 9.22 | % | ||||||||||
| Return on average equity - tangible (non-GAAP) | 11.66 | % | 12.32 | % | 9.91 | % | 12.97 | % | 14.20 | % | ||||||||||
| Return on average common equity | 7.91 | % | 8.24 | % | 6.42 | % | 8.51 | % | 9.29 | % | ||||||||||
| Return on average common equity - tangible (non-GAAP) | 11.79 | % | 12.44 | % | 10.01 | % | 13.12 | % | 14.36 | % | ||||||||||
| Noninterest income as a percentage of total revenue | 49.64 | % | 42.66 | % | 35.00 | % | 35.59 | % | 37.55 | % | ||||||||||
| Regulatory Capital Ratios (1): | ||||||||||||||||||||
| Common equity tier 1 | 11.75 | % | 11.54 | % | 11.23 | % | 11.46 | % | 11.52 | % | ||||||||||
| Tier 1 | 11.91 | % | 11.67 | % | 11.35 | % | 11.49 | % | 11.55 | % | ||||||||||
| Total | 15.33 | % | 14.91 | % | 14.40 | % | 14.58 | % | 14.70 | % | ||||||||||
| Tier 1 leverage ratio | 8.89 | % | 9.05 | % | 10.11 | % | 9.95 | % | 9.84 | % | ||||||||||
| Asset Quality: | ||||||||||||||||||||
| Allowance for credit losses on loans to nonperforming loans | 7.31x | 5.34x | 3.85x | 3.34x | 3.95x | |||||||||||||||
| Allowance for credit losses on loans to period end loans | 1.22 | % | 0.92 | % | 0.73 | % | 0.69 | % | 0.68 | % | ||||||||||
| Allowance for credit losses on loans to period end loans excluding PPP loans (non-GAAP) | 1.37 | % | 1.04 | % | 0.73 | % | 0.69 | % | 0.68 | % | ||||||||||
| Nonperforming loans to period end loans | 0.17 | % | 0.17 | % | 0.19 | % | 0.21 | % | 0.17 | % | ||||||||||
| Nonperforming assets to period end assets | 0.19 | % | 0.19 | % | 0.24 | % | 0.27 | % | 0.26 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | (0.01 | )% | — | % | 0.03 | % | 0.04 | % | 0.03 | % | ||||||||||
| Nonperforming loans | $ | 16,295 | $ | 16,935 | $ | 16,700 | $ | 17,437 | $ | 14,016 | ||||||||||
| Former bank premises | 750 | — | — | 1,521 | 1,510 | |||||||||||||||
| Foreclosed property | 11,695 | 12,315 | 13,053 | 13,839 | 15,517 | |||||||||||||||
| Total nonperforming assets | $ | 28,740 | $ | 29,250 | $ | 29,753 | $ | 32,797 | $ | 31,043 | ||||||||||
| Loans past due 90 days and still accruing interest | $ | 19 | $ | 464 | $ | 91 | $ | 309 | $ | 636 | ||||||||||
| Allowance for credit losses on loans | $ | 119,058 | $ | 90,467 | $ | 64,372 | $ | 58,234 | $ | 55,428 | ||||||||||
| Mortgage Banking: | ||||||||||||||||||||
| Loans originated, mortgage | $ | 1,292,801 | $ | 1,116,782 | $ | 718,681 | $ | 628,279 | $ | 703,922 | ||||||||||
| Loans originated, joint venture | 498,100 | 357,815 | 204,522 | 231,879 | 259,742 | |||||||||||||||
| Total loans originated | $ | 1,790,901 | $ | 1,474,597 | $ | 923,203 | $ | 860,158 | $ | 963,664 | ||||||||||
| Number of loans originated | 5,817 | 4,818 | 3,025 | 2,984 | 3,360 | |||||||||||||||
| Number of originators | 224 | 216 | 223 | 217 | 225 | |||||||||||||||
| Purchase % | 61.21 | % | 51.26 | % | 61.31 | % | 70.32 | % | 68.83 | % | ||||||||||
| Loans sold | $ | 1,833,590 | $ | 1,398,649 | $ | 809,834 | $ | 879,910 | $ | 925,058 | ||||||||||
| Gross realized gain on sales and fees as a % of loans originated | 3.65 | % | 3.17 | % | 1.80 | % | 3.38 | % | 3.45 | % | ||||||||||
| Other Ratios: | ||||||||||||||||||||
| Net interest margin | 2.70 | % | 2.85 | % | 3.35 | % | 3.33 | % | 3.41 | % | ||||||||||
| Net interest margin-fully tax equivalent (non-GAAP) | 2.72 | % | 2.87 | % | 3.37 | % | 3.35 | % | 3.43 | % | ||||||||||
| Average earning assets/total average assets | 92.09 | % | 91.33 | % | 89.15 | % | 89.57 | % | 89.53 | % | ||||||||||
| Average loans/average deposits | 86.29 | % | 91.81 | % | 92.99 | % | 88.41 | % | 87.63 | % | ||||||||||
| Average noninterest deposits/total average deposits | 37.76 | % | 36.52 | % | 32.21 | % | 32.14 | % | 31.82 | % | ||||||||||
| Period end equity/period end total assets | 11.82 | % | 11.05 | % | 13.19 | % | 13.84 | % | 13.63 | % | ||||||||||
| Efficiency ratio (non-GAAP) | 53.55 | % | 56.99 | % | 73.02 | % | 66.11 | % | 66.66 | % | ||||||||||
| (1) Current reporting period regulatory capital ratios are preliminary | ||||||||||||||||||||
| TOWNEBANK | ||||||||||||||||||||
| Selected Data (unaudited) | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Investment Securities | % Change | |||||||||||||||||||
| Q3 | Q3 | Q2 | Q3 20 vs. | Q3 20 vs. | ||||||||||||||||
| Available-for-sale securities, at fair value | 2020 | 2019 | 2020 | Q3 19 | Q2 20 | |||||||||||||||
| U.S. agency securities | $ | 167,275 | $ | 152,581 | $ | 118,176 | 9.63 | % | 41.55 | % | ||||||||||
| U.S. Treasury notes | 1,006 | 999 | 1,010 | 0.70 | % | (0.40 | )% | |||||||||||||
| Municipal securities | 292,792 | 173,519 | 313,322 | 68.74 | % | (6.55 | )% | |||||||||||||
| Trust preferred and other corporate securities | 24,236 | 52,006 | 59,598 | (53.40 | )% | (59.33 | )% | |||||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 825,378 | 958,290 | 774,658 | (13.87 | )% | 6.55 | % | |||||||||||||
| Allowance for credit losses | (4 | ) | n/a | (140 | ) | n/a | (97.14 | )% | ||||||||||||
| Total | $ | 1,310,683 | $ | 1,337,395 | $ | 1,266,624 | (2.00 | )% | 3.48 | % | ||||||||||
| Gross unrealized gains (losses) reflected in financial statements | ||||||||||||||||||||
| Total gross unrealized gains | $ | 62,206 | $ | 28,114 | $ | 61,559 | 121.26 | % | 1.05 | % | ||||||||||
| Total gross unrealized losses | (773 | ) | (2,046 | ) | (1,674 | ) | (62.22 | )% | (53.82 | )% | ||||||||||
| Net unrealized gains (losses) and other adjustments on AFS securities | $ | 61,433 | $ | 26,068 | $ | 59,885 | ||||||||||||||
| Held-to-maturity securities, at amortized cost | ||||||||||||||||||||
| Municipal securities | $ | 2,333 | $ | 29,166 | $ | 28,855 | (92.00 | )% | (91.91 | )% | ||||||||||
| Trust preferred corporate securities | 4,992 | 2,381 | 2,345 | 109.66 | % | 112.88 | % | |||||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 9,806 | 12,947 | 10,395 | (24.26 | )% | (5.67 | )% | |||||||||||||
| Allowance for credit losses | (90 | ) | n/a | (121 | ) | n/a | (25.62 | )% | ||||||||||||
| Total | $ | 17,041 | $ | 44,494 | $ | 41,474 | (61.70 | )% | (58.91 | )% | ||||||||||
| Gross unrealized gains (losses) not reflected in financial statements | ||||||||||||||||||||
| Total gross unrealized gains | $ | 1,971 | $ | 1,688 | $ | 1,980 | 16.77 | % | (0.45 | )% | ||||||||||
| Total gross unrealized losses | — | (5 | ) | — | (100.00 | )% | — | % | ||||||||||||
| Net unrealized gains (losses) in HTM securities | $ | 1,971 | $ | 1,683 | $ | 1,980 | ||||||||||||||
| Loans Held For Investment (1) | % Change | |||||||||||||||||||
| Q3 | Q3 | Q2 | Q3 20 vs. | Q3 20 vs. | ||||||||||||||||
| 2020 | 2019 | 2020 | Q3 19 | Q2 20 | ||||||||||||||||
| Real estate - construction and development | $ | 1,143,202 | $ | 1,142,225 | $ | 1,178,832 | 0.09 | % | (3.02 | )% | ||||||||||
| Commercial real estate - non owner occupied | 2,338,532 | 2,070,317 | 2,332,447 | 12.96 | % | 0.26 | % | |||||||||||||
| Commercial real estate - owner occupied | 1,378,443 | 1,286,137 | 1,383,294 | 7.18 | % | (0.35 | )% | |||||||||||||
| Real estate - multifamily | 289,270 | 219,901 | 277,947 | 31.55 | % | 4.07 | % | |||||||||||||
| Real estate - residential 1-4 family and HELOC | 1,660,535 | 1,621,175 | 1,670,530 | 2.43 | % | (0.60 | )% | |||||||||||||
| Commercial and industrial business | 2,499,801 | 1,527,515 | 2,503,161 | 63.65 | % | (0.13 | )% | |||||||||||||
| Consumer and other loans | 460,787 | 315,559 | 455,678 | 46.02 | % | 1.12 | % | |||||||||||||
| Total | $ | 9,770,570 | $ | 8,182,829 | $ | 9,801,889 | 19.40 | % | (0.32 | )% | ||||||||||
| (1) Paycheck Protection Program loans totaling $1.10 billion and $1.09 billion, primarily in C&I, are included in Q3 2020 and Q2 2020, respectively. | ||||||||||||||||||||
| Deposits | % Change | |||||||||||||||||||
| Q3 | Q3 | Q2 | Q3 20 vs. | Q3 20 vs. | ||||||||||||||||
| 2020 | 2019 | 2020 | Q3 19 | Q2 20 | ||||||||||||||||
| Noninterest-bearing demand | $ | 4,464,178 | $ | 3,030,505 | $ | 4,226,208 | 47.31 | % | 5.63 | % | ||||||||||
| Interest-bearing: | ||||||||||||||||||||
| Demand and money market accounts | 4,642,482 | 3,534,252 | 4,223,391 | 31.36 | % | 9.92 | % | |||||||||||||
| Savings | 312,444 | 280,552 | 298,673 | 11.37 | % | 4.61 | % | |||||||||||||
| Certificates of deposits | 2,285,859 | 2,592,705 | 2,516,666 | (11.83 | )% | (9.17 | )% | |||||||||||||
| Total | $ | 11,704,963 | $ | 9,438,014 | $ | 11,264,938 | 24.02 | % | 3.91 | % | ||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2020 | June 30, 2020 | September 30, 2019 | ||||||||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,752,746 | $ | 103,401 | 4.22 | % | $ | 9,619,931 | $ | 102,656 | 4.29 | % | $ | 8,096,908 | $ | 102,495 | 5.02 | % | ||||||||||||||||||||
| Taxable investment securities | 1,206,679 | 6,726 | 2.23 | % | 1,198,776 | 7,367 | 2.46 | % | 1,266,447 | 9,087 | 2.87 | % | ||||||||||||||||||||||||||
| Tax-exempt investment securities | 144,999 | 779 | 2.15 | % | 147,489 | 836 | 2.27 | % | 121,738 | 997 | 3.28 | % | ||||||||||||||||||||||||||
| Total securities | 1,351,678 | 7,505 | 2.22 | % | 1,346,265 | 8,203 | 2.44 | % | 1,388,185 | 10,084 | 2.91 | % | ||||||||||||||||||||||||||
| Interest-bearing deposits | 2,523,644 | 632 | 0.10 | % | 1,729,140 | 433 | 0.10 | % | 711,030 | 3,745 | 2.09 | % | ||||||||||||||||||||||||||
| Loans held for sale | 634,309 | 4,587 | 2.89 | % | 464,796 | 3,811 | 3.28 | % | 408,377 | 3,956 | 3.87 | % | ||||||||||||||||||||||||||
| Total earning assets | 14,262,377 | 116,125 | 3.24 | % | 13,160,132 | 115,103 | 3.52 | % | 10,604,500 | 120,280 | 4.50 | % | ||||||||||||||||||||||||||
| Less: allowance for credit losses | (95,594 | ) | (69,451 | ) | (54,858 | ) | ||||||||||||||||||||||||||||||||
| Total nonearning assets | 1,320,369 | 1,318,787 | 1,295,640 | |||||||||||||||||||||||||||||||||||
| Total assets | $ | 15,487,152 | $ | 14,409,468 | $ | 11,845,282 | ||||||||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||||||||
| Demand and money market | $ | 4,311,920 | $ | 2,663 | 0.25 | % | $ | 3,857,757 | $ | 2,491 | 0.26 | % | $ | 3,379,888 | $ | 7,223 | 0.85 | % | ||||||||||||||||||||
| Savings | 304,753 | 555 | 0.72 | % | 290,201 | 554 | 0.77 | % | 278,048 | 702 | 1.00 | % | ||||||||||||||||||||||||||
| Certificates of deposit | 2,417,772 | 9,747 | 1.60 | % | 2,503,648 | 12,027 | 1.93 | % | 2,641,681 | 15,627 | 2.35 | % | ||||||||||||||||||||||||||
| Total interest-bearing deposits | 7,034,445 | 12,965 | 0.73 | % | 6,651,606 | 15,072 | 0.91 | % | 6,299,617 | 23,552 | 1.48 | % | ||||||||||||||||||||||||||
| Borrowings | 1,931,120 | 2,841 | 0.58 | % | 1,741,832 | 3,238 | 0.74 | % | 486,644 | 2,020 | 1.62 | % | ||||||||||||||||||||||||||
| Subordinated debt, net | 248,807 | 2,962 | 4.76 | % | 248,660 | 2,962 | 4.76 | % | 248,210 | 2,962 | 4.77 | % | ||||||||||||||||||||||||||
| Total interest-bearing liabilities | 9,214,372 | 18,768 | 0.81 | % | 8,642,098 | 21,272 | 0.99 | % | 7,034,471 | 28,534 | 1.61 | % | ||||||||||||||||||||||||||
| Demand deposits | 4,268,443 | 3,826,439 | 2,940,370 | |||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 257,304 | 239,154 | 250,371 | |||||||||||||||||||||||||||||||||||
| Total liabilities | 13,740,119 | 12,707,691 | 10,225,212 | |||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,747,033 | 1,701,777 | 1,620,070 | |||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 15,487,152 | $ | 14,409,468 | $ | 11,845,282 | ||||||||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 97,357 | $ | 93,831 | $ | 91,746 | ||||||||||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (598 | ) | (557 | ) | (643 | ) | ||||||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 96,759 | $ | 93,274 | $ | 91,103 | ||||||||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 2.43 | % | 2.53 | % | 2.89 | % | ||||||||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.52 | % | 0.65 | % | 1.07 | % | ||||||||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 2.72 | % | 2.87 | % | 3.43 | % | ||||||||||||||||||||||||||||||||
| Total cost of deposits | 0.46 | % | 0.58 | % | 1.01 | % | ||||||||||||||||||||||||||||||||
(1) Includes average PPP balances of $1.10 billion and related interest and fee income of $9.82 million.(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 | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||||||||||
| September 30, 2020 | September 30, 2019 | 2020 Compared with 2019 | |||||||||||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | ||||||||||||||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Increase | Change Due to | ||||||||||||||||||||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | (Decrease) | Rate | Volume | |||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,309,256 | $ | 306,622 | 4.40 | % | $ | 8,067,894 | $ | 305,007 | 5.05 | % | $ | 1,615 | $ | (42,206 | ) | $ | 43,822 | ||||||||||||||||||||||
| Taxable investment securities | 1,253,783 | 23,304 | 2.48 | % | 1,158,611 | 24,962 | 2.87 | % | (1,658 | ) | (3,603 | ) | 1,945 | ||||||||||||||||||||||||||||
| Tax-exempt investment securities | 140,248 | 2,476 | 2.35 | % | 97,485 | 2,519 | 3.45 | % | (43 | ) | (944 | ) | 902 | ||||||||||||||||||||||||||||
| Total securities | 1,394,031 | 25,780 | 2.47 | % | 1,256,096 | 27,481 | 2.92 | % | (1,701 | ) | (4,547 | ) | 2,847 | ||||||||||||||||||||||||||||
| Interest-bearing deposits | 615,466 | 2,168 | 0.47 | % | 700,840 | 11,758 | 2.24 | % | (9,590 | ) | (8,309 | ) | (1,281 | ) | |||||||||||||||||||||||||||
| Loans held for sale | 477,964 | 11,386 | 3.18 | % | 290,384 | 8,966 | 4.12 | % | 2,420 | (2,394 | ) | 4,814 | |||||||||||||||||||||||||||||
| Total earning assets | 11,796,717 | 345,956 | 3.92 | % | 10,315,214 | 353,212 | 4.58 | % | (7,256 | ) | (57,456 | ) | 50,202 | ||||||||||||||||||||||||||||
| Less: allowance for loan losses | (73,538 | ) | (53,703 | ) | |||||||||||||||||||||||||||||||||||||
| Total nonearning assets | 2,264,295 | 1,264,976 | |||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 13,987,474 | $ | 11,526,487 | |||||||||||||||||||||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||||||||||||||
| Demand and money market | $ | 3,898,642 | $ | 10,472 | 0.36 | % | $ | 3,289,539 | $ | 20,488 | 0.83 | % | $ | (10,016 | ) | $ | (13,287 | ) | $ | 3,271 | |||||||||||||||||||||
| Savings | 290,684 | 1,702 | 0.78 | % | 281,562 | 2,658 | 1.26 | % | (956 | ) | (1,040 | ) | 84 | ||||||||||||||||||||||||||||
| Certificates of deposit | 2,451,715 | 34,925 | 1.90 | % | 2,456,360 | 41,364 | 2.25 | % | (6,439 | ) | (6,362 | ) | (78 | ) | |||||||||||||||||||||||||||
| Total interest-bearing deposits | 6,641,041 | 47,099 | 0.95 | % | 6,027,461 | 64,510 | 1.43 | % | (17,411 | ) | (20,689 | ) | 3,277 | ||||||||||||||||||||||||||||
| Borrowings | 1,452,652 | 8,661 | 0.78 | % | 661,216 | 9,559 | 1.91 | % | (898 | ) | (7,871 | ) | 6,973 | ||||||||||||||||||||||||||||
| Subordinated debt, net | 248,660 | 8,885 | 4.76 | % | 248,064 | 8,885 | 4.78 | % | — | (22 | ) | 21 | |||||||||||||||||||||||||||||
| Total interest-bearing liabilities | 8,342,353 | 64,645 | 1.04 | % | 6,936,741 | 82,954 | 1.60 | % | (18,309 | ) | (28,582 | ) | 10,271 | ||||||||||||||||||||||||||||
| Demand deposits | 3,687,791 | 2,787,727 | |||||||||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 252,337 | 221,806 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities | 12,282,481 | 9,946,274 | |||||||||||||||||||||||||||||||||||||||
| Shareholders’ equity | 1,704,993 | 1,580,213 | |||||||||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 13,987,474 | $ | 11,526,487 | |||||||||||||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 281,311 | $ | 270,258 | $ | 11,053 | $ | (28,874 | ) | $ | 39,931 | ||||||||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,781 | ) | (1,862 | ) | 81 | ||||||||||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 279,530 | $ | 268,396 | $ | 11,134 | |||||||||||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 2.88 | % | 2.98 | % | |||||||||||||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.73 | % | 1.08 | % | |||||||||||||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 3.19 | % | 3.50 | % | |||||||||||||||||||||||||||||||||||||
| Total cost of deposits | 0.61 | % | 0.98 | % | |||||||||||||||||||||||||||||||||||||
| (1) Includes average PPP balances of $0.64 billion and related interest income of $15.65 million | |||||||||||||||||||||||||||||||||||||||||
| (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, | ||||||||
| 2020 | 2019 | ||||||||
| (unaudited) | (audited) | ||||||||
| ASSETS | |||||||||
| Cash and due from banks | $ | 114,604 | $ | 97,593 | |||||
| Interest-bearing deposits at FRB - Richmond | 1,670,186 | 322,505 | |||||||
| Interest-bearing deposits in financial institutions | 24,890 | 22,518 | |||||||
| Total Cash and Cash Equivalents | 1,809,680 | 442,616 | |||||||
| Securities available for sale, at fair value (amortized cost $1,249,254, allowance for credit losses of $4) (1) | 1,310,683 | 1,441,308 | |||||||
| Securities held to maturity, at amortized cost (fair value $19,102 )(1) | 17,131 | 43,688 | |||||||
| Less: allowance for credit losses | (90 | ) | — | ||||||
| Securities held to maturity, net of allowance for credit losses | 17,041 | 43,688 | |||||||
| Other equity securities | 6,497 | 6,462 | |||||||
| FHLB stock | 41,829 | 30,094 | |||||||
| Total Securities | 1,376,050 | 1,521,552 | |||||||
| Mortgage loans held for sale | 669,020 | 419,233 | |||||||
| Loans, net of unearned income and deferred costs | 9,770,570 | 8,419,288 | |||||||
| Less: allowance for credit losses | (119,058 | ) | (58,234 | ) | |||||
| Net Loans | 9,651,512 | 8,361,054 | |||||||
| Premises and equipment, net | 256,909 | 231,806 | |||||||
| Goodwill | 446,725 | 446,816 | |||||||
| Other intangible assets, net | 45,781 | 54,399 | |||||||
| BOLI | 244,103 | 243,062 | |||||||
| Other assets | 295,637 | 227,125 | |||||||
| TOTAL ASSETS | $ | 14,795,417 | $ | 11,947,663 | |||||
| LIABILITIES AND EQUITY | |||||||||
| Deposits: | |||||||||
| Noninterest-bearing demand | $ | 4,464,178 | $ | 2,951,225 | |||||
| Interest-bearing: | |||||||||
| Demand and money market accounts | 4,642,482 | 3,586,364 | |||||||
| Savings | 312,444 | 276,205 | |||||||
| Certificates of deposit | 2,285,859 | 2,457,123 | |||||||
| Total Deposits | 11,704,963 | 9,270,917 | |||||||
| Advances from the FHLB | 731,202 | 471,687 | |||||||
| Subordinated debt, net | 248,906 | 248,458 | |||||||
| Repurchase agreements and other borrowings | 58,061 | 52,391 | |||||||
| Total Borrowings | 1,038,169 | 772,536 | |||||||
| Other liabilities | 303,582 | 250,516 | |||||||
| TOTAL LIABILITIES | 13,046,714 | 10,293,969 | |||||||
| Preferred stock | |||||||||
| Authorized and unissued shares - 2,000,000 | — | — | |||||||
| Common stock, $1.667 par: 150,000,000 shares authorized 72,656,729 and 72,649,682 shares issued at September 30, 2020 and December 31, 2019, respectively | 121,115 | 121,107 | |||||||
| Capital surplus | 1,045,170 | 1,041,160 | |||||||
| Retained earnings | 520,888 | 467,186 | |||||||
| Common stock issued to deferred compensation trust, at cost 872,498 and 818,578 shares at September 30, 2020 and December 31, 2019, respectively | (16,951 | ) | (15,555 | ) | |||||
| Deferred compensation trust | 16,951 | 15,555 | |||||||
| Accumulated other comprehensive income (loss) | 44,569 | 11,302 | |||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,731,742 | 1,640,755 | |||||||
| Noncontrolling interest | 16,961 | 12,939 | |||||||
| TOTAL EQUITY | 1,748,703 | 1,653,694 | |||||||
| TOTAL LIABILITIES AND EQUITY | $ | 14,795,417 | $ | 11,947,663 | |||||
| (1) For 2020, disclosures are presented in compliance with ASC 326. | |||||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 102,869 | $ | 102,047 | $ | 305,070 | $ | 303,616 | |||||||||||
| Investment securities | 7,440 | 9,889 | 25,553 | 27,010 | |||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 632 | 3,745 | 2,168 | 11,758 | |||||||||||||||
| Mortgage loans held for sale | 4,587 | 3,956 | 11,385 | 8,966 | |||||||||||||||
| Total interest income | 115,528 | 119,637 | 344,176 | 351,350 | |||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 12,966 | 23,552 | 47,099 | 64,510 | |||||||||||||||
| Advances from the FHLB | 1,901 | 1,935 | 6,990 | 9,288 | |||||||||||||||
| Subordinated debt, net | 2,962 | 2,962 | 8,885 | 8,885 | |||||||||||||||
| Repurchase agreements and other borrowings | 940 | 85 | 1,672 | 271 | |||||||||||||||
| Total interest expense | 18,769 | 28,534 | 64,646 | 82,954 | |||||||||||||||
| Net interest income | 96,759 | 91,103 | 279,530 | 268,396 | |||||||||||||||
| PROVISION FOR CREDIT LOSSES | 31,598 | 1,508 | 65,559 | 5,770 | |||||||||||||||
| Net interest income after provision for credit losses | 65,161 | 89,595 | 213,971 | 262,626 | |||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 37,531 | 18,855 | 74,662 | 50,929 | |||||||||||||||
| Insurance commissions and other title fees and income, net | 17,468 | 16,681 | 51,973 | 49,477 | |||||||||||||||
| Real estate brokerage and property management income, net | 11,301 | 9,444 | 29,020 | 27,555 | |||||||||||||||
| Service charges on deposit accounts | 1,986 | 2,253 | 6,314 | 8,299 | |||||||||||||||
| Credit card merchant fees, net | 1,506 | 1,514 | 3,793 | 3,357 | |||||||||||||||
| BOLI | 1,605 | 2,117 | 6,295 | 5,350 | |||||||||||||||
| Other income | 22,278 | 3,981 | 31,268 | 11,754 | |||||||||||||||
| Net gain/(loss) on investment securities | 1,701 | (69 | ) | 9,632 | (845 | ) | |||||||||||||
| Total noninterest income | 95,376 | 54,776 | 212,957 | 155,876 | |||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 61,408 | 55,784 | 174,201 | 162,907 | |||||||||||||||
| Occupancy expense | 8,396 | 7,953 | 23,124 | 23,866 | |||||||||||||||
| Furniture and equipment | 3,247 | 3,805 | 10,451 | 10,753 | |||||||||||||||
| Amortization - intangibles | 2,851 | 3,059 | 8,702 | 9,364 | |||||||||||||||
| Software expense | 3,572 | 3,208 | 10,556 | 8,742 | |||||||||||||||
| Data processing | 3,113 | 2,533 | 8,622 | 9,316 | |||||||||||||||
| Professional fees | 2,637 | 3,566 | 8,677 | 9,952 | |||||||||||||||
| Advertising and marketing | 1,870 | 3,429 | 7,440 | 9,440 | |||||||||||||||
| Other expenses | 14,887 | 13,950 | 38,121 | 41,627 | |||||||||||||||
| Total noninterest expense | 101,981 | 97,287 | 289,894 | 285,967 | |||||||||||||||
| Income before income tax expense and noncontrolling interest | 58,556 | 47,084 | 137,034 | 132,535 | |||||||||||||||
| Provision for income tax expense | 7,841 | 7,684 | 21,492 | 24,810 | |||||||||||||||
| Net income | $ | 50,715 | $ | 39,400 | $ | 115,542 | $ | 107,725 | |||||||||||
| Net income attributable to noncontrolling interest | (16,251 | ) | (1,741 | ) | (20,089 | ) | (4,018 | ) | |||||||||||
| Net income attributable to TowneBank | $ | 34,464 | $ | 37,659 | $ | 95,453 | $ | 103,707 | |||||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.48 | $ | 0.52 | $ | 1.32 | $ | 1.44 | |||||||||||
| Diluted earnings | $ | 0.48 | $ | 0.52 | $ | 1.32 | $ | 1.44 | |||||||||||
| Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.54 | $ | 0.52 | |||||||||||
| TOWNEBANK | ||||||||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | ||||||||||||||||||||||||
| (dollars in thousands, except share data) | ||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | (unaudited) | ||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||
| Cash and due from banks | $ | 114,604 | $ | 115,724 | $ | 108,929 | $ | 97,593 | $ | 124,439 | ||||||||||||||
| Interest-bearing deposits at FRB - Richmond | 1,670,186 | 2,511,152 | 753,643 | 322,505 | 675,288 | |||||||||||||||||||
| Interest-bearing deposits in financial institutions | 24,890 | 24,374 | 23,564 | 22,518 | 21,663 | |||||||||||||||||||
| Total Cash and Cash Equivalents | 1,809,680 | 2,651,250 | 886,136 | 442,616 | 821,390 | |||||||||||||||||||
| Securities available for sale | 1,310,683 | 1,266,624 | 1,248,420 | 1,441,308 | 1,337,395 | |||||||||||||||||||
| Securities held to maturity | 17,131 | 41,595 | 42,431 | 43,688 | 44,494 | |||||||||||||||||||
| Less: allowance for credit losses | (90 | ) | (121 | ) | (133 | ) | — | — | ||||||||||||||||
| Securities held to maturity, net of allowance for credit losses | 17,041 | 41,474 | 42,298 | 43,688 | 44,494 | |||||||||||||||||||
| Other equity securities | 6,497 | 6,497 | 6,462 | 6,462 | 5,697 | |||||||||||||||||||
| FHLB stock | 41,829 | 49,277 | 52,042 | 30,094 | 26,282 | |||||||||||||||||||
| Total Securities | 1,376,050 | 1,363,872 | 1,349,222 | 1,521,552 | 1,413,868 | |||||||||||||||||||
| Mortgage loans held for sale | 669,020 | 610,369 | 453,143 | 419,233 | 456,719 | |||||||||||||||||||
| Loans, net of unearned income and deferred costs | 9,770,570 | 9,801,889 | 8,784,195 | 8,419,288 | 8,182,829 | |||||||||||||||||||
| Less: allowance for credit losses | (119,058 | ) | (90,467 | ) | (64,372 | ) | (58,234 | ) | (55,428 | ) | ||||||||||||||
| Net Loans | 9,651,512 | 9,711,422 | 8,719,823 | 8,361,054 | 8,127,401 | |||||||||||||||||||
| Premises and equipment, net | 256,909 | 257,533 | 236,735 | 231,806 | 231,060 | |||||||||||||||||||
| Goodwill | 446,725 | 446,725 | 446,725 | 446,816 | 446,423 | |||||||||||||||||||
| Other intangible assets, net | 45,781 | 48,632 | 51,448 | 54,399 | 57,404 | |||||||||||||||||||
| BOLI | 244,103 | 242,493 | 240,924 | 243,062 | 241,652 | |||||||||||||||||||
| Other assets | 295,637 | 247,962 | 239,670 | 227,125 | 225,374 | |||||||||||||||||||
| TOTAL ASSETS | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | $ | 12,021,291 | ||||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||||||||||||
| Deposits: | ||||||||||||||||||||||||
| Noninterest-bearing demand | $ | 4,464,178 | $ | 4,226,208 | $ | 3,060,515 | $ | 2,951,225 | $ | 3,030,505 | ||||||||||||||
| Interest-bearing: | ||||||||||||||||||||||||
| Demand and money market accounts | 4,642,482 | 4,223,391 | 3,573,926 | 3,586,364 | 3,534,252 | |||||||||||||||||||
| Savings | 312,444 | 298,673 | 280,807 | 276,205 | 280,552 | |||||||||||||||||||
| Certificates of deposit | 2,285,859 | 2,516,666 | 2,392,744 | 2,457,123 | 2,592,705 | |||||||||||||||||||
| Total Deposits | 11,704,963 | 11,264,938 | 9,307,992 | 9,270,917 | 9,438,014 | |||||||||||||||||||
| Advances from the FHLB | 731,202 | 906,365 | 971,527 | 471,687 | 381,846 | |||||||||||||||||||
| Subordinated debt, net | 248,906 | 248,756 | 248,607 | 248,458 | 248,309 | |||||||||||||||||||
| FRB PPP lending facility | — | 1,111,429 | — | — | — | |||||||||||||||||||
| Repurchase agreements and other borrowings | 58,061 | 60,913 | 171,762 | 52,391 | 42,971 | |||||||||||||||||||
| Total Borrowings | 1,038,169 | 2,327,463 | 1,391,896 | 772,536 | 673,126 | |||||||||||||||||||
| Other liabilities | 303,582 | 266,314 | 258,306 | 250,516 | 271,617 | |||||||||||||||||||
| TOTAL LIABILITIES | 13,046,714 | 13,858,715 | 10,958,194 | 10,293,969 | 10,382,757 | |||||||||||||||||||
| Preferred stock | ||||||||||||||||||||||||
| Authorized shares - 2,000,000 | — | — | — | — | — | |||||||||||||||||||
| Common stock, $1.667 par value | 121,115 | 121,101 | 121,057 | 121,107 | 121,080 | |||||||||||||||||||
| Capital surplus | 1,045,170 | 1,043,774 | 1,041,870 | 1,041,160 | 1,039,156 | |||||||||||||||||||
| Retained earnings | 520,888 | 499,502 | 477,972 | 467,186 | 445,186 | |||||||||||||||||||
| Common stock issued to deferred compensation trust, at cost | (16,951 | ) | (16,776 | ) | (15,562 | ) | (15,555 | ) | (15,317 | ) | ||||||||||||||
| Deferred compensation trust | 16,951 | 16,776 | 15,562 | 15,555 | 15,317 | |||||||||||||||||||
| Accumulated other comprehensive income (loss) | 44,569 | 43,218 | 12,301 | 11,302 | 19,958 | |||||||||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,731,742 | 1,707,595 | 1,653,200 | 1,640,755 | 1,625,380 | |||||||||||||||||||
| Noncontrolling interest | 16,961 | 13,948 | 12,432 | 12,939 | 13,154 | |||||||||||||||||||
| TOTAL EQUITY | 1,748,703 | 1,721,543 | 1,665,632 | 1,653,694 | 1,638,534 | |||||||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | $ | 12,021,291 | ||||||||||||||
| 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, | ||||||||||||||||||||
| 2020 | 2020 | 2020 | 2019 | 2019 | ||||||||||||||||||||
| INTEREST INCOME: | ||||||||||||||||||||||||
| Loans, including fees | $ | 102,869 | $ | 102,139 | $ | 100,062 | $ | 100,059 | $ | 102,047 | ||||||||||||||
| Investment securities | 7,440 | 8,163 | 9,949 | 9,936 | 9,889 | |||||||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 632 | 433 | 1,102 | 2,067 | 3,745 | |||||||||||||||||||
| Mortgage loans held for sale | 4,587 | 3,811 | 2,988 | 4,413 | 3,956 | |||||||||||||||||||
| Total interest income | 115,528 | 114,546 | 114,101 | 116,475 | 119,637 | |||||||||||||||||||
| INTEREST EXPENSE: | ||||||||||||||||||||||||
| Deposits | 12,966 | 15,072 | 19,062 | 21,744 | 23,552 | |||||||||||||||||||
| Advances from the FHLB | 1,901 | 2,595 | 2,492 | 1,730 | 1,935 | |||||||||||||||||||
| Subordinated debt | 2,962 | 2,962 | 2,962 | 2,962 | 2,962 | |||||||||||||||||||
| Repurchase agreements and other borrowings | 940 | 643 | 89 | 80 | 85 | |||||||||||||||||||
| Total interest expense | 18,769 | 21,272 | 24,605 | 26,516 | 28,534 | |||||||||||||||||||
| Net interest income | 96,759 | 93,274 | 89,496 | 89,959 | 91,103 | |||||||||||||||||||
| PROVISION FOR CREDIT LOSSES | 31,598 | 26,945 | 7,016 | 3,601 | 1,508 | |||||||||||||||||||
| Net interest income after provision for credit losses | 65,161 | 66,329 | 82,480 | 86,358 | 89,595 | |||||||||||||||||||
| NONINTEREST INCOME: | ||||||||||||||||||||||||
| Residential mortgage banking income, net | 37,531 | 29,715 | 7,416 | 15,884 | 18,855 | |||||||||||||||||||
| Insurance commissions and other title fees and income, net | 17,468 | 17,612 | 16,893 | 15,001 | 16,681 | |||||||||||||||||||
| Real estate brokerage and property management income, net | 11,301 | 10,781 | 6,938 | 6,737 | 9,444 | |||||||||||||||||||
| Service charges on deposit accounts | 1,986 | 1,888 | 2,440 | 2,245 | 2,253 | |||||||||||||||||||
| Credit card merchant fees, net | 1,506 | 1,109 | 1,179 | 1,389 | 1,514 | |||||||||||||||||||
| BOLI | 1,605 | 1,584 | 3,105 | 3,865 | 2,117 | |||||||||||||||||||
| Other income | 22,278 | 3,763 | 5,227 | 4,591 | 3,981 | |||||||||||||||||||
| Net gain/(loss) on investment securities | 1,701 | 2,930 | 5,002 | — | (69 | ) | ||||||||||||||||||
| Total noninterest income | 95,376 | 69,382 | 48,200 | 49,712 | 54,776 | |||||||||||||||||||
| NONINTEREST EXPENSE: | ||||||||||||||||||||||||
| Salaries and employee benefits | 61,408 | 56,926 | 55,867 | 56,013 | 55,784 | |||||||||||||||||||
| Occupancy expense | 8,396 | 7,227 | 7,502 | 7,516 | 7,953 | |||||||||||||||||||
| Furniture and equipment | 3,247 | 3,564 | 3,640 | 3,598 | 3,805 | |||||||||||||||||||
| Amortization - intangibles | 2,851 | 2,901 | 2,950 | 3,005 | 3,059 | |||||||||||||||||||
| Software expense | 3,572 | 3,492 | 3,492 | 2,976 | 3,208 | |||||||||||||||||||
| Data processing | 3,113 | 2,718 | 2,791 | 2,510 | 2,533 | |||||||||||||||||||
| Professional fees | 2,637 | 2,972 | 3,067 | 2,990 | 3,566 | |||||||||||||||||||
| Advertising and marketing | 1,870 | 1,986 | 3,584 | 2,839 | 3,429 | |||||||||||||||||||
| Other expenses | 14,887 | 9,239 | 13,995 | 10,889 | 13,950 | |||||||||||||||||||
| Total noninterest expense | 101,981 | 91,025 | 96,888 | 92,336 | 97,287 | |||||||||||||||||||
| Income before income tax expense and noncontrolling interest | 58,556 | 44,686 | 33,792 | 43,734 | 47,084 | |||||||||||||||||||
| Provision for income tax expense | 7,841 | 7,464 | 6,187 | 7,786 | 7,684 | |||||||||||||||||||
| Net income | 50,715 | 37,222 | 27,605 | 35,948 | 39,400 | |||||||||||||||||||
| Net income attributable to noncontrolling interest | (16,251 | ) | (2,617 | ) | (1,221 | ) | (873 | ) | (1,741 | ) | ||||||||||||||
| Net income attributable to TowneBank | $ | 34,464 | $ | 34,605 | $ | 26,384 | $ | 35,075 | $ | 37,659 | ||||||||||||||
| Per common share information | ||||||||||||||||||||||||
| Basic earnings | $ | 0.48 | $ | 0.48 | $ | 0.37 | $ | 0.49 | $ | 0.52 | ||||||||||||||
| Diluted earnings | $ | 0.48 | $ | 0.48 | $ | 0.36 | $ | 0.49 | $ | 0.52 | ||||||||||||||
| Basic weighted average shares outstanding | 72,307,961 | 72,280,555 | 72,206,228 | 72,122,476 | 72,091,221 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 72,344,284 | 72,317,988 | 72,299,721 | 72,302,414 | 72,222,934 | |||||||||||||||||||
| Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | ||||||||||||||
| TOWNEBANK | |||||||||||||||||||||||||||||||
| Banking Segment Financial Information (unaudited) | |||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | |||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | 2020 over 2019 | ||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | |||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||
| Net interest income | $ | 92,869 | $ | 89,490 | $ | 89,665 | $ | 269,941 | $ | 264,332 | $ | 5,609 | 2.12 | % | |||||||||||||||||
| Service charges on deposit accounts | 1,986 | 2,253 | 1,888 | 6,315 | 8,299 | (1,984 | ) | (23.91 | )% | ||||||||||||||||||||||
| Credit card merchant fees | 1,506 | 1,514 | 1,109 | 3,793 | 3,357 | 436 | 12.99 | % | |||||||||||||||||||||||
| Other income | 4,876 | 5,152 | 3,888 | 15,826 | 14,350 | 1,476 | 10.29 | % | |||||||||||||||||||||||
| Subtotal | 8,368 | 8,919 | 6,885 | 25,934 | 26,006 | (72 | ) | (0.28 | )% | ||||||||||||||||||||||
| Net gain/(loss) on investment securities | 1,701 | (69 | ) | 2,930 | 9,632 | (845 | ) | 10,477 | 1,239.88 | % | |||||||||||||||||||||
| Total noninterest income | 10,069 | 8,850 | 9,815 | 35,566 | 25,161 | 10,405 | 41.35 | % | |||||||||||||||||||||||
| Total revenue | 102,938 | 98,340 | 99,480 | 305,507 | 289,493 | 16,014 | 5.53 | % | |||||||||||||||||||||||
| Provision for credit losses | 31,070 | 1,508 | 26,059 | 64,170 | 5,770 | 58,400 | 1,012.13 | % | |||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||
| Salaries and employee benefits | 36,535 | 33,526 | 35,209 | 104,970 | 96,966 | 8,004 | 8.25 | % | |||||||||||||||||||||||
| Occupancy expense | 5,829 | 5,209 | 4,812 | 15,557 | 15,460 | 97 | 0.63 | % | |||||||||||||||||||||||
| Furniture and equipment | 2,424 | 2,779 | 2,715 | 7,800 | 7,662 | 138 | 1.80 | % | |||||||||||||||||||||||
| Amortization of intangibles | 1,063 | 1,265 | 1,114 | 3,341 | 3,946 | (605 | ) | (15.33 | )% | ||||||||||||||||||||||
| Other expenses | 15,793 | 17,098 | 10,718 | 45,214 | 52,218 | (7,004 | ) | (13.41 | )% | ||||||||||||||||||||||
| Total expenses | 61,644 | 59,877 | 54,568 | 176,882 | 176,252 | 630 | 0.36 | % | |||||||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 10,224 | 36,955 | 18,853 | 64,455 | 107,471 | (43,016 | ) | (40.03 | )% | ||||||||||||||||||||||
| Corporate allocation | 595 | 384 | 627 | 1,891 | 1,383 | 508 | 36.73 | % | |||||||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 10,819 | 37,339 | 19,480 | 66,346 | 108,854 | (42,508 | ) | (39.05 | )% | ||||||||||||||||||||||
| Provision for income tax expense | 474 | 5,495 | 2,167 | 9,304 | 19,337 | (10,033 | ) | (51.88 | )% | ||||||||||||||||||||||
| Net income | 10,345 | 31,844 | 17,313 | 57,042 | 89,517 | (32,475 | ) | (36.28 | )% | ||||||||||||||||||||||
| Noncontrolling interest | (2 | ) | — | 5 | 2 | 4 | (2 | ) | (50.00 | )% | |||||||||||||||||||||
| Net income attributable to TowneBank | $ | 10,343 | $ | 31,844 | $ | 17,318 | $ | 57,044 | $ | 89,521 | $ | (32,477 | ) | (36.28 | )% | ||||||||||||||||
| Efficiency ratio | 60.89 | % | 60.85 | % | 56.52 | % | 59.78 | % | 60.71 | % | (0.93 | )% | (1.53 | )% | |||||||||||||||||
| TOWNEBANK | |||||||||||||||||||||||||||||||||
| Realty Segment Financial Information (unaudited) | |||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | |||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | 2020 over 2019 | ||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | |||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||
| Residential mortgage brokerage income, net | $ | 38,074 | $ | 19,171 | $ | 30,468 | $ | 76,549 | $ | 51,826 | $ | 24,723 | 47.70 | % | |||||||||||||||||||
| Real estate brokerage income, net | 3,688 | 2,882 | 2,659 | 8,212 | 7,315 | 897 | 12.26 | % | |||||||||||||||||||||||||
| Title insurance and settlement fees | 654 | 617 | 639 | 1,728 | 1,581 | 147 | 9.30 | % | |||||||||||||||||||||||||
| Property management fees, net | 7,613 | 6,562 | 8,122 | 20,808 | 20,240 | 568 | 2.81 | % | |||||||||||||||||||||||||
| Income from unconsolidated subsidiary | 451 | 185 | 301 | 938 | 441 | 497 | 112.70 | % | |||||||||||||||||||||||||
| Net interest and other income | 4,101 | 1,885 | 3,765 | 10,262 | 4,937 | 5,325 | 107.86 | % | |||||||||||||||||||||||||
| Total revenue | 54,581 | 31,302 | 45,954 | 118,497 | 86,340 | 32,157 | 37.24 | % | |||||||||||||||||||||||||
| Provision for credit losses | 528 | — | 886 | 1,389 | — | 1,389 | n/m | ||||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||||||
| Salaries and employee benefits | 15,744 | 13,474 | 13,059 | 42,095 | 39,678 | 2,417 | 6.09 | % | |||||||||||||||||||||||||
| Occupancy expense | 1,906 | 2,055 | 1,763 | 5,595 | 6,428 | (833 | ) | (12.96 | )% | ||||||||||||||||||||||||
| Furniture and equipment | 620 | 754 | 626 | 2,007 | 2,326 | (319 | ) | (13.71 | )% | ||||||||||||||||||||||||
| Amortization of intangible assets | 658 | 666 | 658 | 1,973 | 2,086 | (113 | ) | (5.42 | )% | ||||||||||||||||||||||||
| Other expenses | 9,226 | 7,478 | 8,270 | 24,366 | 20,953 | 3,413 | 16.29 | % | |||||||||||||||||||||||||
| Total expenses | 28,154 | 24,427 | 24,376 | 76,036 | 71,471 | 4,565 | 6.39 | % | |||||||||||||||||||||||||
| Income (loss) before income tax, corporate allocation and noncontrolling interest | 25,899 | 6,875 | 20,692 | 41,072 | 14,869 | 26,203 | 176.23 | % | |||||||||||||||||||||||||
| Corporate allocation | (356 | ) | (208 | ) | (370 | ) | (1,119 | ) | (800 | ) | (319 | ) | 39.88 | % | |||||||||||||||||||
| (Loss) income before income tax provision and noncontrolling interest | 25,543 | 6,667 | 20,322 | 39,953 | 14,069 | 25,884 | 183.98 | % | |||||||||||||||||||||||||
| Provision for income tax (benefit) expense | 4,780 | 1,454 | 4,127 | 7,614 | 3,292 | 4,322 | 131.29 | % | |||||||||||||||||||||||||
| Net (loss) income | 20,763 | 5,213 | 16,195 | 32,339 | 10,777 | 21,562 | 200.07 | % | |||||||||||||||||||||||||
| Noncontrolling interest | (4,790 | ) | (1,496 | ) | (2,415 | ) | (7,996 | ) | (2,997 | ) | (4,999 | ) | 166.80 | % | |||||||||||||||||||
| Net (loss) income attributable to TowneBank | $ | 15,973 | $ | 3,717 | $ | 13,780 | $ | 24,343 | $ | 7,780 | $ | 16,563 | 212.89 | % | |||||||||||||||||||
| Efficiency ratio | 51.58 | % | 78.04 | % | 53.04 | % | 64.17 | % | 82.78 | % | (18.61 | )% | (22.48 | )% | |||||||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||||
| Insurance Segment Financial Information (unaudited) | ||||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | Increase/(Decrease) | ||||||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | 2020 over 2019 | |||||||||||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||||||||||
| Property and casualty | $ | 14,072 | $ | 13,481 | $ | 13,926 | $ | 40,784 | $ | 38,421 | $ | 2,363 | 6.15 | % | ||||||||||||||||||||
| Employee benefits | 3,825 | 3,629 | 3,791 | 11,534 | 10,968 | 566 | 5.16 | % | ||||||||||||||||||||||||||
| Travel insurance | 1,399 | 834 | 861 | 3,526 | 3,292 | 234 | 7.11 | % | ||||||||||||||||||||||||||
| Specialized benefit services | 165 | 166 | 157 | 489 | 499 | (10 | ) | (2.00 | )% | |||||||||||||||||||||||||
| Total commissions and fees | 19,461 | 18,110 | 18,735 | 56,333 | 53,180 | 3,153 | 5.93 | % | ||||||||||||||||||||||||||
| Contingency and bonus revenue | 1,112 | 1,431 | 2,009 | 5,144 | 4,910 | 234 | 4.77 | % | ||||||||||||||||||||||||||
| Other income * | 17,697 | 74 | 127 | 17,906 | 227 | 17,679 | 7,788.11 | % | ||||||||||||||||||||||||||
| Total revenue | 38,270 | 19,615 | 20,871 | 79,383 | 58,317 | 21,066 | 36.12 | % | ||||||||||||||||||||||||||
| Employee commission expense | 3,654 | 3,378 | 3,649 | 10,900 | 9,878 | 1,022 | 10.35 | % | ||||||||||||||||||||||||||
| Revenue, net of commission expense | 34,616 | 16,237 | 17,222 | 68,483 | 48,439 | 20,044 | 41.38 | % | ||||||||||||||||||||||||||
| Salaries and employee benefits | 9,129 | 8,784 | 8,658 | 27,136 | 26,263 | 873 | 3.32 | % | ||||||||||||||||||||||||||
| Occupancy expense | 661 | 689 | 652 | 1,972 | 1,978 | (6 | ) | (0.30 | )% | |||||||||||||||||||||||||
| Furniture and equipment | 203 | 272 | 223 | 644 | 765 | (121 | ) | (15.82 | )% | |||||||||||||||||||||||||
| Amortization of intangible assets | 1,130 | 1,128 | 1,129 | 3,388 | 3,332 | 56 | 1.68 | % | ||||||||||||||||||||||||||
| Other expenses | 1,060 | 2,110 | 1,419 | 3,836 | 5,906 | (2,070 | ) | (35.05 | )% | |||||||||||||||||||||||||
| Total operating expenses | 12,183 | 12,983 | 12,081 | 36,976 | 38,244 | (1,268 | ) | (3.32 | )% | |||||||||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 22,433 | 3,254 | 5,141 | 31,507 | 10,195 | 21,312 | 209.04 | % | ||||||||||||||||||||||||||
| Corporate allocation | (239 | ) | (176 | ) | (257 | ) | (772 | ) | (583 | ) | (189 | ) | 32.42 | % | ||||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 22,194 | 3,078 | 4,884 | 30,735 | 9,612 | 21,123 | 219.76 | % | ||||||||||||||||||||||||||
| Provision for income tax expense | 2,587 | 735 | 1,170 | 4,574 | 2,181 | 2,393 | 109.72 | % | ||||||||||||||||||||||||||
| Net income | 19,607 | 2,343 | 3,714 | 26,161 | 7,431 | 18,730 | 252.05 | % | ||||||||||||||||||||||||||
| Noncontrolling interest | (11,459 | ) | (245 | ) | (207 | ) | (12,095 | ) | (1,025 | ) | (11,070 | ) | 1,080.00 | % | ||||||||||||||||||||
| Net income attributable to TowneBank | $ | 8,148 | $ | 2,098 | $ | 3,507 | $ | 14,066 | $ | 6,406 | $ | 7,660 | 119.58 | % | ||||||||||||||||||||
| Provision for income taxes | 2,587 | 735 | 1,170 | 4,574 | 2,181 | 2,393 | 109.72 | % | ||||||||||||||||||||||||||
| Depreciation, amortization and interest expense | 1,285 | 1,325 | 1,291 | 3,875 | 3,943 | (68 | ) | (1.72 | )% | |||||||||||||||||||||||||
| EBITDA (non-GAAP) | $ | 12,020 | $ | 4,158 | $ | 5,968 | $ | 22,515 | $ | 12,530 | $ | 9,985 | 79.69 | % | ||||||||||||||||||||
| Efficiency ratio | 35.19 | % | 79.96 | % | 70.15 | % | 53.99 | % | 78.95 | % | $ | (0.25 | ) | (31.67 | )% | |||||||||||||||||||
| *Included in other income is the gross gain on the sale of Red Sky | $ | 17,626 | — | % | n/m | $ | 17,626 | — | % | n/m | ||||||||||||||||||||||||
| Efficiency ratio excluding gain | 71.71 | % | 79.96 | % | 70.15 | % | 72.71 | % | 78.95 | % | $ | (0.06 | ) | (7.60 | )% | |||||||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | June 30, | September 30, | September 30, | ||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | ||||||||||||||||||||
| Return on average assets (GAAP) | 0.89 | % | 1.26 | % | 0.97 | % | 0.91 | % | 1.17 | % | ||||||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.08 | % | 0.14 | % | 0.10 | % | 0.10 | % | 0.15 | % | ||||||||||||||
| Return on average tangible assets (non-GAAP) | 0.97 | % | 1.40 | % | 1.07 | % | 1.01 | % | 1.32 | % | ||||||||||||||
| Return on average equity (GAAP) | 7.85 | % | 9.22 | % | 8.18 | % | 7.48 | % | 8.54 | % | ||||||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.81 | % | 4.98 | % | 4.14 | % | 3.84 | % | 5.03 | % | ||||||||||||||
| Return on average tangible equity (non-GAAP) | 11.66 | % | 14.20 | % | 12.32 | % | 11.32 | % | 13.57 | % | ||||||||||||||
| Return on average common equity (GAAP) | 7.91 | % | 9.29 | % | 8.24 | % | 7.53 | % | 8.60 | % | ||||||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.88 | % | 5.07 | % | 4.20 | % | 3.91 | % | 5.13 | % | ||||||||||||||
| Return on average tangible common equity (non-GAAP) | 11.79 | % | 14.36 | % | 12.44 | % | 11.44 | % | 13.73 | % | ||||||||||||||
| Book value (GAAP) | $ | 23.83 | $ | 22.38 | $ | 23.50 | $ | 23.83 | $ | 21.95 | ||||||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (6.77 | ) | (6.94 | ) | (6.82 | ) | (6.77 | ) | (6.90 | ) | ||||||||||||||
| Tangible book value (non-GAAP) | $ | 17.06 | $ | 15.44 | $ | 16.68 | $ | 17.06 | $ | 15.05 | ||||||||||||||
| Efficiency ratio (GAAP) | 53.08 | % | 55.96 | % | 66.69 | % | 58.86 | % | 67.40 | % | ||||||||||||||
| Impact of excluding gain/loss on investments | (0.47 | )% | (1.03 | )% | 0.03 | % | (1.18 | )% | 0.13 | % | ||||||||||||||
| Efficiency ratio (non-GAAP) | 53.55 | % | 56.99 | % | 66.66 | % | 60.04 | % | 67.27 | % | ||||||||||||||
| Average assets (GAAP) | $ | 15,487,152 | $ | 11,845,282 | $ | 14,409,468 | $ | 13,987,474 | $ | 11,526,487 | ||||||||||||||
| Less: average goodwill | 446,725 | 442,919 | 446,725 | 446,762 | 442,890 | |||||||||||||||||||
| Less: average intangible assets | 47,513 | 57,327 | 50,352 | 50,373 | 60,333 | |||||||||||||||||||
| Average tangible assets (non-GAAP) | $ | 14,992,914 | $ | 11,345,036 | $ | 13,912,391 | $ | 13,490,339 | $ | 11,023,264 | ||||||||||||||
| Average equity (GAAP) | $ | 1,747,033 | $ | 1,620,070 | $ | 1,701,777 | $ | 1,704,993 | $ | 1,580,213 | ||||||||||||||
| Less: average goodwill | 446,725 | 442,919 | 446,725 | 446,762 | 442,890 | |||||||||||||||||||
| Less: average intangible assets | 47,513 | 57,327 | 50,352 | 50,373 | 60,333 | |||||||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,252,795 | $ | 1,119,824 | $ | 1,204,700 | $ | 1,207,858 | $ | 1,076,990 | ||||||||||||||
| Average common equity (GAAP) | $ | 1,732,881 | $ | 1,607,853 | $ | 1,689,603 | $ | 1,692,202 | 1,568,336 | |||||||||||||||
| Less: average goodwill | 446,725 | 442,919 | 446,725 | 446,762 | 442,890 | |||||||||||||||||||
| Less: average intangible assets | 47,513 | 57,327 | 50,352 | 50,373 | 60,333 | |||||||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,238,643 | $ | 1,107,607 | $ | 1,192,526 | $ | 1,195,067 | $ | 1,065,113 | ||||||||||||||
| Net Income (GAAP) | $ | 34,464 | $ | 37,659 | 34,605 | 95,453 | 103,707 | |||||||||||||||||
| Amortization of Intangibles, net of tax | 2,252 | 2,417 | 2,292 | 6,875 | 7,398 | |||||||||||||||||||
| Tangible Net Income (non-GAAP) | $ | 36,716 | $ | 40,076 | $ | 36,897 | $ | 102,328 | $ | 111,105 | ||||||||||||||
| Net Income (GAAP) | $ | 34,464 | $ | 37,659 | $ | 34,605 | $ | 95,453 | $ | 103,707 | ||||||||||||||
| Provision for credit losses | 31,598 | 1,508 | 26,945 | 65,559 | 5,770 | |||||||||||||||||||
| Provision for income tax | 7,841 | 7,684 | 7,464 | 21,492 | 24,810 | |||||||||||||||||||
| Pre-provision, pre-tax net revenues (non-GAAP) | $ | 73,903 | $ | 46,851 | $ | 69,014 | $ | 182,504 | $ | 134,287 | ||||||||||||||
| Total Revenue (GAAP) | $ | 192,135 | $ | 162,656 | $ | 145,879 | $ | 492,487 | $ | 424,272 | ||||||||||||||
| Net (gain)/loss on investment securities | (1,701 | ) | (2,930 | ) | 69 | (9,632 | ) | 845 | ||||||||||||||||
| Total Revenue for Efficiency calculation (non-GAAP) | $ | 190,434 | $ | 159,726 | $ | 145,948 | $ | 482,855 | $ | 425,117 | ||||||||||||||
