SUFFOLK, Va., Jan. 29, 2016 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (the “Bank”) (NASDAQ:TOWN) today reported financial results for the full year and the fourth quarter ended December 31, 2015.
Record Earnings for Full Year 2015
The Bank reported record annual earnings of $62.38 million for the year ended December 31, 2015, as compared to the $42.17 million reported in 2014, representing a 47.93% increase. Fully diluted earnings per share increased 3.39% to $1.22 per share compared to $1.18 per share for 2014. Earnings per share were affected in 2015 by the issuance of 15.55 million new common shares in conjunction with the acquisition of Franklin Financial Corporation (“Franklin”) on January 2, 2015.
The Bank’s quarterly dividend was increased to $0.12 per share beginning in the second quarter of 2015 resulting in total dividends of $0.47 per share for 2015, an increase of 9.3% over 2014. On an annualized basis, the current annual dividend rate is $0.48 per share.
“We are pleased to announce record annual earnings for the 16th consecutive year since our inception,” said G. Robert Aston, Jr., Chairman and Chief Executive Officer. “We finished 2015 with revenue growth of $55.26 million, or 22.79%, over 2014, while producing a return on average assets of 1.03% and a return on average tangible equity of 10.34%.”
“In December, we announced an agreement to acquire Chesapeake, Virginia based Monarch Financial Holdings, which we see as an exciting opportunity to continue our growth strategy while building a great community asset that will continue to help our communities grow and prosper. We anticipate that the acquisition will generate considerable operating synergies and will result in the only community bank in the top 50 largest MSAs in the United States with a No. 1 market share ranking,” added Aston.
The Company anticipates closing the transaction by the end of the second quarter of 2016, subject to customary closing conditions, including the receipt of regulatory approvals and the approval of each company's shareholders. Based on financials reported on September 30, 2015, the combined companies would have total assets of $7.3 billion, deposits of $5.8 billion and loans of $5.4 billion.
2015 Performance Highlights
- Total revenues were $297.73 million, an increase of $55.26 million, or 22.79%, compared to 2014
- Taxable equivalent net interest margin was 3.45%, including accretion of 0.09%, compared to 3.38% for 2014
- Residential mortgage banking income increased $7.03 million, or 25.87%, on production volume of $1.57 billion
- Insurance segment total revenue increased 12.47% to $47.54 million
- Loan growth continued as total loans held for investment increased $955.00 million, or 26.79%, from December 31, 2014 with organic growth of $530.18 million, an increase of 14.87%, including $172.67 million of new loan originations in Richmond
- Total deposits were $4.91 billion, an increase of $1.07 billion, or 27.75%, from 2014, including organic growth of $402.51 million, or 10.46%
- Noninterest bearing deposits increased by 13.79%, to $1.39 billion
- Average interest-bearing deposit costs were 0.57%, up five basis points
- Noninterest bearing deposits were 28.35% of total deposits compared to 31.83% at December 31, 2014
- Total cost of deposits increased to 0.40% from 0.36% at December 31, 2014, reflective of a greater mix of savings deposits acquired in the Franklin merger
- Asset quality showed continued strength
- Nonperforming assets were $43.09 million, or 0.68% of total assets compared to 0.84% at December 31, 2014
- Nonperforming loans were $8.67 million or 0.19% of period end loans
- Foreclosed property decreased to $34.42 million
- Strategic acquisitions
- On January 2, 2015, completed the acquisition of Franklin and its wholly owned subsidiary, Franklin Federal Savings Bank, based in Richmond, Virginia
- On February 1, 2015, acquired two independent insurance agencies, Lackey-Saunders Co., Inc. and Gloucester-Southside Insurance Agency, Inc.
- On September 1, 2015, acquired Total Insurance Planning, LLC, an independent insurance agency
- On October 1, 2015, acquired two independent insurance agencies, B.H. Baird Insurance Agency and Invincia Corporation
- On December 17, 2015, TowneBank announced the signing of a definitive merger agreement to acquire Monarch Financial Holdings, Inc. ("Monarch"), and its wholly-owned bank subsidiary, Monarch Bank, headquartered in Chesapeake, Virginia
- New banking center
- On May 14, 2015, opened a new banking office in the Ghent area in Norfolk, Virginia
- At December 31, 2015, the Ghent banking office had deposits of $54.79 million
- The Bank remained well-capitalized
- Common equity tier 1 capital ratio of 12.59%
- Tier 1 leverage capital ratio of 10.67%
- Tier 1 risk-based capital ratio of 12.70%
- Total risk-based capital ratio of 13.44%
- Tangible book value increased to $12.21 from $11.09 at December 31, 2014
Fourth Quarter 2015 Earnings Compared to Fourth Quarter 2014
Net income for the fourth quarter was $12.47 million versus $7.23 million in 2014, reflecting strong growth in net interest income as compared to the prior year quarter. The fourth quarter of 2014 results included non-recurring, net-of-tax charges of $4.23 million in severance and acquisition-related expenses. Fully diluted earnings per share, including the impact of the non-recurring charges, was $0.24 compared to $0.20 in fourth quarter 2014.
Performance Highlights
- Total revenues were $71.41 million, an increase of $11.87 million, or 19.94%, compared to the fourth quarter of 2014
- Taxable equivalent net interest margin was 3.36%, including accretion of 0.09%, compared to 3.35% in the fourth quarter of 2014
- Residential mortgage banking income increased 11.22% from the fourth quarter of 2014 to $7.25 million on production volume of $353.52 million
- Insurance commissions increased 16.20% to $9.00 million
- Asset quality showed continued improvement
- Net recoveries were 0.01% annualized of average loans versus net charge-offs of 0.03% in fourth quarter 2014
Net Interest Income
Net interest income increased to $46.33 million, a $9.19 million, or 24.75%, increase from the fourth quarter of 2014. The primary driver of the increase was significant growth in earning assets from the Franklin merger along with the restructuring of the Franklin balance sheet. Average earning assets increased $1.19 billion, or 25.82%, while tax-equivalent net interest margin increased slightly to 3.36% in the current quarter from 3.35% in fourth quarter 2014. Accretion income added $1.22 million, or 9 basis points, to margin in the current quarter.
Noninterest Income
Noninterest income, excluding gains or losses on investment securities, was $25.08 million for the fourth quarter of 2015, an increase of $2.68 million, or 11.95%, from the fourth quarter of 2014. A large portion of the increase from the comparative period in 2014 is attributable to insurance commissions, which increased $1.25 million, or 16.20%, primarily due to the acquisition of five insurance agencies in 2015. Additionally, residential mortgage banking income increased $0.73 million, or 11.22%, from the fourth quarter of 2014 primarily due to improved pricing and increased production. Mortgage production was $353.52 million for the fourth quarter of 2015, which was $32.21 million higher than the fourth quarter of 2014. Also contributing to the increase, other income was higher by $0.88 million primarily due to a rise in BOLI income of $0.72 million.
Noninterest Expense
Noninterest expense increased by $3.78 million, or 7.73%, from the fourth quarter of 2014. Driving the increase were operating expenses in our new Richmond region of $2.89 million and operating expenses of $1.85 million related to insurance agencies acquired in 2015. Also contributing to the increase were company-wide annual salary adjustments effective July 1, 2015, combined with increases in employee profit sharing and incentives related to the achievement of the Bank's financial plan for 2015. Fourth quarter 2014 included severance costs of $3.22 million, acquisition-related expenses of $3.10 million, and a reversal of $0.90 million in previously accrued employee incentive compensation unearned for the full 2014 year.
Fourth Quarter 2015 Earnings Compared to Third Quarter 2015
Net income for the fourth quarter was $12.47 million, or $0.24 per diluted share, versus $17.57 million, or $0.34 per diluted share, in third quarter 2015, reflecting the seasonality in our Insurance and Realty segments. The seasonal decline in noninterest revenue was partially offset by an increase in net interest income as strong loan growth continued during the quarter.
Performance Highlights
- Total revenues were $71.41 million compared to $75.97 million in the third quarter of 2015
- Taxable equivalent net interest margin was 3.36%, including accretion of 0.09%, compared to 3.40% in the third quarter of 2015
- Noninterest income, excluding gains on investment securities, decreased $4.49 million due to seasonality in our Insurance and Realty segments
- Total loans held for investment increased $152.35 million, or 3.49%, from September 30, 2015
- Total costs of deposits were 0.42% compared to 0.41% for third quarter 2015
- Asset quality showed continued improvement
- Nonperforming assets were $43.09 million, a decrease of 10.20% from third quarter 2015
- Net recoveries were 0.01% annualized of average loans versus net charge-offs of 0.01% in third quarter 2015
Net Interest Income
On a linked quarter basis, net interest income increased $0.66 million or 1.45%, in fourth quarter 2015 versus the third quarter, while tax-equivalent net interest margin was 3.36% versus 3.40% for the third quarter of 2015. Accretion income added $1.22 million, or 9 basis points, to margin in the current quarter, as compared to $0.68 million, or 6 basis points, in the linked quarter.
Noninterest Income
In comparison to the third quarter of 2015, noninterest income, excluding gains or losses on investment securities, decreased $4.49 million, or 15.18%. Residential mortgage banking income decreased by $1.01 million, or 12.19%, from the third quarter of 2015 primarily due to a seasonal decrease in mortgage production of $81.31 million. A seasonal decrease in policy renewals led to the decrease in net insurance commissions, which was partially offset by commissions earned by insurance agencies acquired in fourth quarter 2015. Decreases in real estate brokerage and property management income from the linked quarter also reflected the seasonal nature of those businesses.
Noninterest Expense
Noninterest expense increased by $2.84 million, or 5.68%, from the third quarter of 2015. The increase was driven by additional operating expenses of $1.43 million due to our two insurance acquisitions in fourth quarter 2015 and one in September 2015, including nonrecurring acquisition-related costs of $0.34 million. Additionally, employee salary and benefit costs increased related to the achievement of the Bank's financial plan for 2015.
| Noninterest Income | % Change | ||||||||||||||||
| Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | |||||||||||||
| (dollars in thousands) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | ||||||||||||
| Residential mortgage banking income, net | $ | 7,255 | $ | 6,523 | $ | 8,262 | 11.22 | % | (12.19 | )% | |||||||
| Real estate brokerage and property management, net | 2,438 | 2,450 | 5,349 | (0.49 | )% | (54.42 | )% | ||||||||||
| Insurance commissions and other title fees and income, net | 8,997 | 7,743 | 9,710 | 16.20 | % | (7.34 | )% | ||||||||||
| Service charges on deposit accounts | 2,254 | 2,288 | 2,388 | (1.49 | )% | (5.61 | )% | ||||||||||
| Credit card merchant fees, net | 767 | 911 | 823 | (15.81 | )% | (6.80 | )% | ||||||||||
| Other income | 3,368 | 2,486 | 3,036 | 35.48 | % | 10.94 | % | ||||||||||
| Subtotal before gain on investment securities | 25,079 | 22,401 | 29,568 | 11.95 | % | (15.18 | )% | ||||||||||
| Net gain on investment securities | — | — | 736 | — | % | (100.00 | )% | ||||||||||
| Total noninterest income | $ | 25,079 | $ | 22,401 | $ | 30,304 | 11.95 | % | (17.24 | )% | |||||||
| Noninterest Expense | % Change | ||||||||||||||||
| Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | |||||||||||||
| (dollars in thousands) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | ||||||||||||
| Salaries and benefits | $ | 30,826 | $ | 25,205 | $ | 28,910 | 22.30 | % | 6.63 | % | |||||||
| Occupancy expense | 5,156 | 4,676 | 4,703 | 10.27 | % | 9.63 | % | ||||||||||
| Furniture and equipment | 2,390 | 2,103 | 2,211 | 13.65 | % | 8.10 | % | ||||||||||
| Acquisition-related expenses | 285 | 3,103 | 243 | (90.82 | )% | 17.28 | % | ||||||||||
| Other expenses | 14,086 | 13,872 | 13,839 | 1.54 | % | 1.78 | % | ||||||||||
| Total noninterest expense | $ | 52,743 | $ | 48,959 | $ | 49,906 | 7.73 | % | 5.68 | % | |||||||
Segment Results
| $ Change | ||||||||||||||||||||
| (in thousands) | Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | |||||||||||||||
| Segment Net Income (Loss) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | |||||||||||||||
| Banking | $ | 12,219 | $ | 7,193 | $ | 14,148 | $ | 5,026 | $ | (1,929 | ) | |||||||||
| Realty | 6 | (234 | ) | 2,345 | $ | 240 | $ | (2,339 | ) | |||||||||||
| Insurance | 241 | 276 | 1,073 | $ | (35 | ) | $ | (832 | ) | |||||||||||
| Total net income | $ | 12,466 | $ | 7,235 | $ | 17,566 | $ | 5,231 | $ | (5,100 | ) | |||||||||
Fourth Quarter 2015 Compared to Fourth Quarter 2014
Banking
Net income for the three months ended December 31, 2015 for the Banking segment was $12.22 million, increasing $5.03 million, or 69.87%, from comparative 2014. The increase in earnings was driven by an increase in net interest income of $9.01 million, primarily due to the increase in earning assets acquired in the Franklin merger and 2015 growth in Hampton Roads. Also contributing to the variance is the decrease in fourth quarter 2014 earnings due to severance costs and acquisition-related expenses from the merger with Franklin. These factors were partially offset by an increase in the provision for loan losses and an increase in noninterest expenses.
Realty
For the three months ended December 31, 2015, the Realty segment had $0.01 million of income, an improvement of $0.24 million or 102.56% compared to the loss in fourth quarter 2014. Contributing to the improvement was an increase in noninterest income of $0.98 million as residential mortgage banking income increased by $0.81 million and net interest income increased by $0.18 million as higher production volume led to higher average mortgage loans held for sale. These improvements were offset by an increase in noninterest expense of $1.11 million primarily related to employee expenses, which increased due to the improved performance of the segment businesses.
Insurance
The Insurance segment had net income of $0.24 million for the three months ended December 31, 2015, a decrease of $0.04 million compared to fourth quarter 2014. The decrease in net income was driven by insurance agency acquisitions in the third and fourth quarters of 2015, which resulted in an additional $1.51 million of noninterest expenses, including acquisition-related expenses of $0.34 million, as compared to additional commissions and fee revenue of $0.96 million, as policy renewals are seasonally lower in the fourth quarter of the year.
Fourth Quarter 2015 Compared to Third Quarter 2015
Banking
The decrease in earnings of $1.93 million, or 13.63% from the third quarter of 2015 was driven by a $1.83 million increase in noninterest expenses related to a performance based staff incentives, increased marketing expenses, and nonrecurring acquisition-related expenses of $0.60 million from the announced acquisition of Monarch. Also contributing was an increase of $0.72 million in the provision for loan losses related to strong loan growth in the quarter.
Realty
Net income in the Realty segment decreased by $2.34 million from the linked quarter ended September 30, 2015 due to due to historically seasonal decreases in the Bank's mortgage, real estate brokerage, and resort property management businesses.
Insurance
Net income decreased $0.83 million from the third quarter of 2015 due to the historically seasonal decrease in fourth quarter policy renewals combined with the previously discussed effect of the insurance agency acquisitions in the third and fourth quarters of 2015.
Balance Sheet
At December 31, 2015, total Bank assets reached $6.30 billion, an increase of $1.31 billion, or 26.37%, over December 31, 2014.
Loans
| % Change | |||||||||||||||||
| Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | |||||||||||||
| (dollars in thousands) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | ||||||||||||
| Construction and land development | $ | 598,875 | $ | 452,481 | $ | 554,753 | 32.35 | % | 7.95 | % | |||||||
| Commercial real estate - investment related properties | 1,004,393 | 695,526 | 1,020,860 | 44.41 | % | (1.61 | )% | ||||||||||
| Commercial real estate - owner occupied | 780,000 | 751,552 | 775,290 | 3.79 | % | 0.61 | % | ||||||||||
| Multifamily real estate | 167,371 | 51,472 | 138,954 | 225.17 | % | 20.45 | % | ||||||||||
| 1-4 family residential real estate | 973,331 | 837,370 | 965,559 | 16.24 | % | 0.80 | % | ||||||||||
| Commercial and industrial business loans | 857,036 | 700,623 | 790,614 | 22.32 | % | 8.40 | % | ||||||||||
| Consumer loans and other | 138,387 | 75,365 | 121,009 | 83.62 | % | 14.36 | % | ||||||||||
| Total | $ | 4,519,393 | $ | 3,564,389 | $ | 4,367,039 | 26.79 | % | 3.49 | % | |||||||
The Bank’s loan portfolio ended the period at $4.52 billion representing an increase of 26.79%, or $955.00 million, from December 31, 2014, and an increase of $152.35 million, or 13.65% on an annualized basis, from September 30, 2015. Organic growth in 2015 was $530.18 million, or 14.87% on an annualized basis. Included in this growth were new originations of $172.67 million in our Richmond market.
Deposits
| % Change | |||||||||||||||||
| Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | |||||||||||||
| (dollars in thousands) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | ||||||||||||
| Noninterest-bearing demand | $ | 1,393,264 | $ | 1,224,466 | $ | 1,445,978 | 13.79 | % | (3.65 | )% | |||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 1,824,226 | 1,365,183 | 1,676,623 | 33.63 | % | 8.80 | % | ||||||||||
| Savings | 300,408 | 301,033 | 295,952 | (0.21 | )% | 1.51 | % | ||||||||||
| Certificates of deposits | 1,396,129 | 955,920 | 1,369,325 | 46.05 | % | 1.96 | % | ||||||||||
| Total | $ | 4,914,027 | $ | 3,846,602 | $ | 4,787,878 | 27.75 | % | 2.63 | % | |||||||
The Bank continued to experience solid deposit growth with total deposits increasing to $4.91 billion, up $1.07 billion, or 27.75%, from December 31, 2014. The increase was mostly due to the deposits acquired in the Franklin merger combined with Hampton Roads market growth. Organic growth was $402.51 million, or 10.46%, including growth in the Richmond market of $46.60 million since the date of the merger. The Bank saw continued growth in noninterest-bearing demand deposits, which ended the year at $1.39 billion, a 13.79% increase from the prior comparative period. Noninterest-bearing deposits represented 28.35% of total deposits at December 31, 2015.
Capital Ratios
| Q4 | Q4 | Q3 | |||||||
| 2015 | 2014 | 2015 | |||||||
| Common Equity Tier 1 (a) | 12.59 | % | N/A | 12.52 | % | ||||
| Tier 1 (a) | 12.70 | % | 12.73 | % | 12.62 | % | |||
| Total (a) | 13.44 | % | 13.67 | % | 13.35 | % | |||
| Tier 1 Leverage Ratio (a) | 10.67 | % | 9.94 | % | 10.93 | % | |||
| (a) Basel III rules became effective January 1, 2015, with transitional provisions. All prior year data is based on Basel I rules | |||||||||
The Bank’s total equity at December 31, 2015 rose to $820.19 million, an increase of $201.92 million, or 32.66%, from December 31, 2014. Common equity increased 52.29%, or $278.43 million, as the Bank issued common stock in the amount of $240.27 million for acquisitions and redeemed in full its $76.46 million of outstanding Non-Cumulative Convertible Preferred Stock, Series C issued to the U.S. Treasury under the Small Business Lending Fund during first quarter 2015. Total risk-based capital remained strong as total risk-based capital, Tier 1 capital, Tier 1 leverage ratios, and common equity Tier 1 capital ratios were 13.44%, 12.70%, 10.67%, 12.59%, respectively. All ratios exceed the current regulatory standards for well capitalized status.
Asset Quality
| (in thousands) | 12/31/2015 | 9/30/2015 | 6/30/2015 | 3/31/2015 | 12/31/2014 | ||||||||||||||
| Nonperforming loans | $ | 8,670 | $ | 8,477 | $ | 7,455 | $ | 7,045 | $ | 6,741 | |||||||||
| Foreclosed property | 34,420 | 39,509 | 46,154 | 51,698 | 35,116 | ||||||||||||||
| Total nonperforming assets | $ | 43,090 | $ | 47,986 | $ | 53,609 | $ | 58,743 | $ | 41,857 | |||||||||
| Quarterly net loans charged off (recovered) | $ | (156 | ) | $ | 69 | $ | 339 | $ | 333 | $ | 261 | ||||||||
| Year-to-date net loans charged off | $ | 585 | $ | 741 | $ | 672 | $ | 333 | $ | 2,955 | |||||||||
| Change | ||||||||||||||||||||
| Q4 | Q4 | Q3 | Q4 15 vs. | Q4 15 vs. | ||||||||||||||||
| (dollars in thousands) | 2015 | 2014 | 2015 | Q4 14 | Q3 15 | |||||||||||||||
| Total loans 90 days past due and still accruing | $ | 424 | $ | 12 | $ | 31 | $ | 412 | $ | 393 | ||||||||||
| Total loans 30-89 days past due | $ | 7,477 | $ | 13,436 | $ | 5,864 | $ | (5,959 | ) | $ | 1,613 | |||||||||
| Allowance for loan losses | $ | 38,359 | $ | 35,917 | $ | 37,351 | $ | 2,442 | $ | 1,008 | ||||||||||
| Total performing TDRs | $ | 29,114 | $ | 38,418 | $ | 29,920 | $ | (9,304 | ) | $ | (806 | ) | ||||||||
| Nonperforming loans to period end loans | 0.19 | % | 0.19 | % | 0.19 | % | — | — | ||||||||||||
| Nonperforming assets to period end assets | 0.68 | % | 0.84 | % | 0.78 | % | (0.16 | ) | (0.10 | ) | ||||||||||
| Allowance for loan losses to period end loans | 0.85 | % | 1.01 | % | 0.86 | % | (0.16 | ) | (0.01 | ) | ||||||||||
| Allowance for loan losses (originated) to originated period end loans | 0.94 | % | 1.02 | % | 0.96 | % | (0.08 | ) | (0.02 | ) | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | (0.01 | )% | 0.03 | % | 0.01 | % | (0.04 | ) | (0.02 | ) | ||||||||||
| Ratio of allowance for loan losses to nonperforming loans | 4.42x | 5.33x | 4.41x | (0.91 | )x | .01 | x | |||||||||||||
Continued improvements in credit quality contributed to the Bank's financial results as net recoveries were $0.16 million in the fourth quarter of 2015 compared to net charge-offs of $0.26 million in the fourth quarter of 2014 and $0.07 million in the linked quarter. Total nonperforming assets were $43.09 million, or 0.68%, of Bank assets at December 31, 2015, as compared to $41.86 million, or 0.84%, at December 31, 2014, and $47.99 million, or 0.78%, at September 30, 2015. The allowance for loan losses was $38.36 million, increased from $35.92 million at December 31, 2014 and $37.35 million at September 30, 2015.
About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 37 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags Head in North Carolina. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Beach Properties of Hilton Head. 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 $6.30 billion as of December 31, 2015, 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 Bank’s management uses these non-GAAP financial measures in their analysis of the Bank's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Since the presentation of these GAAP performance measures and their impact differ between companies, management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Bank’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:
Statements made in this release, other than those concerning historical financial information, may be considered forward-looking statements, which speak only as of the date of this release and are based on current expectations and involve a number of assumptions. These include statements as to the anticipated benefits of the merger with Monarch, including future financial and operating results, cost savings and enhanced revenues that may be realized from the merger as well as other statements of expectations regarding the merger and any other statements regarding future results or expectations. 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. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. Factors which could have a material effect on the operations and future prospects of TowneBank, and the resulting company after the merger with Monarch, include but are not limited to: the businesses of TowneBank and Monarch may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the merger or other pending or recently completed acquisitions may not be fully realized or realized within the expected timeframe; revenues following the merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger; the ability to obtain required regulatory and stockholder approvals, and the ability to complete the merger on the expected timeframe may be more difficult, time-consuming or costly than expected; 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; the quality and composition of the loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market areas; TowneBank’s implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and 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 (the “FDIC”). TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information About the Merger and Where to Find It:
In connection with the proposed merger, TowneBank will file with the FDIC a preliminary proxy statement/prospectus and Monarch will file with the Securities and Exchange Commission (the “SEC”) a preliminary proxy statement. TowneBank and Monarch will each deliver a definitive joint proxy statement/prospectus to their respective stockholders seeking approval of the merger and related matters. In addition, each of TowneBank and Monarch may file other relevant documents concerning the proposed merger with the FDIC and SEC.
Investors and stockholders of both companies are urged to read the definitive joint proxy statement/prospectus when it becomes available and any other relevant documents to be filed with the FDIC and SEC in connection with the proposed merger because they will contain important information about TowneBank, Monarch and the proposed transaction. Investors and stockholders may obtain free copies of certain of these documents through the website maintained by the SEC at http://www.sec.gov. Free copies of the definitive joint proxy statement/prospectus, when available, also may be obtained by directing a request by telephone or mail to TowneBank, 6001 Harbour View Boulevard, Suffolk, Virginia 23425, Attention: Investor Relations (telephone: (757) 638-6794), or Monarch Financial Holdings, Inc., 1435 Crossways Boulevard, Suite 301, Chesapeake, Virginia 23320, Attention: Investor Relations (telephone: (757) 389-5112), or by accessing TowneBank’s website at https://townebank.com under “Investor Relations” or Monarch’s website at https://www.monarchbank.com under “Investor Relations.” The information on TowneBank’s and Monarch’s websites is not, and shall not be deemed to be, a part of this release or incorporated into other filings either company makes with the FDIC or SEC.
TowneBank and Monarch, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the stockholders of TowneBank and/or Monarch in connection with the merger. Information about the directors and executive officers of TowneBank is set forth in the proxy statement for TowneBank’s 2015 annual meeting of stockholders filed with the FDIC on April 17, 2015. Information about the directors and executive officers of Monarch is set forth in the proxy statement for Monarch’s 2015 annual meeting of stockholders filed with the SEC on April 2, 2015. Additional information regarding the interests of these participants and other persons who may be deemed participants in the merger may be obtained by reading the definitive joint proxy statement/prospectus regarding the merger when it becomes available.
This release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
| Selected Financial Highlights (unaudited) | ||||||||||||||
| TOWNEBANK | ||||||||||||||
| December 31, 2015 | ||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| Increase/ | % Increase/ | |||||||||||||
| Three Months Ended December 31, | 2015 | 2014 | (Decrease) | (Decrease) | ||||||||||
| Results of Operations: | ||||||||||||||
| Net interest income | $ | 46,331 | $ | 37,139 | $ | 9,192 | 24.75 | % | ||||||
| Noninterest income (1) | 25,079 | 22,401 | 2,678 | 11.95 | % | |||||||||
| Gain (loss) on investment securities | — | — | — | — | % | |||||||||
| Total Revenue | 71,410 | 59,540 | 11,870 | 19.94 | % | |||||||||
| Noninterest expenses | 52,743 | 48,959 | 3,784 | 7.73 | % | |||||||||
| Provision for loan losses | 852 | (1 | ) | 853 | N/M | |||||||||
| Income before income tax and noncontrolling interest | 17,815 | 10,582 | 7,233 | 68.35 | % | |||||||||
| Provision for income tax expense | 4,846 | 2,798 | 2,048 | 73.20 | % | |||||||||
| Net income | 12,969 | 7,784 | 5,185 | 66.61 | % | |||||||||
| Net income attributable to noncontrolling interest | (503 | ) | (549 | ) | 46 | (8.38 | )% | |||||||
| Net income attributable to TowneBank | 12,466 | 7,235 | 5,231 | 72.30 | % | |||||||||
| Preferred stock dividends | — | 191 | (191 | ) | (100.00 | )% | ||||||||
| Net income available to common shareholders | 12,466 | 7,044 | 5,422 | 76.97 | % | |||||||||
| Net income per common share - basic (2) | 0.24 | 0.20 | 0.04 | 20.00 | % | |||||||||
| Net income per common share - diluted (2) | 0.24 | 0.20 | 0.04 | 20.00 | % | |||||||||
| Period End Data: | ||||||||||||||
| Total assets | $ | 6,296,574 | $ | 4,982,485 | $ | 1,314,089 | 26.37 | % | ||||||
| Total assets - tangible | 6,115,579 | 4,846,816 | 1,268,763 | 26.18 | % | |||||||||
| Earning assets (2) | 5,827,888 | 4,610,142 | 1,217,746 | 26.41 | % | |||||||||
| Loans (net of unearned income) | 4,519,393 | 3,564,389 | 955,004 | 26.79 | % | |||||||||
| Allowance for loan losses | 38,359 | 35,917 | 2,442 | 6.80 | % | |||||||||
| Goodwill and other intangibles | 180,995 | 135,668 | 45,327 | 33.41 | % | |||||||||
| Nonperforming assets | 43,091 | 41,857 | 1,234 | 2.95 | % | |||||||||
| Noninterest bearing deposits | 1,393,264 | 1,224,466 | 168,798 | 13.79 | % | |||||||||
| Interest bearing deposits | 3,520,763 | 2,622,136 | 898,627 | 34.27 | % | |||||||||
| Total deposits | 4,914,027 | 3,846,602 | 1,067,425 | 27.75 | % | |||||||||
| Total equity | 820,194 | 618,276 | 201,918 | 32.66 | % | |||||||||
| Total equity - tangible | 639,199 | 482,608 | 156,591 | 32.45 | % | |||||||||
| Common equity | 810,921 | 532,487 | 278,434 | 52.29 | % | |||||||||
| Common equity - tangible | 629,925 | 396,819 | 233,106 | 58.74 | % | |||||||||
| Book value per common share (2) | 15.71 | 14.88 | 0.83 | 5.58 | % | |||||||||
| Book value per common share - tangible (2) | 12.21 | 11.09 | 1.12 | 10.10 | % | |||||||||
| Daily Average Balances: | ||||||||||||||
| Total assets | $ | 6,305,571 | $ | 5,005,112 | $ | 1,300,459 | 25.98 | % | ||||||
| Total assets - tangible | 6,120,799 | 4,868,868 | 1,251,931 | 25.71 | % | |||||||||
| Earning assets (2) | 5,800,907 | 4,610,309 | 1,190,598 | 25.82 | % | |||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 4,426,387 | 3,526,859 | 899,528 | 25.51 | % | |||||||||
| Allowance for loan losses | 37,918 | 36,296 | 1,622 | 4.47 | % | |||||||||
| Goodwill and other intangibles | 184,773 | 136,243 | 48,530 | 35.62 | % | |||||||||
| Noninterest bearing deposits | 1,420,047 | 1,247,712 | 172,335 | 13.81 | % | |||||||||
| Interest bearing deposits | 3,458,597 | 2,616,976 | 841,621 | 32.16 | % | |||||||||
| Total deposits | 4,878,644 | 3,864,688 | 1,013,956 | 26.24 | % | |||||||||
| Total equity | 823,627 | 621,579 | 202,048 | 32.51 | % | |||||||||
| Total equity - tangible | 638,855 | 485,335 | 153,520 | 31.63 | % | |||||||||
| Common equity | 814,894 | 536,091 | 278,803 | 52.01 | % | |||||||||
| Common equity - tangible | 630,121 | 399,848 | 230,273 | 57.59 | % | |||||||||
| Key Ratios: | ||||||||||||||
| Return on average assets | 0.78 | % | 0.57 | % | 0.21 | % | 36.84 | % | ||||||
| Return on average assets - tangible | 0.85 | % | 0.63 | % | 0.22 | % | 34.92 | % | ||||||
| Return on average equity | 6.00 | % | 4.62 | % | 1.38 | % | 29.87 | % | ||||||
| Return on average equity - tangible | 8.11 | % | 6.35 | % | 1.76 | % | 27.72 | % | ||||||
| Return on average common equity | 6.07 | % | 5.21 | % | 0.86 | % | 16.51 | % | ||||||
| Return on average common equity - tangible | 8.22 | % | 7.52 | % | 0.70 | % | 9.31 | % | ||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.36 | % | 3.35 | % | 0.01 | % | 0.30 | % | ||||||
| Net interest margin (2) | 3.27 | % | 3.26 | % | 0.01 | % | 0.31 | % | ||||||
| Average earning assets/total average assets | 92.00 | % | 92.11 | % | (0.11 | )% | (0.12 | )% | ||||||
| Average loans/average deposits | 90.73 | % | 91.26 | % | (0.53 | )% | (0.58 | )% | ||||||
| Average noninterest deposits/total average deposits | 29.11 | % | 32.28 | % | (3.17 | )% | (9.82 | )% | ||||||
| Allowance for loan losses/period end loans | 0.85 | % | 1.01 | % | (0.16 | )% | (15.84 | )% | ||||||
| Nonperforming assets to period end assets | 0.68 | % | 0.84 | % | (0.16 | )% | (19.05 | )% | ||||||
| Period end equity/period end total assets | 13.03 | % | 12.41 | % | 0.62 | % | 5.00 | % | ||||||
| Efficiency ratio (1) | 73.86 | % | 82.23 | % | (8.37 | )% | (10.18 | )% | ||||||
| (1) Excludes gain (loss) on investment securities | ||||||||||||||
| (2) Includes bank-owned life insurance | ||||||||||||||
| (3) Presented on a tax-equivalent basis | ||||||||||||||
| Selected Financial Highlights (unaudited) | ||||||||||||||
| TOWNEBANK | ||||||||||||||
| December 31, 2015 | ||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| Increase/ | % Increase/ | |||||||||||||
| Twelve Months Ended December 31, | 2015 | 2014 | (Decrease) | (Decrease) | ||||||||||
| Results of Operations: | ||||||||||||||
| Net interest income | $ | 180,442 | $ | 145,736 | $ | 34,706 | 23.81 | % | ||||||
| Noninterest income (1) | 116,379 | 96,744 | 19,635 | 20.30 | % | |||||||||
| Gain (loss) on investment securities | 904 | (15 | ) | 919 | N/M | |||||||||
| Total Revenue | 297,725 | 242,465 | 55,260 | 22.79 | % | |||||||||
| Noninterest expenses | 202,157 | 178,864 | 23,293 | 13.02 | % | |||||||||
| Provision for loan losses | 3,027 | 492 | 2,535 | 515.24 | % | |||||||||
| Income before income tax and noncontrolling interest | 92,541 | 63,109 | 29,432 | 46.64 | % | |||||||||
| Provision for income tax expense | 26,876 | 18,179 | 8,697 | 47.84 | % | |||||||||
| Net income | 65,665 | 44,930 | 20,735 | 46.15 | % | |||||||||
| Net income attributable to noncontrolling interest | (3,283 | ) | (2,761 | ) | (522 | ) | 18.91 | % | ||||||
| Net income attributable to TowneBank | 62,382 | 42,169 | 20,213 | 47.93 | % | |||||||||
| Preferred stock dividends | 13 | 765 | (752 | ) | (98.30 | )% | ||||||||
| Net income available to common shareholders | 62,369 | 41,404 | 20,965 | 50.64 | % | |||||||||
| Net income per common share - basic | 1.22 | 1.18 | 0.04 | 3.39 | % | |||||||||
| Net income per common share - diluted | 1.22 | 1.18 | 0.04 | 3.39 | % | |||||||||
| Period End Data: | ||||||||||||||
| Total assets | $ | 6,296,574 | $ | 4,982,485 | $ | 1,314,089 | 26.37 | % | ||||||
| Total assets - tangible | 6,115,579 | 4,846,816 | 1,268,763 | 26.18 | % | |||||||||
| Earning assets (2) | 5,827,888 | 4,610,142 | 1,217,746 | 26.41 | % | |||||||||
| Loans (net of unearned income) | 4,519,393 | 3,564,389 | 955,004 | 26.79 | % | |||||||||
| Allowance for loan losses | 38,359 | 35,917 | 2,442 | 6.80 | % | |||||||||
| Goodwill and other intangibles | 180,995 | 135,668 | 45,327 | 33.41 | % | |||||||||
| Nonperforming assets | 43,091 | 41,857 | 1,234 | 2.95 | % | |||||||||
| Noninterest bearing deposits | 1,393,264 | 1,224,466 | 168,798 | 13.79 | % | |||||||||
| Interest bearing deposits | 3,520,763 | 2,622,136 | 898,627 | 34.27 | % | |||||||||
| Total deposits | 4,914,027 | 3,846,602 | 1,067,425 | 27.75 | % | |||||||||
| Total equity | 820,194 | 618,276 | 201,918 | 32.66 | % | |||||||||
| Total equity - tangible | 639,199 | 482,608 | 156,591 | 32.45 | % | |||||||||
| Common equity | 810,921 | 532,487 | 278,434 | 52.29 | % | |||||||||
| Common equity - tangible | 629,925 | 396,819 | 233,106 | 58.74 | % | |||||||||
| Book value per common share | 15.71 | 14.88 | 0.83 | 5.58 | % | |||||||||
| Book value per common share - tangible | 12.21 | 11.09 | 1.12 | 10.10 | % | |||||||||
| Daily Average Balances: | ||||||||||||||
| Total assets | $ | 6,039,418 | $ | 4,866,584 | $ | 1,172,834 | 24.10 | % | ||||||
| Total assets - tangible | 5,858,762 | 4,738,306 | 1,120,456 | 23.65 | % | |||||||||
| Earning assets (2) | 5,528,362 | 4,472,117 | 1,056,245 | 23.62 | % | |||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 4,239,887 | 3,450,730 | 789,157 | 22.87 | % | |||||||||
| Allowance for loan losses | 37,194 | 37,168 | 26 | 0.07 | % | |||||||||
| Goodwill and other intangibles | 180,656 | 128,278 | 52,378 | 40.83 | % | |||||||||
| Noninterest bearing deposits | 1,343,360 | 1,158,888 | 184,472 | 15.92 | % | |||||||||
| Interest bearing deposits | 3,324,533 | 2,590,162 | 734,371 | 28.35 | % | |||||||||
| Total deposits | 4,667,893 | 3,749,050 | 918,843 | 24.51 | % | |||||||||
| Total equity | 804,744 | 606,777 | 197,967 | 32.63 | % | |||||||||
| Total equity - tangible | 624,088 | 478,499 | 145,589 | 30.43 | % | |||||||||
| Common equity | 794,874 | 521,502 | 273,372 | 52.42 | % | |||||||||
| Common equity - tangible | 614,218 | 393,224 | 220,994 | 56.20 | % | |||||||||
| Key Ratios: | ||||||||||||||
| Return on average assets | 1.03 | % | 0.87 | % | 0.16 | % | 18.39 | % | ||||||
| Return on average assets - tangible | 1.10 | % | 0.93 | % | 0.17 | % | 18.28 | % | ||||||
| Return on average equity | 7.75 | % | 6.95 | % | 0.80 | % | 11.51 | % | ||||||
| Return on average equity - tangible | 10.34 | % | 9.16 | % | 1.18 | % | 12.88 | % | ||||||
| Return on average common equity | 7.85 | % | 7.94 | % | (0.09 | )% | (1.13 | )% | ||||||
| Return on average common equity - tangible | 10.51 | % | 10.95 | % | (0.44 | )% | (4.02 | )% | ||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.45 | % | 3.38 | % | 0.07 | % | 2.07 | % | ||||||
| Net interest margin (2) | 3.36 | % | 3.31 | % | 0.05 | % | 1.51 | % | ||||||
| Average earning assets/total average assets | 91.54 | % | 91.89 | % | (0.35 | )% | (0.38 | )% | ||||||
| Average loans/average deposits | 90.83 | % | 92.04 | % | (1.21 | )% | (1.31 | )% | ||||||
| Average noninterest deposits/total average deposits | 28.78 | % | 30.91 | % | (2.13 | )% | (6.89 | )% | ||||||
| Allowance for loan losses/period end loans | 0.85 | % | 1.01 | % | (0.16 | )% | (15.84 | )% | ||||||
| Nonperforming assets to period end assets | 0.68 | % | 0.84 | % | (0.16 | )% | (19.05 | )% | ||||||
| Period end equity/period end total assets | 13.03 | % | 12.41 | % | 0.62 | % | 5.00 | % | ||||||
| Efficiency ratio (1) | 68.11 | % | 73.76 | % | (5.65 | )% | (7.66 | )% | ||||||
| (1) Excludes gain (loss) on investment securities | ||||||||||||||
| (2) Includes bank-owned life insurance | ||||||||||||||
| (3) Presented on a tax-equivalent basis | ||||||||||||||
| Selected Financial Highlights (unaudited) | ||||||||||||||
| TOWNEBANK | ||||||||||||||
| December 31, 2015 | ||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||
| December 31, | September 30, | Increase/ | % Increase/ | |||||||||||
| Three Months Ended | 2015 | 2015 | (Decrease) | (Decrease) | ||||||||||
| Results of Operations: | ||||||||||||||
| Net interest income | $ | 46,331 | $ | 45,670 | $ | 661 | 1.45 | % | ||||||
| Noninterest income (1) | 25,079 | 29,568 | (4,489 | ) | (15.18 | )% | ||||||||
| Gain (loss) on investment securities | — | 736 | (736 | ) | (100.00 | )% | ||||||||
| Total Revenue | 71,410 | 75,974 | (4,564 | ) | (6.01 | )% | ||||||||
| Noninterest expenses | 52,743 | 49,906 | 2,837 | 5.68 | % | |||||||||
| Provision for loan losses | 852 | 130 | 722 | 555.38 | % | |||||||||
| Income before income tax and noncontrolling interest | 17,815 | 25,938 | (8,123 | ) | (31.32 | )% | ||||||||
| Provision for income tax expense | 4,846 | 7,444 | (2,598 | ) | (34.90 | )% | ||||||||
| Net income | 12,969 | 18,494 | (5,525 | ) | (29.87 | )% | ||||||||
| Net income attributable to noncontrolling interest | (503 | ) | (928 | ) | 425 | (45.80 | )% | |||||||
| Net income attributable to TowneBank | 12,466 | 17,566 | (5,100 | ) | (29.03 | )% | ||||||||
| Preferred stock dividends | — | — | — | — | % | |||||||||
| Net income available to common shareholders | 12,466 | 17,566 | (5,100 | ) | (29.03 | )% | ||||||||
| Net income per common share - basic | 0.24 | 0.34 | (0.10 | ) | (29.41 | )% | ||||||||
| Net income per common share - diluted | 0.24 | 0.34 | (0.10 | ) | (29.41 | )% | ||||||||
| Period End Data: | ||||||||||||||
| Total assets | $ | 6,296,574 | $ | 6,173,891 | $ | 122,683 | 1.99 | % | ||||||
| Total assets - tangible | 6,115,579 | 5,998,373 | 117,206 | 1.95 | % | |||||||||
| Earning assets (2) | 5,827,888 | 5,508,341 | 319,547 | 5.80 | % | |||||||||
| Loans (net of unearned income) | 4,519,393 | 4,367,039 | 152,354 | 3.49 | % | |||||||||
| Allowance for loan losses | 38,359 | 37,351 | 1,008 | 2.70 | % | |||||||||
| Goodwill and other intangibles | 180,995 | 175,518 | 5,477 | 3.12 | % | |||||||||
| Nonperforming assets | 43,091 | 47,986 | (4,895 | ) | (10.20 | )% | ||||||||
| Noninterest bearing deposits | 1,393,264 | 1,445,978 | (52,714 | ) | (3.65 | )% | ||||||||
| Interest bearing deposits | 3,520,763 | 3,341,900 | 178,863 | 5.35 | % | |||||||||
| Total deposits | 4,914,027 | 4,787,878 | 126,149 | 2.63 | % | |||||||||
| Total equity | 820,194 | 816,069 | 4,125 | 0.51 | % | |||||||||
| Total equity - tangible | 639,199 | 640,551 | (1,352 | ) | (0.21 | )% | ||||||||
| Common equity | 810,921 | 807,152 | 3,769 | 0.47 | % | |||||||||
| Common equity - tangible | 629,925 | 631,634 | (1,709 | ) | (0.27 | )% | ||||||||
| Book value per common share | 15.71 | 15.65 | 0.06 | 0.38 | % | |||||||||
| Book value per common share - tangible | 12.21 | 12.25 | (0.04 | ) | (0.33 | )% | ||||||||
| Daily Average Balances: | ||||||||||||||
| Total assets | $ | 6,305,571 | $ | 6,115,681 | $ | 189,890 | 3.10 | % | ||||||
| Total assets - tangible | 6,120,799 | 5,940,258 | 180,541 | 3.04 | % | |||||||||
| Earning assets (2) | 5,800,907 | 5,604,472 | 196,435 | 3.50 | % | |||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 4,426,387 | 4,300,751 | 125,636 | 2.92 | % | |||||||||
| Allowance for loan losses | 37,918 | 37,926 | (8 | ) | (0.02 | )% | ||||||||
| Goodwill and other intangibles | 184,773 | 175,423 | 9,350 | 5.33 | % | |||||||||
| Noninterest bearing deposits | 1,420,047 | 1,388,002 | 32,045 | 2.31 | % | |||||||||
| Interest bearing deposits | 3,458,597 | 3,346,874 | 111,723 | 3.34 | % | |||||||||
| Total deposits | 4,878,644 | 4,734,876 | 143,768 | 3.04 | % | |||||||||
| Total equity | 823,627 | 812,602 | 11,025 | 1.36 | % | |||||||||
| Total equity - tangible | 638,855 | 637,179 | 1,676 | 0.26 | % | |||||||||
| Common equity | 814,894 | 804,090 | 10,804 | 1.34 | % | |||||||||
| Common equity - tangible | 630,121 | 628,667 | 1,454 | 0.23 | % | |||||||||
| Key Ratios: | ||||||||||||||
| Return on average assets | 0.78 | % | 1.14 | % | (0.36 | )% | (31.58 | )% | ||||||
| Return on average assets - tangible | 0.85 | % | 1.21 | % | (0.36 | )% | (29.75 | )% | ||||||
| Return on average equity | 6.00 | % | 8.58 | % | (2.58 | )% | (30.07 | )% | ||||||
| Return on average equity - tangible | 8.11 | % | 11.25 | % | (3.14 | )% | (27.91 | )% | ||||||
| Return on average common equity | 6.07 | % | 8.67 | % | (2.60 | )% | (29.99 | )% | ||||||
| Return on average common equity - tangible | 8.22 | % | 11.41 | % | (3.19 | )% | (27.96 | )% | ||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.36 | % | 3.40 | % | (0.04 | )% | (1.18 | )% | ||||||
| Net interest margin (2) | 3.27 | % | 3.32 | % | (0.05 | )% | (1.51 | )% | ||||||
| Average earning assets/total average assets | 92.00 | % | 91.64 | % | 0.36 | % | 0.39 | % | ||||||
| Average loans/average deposits | 90.73 | % | 90.83 | % | (0.10 | )% | (0.11 | )% | ||||||
| Average noninterest deposits/total average deposits | 29.11 | % | 29.31 | % | (0.20 | )% | (0.68 | )% | ||||||
| Allowance for loan losses/period end loans | 0.85 | % | 0.86 | % | (0.01 | )% | (1.16 | )% | ||||||
| Nonperforming assets to period end assets | 0.68 | % | 0.78 | % | (0.10 | )% | (12.82 | )% | ||||||
| Period end equity/period end total assets | 13.03 | % | 13.22 | % | (0.19 | )% | (1.44 | )% | ||||||
| Efficiency ratio (1) | 73.86 | % | 66.33 | % | 7.53 | % | 11.35 | % | ||||||
| (1) Excludes gain (loss) on investment securities | ||||||||||||||
| (2) Includes bank-owned life insurance | ||||||||||||||
| (3) Presented on a tax-equivalent basis | ||||||||||||||
| TOWNEBANK | |||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid | |||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | |||||||||||||||||||||||||||
| December 31, 2015 | September 30, 2015 | December 31, 2014 | |||||||||||||||||||||||||||
| 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 | $ | 4,426,387 | $ | 50,850 | 4.56 | % | $ | 4,300,751 | $ | 49,398 | 4.56 | % | $ | 3,526,860 | $ | 41,216 | 4.64 | % | |||||||||||
| Taxable investment securities | 782,998 | 2,987 | 1.53 | % | 796,062 | 3,235 | 1.63 | % | 660,291 | 1,829 | 1.11 | % | |||||||||||||||||
| Tax-exempt investment securities | 54,974 | 428 | 3.11 | % | 61,048 | 493 | 3.23 | % | 67,541 | 560 | 3.31 | % | |||||||||||||||||
| Interest-bearing deposits | 292,085 | 211 | 0.29 | % | 167,247 | 107 | 0.25 | % | 227,773 | 145 | 0.25 | % | |||||||||||||||||
| Loans held for sale | 95,932 | 865 | 3.61 | % | 132,214 | 1,246 | 3.77 | % | 69,496 | 652 | 3.75 | % | |||||||||||||||||
| Bank-owned life insurance | 148,531 | 2,311 | 6.17 | % | 147,150 | 1,877 | 5.06 | % | 58,348 | 1,200 | 8.16 | % | |||||||||||||||||
| Total earning assets | 5,800,907 | 57,652 | 3.94 | % | 5,604,472 | 56,356 | 3.99 | % | 4,610,309 | 45,602 | 3.92 | % | |||||||||||||||||
| Less: allowance for loan losses | (37,918 | ) | (37,926 | ) | (36,296 | ) | |||||||||||||||||||||||
| Total nonearning assets | 542,582 | 549,135 | 431,099 | ||||||||||||||||||||||||||
| Total assets | $ | 6,305,571 | $ | 6,115,681 | $ | 5,005,112 | |||||||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||
| Demand and money market | $ | 1,780,151 | $ | 1,265 | 0.28 | % | $ | 1,693,424 | $ | 1,201 | 0.28 | % | $ | 1,344,262 | $ | 772 | 0.23 | % | |||||||||||
| Savings | 299,503 | 684 | 0.91 | % | 297,041 | 695 | 0.93 | % | 303,623 | 699 | 0.91 | % | |||||||||||||||||
| Certificates of deposit | 1,378,943 | 3,170 | 0.91 | % | 1,356,409 | 2,985 | 0.87 | % | 969,091 | 1,837 | 0.75 | % | |||||||||||||||||
| Total interest-bearing deposits | 3,458,597 | 5,119 | 0.59 | % | 3,346,874 | 4,881 | 0.58 | % | 2,616,976 | 3,308 | 0.50 | % | |||||||||||||||||
| Borrowings | 471,929 | 3,360 | 2.79 | % | 472,120 | 3,435 | 2.85 | % | 430,374 | 3,396 | 3.09 | % | |||||||||||||||||
| Total interest-bearing liabilities | 3,930,526 | 8,479 | 0.86 | % | 3,818,994 | 8,316 | 0.86 | % | 3,047,350 | 6,704 | 0.87 | % | |||||||||||||||||
| Demand deposits | 1,420,047 | 1,388,002 | 1,247,712 | ||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 131,371 | 96,083 | 88,471 | ||||||||||||||||||||||||||
| Total liabilities | 5,481,944 | 5,303,079 | 4,383,533 | ||||||||||||||||||||||||||
| Shareholders’ equity | 823,627 | 812,602 | 621,579 | ||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,305,571 | $ | 6,115,681 | $ | 5,005,112 | |||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 49,173 | $ | 48,040 | $ | 38,898 | |||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||
| Bank-owned life insurance | (2,311 | ) | (1,877 | ) | (1,200 | ) | |||||||||||||||||||||||
| Tax-equivalent basis adjustment | (531 | ) | (493 | ) | (558 | ) | |||||||||||||||||||||||
| Net interest income (GAAP) | $ | 46,331 | $ | 45,670 | $ | 37,140 | |||||||||||||||||||||||
| Interest rate spread (1) | 3.09 | % | 3.13 | % | 3.05 | % | |||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.58 | % | 0.59 | % | 0.58 | % | |||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (2) | 3.36 | % | 3.40 | % | 3.35 | % | |||||||||||||||||||||||
| Total cost of deposits | 0.42 | % | 0.41 | % | 0.34 | % | |||||||||||||||||||||||
| (1) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent. | |||||||||||||||||||||||||||||
| (2) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent. | |||||||||||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2015 | 2014 | 2013 | |||||||||||||||||||||||||||||||||
| 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 | $ | 4,239,887 | $ | 196,868 | 4.64 | % | $ | 3,450,730 | $ | 162,347 | 4.70 | % | $ | 3,258,562 | $ | 161,544 | 4.96 | % | |||||||||||||||||
| Taxable investment securities | 786,737 | 11,849 | 1.51 | % | 574,229 | 6,895 | 1.20 | % | 333,952 | 4,018 | 1.20 | % | |||||||||||||||||||||||
| Tax-exempt investment securities | 61,489 | 1,952 | 3.17 | % | 70,154 | 2,180 | 3.11 | % | 76,589 | 2,346 | 3.06 | % | |||||||||||||||||||||||
| Interest-bearing deposits | 188,546 | 499 | 0.26 | % | 253,416 | 637 | 0.25 | % | 300,977 | 759 | 0.25 | % | |||||||||||||||||||||||
| Mortgage loans held for sale | 106,149 | 3,836 | 3.61 | % | 65,746 | 2,586 | 3.93 | % | 100,507 | 3,469 | 3.45 | % | |||||||||||||||||||||||
| Bank-owned life insurance | 145,554 | 7,985 | 5.49 | % | 57,842 | 3,290 | 5.69 | % | 56,212 | 3,066 | 5.45 | % | |||||||||||||||||||||||
| Total earning assets | 5,528,362 | 222,989 | 4.03 | % | 4,472,117 | 177,935 | 3.98 | % | 4,126,799 | 175,202 | 4.25 | % | |||||||||||||||||||||||
| Less: allowance for loan losses | (37,194 | ) | (37,168 | ) | (39,698 | ) | |||||||||||||||||||||||||||||
| Total nonearning assets | 548,250 | 431,635 | 420,132 | ||||||||||||||||||||||||||||||||
| Total assets | $ | 6,039,418 | $ | 4,866,584 | $ | 4,507,233 | |||||||||||||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||||||||||
| Demand and money market | $ | 1,689,185 | $ | 4,721 | 0.28 | % | $ | 1,306,738 | $ | 3,036 | 0.23 | % | $ | 1,166,510 | $ | 3,146 | 0.27 | % | |||||||||||||||||
| Savings | 300,620 | 2,755 | 0.92 | % | 310,722 | 2,855 | 0.92 | % | 323,011 | 3,117 | 0.96 | % | |||||||||||||||||||||||
| Certificates of deposit | 1,334,728 | 11,390 | 0.85 | % | 972,702 | 7,461 | 0.77 | % | 925,657 | 7,090 | 0.77 | % | |||||||||||||||||||||||
| Total interest-bearing deposits | 3,324,533 | 18,866 | 0.57 | % | 2,590,162 | 13,352 | 0.52 | % | 2,415,178 | 13,353 | 0.55 | % | |||||||||||||||||||||||
| FHLB advances and repurchase agreements | 463,153 | 13,565 | 2.93 | % | 429,249 | 13,424 | 3.13 | % | 425,225 | 13,042 | 3.07 | % | |||||||||||||||||||||||
| Total interest-bearing liabilities | 3,787,686 | 32,431 | 0.86 | % | 3,019,411 | 26,776 | 0.89 | % | 2,840,403 | 26,395 | 0.93 | % | |||||||||||||||||||||||
| Noninterest-bearing liabilities | |||||||||||||||||||||||||||||||||||
| Demand deposits | 1,343,360 | 1,158,888 | 1,022,168 | ||||||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 103,628 | 81,508 | 70,104 | ||||||||||||||||||||||||||||||||
| Total liabilities | 5,234,674 | 4,259,807 | 3,932,675 | ||||||||||||||||||||||||||||||||
| Shareholders' equity | 804,744 | 606,777 | 574,558 | ||||||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,039,418 | $ | 4,866,584 | $ | 4,507,233 | |||||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 190,558 | $ | 151,159 | $ | 148,807 | |||||||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||
| Bank-owned life insurance | (7,985 | ) | (3,290 | ) | (3,066 | ) | |||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (2,131 | ) | (2,133 | ) | (1,846 | ) | |||||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 180,442 | $ | 145,736 | $ | 143,895 | |||||||||||||||||||||||||||||
| Interest rate spread (1) | 3.17 | % | 3.09 | % | 3.32 | % | |||||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.59 | % | 0.60 | % | 0.64 | % | |||||||||||||||||||||||||||||
| Net interest margin (tax-equivalent basis) (2) | 3.45 | % | 3.38 | % | 3.61 | % | |||||||||||||||||||||||||||||
| Total cost of deposits | 0.40 | % | 0.36 | % | 0.39 | % | |||||||||||||||||||||||||||||
| (1) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent. | |||||||||||||||||||||||||||||||||||
| (2) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent. | |||||||||||||||||||||||||||||||||||
| TOWNEBANK | |||||||
| Consolidated Balance Sheets | |||||||
| (dollars in thousands) | |||||||
| 2015 | 2014 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 250,836 | $ | 212,994 | |||
| Interest-bearing deposits in financial institutions | 1,001 | 1,011 | |||||
| Total Cash and Cash Equivalents | 251,837 | 214,005 | |||||
| Securities available for sale, at fair value | 723,489 | 603,908 | |||||
| Securities held to maturity, at amortized cost | 69,045 | 85,247 | |||||
| Federal Home Loan Bank stock, at amortized cost | 23,691 | 22,157 | |||||
| Total Securities | 816,225 | 711,312 | |||||
| Mortgage loans held for sale | 102,346 | 71,390 | |||||
| Loans, net of unearned income and deferred costs: | 4,519,393 | 3,564,389 | |||||
| Less: allowance for loan losses | (38,359 | ) | (35,917 | ) | |||
| Net Loans | 4,481,034 | 3,528,472 | |||||
| Premises and equipment, net | 173,695 | 155,774 | |||||
| Goodwill | 154,842 | 113,159 | |||||
| Other intangible assets, net | 26,153 | 22,509 | |||||
| Bank-owned life insurance policies | 149,452 | 58,716 | |||||
| Other assets | 140,990 | 107,148 | |||||
| TOTAL ASSETS | $ | 6,296,574 | $ | 4,982,485 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 1,393,264 | $ | 1,224,466 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 1,824,226 | 1,365,183 | |||||
| Savings | 300,408 | 301,033 | |||||
| Certificates of deposit | 1,396,129 | 955,920 | |||||
| Total Deposits | 4,914,027 | 3,846,602 | |||||
| Advances from the Federal Home Loan Bank | 429,080 | 398,181 | |||||
| Repurchase agreements and other borrowings | 37,434 | 31,893 | |||||
| Total Borrowings | 466,514 | 430,074 | |||||
| Other liabilities | 95,839 | 87,533 | |||||
| TOTAL LIABILITIES | 5,476,380 | 4,364,209 | |||||
| Preferred stock | |||||||
| Authorized shares - 2,000,000 | |||||||
| Issued and outstanding shares 0 and 76,458 in 2015 and 2014 | — | 76,458 | |||||
| Common stock, $1.667 par value | |||||||
| Authorized shares - 90,000,000 | |||||||
| Issued and outstanding shares 51,605,521 in 2015 and 35,785,679 in 2014 | 86,026 | 59,655 | |||||
| Capital surplus | 535,094 | 317,718 | |||||
| Retained earnings | 192,795 | 154,655 | |||||
| Common stock issued to deferred compensation trust, at cost 648,350 and 627,730 shares at December 31, 2015 and 2014 | (10,172 | ) | (9,674 | ) | |||
| Deferred compensation trust | 10,172 | 9,674 | |||||
| Accumulated other comprehensive income (loss) | (2,994 | ) | 458 | ||||
| TOTAL SHAREHOLDERS’ EQUITY | 810,921 | 608,944 | |||||
| Noncontrolling interest | 9,273 | 9,332 | |||||
| TOTAL EQUITY | 820,194 | 618,276 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 6,296,574 | $ | 4,982,485 | |||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three Months Ended | Twelve months ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 50,319 | $ | 40,660 | $ | 194,737 | $ | 160,213 | |||||||
| Investment securities | 3,415 | 2,387 | 13,801 | 9,076 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 212 | 144 | 499 | 637 | |||||||||||
| Mortgage loans held for sale | 865 | 652 | 3,836 | 2,586 | |||||||||||
| Total interest income | 54,811 | 43,843 | 212,873 | 172,512 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 5,119 | 3,308 | 18,866 | 13,352 | |||||||||||
| Advances from the Federal Home Loan Bank | 3,326 | 3,383 | 13,486 | 13,373 | |||||||||||
| Repurchase agreements and other borrowings, net of capitalized interest | 35 | 13 | 79 | 51 | |||||||||||
| Total interest expense | 8,480 | 6,704 | 32,431 | 26,776 | |||||||||||
| Net interest income | 46,331 | 37,139 | 180,442 | 145,736 | |||||||||||
| PROVISION FOR LOAN LOSSES | 852 | (1 | ) | 3,027 | 492 | ||||||||||
| Net interest income after provision for loan losses | 45,479 | 37,140 | 177,415 | 145,244 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 7,255 | 6,523 | 34,211 | 27,179 | |||||||||||
| Real estate brokerage and property management income, net | 2,438 | 2,450 | 16,326 | 12,634 | |||||||||||
| Insurance commissions and other title fees and income, net | 8,997 | 7,743 | 39,641 | 34,558 | |||||||||||
| Service charges on deposit accounts | 2,254 | 2,288 | 9,165 | 9,192 | |||||||||||
| Credit card merchant fees, net | 767 | 911 | 2,588 | 3,576 | |||||||||||
| Other income | 3,368 | 2,486 | 14,448 | 9,605 | |||||||||||
| Gain (loss) on investment securities | — | — | 904 | (15 | ) | ||||||||||
| Total noninterest income | 25,079 | 22,401 | 117,283 | 96,729 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 30,826 | 25,205 | 113,959 | 99,007 | |||||||||||
| Occupancy | 5,156 | 4,676 | 19,645 | 17,863 | |||||||||||
| Furniture and equipment | 2,390 | 2,103 | 9,339 | 8,183 | |||||||||||
| Other expenses | 14,371 | 16,975 | 59,214 | 53,811 | |||||||||||
| Total noninterest expense | 52,743 | 48,959 | 202,157 | 178,864 | |||||||||||
| Income before income tax expense & noncontrolling interest | 17,815 | 10,582 | 92,541 | 63,109 | |||||||||||
| Provision for income tax expense | 4,846 | 2,798 | 26,876 | 18,179 | |||||||||||
| Net income | $ | 12,969 | $ | 7,784 | $ | 65,665 | $ | 44,930 | |||||||
| Net income attributable to noncontrolling interest | (503 | ) | (549 | ) | (3,283 | ) | (2,761 | ) | |||||||
| Net income attributable to TowneBank | $ | 12,466 | $ | 7,235 | $ | 62,382 | $ | 42,169 | |||||||
| Preferred stock dividends and accretion | — | 191 | 13 | 765 | |||||||||||
| Net income available to common shareholders | $ | 12,466 | $ | 7,044 | $ | 62,369 | $ | 41,404 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.24 | $ | 0.20 | $ | 1.22 | $ | 1.18 | |||||||
| Diluted earnings | $ | 0.24 | $ | 0.20 | $ | 1.22 | $ | 1.18 | |||||||
| Cash dividends declared | $ | 0.12 | $ | 0.11 | $ | 0.47 | $ | 0.43 | |||||||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Comprehensive Income (unaudited) | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three Months Ended | Twelve months ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2015 | 2014 | 2015 | 2014 | ||||||||||||
| Net income | $ | 12,969 | $ | 7,784 | $ | 65,665 | $ | 44,930 | |||||||
| Other comprehensive income (loss) | |||||||||||||||
| Unrealized gains (losses) on securities | |||||||||||||||
| Unrealized holding gains (losses) arising during the period | (5,567 | ) | 825 | (4,031 | ) | 2,404 | |||||||||
| Deferred tax benefit (expense) | 1,949 | (288 | ) | 1,411 | (844 | ) | |||||||||
| Realized (gains) losses reclassified into earnings | — | — | (785 | ) | 15 | ||||||||||
| Deferred tax benefit (expense) | — | — | 275 | (6 | ) | ||||||||||
| Net unrealized gains (losses) | (3,618 | ) | 537 | (3,130 | ) | 1,569 | |||||||||
| Pension and postretirement benefit plans | |||||||||||||||
| Actuarial losses | (711 | ) | (1,196 | ) | (711 | ) | (1,196 | ) | |||||||
| Deferred tax benefit | 249 | 418 | 249 | 418 | |||||||||||
| Amortization | 77 | 2 | 215 | 17 | |||||||||||
| Deferred tax expense | (27 | ) | (1 | ) | (75 | ) | (6 | ) | |||||||
| Change in retirement plans, net of tax | (412 | ) | (777 | ) | (322 | ) | (767 | ) | |||||||
| Other comprehensive income (loss), net of tax | (4,030 | ) | (240 | ) | (3,452 | ) | 802 | ||||||||
| Comprehensive income | $ | 8,939 | $ | 7,544 | $ | 62,213 | $ | 45,732 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 250,836 | $ | 284,625 | $ | 184,099 | $ | 144,215 | $ | 212,994 | |||||||||
| Interest-bearing deposits in financial institutions | 1,001 | 1,000 | 1,011 | 1,000 | 1,011 | ||||||||||||||
| Total Cash and Cash Equivalents | 251,837 | 285,625 | 185,110 | 145,215 | 214,005 | ||||||||||||||
| Securities available for sale, at fair value | 723,489 | 542,634 | 759,425 | 771,208 | 603,908 | ||||||||||||||
| Securities held to maturity, at amortized cost | 69,045 | 75,154 | 80,195 | 83,751 | 85,247 | ||||||||||||||
| Federal Home Loan Bank stock, at amortized cost | 23,691 | 24,058 | 24,058 | 22,366 | 22,157 | ||||||||||||||
| Total Securities | 816,225 | 641,846 | 863,678 | 877,325 | 711,312 | ||||||||||||||
| Mortgage loans held for sale | 102,346 | 99,330 | 165,994 | 102,850 | 71,390 | ||||||||||||||
| Loans, net of unearned income and deferred costs: | 4,519,393 | 4,367,039 | 4,228,127 | 4,095,696 | 3,564,389 | ||||||||||||||
| Less: allowance for loan losses | (38,359 | ) | (37,351 | ) | (37,290 | ) | (35,907 | ) | (35,917 | ) | |||||||||
| Net Loans | 4,481,034 | 4,329,688 | 4,190,837 | 4,059,789 | 3,528,472 | ||||||||||||||
| Premises and equipment, net | 173,695 | 172,940 | 172,492 | 166,164 | 155,774 | ||||||||||||||
| Goodwill | 154,842 | 152,438 | 153,191 | 156,516 | 113,159 | ||||||||||||||
| Other intangible assets, net | 26,153 | 23,080 | 22,016 | 23,090 | 22,509 | ||||||||||||||
| Bank-owned life insurance policies | 149,452 | 147,949 | 146,729 | 145,401 | 58,716 | ||||||||||||||
| Other assets | 140,990 | 320,995 | 155,134 | 152,353 | 107,148 | ||||||||||||||
| TOTAL ASSETS | $ | 6,296,574 | $ | 6,173,891 | $ | 6,055,181 | $ | 5,828,703 | $ | 4,982,485 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 1,393,264 | $ | 1,445,978 | $ | 1,363,551 | $ | 1,261,482 | $ | 1,224,466 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 1,824,226 | 1,676,623 | 1,680,038 | 1,643,534 | 1,365,183 | ||||||||||||||
| Savings | 300,408 | 295,952 | 300,203 | 303,936 | 301,033 | ||||||||||||||
| Certificates of deposit | 1,396,129 | 1,369,325 | 1,342,860 | 1,296,666 | 955,920 | ||||||||||||||
| Total Deposits | 4,914,027 | 4,787,878 | 4,686,652 | 4,505,618 | 3,846,602 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 429,080 | 437,282 | 437,584 | 397,884 | 398,181 | ||||||||||||||
| Repurchase agreements and other borrowings | 37,434 | 33,784 | 35,737 | 37,202 | 31,893 | ||||||||||||||
| Total Borrowings | 466,514 | 471,066 | 473,321 | 435,086 | 430,074 | ||||||||||||||
| Other liabilities | 95,839 | 98,878 | 92,317 | 96,419 | 87,533 | ||||||||||||||
| TOTAL LIABILITIES | 5,476,380 | 5,357,822 | 5,252,290 | 5,037,123 | 4,364,209 | ||||||||||||||
| Preferred stock | |||||||||||||||||||
| Authorized shares - 2,000,000 | |||||||||||||||||||
| Issued and outstanding shares 0 and 76,458 in 2015 and 2014 | — | — | — | — | 76,458 | ||||||||||||||
| Common stock, $1.667 par value | |||||||||||||||||||
| Authorized shares - 90,000,000 | |||||||||||||||||||
| Issued and outstanding shares 51,605,521 in 2015 and 35,785,679 in 2014 | 86,026 | 85,985 | 85,936 | 85,795 | 59,655 | ||||||||||||||
| Capital surplus | 535,094 | 533,609 | 532,646 | 531,483 | 317,718 | ||||||||||||||
| Retained earnings | 192,795 | 186,522 | 175,145 | 163,519 | 154,655 | ||||||||||||||
| Common stock issued to deferred compensation trust, at cost; 648,350 and 627,730 shares at December 31, 2015 and 2014 | (10,172 | ) | (10,151 | ) | (10,110 | ) | (9,816 | ) | (9,674 | ) | |||||||||
| Deferred compensation trust | 10,172 | 10,151 | 10,110 | 9,816 | 9,674 | ||||||||||||||
| Accumulated other comprehensive income (loss) | (2,994 | ) | 1,036 | 291 | 2,359 | 458 | |||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 810,921 | 807,152 | 794,018 | 783,156 | 608,944 | ||||||||||||||
| Noncontrolling interest | 9,273 | 8,917 | 8,873 | 8,424 | 9,332 | ||||||||||||||
| TOTAL EQUITY | 820,194 | 816,069 | 802,891 | 791,580 | 618,276 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 6,296,574 | $ | 6,173,891 | $ | 6,055,181 | $ | 5,828,703 | $ | 4,982,485 | |||||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2015 | 2015 | 2015 | 2015 | 2014 | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 50,319 | $ | 48,906 | $ | 48,170 | $ | 47,341 | $ | 40,660 | |||||||||
| Investment securities | 3,415 | 3,728 | 3,321 | 3,337 | 2,387 | ||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 212 | 107 | 56 | 125 | 144 | ||||||||||||||
| Mortgage loans held for sale | 865 | 1,246 | 1,161 | 565 | 652 | ||||||||||||||
| Total Interest Income | 54,811 | 53,987 | 52,708 | 51,368 | 43,843 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 5,119 | 4,881 | 4,442 | 4,424 | 3,308 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 3,326 | 3,422 | 3,365 | 3,374 | 3,383 | ||||||||||||||
| Repurchase agreements and other borrowings | 35 | 14 | 17 | 14 | 13 | ||||||||||||||
| Total Interest Expense | 8,480 | 8,317 | 7,824 | 7,812 | 6,704 | ||||||||||||||
| Net Interest Income | 46,331 | 45,670 | 44,884 | 43,556 | 37,139 | ||||||||||||||
| PROVISION FOR LOAN LOSSES | 852 | 130 | 1,723 | 323 | (1 | ) | |||||||||||||
| Net Interest Income after Provision for Loan Losses | 45,479 | 45,540 | 43,161 | 43,233 | 37,140 | ||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 7,255 | 8,262 | 10,251 | 8,443 | 6,523 | ||||||||||||||
| Real estate brokerage and property management income, net | 2,438 | 5,349 | 4,584 | 3,955 | 2,450 | ||||||||||||||
| Insurance commissions and other title fees and income, net | 8,997 | 9,710 | 9,885 | 11,049 | 7,743 | ||||||||||||||
| Service charges on deposit accounts | 2,254 | 2,388 | 2,326 | 2,197 | 2,288 | ||||||||||||||
| Credit card merchant fees, net | 767 | 823 | 566 | 432 | 911 | ||||||||||||||
| Other income | 3,368 | 3,036 | 5,354 | 2,691 | 2,486 | ||||||||||||||
| Net gain on investment securities | — | 736 | 119 | 49 | — | ||||||||||||||
| Total Noninterest Income | 25,079 | 30,304 | 33,085 | 28,816 | 22,401 | ||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 30,826 | 28,910 | 26,544 | 27,679 | 25,205 | ||||||||||||||
| Occupancy expense | 5,156 | 4,703 | 4,856 | 4,930 | 4,676 | ||||||||||||||
| Furniture and equipment | 2,390 | 2,211 | 2,369 | 2,369 | 2,103 | ||||||||||||||
| Other expenses | 14,371 | 14,082 | 15,298 | 15,462 | 16,975 | ||||||||||||||
| Total Noninterest Expense | 52,743 | 49,906 | 49,067 | 50,440 | 48,959 | ||||||||||||||
| Income before income tax expense and noncontrolling interest | 17,815 | 25,938 | 27,179 | 21,609 | 10,582 | ||||||||||||||
| Provision for income tax expense | 4,846 | 7,444 | 8,201 | 6,385 | 2,798 | ||||||||||||||
| Net income | 12,969 | 18,494 | 18,978 | 15,224 | 7,784 | ||||||||||||||
| Net income attributable to noncontrolling interest | (503 | ) | (928 | ) | (1,166 | ) | (686 | ) | (549 | ) | |||||||||
| Net income attributable to TowneBank | $ | 12,466 | $ | 17,566 | $ | 17,812 | $ | 14,538 | $ | 7,235 | |||||||||
| Preferred stock dividends | — | — | — | 13 | 191 | ||||||||||||||
| Net income available to common shareholders | $ | 12,466 | $ | 17,566 | $ | 17,812 | $ | 14,525 | $ | 7,044 | |||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.24 | $ | 0.34 | $ | 0.35 | $ | 0.29 | $ | 0.20 | |||||||||
| Diluted earnings | $ | 0.24 | $ | 0.34 | $ | 0.35 | $ | 0.29 | $ | 0.20 | |||||||||
| Cash dividends declared | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.11 | $ | 0.11 | |||||||||
| TOWNEBANK | |||||||||||||||||||||||||
| Insurance Segment Financial Information | |||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||
| Increase/(Decrease) | |||||||||||||||||||||||||
| Three Months Ended | December 31, 2015 | December 31, 2015 | |||||||||||||||||||||||
| December 31, | September 30, | December 31, 2014 | September 30, 2015 | ||||||||||||||||||||||
| 2015 | 2014 | 2015 | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Commission and fee income | |||||||||||||||||||||||||
| Property and casualty | $ | 7,371 | $ | 6,306 | $ | 8,156 | $ | 1,065 | 16.89 | % | $ | (785 | ) | (9.62 | )% | ||||||||||
| Employee benefits | 2,588 | 2,677 | 2,578 | (89 | ) | (3.32 | )% | 10 | 0.39 | % | |||||||||||||||
| Travel insurance | 630 | 460 | 626 | 170 | 36.96 | % | 4 | 0.64 | % | ||||||||||||||||
| Specialized benefit services | 144 | 136 | 145 | 8 | 5.88 | % | (1 | ) | (0.69 | )% | |||||||||||||||
| Total commissions and fees | 10,733 | 9,579 | 11,505 | 1,154 | 12.05 | % | (772 | ) | (6.71 | )% | |||||||||||||||
| Contingency and bonus revenue | 53 | 66 | 260 | (13 | ) | (19.70 | )% | (207 | ) | (79.62 | )% | ||||||||||||||
| Other income | 58 | 56 | 53 | 2 | 3.57 | % | 5 | 9.43 | % | ||||||||||||||||
| Total revenue | $ | 10,844 | $ | 9,701 | $ | 11,818 | $ | 1,143 | 11.78 | % | $ | (974 | ) | (8.24 | )% | ||||||||||
| Employee commission expense | 2,008 | 2,079 | 2,361 | (71 | ) | (3.42 | )% | (353 | ) | (14.95 | )% | ||||||||||||||
| Revenue, net of commission expense | $ | 8,836 | $ | 7,622 | $ | 9,457 | $ | 1,214 | 15.93 | % | $ | (621 | ) | (6.57 | )% | ||||||||||
| Salaries and employee benefits | 5,863 | 4,433 | 4,583 | 1,430 | 32.26 | % | 1,280 | 27.93 | % | ||||||||||||||||
| Occupancy expense | 537 | 456 | 480 | 81 | 17.76 | % | 57 | 11.88 | % | ||||||||||||||||
| Furniture and equipment | 235 | 174 | 202 | 61 | 35.06 | % | 33 | 16.34 | % | ||||||||||||||||
| Amortization of intangible assets | 676 | 511 | 543 | 165 | 32.29 | % | 133 | 24.49 | % | ||||||||||||||||
| Other expenses | 892 | 1,039 | 1,491 | (147 | ) | (14.15 | )% | (599 | ) | (40.17 | )% | ||||||||||||||
| Total operating expenses | 8,203 | 6,613 | 7,299 | 1,590 | 24.04 | % | 904 | 12.39 | % | ||||||||||||||||
| Income before income tax provision and noncontrolling interest | $ | 633 | $ | 1,009 | $ | 2,158 | $ | (376 | ) | (37.26 | )% | $ | (1,525 | ) | (70.67 | )% | |||||||||
| Plus: Acquisition related expenses | (334 | ) | 40 | 164 | (374 | ) | N/M | (498 | ) | N/M | |||||||||||||||
| Plus: Amortization of intangible assets | 676 | 511 | 543 | 165 | 32.29 | % | 133 | 24.49 | % | ||||||||||||||||
| Operating earnings before income taxes (non-GAAP) | $ | 975 | $ | 1,560 | $ | 2,865 | $ | (585 | ) | (37.50 | )% | $ | (1,890 | ) | (65.97 | )% | |||||||||
| TOWNEBANK | ||||||||||||||
| Insurance Segment Financial Information | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| Year Ended | Increase/(Decrease) | |||||||||||||
| December 31, | 2015 over 2014 | |||||||||||||
| 2015 | 2014 | Amount | Percent | |||||||||||
| Commission and fee income | ||||||||||||||
| Property and casualty | $ | 29,978 | $ | 25,067 | $ | 4,911 | 19.59 | % | ||||||
| Employee benefits | 10,279 | 10,732 | (453 | ) | (4.22 | )% | ||||||||
| Travel insurance | 3,297 | 2,353 | 944 | 40.12 | % | |||||||||
| Specialized benefit services | 557 | 544 | 13 | 2.39 | % | |||||||||
| Total commissions and fees | 44,111 | 38,696 | 5,415 | 13.99 | % | |||||||||
| Contingency and bonus revenue | 3,223 | 3,231 | (8 | ) | (0.25 | )% | ||||||||
| Other income | 206 | 343 | (137 | ) | (39.94 | )% | ||||||||
| Total revenue | $ | 47,540 | $ | 42,270 | $ | 5,270 | 12.47 | % | ||||||
| Employee commission expense | 8,711 | 8,342 | 369 | 4.42 | % | |||||||||
| Revenue, net of commission expense | $ | 38,829 | $ | 33,928 | $ | 4,901 | 14.45 | % | ||||||
| Salaries and employee benefits | $ | 19,974 | $ | 16,073 | $ | 3,901 | 24.27 | % | ||||||
| Occupancy expense | 1,954 | 1,688 | 266 | 15.76 | % | |||||||||
| Furniture and equipment | 904 | 737 | 167 | 22.66 | % | |||||||||
| Amortization of intangible assets | 2,285 | 1,879 | 406 | 21.61 | % | |||||||||
| Other expenses | 5,048 | 4,456 | 592 | 13.29 | % | |||||||||
| Total operating expenses | 30,165 | 24,833 | 5,332 | 21.47 | % | |||||||||
| Income before income tax, corporate allocation and noncontrolling interest | $ | 8,664 | $ | 9,095 | $ | (431 | ) | (4.74 | )% | |||||
| Plus: Acquisition related expenses | 186 | 255 | (69 | ) | (27.06 | )% | ||||||||
| Plus: Amortization of intangible assets | 2,285 | 1,879 | 406 | 21.61 | % | |||||||||
| Operating earnings before income taxes (non-GAAP) | $ | 11,135 | $ | 11,229 | $ | (94 | ) | (0.84 | )% | |||||
| TOWNEBANK | |||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures: | |||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||
| Three Months Ended | Twelve months ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
| 2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||
| Return on average assets (GAAP basis) | 0.78 | % | 1.14 | % | 0.57 | % | 1.03 | % | 0.87 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.07 | % | 0.07 | % | 0.06 | % | 0.07 | % | 0.06 | % | |||||||||
| Return on average tangible assets (Non-GAAP) | 0.85 | % | 1.21 | % | 0.63 | % | 1.10 | % | 0.93 | % | |||||||||
| Return on average equity (GAAP basis) | 6.00 | % | 8.58 | % | 4.62 | % | 7.75 | % | 6.95 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 2.11 | % | 2.67 | % | 1.73 | % | 2.59 | % | 2.21 | % | |||||||||
| Return on average tangible equity (Non-GAAP) | 8.11 | % | 11.25 | % | 6.35 | % | 10.34 | % | 9.16 | % | |||||||||
| Return on average common equity (GAAP basis) | 6.07 | % | 8.67 | % | 5.21 | % | 7.85 | % | 7.94 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 2.15 | % | 2.74 | % | 2.31 | % | 2.66 | % | 3.01 | % | |||||||||
| Return on average tangible common equity (Non-GAAP) | 8.22 | % | 11.41 | % | 7.52 | % | 10.51 | % | 10.95 | % | |||||||||
| Book value (GAAP basis) | $ | 15.71 | $ | 15.65 | $ | 14.88 | $ | 15.71 | $ | 14.88 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (3.50 | ) | (3.40 | ) | (3.79 | ) | (3.50 | ) | (3.79 | ) | |||||||||
| Tangible book value | $ | 12.21 | $ | 12.25 | $ | 11.09 | $ | 12.21 | $ | 11.09 | |||||||||