SUFFOLK, Va., Oct. 27, 2016 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank (the “Bank” or “Company”) (NASDAQ:TOWN) today reported financial results for the quarter and nine months ended September 30, 2016. Earnings for the quarter ended September 30, 2016 increased 37.63% to a record $24.18 million compared to $17.57 million for the same quarter in 2015. Fully diluted earnings per share were $0.39 compared to $0.34 for the third quarter of 2015. Earnings in the third quarter of 2016 included after-tax acquisition-related expenses of $0.70 million as compared to $0.16 million in the third quarter of 2015.
Excluding after-tax acquisition-related expenses, core earnings for the quarter ended September 30, 2016 were $24.88 million (non-GAAP) compared to $17.72 million (non-GAAP) for the same quarter in 2015. Fully diluted core earnings per share, excluding after-tax acquisition-related expenses, were $0.40 (non-GAAP measure) compared to $0.35 for the third quarter of 2015.
Earnings for the year-to-date period were $48.25 million as compared to the $49.92 million earned in the same period of 2015. Fully diluted earnings per share were $0.87 compared to $0.98 for the nine months ended September 30, 2015. Earnings in 2016 included after-tax acquisition-related expenses of $13.34 million as compared to $0.67 million in 2015. Earnings per share were also affected by the issuance of 10.49 million new common shares in conjunction with the acquisition of Monarch Financial Holdings, Inc. (“Monarch”) on June 24, 2016.
Excluding after-tax acquisition-related expenses, core earnings for the year-to-date period were $61.60 million (non-GAAP) as compared to the $50.58 million (non-GAAP) earned in the same period of 2015. Fully diluted earnings per share were $1.12 (non-GAAP) compared to $0.99 (non-GAAP) for the nine months ended September 30, 2015.
The Bank’s common dividend was $0.13 per share for the quarter with the common dividend totaling $8.11 million. The current dividend represents an increase of 8.3% over the dividend paid during the same quarter of 2015 and a payout ratio of 33.3%.
“We are extremely pleased with our strong operating performance driven in part by our successful merger integration of Monarch Bank into our Towne family. Reflective of our planned merger cost saves, our core return of average assets increased to 1.24%, producing a core return on average tangible equity of 13.23%. On another note of significance, the June 30, 2016 release of Deposit Market Share by the FDIC for the Virginia Beach-Norfolk-Newport News, VA-NC Metropolitan Statistical Area(s) placed TowneBank in a market leading position with a 21.51% market share,” said G. Robert Aston, Jr., Chairman and Chief Executive Officer.
Third Quarter 2016 Performance Highlights
- Total revenues were a record $109.43 million, an increase of $33.45 million, or 44.03%, from third quarter 2015
- Taxable equivalent net interest margin was 3.57%, including accretion of 17 basis points, compared to 3.40%, including accretion of 6 basis points, for third quarter 2015
- Residential mortgage banking income increased $13.17 million, or 159.38%
- Insurance segment total revenue increased 11.88% from third quarter 2015, to $13.22 million
- Core net income, excluding after-tax acquisition-related expenses, was $24.88 million, an increase of 40.36% from September 30, 2015
- Loans held for investment increased $1.28 billion, or 29.42%, from September 30, 2015, which included $808.14 million of loans acquired in the Monarch merger
- Average loans held for sale increased $349.14 million, or 264.07% from September 30, 2015
- Total deposits were $6.15 billion, an increase of $1.36 billion, or 28.39%, from third quarter 2015, which included $1.06 billion of deposits acquired in the Monarch merger
- Noninterest bearing deposits increased by 36.54%, to $1.97 billion and represent 32.12% of total deposits
- Total cost of deposits decreased to 0.38% from 0.41% at September 30, 2015
- Asset quality showed continued strength
- Nonperforming assets declined to $34.22 million, or 0.44% of total assets compared to $47.99 million, or 0.78%, at September 30, 2015
- Nonperforming loans were 0.20% of period end loans
- Foreclosed property decreased 42.08% to $22.88 million
- The Bank remained well-capitalized
- Common equity tier 1 capital ratio of 11.74%
- Tier 1 leverage capital ratio of 10.18%
- Tier 1 risk-based capital ratio of 11.81%
- Total risk-based capital ratio of 12.42%
Net Interest Income
Net interest income increased to $62.60 million, a $16.94 million, or 37.08%, increase from the third quarter of 2015. The primary driver was the increase in average earning assets, which increased $1.65 billion, or 29.47%, from third quarter 2015. Additionally, tax-equivalent net interest margin increased to 3.57% in the current quarter as compared to 3.40% in third quarter 2015. Accretion income added $2.63 million, or 17 basis points, to margin in the current quarter as compared to $0.68 million, or 6 basis points, in the third quarter of 2015.
Noninterest Income
Noninterest income, excluding gains or losses on investments, was $46.82 million for the third quarter of 2016, an increase of $17.25 million, or 58.35%, from the third quarter of 2015. Residential mortgage banking income increased $13.17 million, or 159.38%, from third quarter 2015 primarily due to higher production volumes resulting from the Monarch merger. Mortgage production was $1.25 billion in the third quarter of 2016, which was $811.86 million greater than third quarter 2015. Insurance commissions and other title fees increased $1.55 million, or 15.94%, primarily due to insurance agency acquisitions in 2015, combined with an increase in commercial lines and travel insurance commissions. Additionally, real estate brokerage and property management income increased $1.30 million, or 24.27%, from the third quarter of 2015 due to the acquisition of a resort property management company in Oak Island, North Carolina ("Oak Island") in first quarter 2016.
Noninterest Expense
Noninterest expense increased by $21.03 million, or 42.13%, from the comparative quarter of 2015. The primary driver was an increase of $11.59 million in salaries and benefits expense due to the addition of staff resulting from the Monarch acquisition, combined with the addition of staff resulting from the acquisitions in our Insurance and Realty segment businesses. Also contributing were increases in occupancy expenses of $1.95 million and furniture and equipment expenses of $0.99 million primarily related to facilities acquired in the Monarch acquisition.
Third Quarter 2016 Earnings Compared to Second Quarter 2016
Core net income for the third quarter, excluding after-tax acquisition-related expenses of $0.70 million, was $24.88 million, or $0.40 per diluted share, versus $18.52 million, or $0.36 per diluted share, excluding after-tax acquisition-related expenses of $12.26 million, for second quarter 2016.
Performance Highlights
- Record revenues of $109.43 million, a $25.17 million, or 29.88%, increase from second quarter 2016
- Taxable equivalent net interest margin was 3.57%, including accretion of 17 basis points, compared to 3.36%, including accretion of 5 basis points, for second quarter 2016
- Noninterest income increased $10.35 million primarily due to merger-related growth in our residential mortgage banking business
- Loans held for investment increased $91.69 million, or 1.65%, from June 30, 2016
- Noninterest bearing deposits increased by $23.58 million, or 1.21% during the quarter
- Nonperforming assets decreased 5.69% during the quarter
Net Interest Income
On a linked quarter basis, net interest income increased by $14.82 million, or 31.02%, in third quarter 2016 versus second quarter 2016, while tax-equivalent net interest margin was 3.57%, an increase of 21 basis points from second quarter 2016. Accretion income added $2.63 million, or 17 basis points, to margin in the current quarter, as compared to $0.61 million, or 5 basis points, in the linked quarter.
Noninterest Income
In comparison to the second quarter of 2016, noninterest income, excluding gains and losses on investment securities, increased $10.35 million, or 28.39%. Residential mortgage banking income increased by $9.28 million, or 76.41%, from the second quarter of 2016 as the Monarch merger was the primary driver of an increase in mortgage production of $654.89 million. Additionally, real estate brokerage and property management income increased due to seasonal improvements in our resort property management businesses. Partially offsetting the increase from the linked quarter was a decline in insurance commissions due to a seasonal decrease in renewals.
Noninterest Expense
Noninterest expense decreased by $0.97 million, or 1.34%, from the second quarter of 2016. Driving the decrease was a decline in acquisition-related expenses of $17.47 million. The decrease was mostly offset by increases in personnel and occupancy expenses due to the addition of staff and facilities resulting from the Monarch merger.
| Noninterest Income | % Change | ||||||||||||||||
| Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | |||||||||||||
| (dollars in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | ||||||||||||
| Residential mortgage banking income, net | $ | 21,430 | $ | 8,262 | $ | 12,148 | 159.38 | % | 76.41 | % | |||||||
| Insurance commissions and other title fees and income, net | 11,258 | 9,710 | 11,627 | 15.94 | % | (3.17 | )% | ||||||||||
| Real estate brokerage and property management, net | 6,647 | 5,349 | 6,116 | 24.27 | % | 8.68 | % | ||||||||||
| Service charges on deposit accounts | 2,552 | 2,388 | 2,284 | 6.87 | % | 11.73 | % | ||||||||||
| Credit card merchant fees, net | 1,365 | 823 | 1,113 | 65.86 | % | 22.64 | % | ||||||||||
| Other income | 3,569 | 3,036 | 3,180 | 17.56 | % | 12.23 | % | ||||||||||
| Subtotal before gain on investments | 46,821 | 29,568 | 36,468 | 58.35 | % | 28.39 | % | ||||||||||
| Net gain on investment securities | — | 736 | — | (100.00 | )% | N/M | |||||||||||
| Total noninterest income | $ | 46,821 | $ | 30,304 | $ | 36,468 | 54.50 | % | 28.39 | % | |||||||
| Noninterest Expense | % Change | ||||||||||||||||
| Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | |||||||||||||
| (dollars in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | ||||||||||||
| Salaries and benefits | $ | 40,497 | $ | 28,910 | $ | 30,093 | 40.08 | % | 34.57 | % | |||||||
| Occupancy expense | 6,656 | 4,703 | 5,157 | 41.53 | % | 29.07 | % | ||||||||||
| Furniture and equipment | 3,199 | 2,211 | 2,381 | 44.69 | % | 34.36 | % | ||||||||||
| Other expenses | 19,612 | 13,839 | 15,833 | 41.72 | % | 23.87 | % | ||||||||||
| Core noninterest expense | 69,964 | 49,663 | 53,464 | 40.88 | % | 30.86 | % | ||||||||||
| Acquisition-related expenses | 969 | 243 | 18,435 | 298.77 | % | (94.74 | )% | ||||||||||
| Total noninterest expense | $ | 70,933 | $ | 49,906 | $ | 71,899 | 42.13 | % | (1.34 | )% | |||||||
Segment Results
The following table presents our segment results:
| $ Change | ||||||||||||||||||||
| Segment Net Income | Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | |||||||||||||||
| (in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | |||||||||||||||
| Banking | $ | 18,276 | $ | 14,148 | $ | 1,290 | $ | 4,128 | $ | 16,986 | ||||||||||
| Realty | 4,815 | 2,345 | 3,765 | 2,470 | 1,050 | |||||||||||||||
| Insurance | 1,085 | 1,073 | 1,204 | 12 | (119 | ) | ||||||||||||||
| Total net income | $ | 24,176 | $ | 17,566 | $ | 6,259 | $ | 6,610 | $ | 17,917 | ||||||||||
Third Quarter 2016 Compared to Third Quarter 2015
Banking
Net income for the three months ended September 30, 2016 for the Banking segment was $18.28 million as compared to $14.15 million in the comparative 2015 quarter, as net interest income climbed by $14.17 million due to the increase in earning assets related to the Monarch merger. Average loan balances saw an increase of $1.28 billion. Partially offsetting the increase was an increase in noninterest expenses of $6.92 million and an increase in the loan loss provision.
Realty
For the three months ended September 30, 2016, the Realty segment had net income of $4.82 million compared to $2.35 million for the third quarter of 2015. The current quarter results were driven by an increase in residential mortgage banking income of $13.16 million, or 154.15%, due to higher production volumes resulting from the Monarch merger. Additionally, property management fees increased by $1.02 million, or 30.39%, primarily due to our purchase of Oak Island in January 2016. The increase in revenue was partially offset by an increase in operational expenses related to the merger with Monarch.
Insurance
The Insurance segment had net income of $1.09 million for the three months ended September 30, 2016, an increase of $0.01 million as compared to the third quarter of 2015. Insurance agencies acquired in 2015 contributed additional revenue, net of commission expense, of $0.97 million in third quarter 2016. Contributing to the increase was an improvement in commercial lines commissions and commissions from travel insurance. The acquired agencies resulted in additional noninterest expenses of $0.95 million, primarily related to personnel expenses.
Third Quarter 2016 Compared to Second Quarter 2016
Banking
The increase in earnings from $1.29 million in the second quarter of 2016 was driven by an increase in net interest income of $12.03 million due to the growth in earning assets resulting from the Monarch merger, combined with a decrease in noninterest expenses of $11.31 million and a decrease in the loan loss provision of $0.41 million. The decrease in noninterest expenses resulted from a decrease in acquisition-related expenses of $17.16 million, partially offset by an increase in personnel costs of $3.39 million.
Realty
Net income in the Realty segment increased by $1.05 million from the linked quarter ended June 30, 2016. The increase resulted primarily from the merger-driven growth in residential mortgage banking income of $9.20 million. Also contributing was a seasonal increase in our resort property management business.
Insurance
Net income decreased $0.12 million from the second quarter of 2016. The variance from the linked quarter was a result of a drop in contingency and bonus revenue of $0.40 million, combined with a seasonal decrease in travel insurance commissions of $0.24 million. Contingent commissions are seasonal in nature and are mostly received during the first quarter of each year. The seasonal decrease in revenue was partially offset by a decline in operating expenses during the current quarter.
Balance Sheet
At September 30, 2016, total Bank assets reached $7.83 billion, an increase of $1.66 billion, or 26.83%, over September 30, 2015.
Loans
| % Change | |||||||||||||||||
| Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | |||||||||||||
| (dollars in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | ||||||||||||
| Construction and land development | $ | 820,453 | $ | 554,753 | $ | 824,609 | 47.90 | % | (0.50 | )% | |||||||
| Commercial real estate - investment related properties | 1,283,619 | 1,020,860 | 1,221,488 | 25.74 | % | 5.09 | % | ||||||||||
| Commercial real estate - owner occupied | 905,870 | 775,290 | 896,620 | 16.84 | % | 1.03 | % | ||||||||||
| Multifamily real estate | 206,623 | 138,954 | 171,501 | 48.70 | % | 20.48 | % | ||||||||||
| 1-4 family residential real estate | 1,208,001 | 965,559 | 1,183,818 | 25.11 | % | 2.04 | % | ||||||||||
| Commercial and industrial business loans | 1,033,797 | 790,614 | 1,075,736 | 30.76 | % | (3.90 | )% | ||||||||||
| Consumer loans and other | 193,279 | 121,009 | 186,177 | 59.72 | % | 3.81 | % | ||||||||||
| Total | $ | 5,651,642 | $ | 4,367,039 | $ | 5,559,949 | 29.42 | % | 1.65 | % | |||||||
The Bank’s loan portfolio ended the period at $5.65 billion representing an increase of 29.42%, or $1.28 billion, from the prior year and an increase of 1.65%, or $91.69 million, from June 30, 2016. In addition to organic growth, the increase in loans from the prior year is related to the acquisition of $808.14 million loans in the Monarch merger on June 24, 2016.
Deposits
| % Change | |||||||||||||||||
| Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | |||||||||||||
| (dollars in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | ||||||||||||
| Noninterest-bearing demand | $ | 1,974,395 | $ | 1,445,978 | $ | 1,950,816 | 36.54 | % | 1.21 | % | |||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 2,207,962 | 1,676,623 | 2,174,154 | 31.69 | % | 1.55 | % | ||||||||||
| Savings | 315,477 | 295,952 | 317,071 | 6.60 | % | (0.50 | )% | ||||||||||
| Certificates of deposits | 1,649,113 | 1,369,325 | 1,744,238 | 20.43 | % | (5.45 | )% | ||||||||||
| Total | $ | 6,146,947 | $ | 4,787,878 | $ | 6,186,279 | 28.39 | % | (0.64 | )% | |||||||
The Bank continued to experience solid deposit growth with total deposits increasing to $6.15 billion, up $1.36 billion, or 28.39%, from September 30, 2015. Growth in total deposits includes $1.06 billion of deposits acquired in the Monarch merger. The Bank saw continued growth in noninterest bearing demand deposits, which ended the quarter at $1.97 billion, a 36.54% increase from September 30, 2015. Noninterest deposits represented 32.12% of total deposits at September 30, 2016.
Capital Ratios
| Q3 | Q3 | Q2 | |||||||
| 2016 | 2015 | 2016 | |||||||
| Common Equity Tier 1 | 11.74 | % | 12.52 | % | 11.82 | % | |||
| Tier 1 | 11.81 | % | 12.62 | % | 11.89 | % | |||
| Total | 12.42 | % | 13.35 | % | 12.50 | % | |||
| Tier 1 leverage ratio | 10.18 | % | 10.93 | % | 12.36 | % | |||
The Bank’s total equity at September 30, 2016 rose to $1.08 billion, an increase of $262.81 million, or 32.20%, from September 30, 2015. Total risk-based capital remained strong as common equity Tier 1, Tier 1 capital, total risk-based capital, and Tier 1 leverage capital ratios were 11.74%, 11.81%, 12.42%, and 10.18%, respectively. All ratios exceed the current regulatory standards for well capitalized status.
Asset Quality
| (in thousands) | 9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | 9/30/2015 | ||||||||||||||
| Nonperforming loans | $ | 11,337 | $ | 10,580 | $ | 7,944 | $ | 8,670 | $ | 8,477 | |||||||||
| Foreclosed property | 22,884 | 25,707 | 29,740 | 34,420 | 39,509 | ||||||||||||||
| Total nonperforming assets | $ | 34,221 | $ | 36,287 | $ | 37,684 | $ | 43,090 | $ | 47,986 | |||||||||
| Quarterly net loans charged off (recovered) | $ | 649 | $ | 241 | $ | 340 | $ | (156 | ) | $ | 69 | ||||||||
| Year-to-date net loans charged off | $ | 1,230 | $ | 581 | $ | 340 | $ | 585 | $ | 741 | |||||||||
| Change | ||||||||||||||||||||
| Q3 | Q3 | Q2 | Q3 16 vs. | Q3 16 vs. | ||||||||||||||||
| (dollars in thousands) | 2016 | 2015 | 2016 | Q3 15 | Q2 16 | |||||||||||||||
| Total loans 90 days past due and still accruing | $ | — | $ | 31 | $ | — | $ | (31 | ) | $ | — | |||||||||
| Total loans 30-89 days past due | $ | 6,707 | $ | 5,864 | $ | 5,041 | $ | 843 | $ | 1,666 | ||||||||||
| Allowance for loan losses | $ | 40,655 | $ | 37,351 | $ | 39,618 | $ | 3,304 | $ | 1,037 | ||||||||||
| Total performing TDRs | $ | 28,345 | $ | 29,920 | $ | 28,184 | $ | (1,575 | ) | $ | 161 | |||||||||
| Nonperforming loans to period end loans | 0.20 | % | 0.19 | % | 0.19 | % | 0.01 | % | 0.01 | % | ||||||||||
| Nonperforming assets to period end assets | 0.44 | % | 0.78 | % | 0.46 | % | (0.34 | )% | (0.02 | )% | ||||||||||
| Allowance for loan losses to period end loans | 0.72 | % | 0.86 | % | 0.71 | % | (0.14 | )% | 0.01 | % | ||||||||||
| Allowance for loan losses (originated) to originated period end loans | 0.91 | % | 0.96 | % | 0.90 | % | (0.05 | )% | 0.01 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | 0.05 | % | 0.01 | % | 0.02 | % | 0.04 | % | 0.03 | % | ||||||||||
| Ratio of allowance for loan losses to nonperforming loans | 3.59x | 4.41x | 3.74x | (0.82)x | (0.15)x | |||||||||||||||
Continued strength in credit quality contributed to the Bank's financial results as net charge-offs remained low at $0.65 million in the third quarter of 2016 compared to $0.07 million in the third quarter of 2015 and $0.24 million in the linked quarter. Total nonperforming assets were $34.22 million, or 0.44%, of Bank assets at September 30, 2016, as compared to $47.99 million, or 0.78%, at September 30, 2015, and $36.29 million, or 0.46%, at June 30, 2016. The allowance for loan losses was $40.66 million, increased from $37.35 million at September 30, 2015 and $39.62 million at June 30, 2016.
About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 38 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, Towne 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 $7.83 billion as of September 30, 2016, 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 their 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. 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 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:
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. 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 include but are not limited to 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. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
| TOWNEBANK | |||||||||||||||
| Selected Financial Highlights (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Increase/ | % Increase/ | ||||||||||||||
| Three months ended September 30, | 2016 | 2015 | (Decrease) | (Decrease) | |||||||||||
| Results of Operations: | |||||||||||||||
| Net interest income | $ | 62,605 | $ | 45,670 | $ | 16,935 | 37.08 | % | |||||||
| Noninterest income (1) | 46,821 | 29,568 | 17,253 | 58.35 | % | ||||||||||
| Gain on investment securities | — | 736 | (736 | ) | (100.00 | )% | |||||||||
| Total Revenue | 109,426 | 75,974 | 33,452 | 44.03 | % | ||||||||||
| Acquisition-related expenses | 969 | 243 | 726 | 298.77 | % | ||||||||||
| Noninterest expenses, excluding acquisition-related expenses | 69,964 | 49,663 | 20,301 | 40.88 | % | ||||||||||
| Provision for loan losses | 1,686 | 130 | 1,556 | N/M | |||||||||||
| Income before income tax and noncontrolling interest | 36,807 | 25,938 | 10,869 | 41.90 | % | ||||||||||
| Provision for income tax expense | 10,974 | 7,444 | 3,530 | 47.42 | % | ||||||||||
| Net income | 25,833 | 18,494 | 7,339 | 39.68 | % | ||||||||||
| Net income attributable to noncontrolling interest | (1,657 | ) | (928 | ) | (729 | ) | 78.56 | % | |||||||
| Net income attributable to TowneBank | 24,176 | 17,566 | 6,610 | 37.63 | % | ||||||||||
| Net income available to common shareholders | 24,176 | 17,566 | 6,610 | 37.63 | % | ||||||||||
| Net income per common share - basic | 0.39 | 0.34 | 0.05 | 14.71 | % | ||||||||||
| Net income per common share - diluted | 0.39 | 0.34 | 0.05 | 14.71 | % | ||||||||||
| Period End Data: | |||||||||||||||
| Total assets | $ | 7,830,142 | $ | 6,173,891 | $ | 1,656,251 | 26.83 | % | |||||||
| Total assets - tangible | 7,525,817 | 5,998,373 | 1,527,444 | 25.46 | % | ||||||||||
| Earning assets (2) | 7,197,077 | 5,508,341 | 1,688,736 | 30.66 | % | ||||||||||
| Loans (net of unearned income) | 5,651,642 | 4,367,039 | 1,284,603 | 29.42 | % | ||||||||||
| Allowance for loan losses | 40,655 | 37,351 | 3,304 | 8.85 | % | ||||||||||
| Goodwill and other intangibles | 304,325 | 175,518 | 128,807 | 73.39 | % | ||||||||||
| Nonperforming assets | 34,221 | 47,986 | (13,765 | ) | (28.69 | )% | |||||||||
| Noninterest bearing deposits | 1,974,395 | 1,445,978 | 528,417 | 36.54 | % | ||||||||||
| Interest bearing deposits | 4,172,552 | 3,341,900 | 830,652 | 24.86 | % | ||||||||||
| Total deposits | 6,146,947 | 4,787,878 | 1,359,069 | 28.39 | % | ||||||||||
| Total equity | 1,078,878 | 816,069 | 262,809 | 32.20 | % | ||||||||||
| Total equity - tangible | 774,553 | 640,551 | 134,002 | 20.92 | % | ||||||||||
| Common equity | 1,067,193 | 807,152 | 260,041 | 32.22 | % | ||||||||||
| Common equity - tangible | 762,868 | 631,634 | 131,234 | 20.78 | % | ||||||||||
| Book value per common share | 17.11 | 15.65 | 1.46 | 9.33 | % | ||||||||||
| Book value per common share - tangible | 12.23 | 12.25 | (0.02 | ) | (0.16 | )% | |||||||||
| Daily Average Balances: | |||||||||||||||
| Total assets | $ | 7,991,213 | $ | 6,115,681 | $ | 1,875,532 | 30.67 | % | |||||||
| Total assets - tangible | 7,689,122 | 5,940,258 | 1,748,864 | 29.44 | % | ||||||||||
| Earning assets (2) | 7,255,956 | 5,604,472 | 1,651,484 | 29.47 | % | ||||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 5,583,711 | 4,300,751 | 1,282,960 | 29.83 | % | ||||||||||
| Allowance for loan losses | 40,004 | 37,926 | 2,078 | 5.48 | % | ||||||||||
| Goodwill and other intangibles | 302,091 | 175,423 | 126,668 | 72.21 | % | ||||||||||
| Noninterest bearing deposits | 1,959,025 | 1,388,002 | 571,023 | 41.14 | % | ||||||||||
| Interest bearing deposits | 4,219,316 | 3,346,874 | 872,442 | 26.07 | % | ||||||||||
| Total deposits | 6,178,341 | 4,734,876 | 1,443,465 | 30.49 | % | ||||||||||
| Total equity | 1,075,023 | 812,602 | 262,421 | 32.29 | % | ||||||||||
| Total equity - tangible | 772,932 | 637,179 | 135,753 | 21.31 | % | ||||||||||
| Common equity | 1,064,179 | 804,090 | 260,089 | 32.35 | % | ||||||||||
| Common equity - tangible | 762,088 | 628,667 | 133,421 | 21.22 | % | ||||||||||
| Key Ratios: | |||||||||||||||
| Return on average assets | 1.20 | % | 1.14 | % | 0.06 | % | 5.26 | % | |||||||
| Return on average assets - tangible | 1.29 | % | 1.21 | % | 0.08 | % | 6.61 | % | |||||||
| Return on average equity | 8.95 | % | 8.58 | % | 0.37 | % | 4.31 | % | |||||||
| Return on average equity - tangible | 12.87 | % | 11.25 | % | 1.62 | % | 14.40 | % | |||||||
| Return on average common equity | 9.04 | % | 8.67 | % | 0.37 | % | 4.27 | % | |||||||
| Return on average common equity - tangible | 13.05 | % | 11.41 | % | 1.64 | % | 14.37 | % | |||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.57 | % | 3.40 | % | 0.17 | % | 5.00 | % | |||||||
| Net interest margin (2) | 3.50 | % | 3.32 | % | 0.18 | % | 5.42 | % | |||||||
| Average earning assets/total average assets | 90.80 | % | 91.64 | % | (0.84 | )% | (0.92 | )% | |||||||
| Average loans/average deposits | 90.38 | % | 90.83 | % | (0.45 | )% | (0.50 | )% | |||||||
| Average noninterest deposits/total average deposits | 31.71 | % | 29.31 | % | 2.40 | % | 8.19 | % | |||||||
| Allowance for loan losses/period end loans | 0.72 | % | 0.86 | % | (0.14 | )% | (16.28 | )% | |||||||
| Nonperforming assets to period end assets | 0.44 | % | 0.78 | % | (0.34 | )% | (43.59 | )% | |||||||
| Period end equity/period end total assets | 13.78 | % | 13.22 | % | 0.56 | % | 4.24 | % | |||||||
| Efficiency ratio (1) | 64.82 | % | 66.33 | % | (1.51 | )% | (2.28 | )% | |||||||
| (1) Excludes gain on investment securities | |||||||||||||||
| (2) Includes bank-owned life insurance | |||||||||||||||
| (3) Presented on a tax-equivalent basis | |||||||||||||||
| TOWNEBANK | |||||||||||||||
| Selected Financial Highlights (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Increase/ | % Increase/ | ||||||||||||||
| Nine Months Ended September 30, | 2016 | 2015 | (Decrease) | (Decrease) | |||||||||||
| Results of Operations: | |||||||||||||||
| Net interest income | $ | 156,724 | $ | 134,111 | $ | 22,613 | 16.86 | % | |||||||
| Noninterest income (1) | 115,704 | 89,368 | 26,336 | 29.47 | % | ||||||||||
| Gain on investment securities | — | 904 | (904 | ) | (100.00 | )% | |||||||||
| Gain on investment properties | — | 1,933 | (1,933 | ) | (100.00 | )% | |||||||||
| Total Revenue | 272,428 | 226,316 | 46,112 | 20.38 | % | ||||||||||
| Acquisition-related expenses | 19,817 | 1,027 | 18,790 | N/M | |||||||||||
| Noninterest expenses, excluding acquisition-related expenses | 175,175 | 148,387 | 26,788 | 18.05 | % | ||||||||||
| Provision for loan losses | 3,526 | 2,176 | 1,350 | 62.04 | % | ||||||||||
| Income before income tax and noncontrolling interest | 73,910 | 74,726 | (816 | ) | (1.09 | )% | |||||||||
| Provision for income tax expense | 21,538 | 22,030 | (492 | ) | (2.23 | )% | |||||||||
| Net income | 52,372 | 52,696 | (324 | ) | (0.61 | )% | |||||||||
| Net income attributable to noncontrolling interest | (4,118 | ) | (2,780 | ) | (1,338 | ) | 48.13 | % | |||||||
| Net income attributable to TowneBank | 48,254 | 49,916 | (1,662 | ) | (3.33 | )% | |||||||||
| Preferred stock dividends | — | 13 | (13 | ) | (100.00 | )% | |||||||||
| Net income available to common shareholders | 48,254 | 49,903 | (1,649 | ) | (3.30 | )% | |||||||||
| Net income per common share - basic | 0.88 | 0.98 | (0.10 | ) | (10.20 | )% | |||||||||
| Net income per common share - diluted | 0.87 | 0.98 | (0.11 | ) | (11.22 | )% | |||||||||
| Period End Data: | |||||||||||||||
| Total assets | $ | 7,830,142 | $ | 6,173,891 | $ | 1,656,251 | 26.83 | % | |||||||
| Total assets - tangible | 7,525,817 | 5,998,373 | 1,527,444 | 25.46 | % | ||||||||||
| Earning assets (2) | 7,197,077 | 5,508,341 | 1,688,736 | 30.66 | % | ||||||||||
| Loans (net of unearned income) | 5,651,642 | 4,367,039 | 1,284,603 | 29.42 | % | ||||||||||
| Allowance for loan losses | 40,655 | 37,351 | 3,304 | 8.85 | % | ||||||||||
| Goodwill and other intangibles | 304,325 | 175,518 | 128,807 | 73.39 | % | ||||||||||
| Nonperforming assets | 34,221 | 47,986 | (13,765 | ) | (28.69 | )% | |||||||||
| Noninterest bearing deposits | 1,974,395 | 1,445,978 | 528,417 | 36.54 | % | ||||||||||
| Interest bearing deposits | 4,172,552 | 3,341,900 | 830,652 | 24.86 | % | ||||||||||
| Total deposits | 6,146,947 | 4,787,878 | 1,359,069 | 28.39 | % | ||||||||||
| Total equity | 1,078,878 | 816,069 | 262,809 | 32.20 | % | ||||||||||
| Total equity - tangible | 774,553 | 640,551 | 134,002 | 20.92 | % | ||||||||||
| Common equity | 1,067,193 | 807,152 | 260,041 | 32.22 | % | ||||||||||
| Common equity - tangible | 762,868 | 631,634 | 131,234 | 20.78 | % | ||||||||||
| Book value per common share | 17.11 | 15.65 | 1.46 | 9.33 | % | ||||||||||
| Book value per common share - tangible | 12.23 | 12.25 | (0.02 | ) | (0.16 | )% | |||||||||
| Daily Average Balances: | |||||||||||||||
| Total assets | $ | 6,949,985 | $ | 5,949,725 | $ | 1,000,260 | 16.81 | % | |||||||
| Total assets - tangible | 6,722,029 | 5,770,456 | 951,573 | 16.49 | % | ||||||||||
| Earning assets (2) | 6,368,707 | 5,435,333 | 933,374 | 17.17 | % | ||||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 4,936,641 | 4,177,038 | 759,603 | 18.19 | % | ||||||||||
| Allowance for loan losses | 38,996 | 36,950 | 2,046 | 5.54 | % | ||||||||||
| Goodwill and other intangibles | 227,956 | 179,269 | 48,687 | 27.16 | % | ||||||||||
| Noninterest bearing deposits | 1,638,902 | 1,317,517 | 321,385 | 24.39 | % | ||||||||||
| Interest bearing deposits | 3,756,169 | 3,279,354 | 476,815 | 14.54 | % | ||||||||||
| Total deposits | 5,395,071 | 4,596,871 | 798,200 | 17.36 | % | ||||||||||
| Total equity | 922,272 | 798,381 | 123,891 | 15.52 | % | ||||||||||
| Total equity - tangible | 694,316 | 619,111 | 75,205 | 12.15 | % | ||||||||||
| Common equity | 912,502 | 788,128 | 124,374 | 15.78 | % | ||||||||||
| Common equity - tangible | 684,546 | 608,858 | 75,688 | 12.43 | % | ||||||||||
| Key Ratios: | |||||||||||||||
| Return on average assets | 0.93 | % | 1.12 | % | (0.19 | )% | (16.96 | )% | |||||||
| Return on average assets - tangible | 1.00 | % | 1.19 | % | (0.19 | )% | (15.97 | )% | |||||||
| Return on average equity | 6.99 | % | 8.36 | % | (1.37 | )% | (16.39 | )% | |||||||
| Return on average equity - tangible | 9.70 | % | 11.12 | % | (1.42 | )% | (12.77 | )% | |||||||
| Return on average common equity | 7.06 | % | 8.47 | % | (1.41 | )% | (16.65 | )% | |||||||
| Return on average common equity - tangible | 9.84 | % | 11.30 | % | (1.46 | )% | (12.92 | )% | |||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.45 | % | 3.48 | % | (0.03 | )% | (0.86 | )% | |||||||
| Net interest margin (2) | 3.36 | % | 3.39 | % | (0.03 | )% | (0.88 | )% | |||||||
| Average earning assets/total average assets | 91.64 | % | 91.35 | % | 0.29 | % | 0.32 | % | |||||||
| Average loans/average deposits | 91.50 | % | 90.87 | % | 0.63 | % | 0.69 | % | |||||||
| Average noninterest deposits/total average deposits | 30.38 | % | 28.66 | % | 1.72 | % | 6.00 | % | |||||||
| Allowance for loan losses/period end loans | 0.72 | % | 0.86 | % | (0.14 | )% | (16.28 | )% | |||||||
| Nonperforming assets to period end assets | 0.44 | % | 0.78 | % | (0.34 | )% | (43.59 | )% | |||||||
| Period end equity/period end total assets | 13.78 | % | 13.22 | % | 0.56 | % | 4.24 | % | |||||||
| Efficiency ratio (1) | 71.58 | % | 66.86 | % | 4.72 | % | 7.06 | % | |||||||
| (1) Excludes gain on investment securities and properties | |||||||||||||||
| (2) Includes bank-owned life insurance | |||||||||||||||
| (3) Presented on a tax-equivalent basis | |||||||||||||||
| TOWNEBANK | |||||||||||||||
| Selected Financial Highlights (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| September 30, | June 30, | Increase/ | % Increase/ | ||||||||||||
| Three Months Ended | 2016 | 2016 | (Decrease) | (Decrease) | |||||||||||
| Results of Operations: | |||||||||||||||
| Net interest income | $ | 62,605 | $ | 47,784 | $ | 14,821 | 31.02 | % | |||||||
| Noninterest income (1) | 46,821 | 36,468 | 10,353 | 28.39 | % | ||||||||||
| Total Revenue | 109,426 | 84,252 | 25,174 | 29.88 | % | ||||||||||
| Acquisition-related expenses | 969 | 18,435 | (17,466 | ) | (94.74 | )% | |||||||||
| Noninterest expenses, excluding acquisition-related expenses | 69,964 | 53,464 | 16,500 | 30.86 | % | ||||||||||
| Provision for loan losses | 1,686 | 2,099 | (413 | ) | (19.68 | )% | |||||||||
| Income before income tax and noncontrolling interest | 36,807 | 10,254 | 26,553 | 258.95 | % | ||||||||||
| Provision for income tax expense | 10,974 | 2,375 | 8,599 | 362.06 | % | ||||||||||
| Net income | 25,833 | 7,879 | 17,954 | 227.87 | % | ||||||||||
| Net income attributable to noncontrolling interest | (1,657 | ) | (1,620 | ) | (37 | ) | 2.28 | % | |||||||
| Net income attributable to TowneBank | 24,176 | 6,259 | 17,917 | 286.26 | % | ||||||||||
| Net income available to common shareholders | 24,176 | 6,259 | 17,917 | 286.26 | % | ||||||||||
| Net income per common share - basic | 0.39 | 0.12 | 0.27 | 225.00 | % | ||||||||||
| Net income per common share - diluted | 0.39 | 0.12 | 0.27 | 225.00 | % | ||||||||||
| Period End Data: | |||||||||||||||
| Total assets | $ | 7,830,142 | $ | 7,940,741 | $ | (110,599 | ) | (1.39 | )% | ||||||
| Total assets - tangible | 7,525,817 | 7,641,740 | (115,923 | ) | (1.52 | )% | |||||||||
| Earning assets (2) | 7,197,077 | 7,310,561 | (113,484 | ) | (1.55 | )% | |||||||||
| Loans (net of unearned income) | 5,651,642 | 5,559,949 | 91,693 | 1.65 | % | ||||||||||
| Allowance for loan losses | 40,655 | 39,618 | 1,037 | 2.62 | % | ||||||||||
| Goodwill and other intangibles | 304,325 | 299,000 | 5,325 | 1.78 | % | ||||||||||
| Nonperforming assets | 34,221 | 36,287 | (2,066 | ) | (5.69 | )% | |||||||||
| Noninterest bearing deposits | 1,974,395 | 1,950,816 | 23,579 | 1.21 | % | ||||||||||
| Interest bearing deposits | 4,172,552 | 4,235,463 | (62,911 | ) | (1.49 | )% | |||||||||
| Total deposits | 6,146,947 | 6,186,279 | (39,332 | ) | (0.64 | )% | |||||||||
| Total equity | 1,078,878 | 1,061,548 | 17,330 | 1.63 | % | ||||||||||
| Total equity - tangible | 774,553 | 762,548 | 12,005 | 1.57 | % | ||||||||||
| Common equity | 1,067,193 | 1,050,360 | 16,833 | 1.60 | % | ||||||||||
| Common equity - tangible | 762,868 | 751,360 | 11,508 | 1.53 | % | ||||||||||
| Book value per common share | 17.11 | 16.84 | 0.27 | 1.60 | % | ||||||||||
| Book value per common share - tangible | 12.23 | 12.05 | 0.18 | 1.49 | % | ||||||||||
| Daily Average Balances: | |||||||||||||||
| Total assets | $ | 7,991,213 | $ | 6,534,063 | $ | 1,457,150 | 22.30 | % | |||||||
| Total assets - tangible | 7,689,122 | 6,339,815 | 1,349,307 | 21.28 | % | ||||||||||
| Earning assets (2) | 7,255,956 | 6,025,033 | 1,230,923 | 20.43 | % | ||||||||||
| Loans (net of unearned income), excluding nonaccrual loans | 5,583,711 | 4,702,825 | 880,886 | 18.73 | % | ||||||||||
| Allowance for loan losses | 40,004 | 38,419 | 1,585 | 4.13 | % | ||||||||||
| Goodwill and other intangibles | 302,091 | 194,248 | 107,843 | 55.52 | % | ||||||||||
| Noninterest bearing deposits | 1,959,025 | 1,538,370 | 420,655 | 27.34 | % | ||||||||||
| Interest bearing deposits | 4,219,316 | 3,544,493 | 674,823 | 19.04 | % | ||||||||||
| Total deposits | 6,178,341 | 5,082,863 | 1,095,478 | 21.55 | % | ||||||||||
| Total equity | 1,075,023 | 859,938 | 215,085 | 25.01 | % | ||||||||||
| Total equity - tangible | 772,932 | 665,690 | 107,242 | 16.11 | % | ||||||||||
| Common equity | 1,064,179 | 850,393 | 213,786 | 25.14 | % | ||||||||||
| Common equity - tangible | 762,088 | 656,145 | 105,943 | 16.15 | % | ||||||||||
| Key Ratios: | |||||||||||||||
| Return on average assets | 1.20 | % | 0.39 | % | 0.81 | % | 207.69 | % | |||||||
| Return on average assets - tangible | 1.29 | % | 0.44 | % | 0.85 | % | 193.18 | % | |||||||
| Return on average equity | 8.95 | % | 2.93 | % | 6.02 | % | 205.46 | % | |||||||
| Return on average equity - tangible | 12.87 | % | 4.19 | % | 8.68 | % | 207.16 | % | |||||||
| Return on average common equity | 9.04 | % | 2.96 | % | 6.08 | % | 205.41 | % | |||||||
| Return on average common equity - tangible | 13.05 | % | 4.25 | % | 8.80 | % | 207.06 | % | |||||||
| Net interest margin-fully tax equivalent (2)(3) | 3.57 | % | 3.36 | % | 0.21 | % | 6.25 | % | |||||||
| Net interest margin (2) | 3.50 | % | 3.27 | % | 0.23 | % | 7.03 | % | |||||||
| Average earning assets/total average assets | 90.80 | % | 92.21 | % | (1.41 | )% | (1.53 | )% | |||||||
| Average loans/average deposits | 90.38 | % | 92.52 | % | (2.14 | )% | (2.31 | )% | |||||||
| Average noninterest deposits/total average deposits | 31.71 | % | 30.27 | % | 1.44 | % | 4.76 | % | |||||||
| Allowance for loan losses/period end loans | 0.72 | % | 0.71 | % | 0.01 | % | 1.41 | % | |||||||
| Nonperforming assets to period end assets | 0.44 | % | 0.46 | % | (0.02 | )% | (4.35 | )% | |||||||
| Period end equity/period end total assets | 13.78 | % | 13.37 | % | 0.41 | % | 3.07 | % | |||||||
| Efficiency ratio (1) | 64.82 | % | 85.34 | % | (20.52 | )% | (24.04 | )% | |||||||
| (1) Excludes gain on investment securities | |||||||||||||||
| (2) Includes bank-owned life insurance | |||||||||||||||
| (3) Presented on a tax-equivalent basis | |||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||||||||
| 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 | $ | 5,583,711 | $ | 65,245 | 4.65 | % | $ | 4,702,825 | $ | 52,232 | 4.47 | % | $ | 4,300,751 | $ | 49,398 | 4.56 | % | ||||||||
| Taxable investment securities | 687,480 | 2,703 | 1.57 | % | 671,792 | 2,734 | 1.63 | % | 796,062 | 3,235 | 1.63 | % | ||||||||||||||
| Tax-exempt investment securities | 53,180 | 396 | 2.98 | % | 52,398 | 405 | 3.09 | % | 61,048 | 493 | 3.23 | % | ||||||||||||||
| Interest-bearing deposits | 287,672 | (36 | ) | (0.05 | )% | 289,698 | 364 | 0.51 | % | 167,247 | 107 | 0.25 | % | |||||||||||||
| Loans held for sale | 481,358 | 4,137 | 3.44 | % | 156,425 | 1,294 | 3.31 | % | 132,214 | 1,246 | 3.77 | % | ||||||||||||||
| Bank-owned life insurance | 162,555 | 1,945 | 4.76 | % | 151,895 | 1,817 | 4.81 | % | 147,150 | 1,877 | 5.06 | % | ||||||||||||||
| Total earning assets | 7,255,956 | 74,390 | 4.08 | % | 6,025,033 | 58,846 | 3.93 | % | 5,604,472 | 56,356 | 3.99 | % | ||||||||||||||
| Less: allowance for loan losses | (40,004 | ) | (38,419 | ) | (37,926 | ) | ||||||||||||||||||||
| Total nonearning assets | 775,261 | 547,449 | 549,135 | |||||||||||||||||||||||
| Total assets | $ | 7,991,213 | $ | 6,534,063 | $ | 6,115,681 | ||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||
| Demand and money market | $ | 2,216,987 | $ | 1,674 | 0.30 | % | $ | 1,813,502 | $ | 1,298 | 0.29 | % | $ | 1,693,424 | $ | 1,201 | 0.28 | % | ||||||||
| Savings | 318,193 | 723 | 0.90 | % | 301,542 | 709 | 0.95 | % | 297,041 | 695 | 0.93 | % | ||||||||||||||
| Certificates of deposit | 1,684,136 | 3,512 | 0.83 | % | 1,429,449 | 3,260 | 0.92 | % | 1,356,409 | 2,985 | 0.87 | % | ||||||||||||||
| Total interest-bearing deposits | 4,219,316 | 5,909 | 0.56 | % | 3,544,493 | 5,267 | 0.60 | % | 3,346,874 | 4,881 | 0.58 | % | ||||||||||||||
| Borrowings | 512,027 | 3,309 | 2.53 | % | 469,939 | 3,190 | 2.69 | % | 472,120 | 3,435 | 2.85 | % | ||||||||||||||
| Total interest-bearing liabilities | 4,731,343 | 9,218 | 0.78 | % | 4,014,432 | 8,457 | 0.85 | % | 3,818,994 | 8,316 | 0.86 | % | ||||||||||||||
| Demand deposits | 1,959,025 | 1,538,370 | 1,388,002 | |||||||||||||||||||||||
| Other noninterest-bearing liabilities | 225,822 | 121,323 | 96,083 | |||||||||||||||||||||||
| Total liabilities | 6,916,190 | 5,674,125 | 5,303,079 | |||||||||||||||||||||||
| Shareholders’ equity | 1,075,023 | 859,938 | 812,602 | |||||||||||||||||||||||
| Total liabilities and equity | $ | 7,991,213 | $ | 6,534,063 | $ | 6,115,681 | ||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 65,172 | $ | 50,389 | $ | 48,040 | ||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| Bank-owned life insurance | (1,945 | ) | (1,817 | ) | (1,877 | ) | ||||||||||||||||||||
| Tax-equivalent basis adjustment | (622 | ) | (788 | ) | (493 | ) | ||||||||||||||||||||
| Net interest income (GAAP) | $ | 62,605 | $ | 47,784 | $ | 45,670 | ||||||||||||||||||||
| Interest rate spread (1) | 3.30 | % | 3.08 | % | 3.13 | % | ||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.51 | % | 0.56 | % | 0.59 | % | ||||||||||||||||||||
| Net interest margin (tax equivalent basis) (2) | 3.57 | % | 3.36 | % | 3.40 | % | ||||||||||||||||||||
| Total cost of deposits | 0.38 | % | 0.42 | % | 0.41 | % | ||||||||||||||||||||
(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 (unaudited) | |||||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||||
| Nine Months Ended | Nine Months Ended | Nine Months Ended September 30, 2016 | |||||||||||||||||||||||||
| September 30, 2016 | September 30, 2015 | Compared with September 30, 2015 | |||||||||||||||||||||||||
| 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 | $ | 4,936,641 | $ | 168,257 | 4.55 | % | $ | 4,177,038 | $ | 146,020 | 4.67 | % | $ | 22,309 | $ | (3,787 | ) | $ | 26,096 | ||||||||
| Taxable investment securities | 704,532 | 8,492 | 1.61 | % | 787,996 | 8,862 | 1.50 | % | (370 | ) | 609 | (979 | ) | ||||||||||||||
| Tax-exempt investment securities | 52,854 | 1,211 | 3.05 | % | 63,684 | 1,524 | 3.19 | % | (314 | ) | (63 | ) | (250 | ) | |||||||||||||
| Interest-bearing deposits | 280,900 | 658 | 0.31 | % | 152,472 | 287 | 0.25 | % | 371 | 83 | 288 | ||||||||||||||||
| Loans held for sale | 238,983 | 6,124 | 3.42 | % | 109,592 | 2,971 | 3.62 | % | 3,153 | (172 | ) | 3,324 | |||||||||||||||
| Bank-owned life insurance | 154,796 | 5,564 | 4.80 | % | 144,551 | 5,674 | 5.25 | % | (110 | ) | (853 | ) | 743 | ||||||||||||||
| Total earning assets | 6,368,706 | 190,306 | 3.99 | % | 5,435,333 | 165,338 | 4.07 | % | 25,039 | (4,183 | ) | 29,222 | |||||||||||||||
| Less: allowance for loan losses | (38,996 | ) | (36,950 | ) | |||||||||||||||||||||||
| Total nonearning assets | 620,275 | 551,342 | |||||||||||||||||||||||||
| Total assets | $ | 6,949,985 | $ | 5,949,725 | |||||||||||||||||||||||
| Liabilities and Equity: | |||||||||||||||||||||||||||
| Interest-bearing deposits | |||||||||||||||||||||||||||
| Demand and money market | $ | 1,938,818 | $ | 4,300 | 0.30 | % | $ | 1,658,531 | $ | 3,456 | 0.28 | % | $ | 844 | $ | 230 | $ | 614 | |||||||||
| Savings | 306,644 | 2,132 | 0.93 | % | 300,996 | 2,071 | 0.92 | % | 61 | 21 | 40 | ||||||||||||||||
| Certificates of deposit | 1,510,707 | 9,957 | 0.88 | % | 1,319,827 | 8,220 | 0.83 | % | 1,736 | 492 | 1,244 | ||||||||||||||||
| Total interest-bearing deposits | 3,756,169 | 16,389 | 0.58 | % | 3,279,354 | 13,747 | 0.56 | % | 2,641 | 743 | 1,898 | ||||||||||||||||
| Borrowings | 483,692 | 9,685 | 2.63 | % | 460,195 | 10,205 | 2.92 | % | (519 | ) | (1,018 | ) | 498 | ||||||||||||||
| Total interest-bearing liabilities | 4,239,861 | 26,074 | 0.82 | % | 3,739,549 | 23,952 | 0.86 | % | 2,122 | (275 | ) | 2,396 | |||||||||||||||
| Demand deposits | 1,638,902 | 1,317,517 | |||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 148,950 | 94,278 | |||||||||||||||||||||||||
| Total liabilities | 6,027,713 | 5,151,344 | |||||||||||||||||||||||||
| Shareholders’ equity | 922,272 | 798,381 | |||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,949,985 | $ | 5,949,725 | |||||||||||||||||||||||
| Net interest income (tax- equivalent basis) | $ | 164,232 | $ | 141,386 | $ | 22,846 | $ | (3,908 | ) | $ | 26,826 | ||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | |||||||||||||||||||||||||||
| Bank-owned life insurance | (5,564 | ) | (5,674 | ) | 110 | ||||||||||||||||||||||
| Tax-equivalent basis adjustment | (1,943 | ) | (1,601 | ) | (413 | ) | |||||||||||||||||||||
| Net interest income (GAAP) | $ | 156,725 | $ | 134,111 | $ | 22,543 | |||||||||||||||||||||
| Interest rate spread (1) | 3.17 | % | 3.21 | % | |||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.55 | % | 0.59 | % | |||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (2) | 3.45 | % | 3.48 | % | |||||||||||||||||||||||
| Total cost of deposits | 0.41 | % | 0.40 | % | |||||||||||||||||||||||
| (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, except share data) | |||||||||||
| September 30, | December 31, | ||||||||||
| 2016 | 2015 | 2015 | |||||||||
| (unaudited) | (audited) | ||||||||||
| ASSETS | |||||||||||
| Cash and due from banks | $ | 147,887 | $ | 284,625 | $ | 250,836 | |||||
| Interest-bearing deposits in financial institutions | 6,891 | 1,000 | 1,001 | ||||||||
| Total Cash and Cash Equivalents | 154,778 | 285,625 | 251,837 | ||||||||
| Securities available for sale, at fair value | 704,418 | 542,634 | 723,489 | ||||||||
| Securities held to maturity, at amortized cost | 70,304 | 75,154 | 69,045 | ||||||||
| Federal Home Loan Bank stock, at amortized cost | 24,888 | 24,058 | 23,691 | ||||||||
| Total Securities | 799,610 | 641,846 | 816,225 | ||||||||
| Mortgage loans held for sale | 439,608 | 99,330 | 102,346 | ||||||||
| Loans, net of unearned income and deferred costs: | |||||||||||
| Real estate - residential 1-4 family | 1,208,001 | 965,559 | 973,331 | ||||||||
| Real estate - commercial | 2,189,489 | 1,796,150 | 1,784,393 | ||||||||
| Real estate - construction and land development | 820,453 | 554,753 | 598,875 | ||||||||
| Real estate - multifamily | 206,623 | 138,954 | 167,371 | ||||||||
| Commercial and industrial business | 1,033,797 | 790,614 | 857,036 | ||||||||
| Consumer and other loans | 193,279 | 121,009 | 138,387 | ||||||||
| Loans, net of unearned income and deferred costs | 5,651,642 | 4,367,039 | 4,519,393 | ||||||||
| Less: Allowance for loan losses | (40,655 | ) | (37,351 | ) | (38,359 | ) | |||||
| Net Loans | 5,610,987 | 4,329,688 | 4,481,034 | ||||||||
| Premises and equipment, net | 202,955 | 172,940 | 173,695 | ||||||||
| Goodwill | 264,578 | 152,438 | 154,842 | ||||||||
| Other intangible assets, net | 39,747 | 23,080 | 26,153 | ||||||||
| Bank-owned life insurance policies | 163,385 | 147,949 | 149,452 | ||||||||
| Other assets | 154,494 | 320,995 | 140,990 | ||||||||
| TOTAL ASSETS | $ | 7,830,142 | $ | 6,173,891 | $ | 6,296,574 | |||||
| LIABILITIES AND EQUITY | |||||||||||
| Liabilities | |||||||||||
| Deposits: | |||||||||||
| Noninterest-bearing demand | $ | 1,974,395 | $ | 1,445,978 | $ | 1,393,264 | |||||
| Interest-bearing: | |||||||||||
| Demand and money market accounts | 2,207,962 | 1,676,623 | 1,824,226 | ||||||||
| Savings | 315,477 | 295,952 | 300,408 | ||||||||
| Certificates of deposit | 1,649,113 | 1,369,325 | 1,396,129 | ||||||||
| Total Deposits | 6,146,947 | 4,787,878 | 4,914,027 | ||||||||
| Advances from the Federal Home Loan Bank | 427,655 | 437,282 | 429,080 | ||||||||
| Repurchase agreements and other borrowings | 31,927 | 33,784 | 37,434 | ||||||||
| Total Borrowings | 459,582 | 471,066 | 466,514 | ||||||||
| Other liabilities | 144,735 | 98,878 | 95,839 | ||||||||
| TOTAL LIABILITIES | 6,751,264 | 5,357,822 | 5,476,380 | ||||||||
| Shareholders’ Equity | |||||||||||
| Preferred stock: | |||||||||||
| Authorized and unissued shares - 2,000,000 | — | — | — | ||||||||
| Common stock, $1.667 par: 90,000,000 shares authorized | |||||||||||
| 62,387,564; 51,580,762; and 51,605,521 shares issued at | |||||||||||
| September 30, 2016 and 2015 and December 31, 2015, respectively | 104,000 | 85,985 | 86,026 | ||||||||
| Capital surplus | 743,223 | 533,609 | 535,094 | ||||||||
| Retained earnings | 218,631 | 186,522 | 192,795 | ||||||||
| Common stock issued to deferred compensation trust, at cost | |||||||||||
| 683,833; 651,362; and 648,350 shares at | |||||||||||
| September 30, 2016 and 2015 and December 31, 2015, respectively | (10,969 | ) | (10,151 | ) | (10,172 | ) | |||||
| Deferred compensation trust | 10,969 | 10,151 | 10,172 | ||||||||
| Accumulated other comprehensive income (loss) | 1,339 | 1,036 | (2,994 | ) | |||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,067,193 | 807,152 | 810,921 | ||||||||
| Noncontrolling interests | 11,685 | 8,917 | 9,273 | ||||||||
| TOTAL EQUITY | 1,078,878 | 816,069 | 820,194 | ||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 7,830,142 | $ | 6,173,891 | $ | 6,296,574 | |||||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income (unaudited) | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 64,623 | $ | 48,906 | $ | 166,313 | $ | 144,418 | |||||||
| Investment securities | 3,099 | 3,728 | 9,703 | 10,386 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | (36 | ) | 107 | 658 | 287 | ||||||||||
| Mortgage loans held for sale | 4,137 | 1,246 | 6,124 | 2,971 | |||||||||||
| Total Interest Income | 71,823 | 53,987 | 182,798 | 158,062 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 5,909 | 4,881 | 16,389 | 13,747 | |||||||||||
| Advances from the Federal Home Loan Bank | 3,276 | 3,422 | 9,606 | 10,160 | |||||||||||
| Repurchase agreements and other borrowings | 33 | 14 | 79 | 44 | |||||||||||
| Total Interest Expense | 9,218 | 8,317 | 26,074 | 23,951 | |||||||||||
| Net Interest Income | 62,605 | 45,670 | 156,724 | 134,111 | |||||||||||
| PROVISION FOR LOAN LOSSES | 1,686 | 130 | 3,526 | 2,176 | |||||||||||
| Net Interest Income after Provision for Loan Losses | 60,919 | 45,540 | 153,198 | 131,935 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 21,430 | 8,262 | 40,696 | 26,956 | |||||||||||
| Insurance commissions and other title fees and income, net | 11,258 | 9,710 | 36,918 | 30,644 | |||||||||||
| Real estate brokerage and property management income, net | 6,647 | 5,349 | 17,591 | 13,888 | |||||||||||
| Service charges on deposit accounts | 2,552 | 2,388 | 7,012 | 6,911 | |||||||||||
| Credit card merchant fees, net | 1,365 | 823 | 3,373 | 1,821 | |||||||||||
| Other income | 3,569 | 3,036 | 10,114 | 11,081 | |||||||||||
| Net gain on investment securities | — | 736 | — | 904 | |||||||||||
| Total Noninterest Income | 46,821 | 30,304 | 115,704 | 92,205 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 40,497 | 28,910 | 100,776 | 83,133 | |||||||||||
| Occupancy expense | 6,656 | 4,703 | 16,831 | 14,489 | |||||||||||
| Furniture and equipment | 3,199 | 2,211 | 7,937 | 6,949 | |||||||||||
| Other expenses | 20,581 | 14,082 | 69,448 | 44,843 | |||||||||||
| Total Noninterest Expense | 70,933 | 49,906 | 194,992 | 149,414 | |||||||||||
| Income before income tax expense and noncontrolling interest | 36,807 | 25,938 | 73,910 | 74,726 | |||||||||||
| Provision for income tax expense | 10,974 | 7,444 | 21,538 | 22,030 | |||||||||||
| Net income | 25,833 | 18,494 | 52,372 | 52,696 | |||||||||||
| Net income attributable to noncontrolling interest | (1,657 | ) | (928 | ) | (4,118 | ) | (2,780 | ) | |||||||
| Net income attributable to TowneBank | $ | 24,176 | $ | 17,566 | $ | 48,254 | $ | 49,916 | |||||||
| Preferred stock dividends | — | — | — | 13 | |||||||||||
| Net income available to common shareholders | $ | 24,176 | $ | 17,566 | $ | 48,254 | $ | 49,903 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.39 | $ | 0.34 | $ | 0.88 | $ | 0.98 | |||||||
| Diluted earnings | $ | 0.39 | $ | 0.34 | $ | 0.87 | $ | 0.98 | |||||||
| Cash dividends declared | $ | 0.13 | $ | 0.12 | $ | 0.38 | $ | 0.35 | |||||||
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Comprehensive Income (unaudited) | |||||||||||||||
| (dollars in thousands) | |||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||
| September 30, | September 30, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | ||||||||||||
| Net income | $ | 25,833 | $ | 18,494 | $ | 52,372 | $ | 52,696 | |||||||
| Other comprehensive income (loss) | |||||||||||||||
| Unrealized gains (losses) on securities | |||||||||||||||
| Unrealized holding gains (losses) arising during the period | (516 | ) | 1,822 | 6,294 | 1,536 | ||||||||||
| Deferred tax benefit (expense) | 180 | (638 | ) | (2,203 | ) | (538 | ) | ||||||||
| Realized gains reclassified into earnings | — | (736 | ) | — | (785 | ) | |||||||||
| Deferred tax benefit | — | 258 | — | 275 | |||||||||||
| Net unrealized gains (losses) | (336 | ) | 706 | 4,091 | 488 | ||||||||||
| Pension and postretirement benefit plans | |||||||||||||||
| Actuarial gains | — | — | 109 | — | |||||||||||
| Deferred tax expense | — | — | (38 | ) | — | ||||||||||
| Amortization of prior service costs | 110 | — | 263 | — | |||||||||||
| Deferred tax expense | (38 | ) | — | (91 | ) | — | |||||||||
| Amortization of net actuarial (gain) loss | (2 | ) | 60 | (2 | ) | 138 | |||||||||
| Deferred tax benefit (expense) | 1 | (21 | ) | 1 | (48 | ) | |||||||||
| Change in defined benefit retirement plan, net of tax | 71 | 39 | 242 | 90 | |||||||||||
| Other comprehensive income (loss), net of tax | (265 | ) | 745 | 4,333 | 578 | ||||||||||
| Comprehensive income | $ | 25,568 | $ | 19,239 | $ | 56,705 | $ | 53,274 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except share data) | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | (unaudited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 147,887 | $ | 188,183 | $ | 195,161 | $ | 250,836 | $ | 284,625 | |||||||||
| Interest-bearing deposits in financial institutions | 6,891 | 33,777 | 1,006 | 1,001 | 1,000 | ||||||||||||||
| Federal funds sold | — | 14 | — | — | — | ||||||||||||||
| Total Cash and Cash Equivalents | 154,778 | 221,974 | 196,167 | 251,837 | 285,625 | ||||||||||||||
| Securities available for sale, at fair value | 704,418 | 812,375 | 821,551 | 723,489 | 542,634 | ||||||||||||||
| Securities held to maturity, at amortized cost | 70,304 | 65,728 | 66,921 | 69,045 | 75,154 | ||||||||||||||
| Federal Home Loan Bank stock, at amortized cost | 24,888 | 28,008 | 23,903 | 23,691 | 24,058 | ||||||||||||||
| Total Securities | 799,610 | 906,111 | 912,375 | 816,225 | 641,846 | ||||||||||||||
| Mortgage loans held for sale | 439,608 | 474,978 | 97,491 | 102,346 | 99,330 | ||||||||||||||
| Loans, net of unearned income and deferred costs: | 5,651,642 | 5,559,949 | 4,552,260 | 4,519,393 | 4,367,039 | ||||||||||||||
| Less: allowance for loan losses | (40,655 | ) | (39,618 | ) | (37,760 | ) | (38,359 | ) | (37,351 | ) | |||||||||
| Net Loans | 5,610,987 | 5,520,331 | 4,514,500 | 4,481,034 | 4,329,688 | ||||||||||||||
| Premises and equipment, net | 202,955 | 202,333 | 178,154 | 173,695 | 172,940 | ||||||||||||||
| Goodwill | 264,578 | 257,485 | 157,659 | 154,842 | 152,438 | ||||||||||||||
| Other intangible assets, net | 39,747 | 41,515 | 29,286 | 26,153 | 23,080 | ||||||||||||||
| Bank-owned life insurance policies | 163,385 | 164,933 | 150,623 | 149,452 | 147,949 | ||||||||||||||
| Other assets | 154,494 | 151,081 | 128,914 | 140,990 | 320,995 | ||||||||||||||
| TOTAL ASSETS | $ | 7,830,142 | $ | 7,940,741 | $ | 6,365,169 | $ | 6,296,574 | $ | 6,173,891 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 1,974,395 | $ | 1,950,816 | $ | 1,449,660 | $ | 1,393,264 | $ | 1,445,978 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 2,207,962 | 2,174,154 | 1,769,414 | 1,824,226 | 1,676,623 | ||||||||||||||
| Savings | 315,477 | 317,071 | 302,373 | 300,408 | 295,952 | ||||||||||||||
| Certificates of deposit | 1,649,113 | 1,744,238 | 1,433,679 | 1,396,129 | 1,369,325 | ||||||||||||||
| Total Deposits | 6,146,947 | 6,186,279 | 4,955,126 | 4,914,027 | 4,787,878 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 427,655 | 500,798 | 428,940 | 429,080 | 437,282 | ||||||||||||||
| Repurchase agreements and other borrowings | 31,927 | 44,008 | 39,442 | 37,434 | 33,784 | ||||||||||||||
| Total Borrowings | 459,582 | 544,806 | 468,382 | 466,514 | 471,066 | ||||||||||||||
| Other liabilities | 144,735 | 148,108 | 105,658 | 95,839 | 98,878 | ||||||||||||||
| TOTAL LIABILITIES | 6,751,264 | 6,879,193 | 5,529,166 | 5,476,380 | 5,357,822 | ||||||||||||||
| Preferred stock | |||||||||||||||||||
| Authorized and unissued shares - 2,000,000 | — | — | — | — | — | ||||||||||||||
| Common stock, $1.667 par value | 104,000 | 103,963 | 86,151 | 86,026 | 85,985 | ||||||||||||||
| Capital surplus | 743,223 | 742,228 | 536,294 | 535,094 | 533,609 | ||||||||||||||
| Retained earnings | 218,631 | 202,565 | 204,413 | 192,795 | 186,522 | ||||||||||||||
| Common stock issued to deferred compensation trust, at cost | (10,969 | ) | (10,785 | ) | (10,288 | ) | (10,172 | ) | (10,151 | ) | |||||||||
| Deferred compensation trust | 10,969 | 10,785 | 10,288 | 10,172 | 10,151 | ||||||||||||||
| Accumulated other comprehensive income (loss) | 1,339 | 1,604 | 17 | (2,994 | ) | 1,036 | |||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,067,193 | 1,050,360 | 826,875 | 810,921 | 807,152 | ||||||||||||||
| Noncontrolling interest | 11,685 | 11,188 | 9,128 | 9,273 | 8,917 | ||||||||||||||
| TOTAL EQUITY | 1,078,878 | 1,061,548 | 836,003 | 820,194 | 816,069 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 7,830,142 | $ | 7,940,741 | $ | 6,365,169 | $ | 6,296,574 | $ | 6,173,891 | |||||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | |||||||||||||||
| 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 64,623 | $ | 51,444 | $ | 50,247 | $ | 50,319 | $ | 48,906 | |||||||||
| Investment securities | 3,099 | 3,139 | 3,464 | 3,415 | 3,728 | ||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | (36 | ) | 364 | 330 | 212 | 107 | |||||||||||||
| Mortgage loans held for sale | 4,137 | 1,294 | 693 | 865 | 1,246 | ||||||||||||||
| Total Interest Income | 71,823 | 56,241 | 54,734 | 54,811 | 53,987 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 5,909 | 5,267 | 5,213 | 5,119 | 4,881 | ||||||||||||||
| Advances from the Federal Home Loan Bank | 3,276 | 3,158 | 3,163 | 3,326 | 3,422 | ||||||||||||||
| Repurchase agreements and other borrowings | 33 | 32 | 22 | 35 | 14 | ||||||||||||||
| Total Interest Expense | 9,218 | 8,457 | 8,398 | 8,480 | 8,317 | ||||||||||||||
| Net Interest Income | 62,605 | 47,784 | 46,336 | 46,331 | 45,670 | ||||||||||||||
| PROVISION FOR LOAN LOSSES | 1,686 | 2,099 | (259 | ) | 852 | 130 | |||||||||||||
| Net Interest Income after Provision for Loan Losses | 60,919 | 45,685 | 46,595 | 45,479 | 45,540 | ||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 21,430 | 12,148 | 7,118 | 7,255 | 8,262 | ||||||||||||||
| Insurance commissions and other title fees and income, net | 11,258 | 11,627 | 14,033 | 8,997 | 9,710 | ||||||||||||||
| Real estate brokerage and property management income, net | 6,647 | 6,116 | 4,827 | 2,438 | 5,349 | ||||||||||||||
| Service charges on deposit accounts | 2,552 | 2,284 | 2,176 | 2,254 | 2,388 | ||||||||||||||
| Credit card merchant fees, net | 1,365 | 1,113 | 895 | 767 | 823 | ||||||||||||||
| Other income | 3,569 | 3,180 | 3,366 | 3,368 | 3,036 | ||||||||||||||
| Net gain on investment securities | — | — | — | — | 736 | ||||||||||||||
| Total Noninterest Income | 46,821 | 36,468 | 32,415 | 25,079 | 30,304 | ||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 40,497 | 30,093 | 30,187 | 30,826 | 28,910 | ||||||||||||||
| Occupancy expense | 6,656 | 5,157 | 5,017 | 5,156 | 4,703 | ||||||||||||||
| Furniture and equipment | 3,199 | 2,381 | 2,357 | 2,390 | 2,211 | ||||||||||||||
| Other expenses | 20,581 | 34,268 | 14,600 | 14,371 | 14,082 | ||||||||||||||
| Total Noninterest Expense | 70,933 | 71,899 | 52,161 | 52,743 | 49,906 | ||||||||||||||
| Income before income tax expense and noncontrolling interest | 36,807 | 10,254 | 26,849 | 17,815 | 25,938 | ||||||||||||||
| Provision for income tax expense | 10,974 | 2,375 | 8,188 | 4,846 | 7,444 | ||||||||||||||
| Net income | 25,833 | 7,879 | 18,661 | 12,969 | 18,494 | ||||||||||||||
| Net income attributable to noncontrolling interest | (1,657 | ) | (1,620 | ) | (842 | ) | (503 | ) | (928 | ) | |||||||||
| Net income attributable to TowneBank | $ | 24,176 | $ | 6,259 | $ | 17,819 | $ | 12,466 | $ | 17,566 | |||||||||
| Preferred stock dividends | — | — | — | — | — | ||||||||||||||
| Net income available to common shareholders | $ | 24,176 | $ | 6,259 | $ | 17,819 | $ | 12,466 | $ | 17,566 | |||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.39 | $ | 0.12 | $ | 0.35 | $ | 0.24 | $ | 0.34 | |||||||||
| Diluted earnings | $ | 0.39 | $ | 0.12 | $ | 0.35 | $ | 0.24 | $ | 0.34 | |||||||||
| Basic weighted average shares outstanding | 61,908,316 | 51,994,473 | 51,290,010 | 51,267,447 | 51,153,205 | ||||||||||||||
| Diluted weighted average shares outstanding | 62,067,832 | 52,116,772 | 51,392,857 | 51,440,440 | 51,263,382 | ||||||||||||||
| Cash dividends declared | $ | 0.13 | $ | 0.13 | $ | 0.12 | $ | 0.12 | $ | 0.12 | |||||||||
| TOWNEBANK | |||||||||||||||||||||||||
| Insurance Segment Financial Information | |||||||||||||||||||||||||
| (dollars in thousands) | |||||||||||||||||||||||||
| Increase/(Decrease) | |||||||||||||||||||||||||
| Three Months Ended | September 30, 2016 | September 30, 2016 | |||||||||||||||||||||||
| September 30, | June 30, | September 30, 2015 | June 30, 2016 | ||||||||||||||||||||||
| 2016 | 2015 | 2016 | Amount | Percent | Amount | Percent | |||||||||||||||||||
| Commission and fee income | |||||||||||||||||||||||||
| Property and casualty | $ | 9,068 | $ | 8,156 | $ | 8,815 | $ | 912 | 11.18 | % | $ | 253 | 2.87 | % | |||||||||||
| Employee benefits | 2,947 | 2,578 | 2,907 | 369 | 14.31 | % | 40 | 1.38 | % | ||||||||||||||||
| Travel insurance | 926 | 626 | 1,163 | 300 | 47.92 | % | (237 | ) | (20.38 | )% | |||||||||||||||
| Specialized benefit services | 154 | 145 | 152 | 9 | 6.21 | % | 2 | 1.32 | % | ||||||||||||||||
| Total commissions and fees | 13,095 | 11,505 | 13,037 | 1,590 | 13.82 | % | 58 | 0.44 | % | ||||||||||||||||
| Contingency and bonus revenue | 45 | 260 | 445 | (215 | ) | (82.69 | )% | (400 | ) | (89.89 | )% | ||||||||||||||
| Other income | 82 | 53 | 52 | 29 | 54.72 | % | 30 | 57.69 | % | ||||||||||||||||
| Total revenue | $ | 13,222 | $ | 11,818 | $ | 13,534 | $ | 1,404 | 11.88 | % | $ | (312 | ) | (2.31 | )% | ||||||||||
| Employee commission expense | 2,482 | 2,361 | 2,254 | 121 | 5.12 | % | 228 | 10.12 | % | ||||||||||||||||
| Revenue, net of commission expense | $ | 10,740 | $ | 9,457 | $ | 11,280 | $ | 1,283 | 13.57 | % | $ | (540 | ) | (4.79 | )% | ||||||||||
| Salaries and employee benefits | 5,790 | 4,583 | 5,723 | 1,207 | 26.34 | % | 67 | 1.17 | % | ||||||||||||||||
| Occupancy expense | 537 | 480 | 517 | 57 | 11.88 | % | 20 | 3.87 | % | ||||||||||||||||
| Furniture and equipment | 78 | 202 | 259 | (124 | ) | (61.39 | )% | (181 | ) | (69.88 | )% | ||||||||||||||
| Amortization of intangible assets | 706 | 543 | 692 | 163 | 30.02 | % | 14 | 2.02 | % | ||||||||||||||||
| Other expenses | 1,385 | 1,491 | 1,586 | (106 | ) | (7.11 | )% | (201 | ) | (12.67 | )% | ||||||||||||||
| Total operating expenses | 8,496 | 7,299 | 8,777 | 1,197 | 16.40 | % | (281 | ) | (3.20 | )% | |||||||||||||||
| Income before income tax provision and noncontrolling interest | $ | 2,244 | $ | 2,158 | $ | 2,503 | $ | 86 | 3.99 | % | $ | (259 | ) | (10.35 | )% | ||||||||||
| Plus: Acquisition related expenses | — | 164 | 277 | (164 | ) | (100.00 | )% | (277 | ) | (100.00 | )% | ||||||||||||||
| Plus: Amortization of intangible assets | 706 | 543 | 692 | 163 | 30.02 | % | 14 | 2.02 | % | ||||||||||||||||
| Operating earnings before income taxes (non-GAAP) | $ | 2,950 | $ | 2,865 | $ | 3,472 | $ | 85 | 2.97 | % | $ | (522 | ) | (15.03 | )% | ||||||||||
| TOWNEBANK | ||||||||||||||
| Insurance Segment Financial Information | ||||||||||||||
| (dollars in thousands) | ||||||||||||||
| Nine Months Ended | Increase/(Decrease) | |||||||||||||
| September 30, | 2016 over 2015 | |||||||||||||
| 2016 | 2015 | Amount | Percent | |||||||||||
| Net commission and fee income | ||||||||||||||
| Property and casualty | $ | 26,029 | $ | 22,627 | $ | 3,402 | 15.04 | % | ||||||
| Employee benefits | 8,753 | 7,690 | 1,063 | 13.82 | % | |||||||||
| Travel insurance | 3,546 | 2,668 | 878 | 32.91 | % | |||||||||
| Specialized benefit services | 459 | 413 | 46 | 11.14 | % | |||||||||
| Total commissions and fees | 38,787 | 33,398 | 5,389 | 16.14 | % | |||||||||
| Contingency and bonus revenue | 3,842 | 3,171 | 671 | 21.16 | % | |||||||||
| Other income | 208 | 148 | 60 | 40.54 | % | |||||||||
| Total revenues | $ | 42,837 | $ | 36,717 | $ | 6,120 | 16.67 | % | ||||||
| Employee commission expense | 6,903 | 6,723 | 180 | 2.68 | % | |||||||||
| Revenue, net of commission expense | $ | 35,934 | $ | 29,994 | $ | 5,940 | 19.80 | % | ||||||
| Salaries and employee benefits | $ | 17,481 | $ | 14,111 | $ | 3,370 | 23.88 | % | ||||||
| Occupancy expense | 1,582 | 1,416 | 166 | 11.72 | % | |||||||||
| Furniture and equipment | 562 | 669 | (107 | ) | (15.99 | )% | ||||||||
| Amortization of intangible assets | 2,083 | 1,609 | 474 | 29.46 | % | |||||||||
| Other expenses | 4,361 | 4,157 | 204 | 4.91 | % | |||||||||
| Total operating expenses | 26,069 | 21,962 | 4,107 | 18.70 | % | |||||||||
| Income before income tax provision and noncontrolling interest | $ | 9,865 | $ | 8,032 | $ | 1,833 | 22.82 | % | ||||||
| Plus: Acquisition related expenses | 354 | 520 | (166 | ) | (31.92 | )% | ||||||||
| Plus: Amortization of intangible assets | 2,083 | 1,609 | 474 | 29.46 | % | |||||||||
| Operating earnings before income taxes (non-GAAP) | $ | 12,302 | $ | 10,161 | $ | 2,141 | 21.07 | % | ||||||
| TOWNEBANK | ||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | September 30, | December 31, | September 30, | September 30, | ||||||||||||||||
| 2016 | 2015 | 2015 | 2016 | 2015 | ||||||||||||||||
| Return on average assets (GAAP basis) | 1.20 | % | 1.14 | % | 0.78 | % | 0.93 | % | 1.12 | % | ||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.09 | % | 0.07 | % | 0.07 | % | 0.07 | % | 0.07 | % | ||||||||||
| Return on average tangible assets (Non-GAAP) | 1.29 | % | 1.21 | % | 0.85 | % | 1.00 | % | 1.19 | % | ||||||||||
| Return on average equity (GAAP basis) | 8.95 | % | 8.58 | % | 6.00 | % | 6.99 | % | 8.36 | % | ||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 3.92 | % | 2.67 | % | 2.11 | % | 2.71 | % | 2.76 | % | ||||||||||
| Return on average tangible equity (Non-GAAP) | 12.87 | % | 11.25 | % | 8.11 | % | 9.70 | % | 11.12 | % | ||||||||||
| Return on average common equity (GAAP basis) | 9.04 | % | 8.67 | % | 6.07 | % | 7.06 | % | 8.47 | % | ||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 4.01 | % | 2.74 | % | 2.15 | % | 2.78 | % | 2.83 | % | ||||||||||
| Return on average tangible common equity (Non-GAAP) | 13.05 | % | 11.41 | % | 8.22 | % | 9.84 | % | 11.30 | % | ||||||||||
| Book value (GAAP basis) | $ | 17.11 | 15.65 | $ | 15.71 | $ | 17.11 | $ | 15.65 | |||||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (4.88 | ) | (3.40 | ) | (3.50 | ) | (4.88 | ) | (3.40 | ) | ||||||||||
| Tangible book value | $ | 12.23 | $ | 12.25 | $ | 12.21 | $ | 12.23 | $ | 12.25 | ||||||||||
| TOWNEBANK | ||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| Reconcilement of GAAP Earnings to Core Operating Earnings | 2016 | 2016 | 2016 | 2015 | 2015 | |||||||||||||||
| Net income (GAAP) | $ | 24,176 | $ | 6,259 | $ | 17,819 | $ | 12,466 | $ | 17,566 | ||||||||||
| Acquisition-related expenses | 969 | 18,435 | 414 | 285 | 243 | |||||||||||||||
| Non-core charges | 969 | 18,435 | 414 | 285 | 243 | |||||||||||||||
| Income tax expense | (267 | ) | (6,177 | ) | (33 | ) | (100 | ) | (85 | ) | ||||||||||
| Non-core charges, net of taxes | 702 | 12,258 | 381 | 185 | 158 | |||||||||||||||
| Core operating earnings (non-GAAP) | $ | 24,878 | $ | 18,517 | $ | 18,200 | $ | 12,651 | $ | 17,724 | ||||||||||
| Weighted average diluted shares | 62,067,832 | 52,116,772 | 51,392,857 | 51,440,440 | 51,263,382 | |||||||||||||||
| Diluted EPS (GAAP) | $ | 0.39 | $ | 0.12 | $ | 0.35 | $ | 0.24 | $ | 0.34 | ||||||||||
| Core diluted EPS (non-GAAP) | $ | 0.40 | $ | 0.36 | $ | 0.35 | $ | 0.25 | $ | 0.35 | ||||||||||
| Average assets | $ | 7,991,213 | $ | 6,534,063 | $ | 6,313,238 | $ | 6,305,571 | $ | 6,115,681 | ||||||||||
| Average tangible equity | 772,932 | $ | 665,690 | $ | 643,464 | $ | 638,855 | $ | 637,179 | |||||||||||
| Core return on average assets (non-GAAP) | 1.24 | % | 1.14 | % | 1.16 | % | 0.80 | % | 1.15 | % | ||||||||||
| Core return on average tangible equity (non-GAAP) | 13.23 | % | 11.60 | % | 11.80 | % | 8.23 | % | 11.35 | % | ||||||||||
| TOWNEBANK | ||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||
| (dollars in thousands) | ||||||||
| Nine Months Ended | ||||||||
| September 30, | September 30, | |||||||
| Reconcilement of GAAP Earnings to Core Operating Earnings | 2016 | 2015 | ||||||
| Net income (GAAP) | $ | 48,254 | $ | 49,916 | ||||
| Acquisition-related expenses | 19,817 | 1,027 | ||||||
| Non-core charges | 19,817 | 1,027 | ||||||
| Income tax expense | (6,476 | ) | (359 | ) | ||||
| Non-core charges, net of taxes | 13,341 | 668 | ||||||
| Core operating earnings (non-GAAP) | $ | 61,595 | $ | 50,584 | ||||
| Weighted average diluted shares | 55,238,139 | 51,046,899 | ||||||
| Diluted EPS (GAAP) | $ | 0.87 | $ | 0.98 | ||||
| Core diluted EPS (non-GAAP) | $ | 1.12 | $ | 0.99 | ||||
| Average assets | $ | 6,949,985 | $ | 5,949,725 | ||||
| Average tangible equity | $ | 694,316 | $ | 619,111 | ||||
| Core return on average assets (non-GAAP) | 1.18 | % | 1.14 | % | ||||
| Core return on average tangible equity (non-GAAP) | 12.27 | % | 11.26 | % | ||||