SUFFOLK, Va., Jan. 28, 2021 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (Nasdaq: TOWN) today reported financial results for the full year and the fourth quarter ended December 31, 2020. For the year ended December 31, 2020, earnings were $145.54 million, or $2.01 per diluted share, compared to $138.78 million, or $1.92 per diluted share for the year ended December 31, 2019. Earnings in the fourth quarter of 2020 were $50.08 million, or $0.69 per diluted share, compared to fourth quarter 2019 earnings of $35.08 million, or $0.49 per diluted share.
“We were pleased to deliver our 21St consecutive year of increased earnings during a year filled with challenges and opportunities. We achieved solid financial results while facing economic headwinds and prudently building substantial reserves to address future economic uncertainty. Our unique business model enabled our HomeTowne bankers to support our members and the communities we serve with more than $1.1 billion in funds through the Paycheck Protection Program. Additionally, our diverse sources of revenue resulted in record levels of total revenues which eclipsed $664 million for the year. TowneMortgage achieved record volumes and delivered a strong performance by closing more than $5.88 billion in mortgages. These accomplishments were the result of hard work and dedication from our more than 2,800 team members who work each day defining our culture of caring,” said G. Robert Aston, Jr., Executive Chairman.
Quarter Highlights:
- Total revenues were $171.85 million, in fourth quarter 2020, an increase over the prior year quarter of $32.18 million, or 23.04%.
- Quarterly pre-provision, pre-tax, net revenues (non-GAAP) were $62.11 million, an increase of $15.65 million, or 33.67%.
- During fourth quarter 2020, we completed a core banking system conversion to allow the Company to provide a greater variety of financial services to our members through new technologies and enhanced digital solutions.
- Loans held for investment increased $1.21 billion, or 14.37%, from December 31, 2019, and decreased $141.50 million, or 1.45%, from September 30, 2020. The balance at December 31, 2020 and September 30, 2020 included $0.86 billion and $1.10 billion, respectively, of loans originated under the Small Business Administration's Paycheck Protection Program ("PPP"). Excluding PPP, loans held for investment increased $353.89 million, or 4.20%, compared to prior year, and $105.75 million, or 4.85% on an annualized basis, compared to the linked quarter.
- Total deposits were $11.57 billion, an increase of $2.30 billion, or 24.83%, compared to prior year but a decrease, due to expected runoff and seasonality, of $131.80 million, or 1.13%, from September 30, 2020.
- Noninterest bearing deposits increased by 48.23%, to $4.37 billion, compared to prior year, representing 37.80% of total deposits. Compared to the linked quarter, noninterest bearing deposits decreased 2.01%.
- In the quarter ended December 31, 2020, annualized return on average common shareholders' equity was 11.36% and annualized return on average tangible common shareholders' equity was 16.48% (non-GAAP). For the full 12 months, return on average common shareholders' equity was 8.52% and return on average tangible common shareholders' equity was 12.76% (non-GAAP).
- Net interest margin of 2.97% and taxable equivalent net interest margin of 2.98% (non-GAAP) compared to the prior year quarter of 3.33% and 3.35%, respectively.
- Effective tax rate of 17.21% compared to 18.17% at December 31, 2019.
“In addition to our financial results, we concluded a multi-year system conversion during the fourth quarter. This system will enable us to improve our digital capabilities and drive revenue growth. We opened the door to over 700 new relationships through our efforts with the Paycheck Protection Program, having onboarded 65% of those new banking relationships throughout 2020. We continue to have strong interest in nonbank acquisitions and completed an insurance agency acquisition in late December,” said J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to the Fourth Quarter of 2019:
- Net interest income was $100.61 million compared to $89.96 million for the quarter ended December 31, 2019. Included in net interest income was PPP interest and fee income of $11.29 million and $0, respectively.
- Taxable equivalent net interest margin was 2.98%, including purchase accounting accretion of 5 basis points and PPP accretion of 5 basis points, compared to 3.35%, including purchase accounting accretion of 9 basis points, for 2019.
- Average loans held for investment, with an average yield of 4.28%, represented 72.32% of average earning assets in the fourth quarter of 2020 compared to an average yield of 4.81%, which represented 77.25% of average earning assets in the fourth quarter of 2019.
- Total cost of deposits decreased to 0.37% from 0.92% at December 31, 2019.
- Average interest-earning assets totaled $13.48 billion at December 31, 2020 compared to $10.72 billion at December 31, 2019, an increase of 25.76%.
- Average interest-bearing liabilities totaled $8.03 billion, an increase of $0.97 billion, or 13.74%, from the prior year.
- Total interest expense decreased 42.04%, to $15.37 million in fourth quarter 2020 compared to $26.52 million in fourth quarter 2019, and decreased $3.40 million, or 18.11%, compared to the linked quarter.
Quarterly Provision for Loan Losses:
- Recorded a provision for loan losses of $1.21 million compared to $3.60 million one year ago and $28.26 million in the linked quarter. A combination of modest loan growth, significantly higher provisions in the two previous quarters, and improvements in the economic forecast were the drivers in the lower fourth quarter 2020 provision.
- Net charge-offs were $0.11 million compared to $0.80 million one year prior. The ratio of net charge-offs (recoveries) to average loans on an annualized basis was 0.00% in fourth quarter 2020, (0.01)% in the linked quarter, and 0.04% in fourth quarter 2019.
- Recorded a provision for credit losses on off-balance sheet commitments of $0.06 million compared to $3.50 million in the linked quarter.
- The allowance for loan losses represented 1.25% of total loans compared to 1.22% at September 30, 2020 and 0.69% at December 31, 2019. Excluding PPP loans, which are fully government guaranteed, the allowance for credit losses (non-GAAP) was 1.37%, at December 31, 2020 and September 30, 2020. The allowance for loan losses was 10.74 times nonperforming loans compared to 7.31 times at September 30, 2020 and 3.34 times at December 31, 2019.
Quarterly Noninterest Income Compared to the Fourth Quarter of 2019:
- Total noninterest income was $71.23 million compared to $49.71 million in 2019, an increase of $21.52 million, or 43.29%. Residential mortgage banking income increased $21.62 million, insurance commissions decreased $1.13 million, and real estate brokerage and property management income increased $2.49 million.
- Residential mortgage banking income was $37.50 million compared to $15.88 million in fourth quarter 2019. Loan volume in the current quarter was $1.69 billion, with purchase activity comprising 59.76%. Loan volume in fourth quarter 2019 was $860.16 million, with purchase activity of 70.32%. Loan volume in the linked quarter was $1.79 billion with purchase activity of 61.21%.
- Total insurance segment revenue decreased $2.89 million, or 14.51%, to $17.00 million in the fourth quarter of 2020. This decrease is attributable to several factors. The prior year quarter included proceeds from life insurance policies of $1.64 million. Contingency income and benefits commissions declined, compared to the prior year quarter. Additionally, there were no commissions on travel insurance in the fourth quarter of 2020, compared to $0.79 million in the prior year quarter, due to the sale of Red Sky Insurance in the third quarter of 2020. We also acquired an insurance agency, which is expected to add approximately $2.4 million in gross revenue for 2021, at the end of December 2020.
- Property management fee revenue increased 35.30%, or $1.48 million, as compared to fourth quarter 2019 due to increases in reservation levels and stronger fourth quarter 2020 advanced reservations.
- Service charges on deposit accounts declined $0.54 million, or 23.96%, compared to the prior year quarter due to fee waivers for members experiencing financial hardship and the waiving of various member service charges during our core conversion.
Quarterly Noninterest Expense Compared to the Fourth Quarter of 2019:
- Total noninterest expense was $105.93 million compared to $92.34 million, an increase of $13.60 million, or 14.72%. This reflects increases of $5.46 million in salary and benefits expense, $1.09 million in software expense, and $0.68 million in occupancy expenses.
- FDIC insurance assessments increased $1.84 million in fourth quarter 2020 compared to 2019 due to the Company's receipt of small bank assessment credits for $1.66 million in the fourth quarter of 2019.
- Increases in salaries and benefits were driven by incentives related to a strong full-year performance and conversion and production related overtime. Software increases were largely driven by core conversion costs, and the costs associated with software needed to facilitate the adoption of CECL. Occupancy expense increases were driven by a full quarter expense related to the November 2019 expansion into the Greensboro, North Carolina market.
- Recorded a loss on early extinguishment of debt of $2.63 million in the fourth quarter of 2020, associated with restructuring of certain borrowings to reduce future interest expense and deploy excess liquidity. The impact of this nonrecurring expense was a reduction to our EPS of $0.03.
Quarterly Income Taxes Compared to the Fourth Quarter of 2019:
- Income tax expense was $10.41 million compared to $7.79 million one year prior. This represents an effective tax rate of 17.21% compared to 18.17% in the fourth quarter of 2019.
Consolidated Balance Sheet December 31, 2020 Compared to December 31, 2019
- Total assets were $14.63 billion at December 31, 2020, an increase of 22.42%, compared to $11.95 billion at December 31, 2019. This increase was driven primarily by increased liquidity levels and additional loan balances attributable to PPP loans.
- Loans held for investment increased $1.21 billion, or 14.37%, compared to year end 2019, but decreased $0.14 billion compared to the linked quarter.
- Mortgage loans held for sale increased $121.57 million, or 29.00%, compared to prior year and decreased $128.22 million, or 19.17%, compared to the linked quarter.
- Total deposits increased $2.30 billion, or 24.83%, over December 31, 2019, and decreased $0.13 billion, or 1.13%, compared to the linked quarter.
Investment Securities:
- Total investment securities were $1.42 billion compared to $1.38 billion at September 30, 2020 and $1.52 billion at December 31, 2019. The weighted average duration of the portfolio at December 31, 2020 was 4.10 years. The carrying value of the AFS debt securities portfolio included $58.32 million in net unrealized gains compared to $19.73 million in net unrealized gains at December 31, 2019.
Loans and Asset Quality:
- Total loans held for investment were $9.63 billion at December 31, 2020 compared to $9.77 billion at September 30, 2020 and $8.42 billion at December 31, 2019.
- Nonperforming assets were $16.21 million, or 0.11% of total assets, compared to $32.80 million, or 0.27% of total assets, at December 31, 2019.
- Nonperforming loans were 0.12% of period end loans compared to 0.21% at December 31, 2019.
- Foreclosed property decreased to $4.28 million from $13.84 million at December 31, 2019.
- Expected loss estimates are subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix which could result in material changes to the reserve in future periods.
- At December 31, 2020 we had $340.81 million in loan modifications made in accordance with section 4013 of the Cares Act, 64% are currently paying interest.
Deposits and Borrowings:
- Total deposits were $11.57 billion compared to $11.70 billion at September 30, 2020 and $9.27 billion at December 31, 2019.
- Total loans to total deposits were 83.20% compared to 83.47% at September 30, 2020 and 90.81% at December 31, 2019.
- Non-interest bearing deposits were 37.80% of total deposits at December 31, 2020 compared to 38.14% at September 30, 2020 and 31.83% at December 31, 2019. Non-interest bearing deposits experienced typical seasonality during the fourth quarter.
- Total borrowings were $0.96 billion compared to $1.04 billion and $0.77 billion at September 30, 2020 and December 31, 2019, respectively.
Capital:
- Common equity tier 1 capital ratio of 11.87%.
- Tier 1 leverage capital ratio of 8.99%.
- Tier 1 risk-based capital ratio of 12.04%.
- Total risk-based capital ratio of 15.42%.
- Book value was $24.31 compared to $23.83 at September 30, 2020 and $22.58 at December 31, 2019.
- Tangible book value (non-GAAP) was $17.46 compared to $17.06 at September 30, 2020 and $15.69 at December 31, 2019.
Annual Meeting of Shareholders:
TowneBank intends to hold its 2021 Annual Meeting of Shareholders at 11:30 a.m. on Wednesday, May 26, 2021 at the Virginia Beach Convention Center, 1000 19th Street in Virginia Beach, Virginia.
About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 42 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Greensboro, Greenville, Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags Head in North Carolina. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group’s President and Board of Directors. With total assets of $14.63 billion as of December 31, 2020, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:
This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in 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. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.
Forward-Looking Statements:
Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank’s future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” or “project” or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: the impact of the COVID-19 pandemic and the associated efforts to limit its spread, changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank’s loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market areas; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
J. Morgan Davis, President and Chief Executive Officer, 757-673-1673
Investor contact:
William B. Littreal, Chief Financial Officer, 757-638-6813
| TOWNEBANK | ||||||||||||||||||||
| Selected Financial Highlights (unaudited) | ||||||||||||||||||||
| (dollars in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||
| Income and Performance Ratios: | ||||||||||||||||||||
| Total Revenue | $ | 171,848 | $ | 192,135 | $ | 162,656 | $ | 137,696 | $ | 139,671 | ||||||||||
| Net income | 53,891 | 50,715 | 37,222 | 27,605 | 35,948 | |||||||||||||||
| Net income available to common shareholders | 50,082 | 34,464 | 34,605 | 26,384 | 35,075 | |||||||||||||||
| Pre-provision, pre-tax, net revenues (non-GAAP) | 62,107 | 73,903 | 69,014 | 39,587 | 46,462 | |||||||||||||||
| Net income per common share - diluted | 0.69 | 0.48 | 0.48 | 0.36 | 0.49 | |||||||||||||||
| Book value per common share | 24.31 | 23.83 | 23.50 | 22.77 | 22.58 | |||||||||||||||
| Book value per share - tangible (non-GAAP) | 17.46 | 17.06 | 16.68 | 15.91 | 15.69 | |||||||||||||||
| Return on average assets | 1.35 | % | 0.89 | % | 0.97 | % | 0.88 | % | 1.16 | % | ||||||||||
| Return on average assets - tangible (non-GAAP) | 1.46 | % | 0.97 | % | 1.07 | % | 1.00 | % | 1.30 | % | ||||||||||
| Return on average equity | 11.26 | % | 7.85 | % | 8.18 | % | 6.37 | % | 8.44 | % | ||||||||||
| Return on average equity - tangible (non-GAAP) | 16.28 | % | 11.66 | % | 12.32 | % | 9.91 | % | 12.97 | % | ||||||||||
| Return on average common equity | 11.36 | % | 7.91 | % | 8.24 | % | 6.42 | % | 8.51 | % | ||||||||||
| Return on average common equity - tangible (non-GAAP) | 16.48 | % | 11.79 | % | 12.44 | % | 10.01 | % | 13.12 | % | ||||||||||
| Noninterest income as a percentage of total revenue | 41.45 | % | 49.64 | % | 42.66 | % | 35.00 | % | 35.59 | % | ||||||||||
| Regulatory Capital Ratios (1): | ||||||||||||||||||||
| Common equity tier 1 | 11.87 | % | 11.75 | % | 11.54 | % | 11.23 | % | 11.46 | % | ||||||||||
| Tier 1 | 12.04 | % | 11.91 | % | 11.67 | % | 11.35 | % | 11.49 | % | ||||||||||
| Total | 15.42 | % | 15.35 | % | 14.91 | % | 14.40 | % | 14.58 | % | ||||||||||
| Tier 1 leverage ratio | 8.99 | % | 8.89 | % | 9.05 | % | 10.11 | % | 9.95 | % | ||||||||||
| Asset Quality: | ||||||||||||||||||||
| Allowance for loan losses to nonperforming loans | 10.74x | 7.31x | 5.34x | 3.85x | 3.34x | |||||||||||||||
| Allowance for loan losses to period end loans | 1.25 | % | 1.22 | % | 0.92 | % | 0.73 | % | 0.69 | % | ||||||||||
| Allowance for loan losses to period end loans excluding PPP loans (non-GAAP) | 1.37 | % | 1.37 | % | 1.04 | % | 0.73 | % | 0.69 | % | ||||||||||
| Nonperforming loans to period end loans | 0.12 | % | 0.17 | % | 0.17 | % | 0.19 | % | 0.21 | % | ||||||||||
| Nonperforming assets to period end assets | 0.11 | % | 0.19 | % | 0.19 | % | 0.24 | % | 0.27 | % | ||||||||||
| Net charge-offs (recoveries) to average loans (annualized) | — | % | (0.01 | )% | — | % | 0.03 | % | 0.04 | % | ||||||||||
| Nonperforming loans | $ | 11,188 | $ | 16,295 | $ | 16,935 | $ | 16,700 | $ | 17,437 | ||||||||||
| Former bank premises | 750 | 750 | — | — | 1,521 | |||||||||||||||
| Foreclosed property | 4,276 | 11,695 | 12,315 | 13,053 | 13,839 | |||||||||||||||
| Total nonperforming assets | $ | 16,214 | $ | 28,740 | $ | 29,250 | $ | 29,753 | $ | 32,797 | ||||||||||
| Loans past due 90 days and still accruing interest | $ | 528 | $ | 19 | $ | 464 | $ | 91 | $ | 309 | ||||||||||
| Allowance for loan losses | 120,157 | 119,058 | 90,467 | 64,372 | 58,234 | |||||||||||||||
| Mortgage Banking: | ||||||||||||||||||||
| Loans originated, mortgage | $ | 1,257,963 | $ | 1,292,801 | $ | 1,116,782 | $ | 718,681 | $ | 628,279 | ||||||||||
| Loans originated, joint venture | 429,848 | 498,100 | 357,815 | 204,522 | 231,879 | |||||||||||||||
| Total loans originated | $ | 1,687,811 | $ | 1,790,901 | $ | 1,474,597 | $ | 923,203 | $ | 860,158 | ||||||||||
| Number of loans originated | 5,481 | 5,817 | 4,818 | 3,025 | 2,984 | |||||||||||||||
| Number of originators | 228 | 224 | 216 | 223 | 217 | |||||||||||||||
| Purchase % | 59.76 | % | 61.21 | % | 51.26 | % | 61.31 | % | 70.32 | % | ||||||||||
| Loans sold | $ | 1,845,926 | $ | 1,833,590 | $ | 1,398,649 | $ | 809,834 | $ | 879,910 | ||||||||||
| Rate lock asset | $ | 11,781 | $ | 10,480 | $ | 7,202 | $ | 3,691 | $ | 1,525 | ||||||||||
| Gross realized gain on sales and fees as a % of loans originated | 4.02 | % | 3.65 | % | 3.17 | % | 1.80 | % | 3.38 | % | ||||||||||
| Other Ratios: | ||||||||||||||||||||
| Net interest margin | 2.97 | % | 2.70 | % | 2.85 | % | 3.35 | % | 3.33 | % | ||||||||||
| Net interest margin-fully tax equivalent (non-GAAP) | 2.98 | % | 2.72 | % | 2.87 | % | 3.37 | % | 3.35 | % | ||||||||||
| Average earning assets/total average assets | 91.59 | % | 92.09 | % | 91.33 | % | 89.15 | % | 89.57 | % | ||||||||||
| Average loans/average deposits | 83.42 | % | 86.29 | % | 91.81 | % | 92.99 | % | 88.41 | % | ||||||||||
| Average noninterest deposits/total average deposits | 39.61 | % | 37.76 | % | 36.52 | % | 32.21 | % | 32.14 | % | ||||||||||
| Period end equity/period end total assets | 12.20 | % | 11.82 | % | 11.05 | % | 13.19 | % | 13.84 | % | ||||||||||
| Efficiency ratio (non-GAAP) | 60.02 | % | 57.36 | % | 55.17 | % | 70.79 | % | 63.96 | % | ||||||||||
| (1) Current reporting period regulatory capital ratios are preliminary. | ||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||
| Selected Data (unaudited) | |||||||||||||||||
| (dollars in thousands) | |||||||||||||||||
| Investment Securities | % Change | ||||||||||||||||
| Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
| Available-for-sale securities, at fair value | 2020 | 2019 | 2020 | Q4 19 | Q3 20 | ||||||||||||
| U.S. agency securities | $ | 184,657 | $ | 129,038 | $ | 167,275 | 43.10 | % | 10.39 | % | |||||||
| U.S. Treasury notes | 1,000 | 1,000 | 1,006 | — | % | (0.60 | )% | ||||||||||
| Municipal securities | 353,651 | 223,106 | 292,792 | 58.51 | % | 20.79 | % | ||||||||||
| Trust preferred and other corporate securities | 31,499 | 53,367 | 24,236 | (40.98 | )% | 29.97 | % | ||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 797,765 | 1,034,797 | 825,378 | (22.91 | )% | (3.35 | )% | ||||||||||
| Allowance for credit losses | (348 | ) | — | (4 | ) | n/m | n/m | ||||||||||
| Total | $ | 1,368,224 | $ | 1,441,308 | $ | 1,310,683 | (5.07 | )% | 4.39 | % | |||||||
| Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 60,025 | $ | 23,950 | $ | 62,206 | 150.63 | % | (3.51 | )% | |||||||
| Total gross unrealized losses | (1,703 | ) | (4,215 | ) | (773 | ) | (59.60 | )% | 120.31 | % | |||||||
| Net unrealized gain (loss) on AFS securities | $ | 58,322 | $ | 19,735 | $ | 61,433 | 195.53 | % | (5.06 | )% | |||||||
| Held-to-maturity securities, at amortized cost | |||||||||||||||||
| Municipal securities | $ | 5,012 | $ | 29,167 | $ | 2,333 | (82.82 | )% | 114.83 | % | |||||||
| Trust preferred corporate securities | 2,321 | 2,369 | 4,992 | (2.03 | )% | (53.51 | )% | ||||||||||
| Mortgage-backed securities issued by GSE and GNMA | 9,179 | 12,152 | 9,806 | (24.47 | )% | (6.39 | )% | ||||||||||
| Allowance for credit losses | (97 | ) | — | (90 | ) | n/a | 7.78 | % | |||||||||
| Total | $ | 16,415 | $ | 43,688 | $ | 17,041 | (62.43 | )% | (3.67 | )% | |||||||
| Gross unrealized gains (losses) not reflected in financial statements | |||||||||||||||||
| Total gross unrealized gains | $ | 1,957 | $ | 1,520 | $ | 1,971 | 28.75 | % | (0.71 | )% | |||||||
| Total gross unrealized losses | — | (37 | ) | — | (100.00 | )% | n/m | ||||||||||
| Net unrealized gain (loss) on HTM securities | $ | 1,957 | $ | 1,483 | $ | 1,971 | 31.96 | % | (0.71 | )% | |||||||
| Loans Held For Investment (1) | % Change | ||||||||||||||||
| Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
| 2020 | 2019 | 2020 | Q4 19 | Q3 20 | |||||||||||||
| Real estate - construction and development | $ | 1,199,772 | $ | 1,120,533 | $ | 1,143,202 | 7.07 | % | 4.95 | % | |||||||
| Commercial real estate - investment related properties | 2,335,235 | 2,183,232 | 2,338,532 | 6.96 | % | (0.14 | )% | ||||||||||
| Commercial real estate - owner occupied | 1,380,516 | 1,329,144 | 1,378,443 | 3.87 | % | 0.15 | % | ||||||||||
| Real estate - multifamily | 295,488 | 243,041 | 289,270 | 21.58 | % | 2.15 | % | ||||||||||
| Real estate - residential 1-4 family | 1,629,105 | 1,653,084 | 1,660,535 | (1.45 | )% | (1.89 | )% | ||||||||||
| Commercial and industrial business | 2,370,051 | 1,574,275 | 2,499,801 | 50.55 | % | (5.19 | )% | ||||||||||
| Consumer and other loans | 418,901 | 315,979 | 460,787 | 32.57 | % | (9.09 | )% | ||||||||||
| Total | $ | 9,629,068 | $ | 8,419,288 | $ | 9,770,570 | 14.37 | % | (1.45 | )% | |||||||
| (1) PPP loans totaling $0.86 billion and $1.10 billion, primarily in C&I, are included in Q4 2020 and Q3 2020, respectively. | |||||||||||||||||
| Deposits | % Change | ||||||||||||||||
| Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
| 2020 | 2019 | 2020 | Q4 19 | Q3 20 | |||||||||||||
| Noninterest-bearing demand | $ | 4,374,566 | $ | 2,951,225 | $ | 4,464,178 | 48.23 | % | (2.01 | )% | |||||||
| Interest-bearing: | |||||||||||||||||
| Demand and money market accounts | 4,819,604 | 3,586,364 | 4,642,482 | 34.39 | % | 3.82 | % | ||||||||||
| Savings | 330,091 | 276,205 | 312,444 | 19.51 | % | 5.65 | % | ||||||||||
| Certificates of deposits | 2,048,905 | 2,457,123 | 2,285,859 | (16.61 | )% | (10.37 | )% | ||||||||||
| Total | $ | 11,573,166 | $ | 9,270,917 | $ | 11,704,963 | 24.83 | % | (1.13 | )% | |||||||
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
| December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,752,150 | $ | 104,799 | 4.28 | % | $ | 9,752,746 | $ | 103,401 | 4.22 | % | $ | 8,283,388 | $ | 100,504 | 4.81 | % | ||||||||||||||
| Taxable investment securities | 1,250,375 | 6,878 | 2.20 | % | 1,206,679 | 6,726 | 2.23 | % | 1,331,175 | 9,179 | 2.76 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 139,572 | 520 | 1.49 | % | 144,999 | 779 | 2.15 | % | 118,298 | 908 | 3.07 | % | ||||||||||||||||||||
| Total securities | 1,389,947 | 7,398 | 2.13 | % | 1,351,678 | 7,505 | 2.22 | % | 1,449,473 | 10,087 | 2.78 | % | ||||||||||||||||||||
| Interest-bearing deposits | 1,754,365 | 435 | 0.10 | % | 2,523,644 | 632 | 0.10 | % | 519,737 | 2,067 | 1.58 | % | ||||||||||||||||||||
| Loans held for sale | 587,517 | 3,867 | 2.63 | % | 634,309 | 4,587 | 2.89 | % | 469,725 | 4,413 | 3.76 | % | ||||||||||||||||||||
| Total earning assets | 13,483,979 | 116,499 | 3.44 | % | 14,262,377 | 116,125 | 3.24 | % | 10,722,323 | 117,071 | 4.33 | % | ||||||||||||||||||||
| Less: allowance for loan losses | (121,402 | ) | (95,594 | ) | (56,766 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 1,359,808 | 1,320,369 | 1,305,036 | |||||||||||||||||||||||||||||
| Total assets | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 4,582,588 | $ | 2,633 | 0.23 | % | $ | 4,311,920 | $ | 2,663 | 0.25 | % | $ | 3,533,912 | $ | 6,421 | 0.72 | % | ||||||||||||||
| Savings | 317,561 | 552 | 0.69 | % | 304,753 | 555 | 0.72 | % | 278,910 | 638 | 0.91 | % | ||||||||||||||||||||
| Certificates of deposit | 2,159,573 | 7,578 | 1.40 | % | 2,417,772 | 9,747 | 1.60 | % | 2,544,845 | 14,685 | 2.29 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 7,059,722 | 10,763 | 0.61 | % | 7,034,445 | 12,965 | 0.73 | % | 6,357,667 | 21,744 | 1.36 | % | ||||||||||||||||||||
| Borrowings | 722,291 | 1,645 | 0.89 | % | 1,931,120 | 2,841 | 0.58 | % | 454,621 | 1,810 | 1.56 | % | ||||||||||||||||||||
| Subordinated debt, net | 248,965 | 2,962 | 4.76 | % | 248,807 | 2,962 | 4.76 | % | 248,361 | 2,962 | 4.77 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 8,030,978 | 15,370 | 0.76 | % | 9,214,372 | 18,768 | 0.81 | % | 7,060,649 | 26,516 | 1.49 | % | ||||||||||||||||||||
| Demand deposits | 4,630,665 | 4,268,443 | 3,011,688 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 291,836 | 257,304 | 250,327 | |||||||||||||||||||||||||||||
| Total liabilities | 12,953,479 | 13,740,119 | 10,322,664 | |||||||||||||||||||||||||||||
| Shareholders’ equity | 1,768,906 | 1,747,033 | 1,647,929 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 101,129 | $ | 97,357 | $ | 90,555 | ||||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (515 | ) | (598 | ) | (596 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 100,614 | $ | 96,759 | $ | 89,959 | ||||||||||||||||||||||||||
| Interest rate spread (2)(3) | 2.68 | % | 2.43 | % | 2.84 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.45 | % | 0.52 | % | 0.98 | % | ||||||||||||||||||||||||||
| Net interest margin (tax equivalent basis) (3)(4) | 2.98 | % | 2.72 | % | 3.35 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 0.37 | % | 0.46 | % | 0.92 | % | ||||||||||||||||||||||||||
(1) December 31, and September 30, 2020 balances include average PPP balances of $1.04 billion and $1.10 billion, and related interest and fee income of $11.29 million and $9.82 million, respectively. There were no PPP balances at December 31, 2019.
(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.
(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.
(4) Non-GAAP.
| TOWNEBANK | ||||||||||||||||||||||||||||||||
| Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||||||||||||||
| 2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
| Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||
| Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||
| Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,420,584 | $ | 411,421 | 4.37 | % | $ | 8,122,210 | $ | 405,511 | 4.99 | % | $ | 7,567,570 | $ | 373,057 | 4.93 | % | ||||||||||||||
| Taxable investment securities | 1,252,926 | 30,181 | 2.41 | % | 1,202,107 | 34,141 | 2.84 | % | 1,004,080 | 24,729 | 2.46 | % | ||||||||||||||||||||
| Tax-exempt investment securities | 140,078 | 2,997 | 2.14 | % | 102,731 | 3,426 | 3.34 | % | 79,720 | 2,920 | 3.66 | % | ||||||||||||||||||||
| Total securities | 1,393,004 | 33,178 | 2.38 | % | 1,304,838 | 37,567 | 2.88 | % | 1,083,800 | 27,649 | 2.55 | % | ||||||||||||||||||||
| Interest-bearing deposits | 689,715 | 2,603 | 0.38 | % | 665,903 | 13,825 | 2.08 | % | 560,368 | 10,229 | 1.83 | % | ||||||||||||||||||||
| Mortgage loans held for sale | 505,502 | 15,252 | 3.02 | % | 335,588 | 13,379 | 3.99 | % | 293,017 | 13,124 | 4.48 | % | ||||||||||||||||||||
| Total earning assets | 12,008,805 | 462,454 | 3.85 | % | 10,428,539 | 470,282 | 4.51 | % | 9,504,755 | 424,059 | 4.46 | % | ||||||||||||||||||||
| Less: allowance for loan losses | (85,570 | ) | (54,476 | ) | (48,737 | ) | ||||||||||||||||||||||||||
| Total nonearning assets | 2,248,971 | 1,264,363 | 1,143,167 | |||||||||||||||||||||||||||||
| Total assets | $ | 14,172,206 | $ | 11,638,426 | $ | 10,599,185 | ||||||||||||||||||||||||||
| Liabilities and Equity: | ||||||||||||||||||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||||||||||||||
| Demand and money market | $ | 4,070,562 | $ | 13,105 | 0.32 | % | $ | 3,351,135 | $ | 26,909 | 0.80 | % | $ | 2,951,038 | $ | 16,458 | 0.56 | % | ||||||||||||||
| Savings | 297,441 | 2,254 | 0.76 | % | 280,894 | 3,296 | 1.17 | % | 302,435 | 3,824 | 1.26 | % | ||||||||||||||||||||
| Certificates of deposit | 2,378,281 | 42,502 | 1.79 | % | 2,478,663 | 56,050 | 2.26 | % | 2,060,587 | 32,859 | 1.59 | % | ||||||||||||||||||||
| Total interest-bearing deposits | 6,746,284 | 57,861 | 0.86 | % | 6,110,692 | 86,255 | 1.41 | % | 5,314,060 | 53,141 | 1.00 | % | ||||||||||||||||||||
| Borrowings | 1,269,064 | 10,306 | 0.80 | % | 609,142 | 11,368 | 1.84 | % | 897,574 | 15,542 | 1.71 | % | ||||||||||||||||||||
| Subordinated debt, net | 248,736 | 11,847 | 4.76 | % | 248,139 | 11,847 | 4.77 | % | 251,097 | 12,067 | 4.81 | % | ||||||||||||||||||||
| Total interest-bearing liabilities | 8,264,084 | 80,014 | 0.97 | % | 6,967,973 | 109,470 | 1.57 | % | 6,462,731 | 80,750 | 1.25 | % | ||||||||||||||||||||
| Demand deposits | 3,924,797 | 2,844,178 | 2,517,173 | |||||||||||||||||||||||||||||
| Other noninterest-bearing liabilities | 262,266 | 228,994 | 164,486 | |||||||||||||||||||||||||||||
| Total liabilities | 12,451,147 | 10,041,145 | 9,144,390 | |||||||||||||||||||||||||||||
| Shareholders' equity | 1,721,059 | 1,597,281 | 1,454,795 | |||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 14,172,206 | $ | 11,638,426 | $ | 10,599,185 | ||||||||||||||||||||||||||
| Net interest income (tax-equivalent basis) | $ | 382,440 | $ | 360,812 | $ | 343,309 | ||||||||||||||||||||||||||
| Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
| Tax-equivalent basis adjustment | (2,296 | ) | (2,457 | ) | (2,236 | ) | ||||||||||||||||||||||||||
| Net interest income (GAAP) | $ | 380,144 | $ | 358,355 | $ | 341,073 | ||||||||||||||||||||||||||
| Interest rate spread (2)(4) | 2.88 | % | 2.94 | % | 3.21 | % | ||||||||||||||||||||||||||
| Interest expense as a percent of average earning assets | 0.67 | % | 1.05 | % | 0.85 | % | ||||||||||||||||||||||||||
| Net interest margin (tax-equivalent basis) (3)(4) | 3.18 | % | 3.46 | % | 3.61 | % | ||||||||||||||||||||||||||
| Total cost of deposits | 0.54 | % | 0.96 | % | 0.68 | % | ||||||||||||||||||||||||||
(1) December 31, 2020 balances include average PPP balances of $0.74 billion and related interest and fee income of $26.94 million. There were no PPP balances at December 31, 2019 or 2018.
(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.
(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.
(4) Non-GAAP.
| TOWNEBANK | |||||||
| Consolidated Balance Sheets | |||||||
| (dollars in thousands, except per share data) | |||||||
| 2020 | 2019 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Cash and due from banks | $ | 41,514 | $ | 97,593 | |||
| Interest-bearing deposits at FRB - Richmond | 1,795,241 | 322,505 | |||||
| Interest-bearing deposits in financial institutions | 27,532 | 22,518 | |||||
| Total Cash and Cash Equivalents | 1,864,287 | 442,616 | |||||
| Securities available for sale, at fair value (amortized cost $1,310,250, allowance for credit losses of $348)(1) | 1,368,224 | 1,441,308 | |||||
| Securities held to maturity, at amortized cost (fair value $18,469)(1) | 16,512 | 43,688 | |||||
| Less: allowance for credit losses | (97 | ) | — | ||||
| Securities held to maturity, net of allowance for credit losses | 16,415 | 43,688 | |||||
| Other equity securities | 6,492 | 6,462 | |||||
| FHLB stock | 30,135 | 30,094 | |||||
| Total Securities | 1,421,266 | 1,521,552 | |||||
| Mortgage loans held for sale | 540,798 | 419,233 | |||||
| Loans, net of unearned income and deferred costs | 9,629,068 | 8,419,288 | |||||
| Less: allowance for credit losses | (120,157 | ) | (58,234 | ) | |||
| Net Loans | 9,508,911 | 8,361,054 | |||||
| Premises and equipment, net | 260,242 | 231,806 | |||||
| Goodwill | 452,328 | 446,816 | |||||
| Other intangible assets, net | 45,533 | 54,399 | |||||
| BOLI | 246,109 | 243,062 | |||||
| Other assets | 286,970 | 227,125 | |||||
| TOTAL ASSETS | $ | 14,626,444 | $ | 11,947,663 | |||
| LIABILITIES AND EQUITY | |||||||
| Deposits: | |||||||
| Noninterest-bearing demand | $ | 4,374,566 | $ | 2,951,225 | |||
| Interest-bearing: | |||||||
| Demand and money market accounts | 4,819,604 | 3,586,364 | |||||
| Savings | 330,091 | 276,205 | |||||
| Certificates of deposit | 2,048,905 | 2,457,123 | |||||
| Total Deposits | 11,573,166 | 9,270,917 | |||||
| Advances from the FHLB | 456,038 | 471,687 | |||||
| Subordinated debt, net | 249,055 | 248,458 | |||||
| FRB PPP Lending Facility | 182,852 | — | |||||
| Repurchase agreements and other borrowings | 67,786 | 52,391 | |||||
| Total Borrowings | 955,731 | 772,536 | |||||
| Other liabilities | 313,719 | 250,516 | |||||
| TOTAL LIABILITIES | 12,842,616 | 10,293,969 | |||||
| Preferred stock | |||||||
| Authorized and unissued shares - 2,000,000 | — | — | |||||
| Common stock, $1.667 par: Authorized shares - 150,000,000 | |||||||
| Issued and outstanding shares 72,667,541 in 2020 and 72,649,682 in 2019 | 121,132 | 121,107 | |||||
| Capital surplus | 1,046,642 | 1,041,160 | |||||
| Retained earnings | 557,889 | 467,186 | |||||
| Common stock issued to deferred compensation trust, at cost | |||||||
| 873,486 shares in 2020 and 818,578 shares in 2019 | (16,969 | ) | (15,555 | ) | |||
| Deferred compensation trust | 16,969 | 15,555 | |||||
| Accumulated other comprehensive income (loss) | 41,184 | 11,302 | |||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,766,847 | 1,640,755 | |||||
| Noncontrolling interest | 16,981 | 12,939 | |||||
| TOTAL EQUITY | 1,783,828 | 1,653,694 | |||||
| TOTAL LIABILITIES AND EQUITY | $ | 14,626,444 | $ | 11,947,663 | |||
(1) For 2020, disclosures are presented in compliance with ASC 326.
| TOWNEBANK | |||||||||||||||
| Consolidated Statements of Income | |||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||||||
| INTEREST INCOME: | |||||||||||||||
| Loans, including fees | $ | 104,182 | $ | 100,059 | $ | 409,252 | $ | 403,675 | |||||||
| Investment securities | 7,499 | 9,936 | 33,052 | 36,946 | |||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 435 | 2,067 | 2,603 | 13,825 | |||||||||||
| Mortgage loans held for sale | 3,867 | 4,413 | 15,252 | 13,379 | |||||||||||
| Total interest income | 115,983 | 116,475 | 460,159 | 467,825 | |||||||||||
| INTEREST EXPENSE: | |||||||||||||||
| Deposits | 10,762 | 21,744 | 57,862 | 86,255 | |||||||||||
| Advances from the FHLB | 1,404 | 1,730 | 8,393 | 11,018 | |||||||||||
| Subordinated debt, net | 2,962 | 2,962 | 11,847 | 11,847 | |||||||||||
| Repurchase agreements and other borrowings | 241 | 80 | 1,913 | 350 | |||||||||||
| Total interest expense | 15,369 | 26,516 | 80,015 | 109,470 | |||||||||||
| Net interest income | 100,614 | 89,959 | 380,144 | 358,355 | |||||||||||
| PROVISION FOR CREDIT LOSSES | 1,617 | 3,601 | 67,177 | 9,371 | |||||||||||
| Net interest income after provision for credit losses | 98,997 | 86,358 | 312,967 | 348,984 | |||||||||||
| NONINTEREST INCOME: | |||||||||||||||
| Residential mortgage banking income, net | 37,504 | 15,884 | 112,166 | 66,812 | |||||||||||
| Insurance commissions and other title fees and income, net | 13,868 | 15,001 | 65,840 | 64,478 | |||||||||||
| Real estate brokerage and property management income, net | 9,229 | 6,737 | 38,249 | 34,292 | |||||||||||
| Service charges on deposit accounts | 1,707 | 2,245 | 8,021 | 10,544 | |||||||||||
| Credit card merchant fees, net | 1,377 | 1,389 | 5,170 | 4,746 | |||||||||||
| BOLI | 1,990 | 3,865 | 8,285 | 9,215 | |||||||||||
| Other income | 5,559 | 4,591 | 36,826 | 16,346 | |||||||||||
| Net gain/(loss) on investment securities | — | — | 9,634 | (845 | ) | ||||||||||
| Total noninterest income | 71,234 | 49,712 | 284,191 | 205,588 | |||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||
| Salaries and employee benefits | 61,475 | 56,013 | 235,676 | 218,920 | |||||||||||
| Occupancy expense | 8,193 | 7,516 | 31,317 | 31,381 | |||||||||||
| Furniture and equipment | 3,462 | 3,598 | 13,914 | 14,351 | |||||||||||
| Amortization - intangibles | 2,797 | 3,005 | 11,498 | 12,370 | |||||||||||
| Software expense | 4,066 | 2,976 | 14,622 | 11,717 | |||||||||||
| Data processing | 2,363 | 2,510 | 10,985 | 11,825 | |||||||||||
| Professional fees | 2,591 | 2,990 | 11,268 | 12,943 | |||||||||||
| Advertising and marketing | 2,204 | 2,839 | 9,643 | 12,279 | |||||||||||
| Other expenses | 18,781 | 10,889 | 56,902 | 52,516 | |||||||||||
| Total noninterest expense | 105,932 | 92,336 | 395,825 | 378,302 | |||||||||||
| Income before income tax expense and noncontrolling interest | 64,299 | 43,734 | 201,333 | 176,270 | |||||||||||
| Provision for income tax expense | 10,408 | 7,786 | 31,900 | 32,596 | |||||||||||
| Net income | $ | 53,891 | $ | 35,948 | $ | 169,433 | $ | 143,674 | |||||||
| Net income attributable to noncontrolling interest | (3,809 | ) | (873 | ) | (23,898 | ) | (4,891 | ) | |||||||
| Net income attributable to TowneBank | $ | 50,082 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||
| Per common share information | |||||||||||||||
| Basic earnings | $ | 0.69 | $ | 0.49 | $ | 2.01 | $ | 1.93 | |||||||
| Diluted earnings | $ | 0.69 | $ | 0.49 | $ | 2.01 | $ | 1.92 | |||||||
| Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.72 | $ | 0.70 | |||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | |||||||||||||||
| ASSETS | |||||||||||||||||||
| Cash and due from banks | $ | 41,514 | $ | 114,604 | $ | 115,724 | $ | 108,929 | $ | 97,593 | |||||||||
| Interest-bearing deposits at FRB - Richmond | 1,795,241 | 1,670,186 | 2,511,152 | 753,643 | 322,505 | ||||||||||||||
| Interest-bearing deposits in financial institutions | 27,532 | 24,890 | 24,374 | 23,564 | 22,518 | ||||||||||||||
| Total Cash and Cash Equivalents | 1,864,287 | 1,809,680 | 2,651,250 | 886,136 | 442,616 | ||||||||||||||
| Securities available for sale, at fair value | 1,368,224 | 1,310,683 | 1,266,624 | 1,248,420 | 1,441,308 | ||||||||||||||
| Securities held to maturity | 16,512 | 17,131 | 41,595 | 42,431 | 43,688 | ||||||||||||||
| Less: allowance for credit losses | (97 | ) | (90 | ) | (121 | ) | (133 | ) | — | ||||||||||
| Securities held to maturity, net of allowance for credit losses | 16,415 | 17,041 | 41,474 | 42,298 | 43,688 | ||||||||||||||
| Other equity securities | 6,492 | 6,497 | 6,497 | 6,462 | 6,462 | ||||||||||||||
| Federal Home Loan Bank stock | 30,135 | 41,829 | 49,277 | 52,042 | 30,094 | ||||||||||||||
| Total Securities | 1,421,266 | 1,376,050 | 1,363,872 | 1,349,222 | 1,521,552 | ||||||||||||||
| Mortgage loans held for sale | 540,798 | 669,020 | 610,369 | 453,143 | 419,233 | ||||||||||||||
| Loans, net of unearned income and deferred costs | 9,629,068 | 9,770,570 | 9,801,889 | 8,784,195 | 8,419,288 | ||||||||||||||
| Less: allowance for credit losses | (120,157 | ) | (119,058 | ) | (90,467 | ) | (64,372 | ) | (58,234 | ) | |||||||||
| Net Loans | 9,508,911 | 9,651,512 | 9,711,422 | 8,719,823 | 8,361,054 | ||||||||||||||
| Premises and equipment, net | 260,242 | 256,909 | 257,533 | 236,735 | 231,806 | ||||||||||||||
| Goodwill | 452,328 | 446,725 | 446,725 | 446,725 | 446,816 | ||||||||||||||
| Other intangible assets, net | 45,533 | 45,781 | 48,632 | 51,448 | 54,399 | ||||||||||||||
| BOLI | 246,109 | 244,103 | 242,493 | 240,924 | 243,062 | ||||||||||||||
| Other assets | 286,970 | 295,637 | 247,962 | 239,670 | 227,125 | ||||||||||||||
| TOTAL ASSETS | $ | 14,626,444 | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||||||||
| Deposits: | |||||||||||||||||||
| Noninterest-bearing demand | $ | 4,374,566 | $ | 4,464,178 | $ | 4,226,208 | $ | 3,060,515 | $ | 2,951,225 | |||||||||
| Interest-bearing: | |||||||||||||||||||
| Demand and money market accounts | 4,819,604 | 4,642,482 | 4,223,391 | 3,573,926 | 3,586,364 | ||||||||||||||
| Savings | 330,091 | 312,444 | 298,673 | 280,807 | 276,205 | ||||||||||||||
| Certificates of deposit | 2,048,905 | 2,285,859 | 2,516,666 | 2,392,744 | 2,457,123 | ||||||||||||||
| Total Deposits | 11,573,166 | 11,704,963 | 11,264,938 | 9,307,992 | 9,270,917 | ||||||||||||||
| Advances from the FHLB | 456,038 | 731,202 | 906,365 | 971,527 | 471,687 | ||||||||||||||
| Subordinated debt, net | 249,055 | 248,906 | 248,756 | 248,607 | 248,458 | ||||||||||||||
| FRB PPP Lending Facility | 182,852 | — | 1,111,429 | — | — | ||||||||||||||
| Repurchase agreements and other borrowings | 67,786 | 58,061 | 60,913 | 171,762 | 52,391 | ||||||||||||||
| Total Borrowings | 955,731 | 1,038,169 | 2,327,463 | 1,391,896 | 772,536 | ||||||||||||||
| Other liabilities | 313,719 | 303,582 | 266,314 | 258,306 | 250,516 | ||||||||||||||
| TOTAL LIABILITIES | 12,842,616 | 13,046,714 | 13,858,715 | 10,958,194 | 10,293,969 | ||||||||||||||
| Preferred stock | |||||||||||||||||||
| Authorized shares - 2,000,000 | — | — | — | — | — | ||||||||||||||
| Common stock, $1.667 par value | 121,132 | 121,115 | 121,101 | 121,057 | 121,107 | ||||||||||||||
| Capital surplus | 1,046,642 | 1,045,170 | 1,043,774 | 1,041,870 | 1,041,160 | ||||||||||||||
| Retained earnings | 557,889 | 520,888 | 499,502 | 477,972 | 467,186 | ||||||||||||||
| Common stock issued to deferred compensation trust, at cost | (16,969 | ) | (16,951 | ) | (16,776 | ) | (15,562 | ) | (15,555 | ) | |||||||||
| Deferred compensation trust | 16,969 | 16,951 | 16,776 | 15,562 | 15,555 | ||||||||||||||
| Accumulated other comprehensive income (loss) | 41,184 | 44,569 | 43,218 | 12,301 | 11,302 | ||||||||||||||
| TOTAL SHAREHOLDERS’ EQUITY | 1,766,847 | 1,731,742 | 1,707,595 | 1,653,200 | 1,640,755 | ||||||||||||||
| Noncontrolling interest | 16,981 | 16,961 | 13,948 | 12,432 | 12,939 | ||||||||||||||
| TOTAL EQUITY | 1,783,828 | 1,748,703 | 1,721,543 | 1,665,632 | 1,653,694 | ||||||||||||||
| TOTAL LIABILITIES AND EQUITY | $ | 14,626,444 | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | |||||||||
| TOWNEBANK | |||||||||||||||||||
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | |||||||||||||||||||
| (dollars in thousands, except per share data) | |||||||||||||||||||
| Three Months Ended | |||||||||||||||||||
| December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
| 2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
| INTEREST INCOME: | |||||||||||||||||||
| Loans, including fees | $ | 104,182 | $ | 102,869 | $ | 102,139 | $ | 100,062 | $ | 100,059 | |||||||||
| Investment securities | 7,499 | 7,440 | 8,163 | 9,949 | 9,936 | ||||||||||||||
| Interest-bearing deposits in financial institutions and federal funds sold | 435 | 632 | 433 | 1,102 | 2,067 | ||||||||||||||
| Mortgage loans held for sale | 3,867 | 4,587 | 3,811 | 2,988 | 4,413 | ||||||||||||||
| Total interest income | 115,983 | 115,528 | 114,546 | 114,101 | 116,475 | ||||||||||||||
| INTEREST EXPENSE: | |||||||||||||||||||
| Deposits | 10,762 | 12,966 | 15,072 | 19,062 | 21,744 | ||||||||||||||
| Advances from the FHLB | 1,404 | 1,901 | 2,595 | 2,492 | 1,730 | ||||||||||||||
| Subordinated debt | 2,962 | 2,962 | 2,962 | 2,962 | 2,962 | ||||||||||||||
| Repurchase agreements and other borrowings | 241 | 940 | 643 | 89 | 80 | ||||||||||||||
| Total interest expense | 15,369 | 18,769 | 21,272 | 24,605 | 26,516 | ||||||||||||||
| Net interest income | 100,614 | 96,759 | 93,274 | 89,496 | 89,959 | ||||||||||||||
| PROVISION FOR CREDIT LOSSES | 1,617 | 31,598 | 26,945 | 7,016 | 3,601 | ||||||||||||||
| Net interest income after provision for credit losses | 98,997 | 65,161 | 66,329 | 82,480 | 86,358 | ||||||||||||||
| NONINTEREST INCOME: | |||||||||||||||||||
| Residential mortgage banking income, net | 37,504 | 37,531 | 29,715 | 7,416 | 15,884 | ||||||||||||||
| Insurance commissions and other title fees and income, net | 13,868 | 17,468 | 17,612 | 16,893 | 15,001 | ||||||||||||||
| Real estate brokerage and property management income, net | 9,229 | 11,301 | 10,781 | 6,938 | 6,737 | ||||||||||||||
| Service charges on deposit accounts | 1,707 | 1,986 | 1,888 | 2,440 | 2,245 | ||||||||||||||
| Credit card merchant fees, net | 1,377 | 1,506 | 1,109 | 1,179 | 1,389 | ||||||||||||||
| BOLI | 1,990 | 1,605 | 1,584 | 3,105 | 3,865 | ||||||||||||||
| Other income | 5,559 | 22,278 | 3,763 | 5,227 | 4,591 | ||||||||||||||
| Net gain/(loss) on investment securities | — | 1,701 | 2,930 | 5,002 | — | ||||||||||||||
| Total noninterest income | 71,234 | 95,376 | 69,382 | 48,200 | 49,712 | ||||||||||||||
| NONINTEREST EXPENSE: | |||||||||||||||||||
| Salaries and employee benefits | 61,475 | 61,408 | 56,926 | 55,867 | 56,013 | ||||||||||||||
| Occupancy expense | 8,193 | 8,396 | 7,227 | 7,502 | 7,516 | ||||||||||||||
| Furniture and equipment | 3,462 | 3,247 | 3,564 | 3,640 | 3,598 | ||||||||||||||
| Amortization - intangibles | 2,797 | 2,851 | 2,901 | 2,950 | 3,005 | ||||||||||||||
| Software expense | 4,066 | 3,572 | 3,492 | 3,492 | 2,976 | ||||||||||||||
| Data processing | 2,363 | 3,113 | 2,718 | 2,791 | 2,510 | ||||||||||||||
| Professional fees | 2,591 | 2,637 | 2,972 | 3,067 | 2,990 | ||||||||||||||
| Advertising and marketing | 2,204 | 1,870 | 1,986 | 3,584 | 2,839 | ||||||||||||||
| Other expenses | 18,781 | 14,887 | 9,239 | 13,995 | 10,889 | ||||||||||||||
| Total noninterest expense | 105,932 | 101,981 | 91,025 | 96,888 | 92,336 | ||||||||||||||
| Income before income tax expense and noncontrolling interest | 64,299 | 58,556 | 44,686 | 33,792 | 43,734 | ||||||||||||||
| Provision for income tax expense | 10,408 | 7,841 | 7,464 | 6,187 | 7,786 | ||||||||||||||
| Net income | 53,891 | 50,715 | 37,222 | 27,605 | 35,948 | ||||||||||||||
| Net income attributable to noncontrolling interest | (3,809 | ) | (16,251 | ) | (2,617 | ) | (1,221 | ) | (873 | ) | |||||||||
| Net income attributable to TowneBank | $ | 50,082 | $ | 34,464 | $ | 34,605 | $ | 26,384 | $ | 35,075 | |||||||||
| Per common share information | |||||||||||||||||||
| Basic earnings | $ | 0.69 | $ | 0.48 | $ | 0.48 | $ | 0.37 | $ | 0.49 | |||||||||
| Diluted earnings (1) | $ | 0.69 | $ | 0.48 | $ | 0.48 | $ | 0.36 | $ | 0.49 | |||||||||
| Basic weighted average shares outstanding | 72,357,177 | 72,307,961 | 72,280,555 | 72,206,228 | 72,122,476 | ||||||||||||||
| Diluted weighted average shares outstanding | 72,455,096 | 72,344,284 | 72,317,988 | 72,299,721 | 72,302,414 | ||||||||||||||
| Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | |||||||||
(1) The quarterly diluted EPS do not sum to the total year diluted EPS due to rounding.
| TOWNEBANK Banking Segment Financial Information (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Net interest income | $ | 97,412 | $ | 87,637 | $ | 92,869 | $ | 367,353 | $ | 351,969 | $ | 15,384 | 4.37 | % | ||||||||||||
| Noninterest income | ||||||||||||||||||||||||||
| Service charges on deposit accounts | 1,707 | 2,245 | 1,986 | 8,021 | 10,544 | (2,523 | ) | (23.93 | )% | |||||||||||||||||
| Credit card merchant fees | 1,377 | 1,389 | 1,506 | 5,169 | 4,746 | 423 | 8.91 | % | ||||||||||||||||||
| Other income | 5,983 | 5,271 | 4,876 | 21,809 | 19,620 | 2,189 | 11.16 | % | ||||||||||||||||||
| Subtotal | 9,067 | 8,905 | 8,368 | 34,999 | 34,910 | 89 | 0.25 | % | ||||||||||||||||||
| Gain (loss) on investment securities | — | — | 1,701 | 9,634 | (845 | ) | 10,479 | n/m | ||||||||||||||||||
| Total noninterest income | 9,067 | 8,905 | 10,069 | 44,633 | 34,065 | 10,568 | 31.02 | % | ||||||||||||||||||
| Total revenue | 106,479 | 96,542 | 102,938 | 411,986 | 386,034 | 25,952 | 6.72 | % | ||||||||||||||||||
| Provision for credit losses | 1,628 | 3,601 | 31,070 | 65,799 | 9,371 | 56,428 | 602.16 | % | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | 37,358 | 34,183 | 36,535 | 142,328 | 131,149 | 11,179 | 8.52 | % | ||||||||||||||||||
| Occupancy expense | 5,681 | 4,959 | 5,829 | 21,237 | 20,419 | 818 | 4.01 | % | ||||||||||||||||||
| Furniture and equipment | 2,625 | 2,577 | 2,424 | 10,425 | 10,240 | 185 | 1.81 | % | ||||||||||||||||||
| Amortization of intangible assets | 1,013 | 1,214 | 1,063 | 4,354 | 5,160 | (806 | ) | (15.62 | )% | |||||||||||||||||
| Other expenses | 19,892 | 14,078 | 15,793 | 65,107 | 66,295 | (1,188 | ) | (1.79 | )% | |||||||||||||||||
| Total expenses | 66,569 | 57,011 | 61,644 | 243,451 | 233,263 | 10,188 | 4.37 | % | ||||||||||||||||||
| Income before income tax, corporate allocation and noncontrolling interest | 38,282 | 35,930 | 10,224 | 102,736 | 143,400 | (40,664 | ) | (28.36 | )% | |||||||||||||||||
| Corporate allocation | 643 | 627 | 595 | 2,534 | 2,011 | 523 | 26.01 | % | ||||||||||||||||||
| Income before income tax provision and noncontrolling interest | 38,925 | 36,557 | 10,819 | 105,270 | 145,411 | (40,141 | ) | (27.61 | )% | |||||||||||||||||
| Provision for income tax expense | 5,163 | 6,368 | 474 | 14,467 | 25,706 | (11,239 | ) | (43.72 | )% | |||||||||||||||||
| Net income | 33,762 | 30,189 | 10,345 | 90,803 | 119,705 | (28,902 | ) | (24.14 | )% | |||||||||||||||||
| Noncontrolling interest | 4 | (1 | ) | (2 | ) | 6 | 2 | 4 | n/m | |||||||||||||||||
| Net income attributable to TowneBank | $ | 33,766 | $ | 30,188 | $ | 10,343 | $ | 90,809 | $ | 119,707 | $ | (28,898 | ) | (24.14 | )% | |||||||||||
| Efficiency ratio (non-GAAP) | 61.57 | % | 57.80 | % | 59.84 | % | 59.42 | % | 58.96 | % | ||||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Realty Segment Financial Information | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
| Revenue | ||||||||||||||||||||||||||
| Residential mortgage brokerage income, net | $ | 38,040 | $ | 16,617 | $ | 38,074 | $ | 114,589 | $ | 68,443 | $ | 46,146 | 67.42 | % | ||||||||||||
| Real estate brokerage income, net | 3,564 | 2,550 | 3,688 | 11,776 | 9,865 | 1,911 | 19.37 | % | ||||||||||||||||||
| Title insurance and settlement fees | 669 | 531 | 654 | 2,397 | 2,111 | 286 | 13.55 | % | ||||||||||||||||||
| Property management fees, net | 5,665 | 4,187 | 7,613 | 26,473 | 24,427 | 2,046 | 8.38 | % | ||||||||||||||||||
| Income from unconsolidated subsidiary | 398 | 75 | 451 | 1,336 | 516 | 820 | 158.91 | % | ||||||||||||||||||
| Net interest and other income | 3,627 | 2,787 | 4,101 | 13,889 | 7,724 | 6,165 | 79.82 | % | ||||||||||||||||||
| Total revenue | 51,963 | 26,747 | 54,581 | 170,460 | 113,086 | 57,374 | 50.73 | % | ||||||||||||||||||
| Provision for (recovery of) credit losses | (11 | ) | — | 528 | 1,378 | — | $ | 1,378 | n/m | |||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 16,168 | $ | 12,941 | $ | 15,744 | $ | 58,263 | $ | 52,619 | $ | 5,644 | 10.73 | % | ||||||||||||
| Occupancy expense | 1,869 | 1,857 | 1,906 | 7,465 | 8,285 | (820 | ) | (9.90 | )% | |||||||||||||||||
| Furniture and equipment | 614 | 773 | 620 | 2,622 | 3,099 | (477 | ) | (15.39 | )% | |||||||||||||||||
| Amortization of intangible assets | 658 | 655 | 658 | 2,630 | 2,741 | (111 | ) | (4.05 | )% | |||||||||||||||||
| Other expenses | 8,779 | 7,030 | 9,226 | 33,143 | 27,982 | 5,161 | 18.44 | % | ||||||||||||||||||
| Total expenses | 28,088 | 23,256 | 28,154 | 104,123 | 94,726 | 9,397 | 9.92 | % | ||||||||||||||||||
| Income (loss) before income tax, corporate allocation, and noncontrolling interest | 23,886 | 3,491 | 25,899 | 64,959 | 18,360 | 46,599 | 253.81 | % | ||||||||||||||||||
| Corporate allocation | (403 | ) | (362 | ) | (356 | ) | (1,522 | ) | (1,163 | ) | (359 | ) | 30.87 | % | ||||||||||||
| Income (loss) before income tax provision and noncontrolling interest | 23,483 | 3,129 | 25,543 | 63,437 | 17,197 | 46,240 | 268.88 | % | ||||||||||||||||||
| Provision for income tax | 4,421 | 416 | 4,780 | 12,035 | 3,707 | 8,328 | 224.66 | % | ||||||||||||||||||
| Net income (loss) | 19,062 | 2,713 | 20,763 | 51,402 | 13,490 | 37,912 | 281.04 | % | ||||||||||||||||||
| Noncontrolling interest | (3,813 | ) | (715 | ) | (4,790 | ) | (11,809 | ) | (3,711 | ) | (8,098 | ) | 218.22 | % | ||||||||||||
| Net income (loss) attributable to TowneBank | $ | 15,249 | $ | 1,998 | $ | 15,973 | $ | 39,593 | $ | 9,779 | $ | 29,814 | 304.88 | % | ||||||||||||
| Efficiency ratio (non-GAAP) | 52.79 | % | 84.50 | % | 50.38 | % | 59.54 | % | 81.34 | % | ||||||||||||||||
| TOWNEBANK | ||||||||||||||||||||||||||
| Insurance Segment Financial Information | ||||||||||||||||||||||||||
| (dollars in thousands) | ||||||||||||||||||||||||||
| Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
| December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
| 2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
| Commission and fee income | ||||||||||||||||||||||||||
| Property and casualty | $ | 11,942 | $ | 11,957 | $ | 14,072 | $ | 52,726 | $ | 50,380 | $ | 2,346 | 4.66 | % | ||||||||||||
| Employee benefits | 3,725 | 3,758 | 3,825 | 15,259 | 14,726 | 533 | 3.62 | % | ||||||||||||||||||
| Travel insurance (1) | — | 794 | 1,399 | 3,526 | 4,085 | (559 | ) | (13.68 | )% | |||||||||||||||||
| Specialized benefit services | 175 | 173 | 165 | 664 | 672 | (8 | ) | (1.19 | )% | |||||||||||||||||
| Total commissions and fees | 15,842 | 16,682 | 19,461 | 72,175 | 69,863 | 2,312 | 3.31 | % | ||||||||||||||||||
| Contingency and bonus revenue | 1,087 | 1,396 | 1,112 | 6,230 | 6,307 | (77 | ) | (1.22 | )% | |||||||||||||||||
| Other income (1) | 69 | 1,805 | 17,697 | 17,976 | 2,032 | 15,944 | 784.65 | % | ||||||||||||||||||
| Total revenue | 16,998 | 19,883 | 38,270 | 96,381 | 78,202 | 18,179 | 23.25 | % | ||||||||||||||||||
| Employee commission expense | 3,592 | 3,501 | 3,654 | 14,492 | 13,379 | 1,113 | 8.32 | % | ||||||||||||||||||
| Revenue, net of commission expense | 13,406 | 16,382 | 34,616 | 81,889 | 64,823 | 17,066 | 26.33 | % | ||||||||||||||||||
| Expenses | ||||||||||||||||||||||||||
| Salaries and employee benefits | $ | 7,949 | $ | 8,889 | $ | 9,129 | $ | 35,085 | $ | 35,152 | $ | (67 | ) | (0.19 | )% | |||||||||||
| Occupancy expense | 643 | 700 | 661 | 2,615 | 2,677 | (62 | ) | (2.32 | )% | |||||||||||||||||
| Furniture and equipment | 223 | 248 | 203 | 867 | 1,012 | (145 | ) | (14.33 | )% | |||||||||||||||||
| Amortization of intangible assets | 1,126 | 1,136 | 1,130 | 4,514 | 4,469 | 45 | 1.01 | % | ||||||||||||||||||
| Other expenses | 1,334 | 1,096 | 1,060 | 5,170 | 7,003 | (1,833 | ) | (26.17 | )% | |||||||||||||||||
| Total operating expenses | 11,275 | 12,069 | 12,183 | 48,251 | 50,313 | (2,062 | ) | (4.10 | )% | |||||||||||||||||
| Income before income tax and noncontrolling interest | 2,131 | 4,313 | 22,433 | 33,638 | 14,510 | 19,128 | 131.83 | % | ||||||||||||||||||
| Corporate allocation | (240 | ) | (265 | ) | (239 | ) | (1,012 | ) | (848 | ) | (164 | ) | 19.34 | % | ||||||||||||
| Income before income tax provision and noncontrolling interest | 1,891 | 4,048 | 22,194 | 32,626 | 13,662 | 18,964 | 138.81 | % | ||||||||||||||||||
| Provision for income tax expense | 824 | 1,002 | 2,587 | 5,398 | 3,183 | 2,215 | 69.59 | % | ||||||||||||||||||
| Net income | 1,067 | 3,046 | 19,607 | 27,228 | 10,479 | 16,749 | 159.83 | % | ||||||||||||||||||
| Noncontrolling interest (1) | — | (157 | ) | (11,459 | ) | (12,095 | ) | (1,182 | ) | (10,913 | ) | 923.27 | % | |||||||||||||
| Net income attributable to TowneBank | $ | 1,067 | $ | 2,889 | $ | 8,148 | $ | 15,133 | $ | 9,297 | $ | 5,836 | 62.77 | % | ||||||||||||
| Provision for income taxes | 824 | 1,002 | 2,587 | 5,398 | 3,183 | 2,215 | 69.59 | % | ||||||||||||||||||
| Depreciation, amortization and interest expense | 1,274 | 1,333 | 1,285 | 5,151 | 5,312 | (161 | ) | (3.03 | )% | |||||||||||||||||
| EBITDA (non-GAAP) | $ | 3,165 | $ | 5,224 | $ | 12,020 | $ | 25,682 | $ | 17,792 | $ | 7,890 | 44.35 | % | ||||||||||||
| Efficiency ratio (non-GAAP) | 75.70 | % | 66.74 | % | 65.06 | % | 68.06 | % | 70.72 | % | ||||||||||||||||
| (1) In third quarter 2020 we sold Red Sky Insurance, our travel insurance joint venture. We recorded a gross gain on sale in other income of $17,626. Our re-tax net gain, after distributions to noncontrolling interest was $6,521. | ||||||||||||||||||||||||||
| TOWNEBANK | |||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures: | |||||||||||||||||||
| Three Months Ended | Twelve Months Ended | ||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
| 2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
| Return on average assets (GAAP) | 1.35 | % | 0.89 | % | 1.16 | % | 1.03 | % | 1.19 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 0.11 | % | 0.08 | % | 0.14 | % | 0.10 | % | 0.15 | % | |||||||||
| Return on average tangible assets (non-GAAP) | 1.46 | % | 0.97 | % | 1.30 | % | 1.13 | % | 1.33 | % | |||||||||
| Return on average equity (GAAP) | 11.26 | % | 7.85 | % | 8.44 | % | 8.46 | % | 8.69 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 5.02 | % | 3.81 | % | 4.53 | % | 4.16 | % | 4.89 | % | |||||||||
| Return on average tangible equity (non-GAAP) | 16.28 | % | 11.66 | % | 12.97 | % | 12.62 | % | 13.58 | % | |||||||||
| Return on average common equity (GAAP) | 11.36 | % | 7.91 | % | 8.51 | % | 8.52 | % | 8.75 | % | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | 5.12 | % | 3.88 | % | 4.61 | % | 4.24 | % | 4.98 | % | |||||||||
| Return on average tangible common equity (non-GAAP) | 16.48 | % | 11.79 | % | 13.12 | % | 12.76 | % | 13.73 | % | |||||||||
| Book value (GAAP) | $ | 24.31 | $ | 23.83 | $ | 22.58 | $ | 24.31 | $ | 22.58 | |||||||||
| Impact of excluding average goodwill and other intangibles and amortization | (6.85 | ) | (6.77 | ) | (6.89 | ) | (6.85 | ) | (6.89 | ) | |||||||||
| Tangible book value (non-GAAP) | $ | 17.46 | $ | 17.06 | $ | 15.69 | $ | 17.46 | 15.69 | ||||||||||
| Efficiency ratio (GAAP) | 61.64 | % | 53.08 | % | 66.11 | % | 59.58 | % | 67.08 | % | |||||||||
| Impact of excluding g/l on investments and amortization expense | (1.62 | )% | 4.28 | % | (2.15 | )% | (0.88 | )% | (2.29 | )% | |||||||||
| Efficiency ratio (non-GAAP) | 60.02 | % | 57.36 | % | 63.96 | % | 58.70 | % | 64.79 | % | |||||||||
| Average assets (GAAP) | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | $ | 14,172,206 | $ | 11,638,426 | |||||||||
| Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
| Average tangible assets (non-GAAP) | $ | 14,230,932 | $ | 14,992,914 | $ | 11,467,826 | $ | 13,676,499 | $ | 11,135,318 | |||||||||
| Average equity (GAAP) | $ | 1,768,906 | $ | 1,747,033 | $ | 1,647,929 | $ | 1,721,059 | $ | 1,597,281 | |||||||||
| Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
| Average tangible equity (non-GAAP) | $ | 1,277,453 | $ | 1,252,795 | $ | 1,145,162 | $ | 1,225,352 | $ | 1,094,173 | |||||||||
| Average common equity (GAAP) | $ | 1,753,596 | $ | 1,732,881 | $ | 1,635,394 | $ | 1,707,635 | $ | 1,585,238 | |||||||||
| Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
| Average tangible common equity (non-GAAP) | $ | 1,262,143 | $ | 1,238,643 | $ | 1,132,627 | $ | 1,211,928 | $ | 1,082,130 | |||||||||
| Net income (GAAP) | $ | 50,082 | $ | 34,464 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||||
| Amortization of intangibles, net of tax | 2,210 | 2,252 | 2,374 | 9,086 | 9,772 | ||||||||||||||
| Tangible net income (non-GAAP) | $ | 52,292 | $ | 36,716 | $ | 37,449 | $ | 154,621 | $ | 148,555 | |||||||||
| Net income (GAAP) | $ | 50,082 | $ | 34,464 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||||
| Provision for credit losses | 1,617 | 31,598 | 3,601 | 67,177 | 9,371 | ||||||||||||||
| Provision for income taxes | 10,408 | 7,841 | 7,786 | 31,900 | 32,596 | ||||||||||||||
| Pre-provision, pre-tax net revenues (non-GAAP) | $ | 62,107 | $ | 73,903 | $ | 46,462 | $ | 244,612 | $ | 180,750 | |||||||||
| Total revenue (GAAP) | $ | 171,848 | $ | 192,135 | $ | 139,671 | $ | 664,335 | $ | 563,943 | |||||||||
| Net (gain) loss on equity investment | — | (17,625 | ) | — | — | — | |||||||||||||
| Net (gain)/loss on investment securities | — | (1,701 | ) | — | (9,634 | ) | 845 | ||||||||||||
| Total revenue for efficiency calculation (non-GAAP) | $ | 171,848 | $ | 172,809 | $ | 139,671 | $ | 654,701 | $ | 564,788 | |||||||||
| Noninterest expense (GAAP) | $ | 105,932 | $ | 101,981 | $ | 92,336 | $ | 395,825 | $ | 378,302 | |||||||||
| Less: Amortization of intangibles | 2,797 | 2,851 | 3,005 | 11,498 | 12,370 | ||||||||||||||
| Noninterest expense net of amortization (non-GAAP) | $ | 103,135 | $ | 99,130 | $ | 89,331 | $ | 384,327 | $ | 365,932 | |||||||||