SUFFOLK, Va., Jan. 24, 2019 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (Nasdaq: TOWN) today reported financial
results for the full year and the fourth quarter ended December 31, 2018. For the year ended December 31, 2018,
earnings were $133.79 million, or $1.88 per diluted share, compared to $87.66 million, or $1.41 per diluted share for the
year ended December 31, 2017. “2018 was a great year for TowneBank, highlighted by a strong operating performance,
continued number one deposit market share in Hampton Roads, and a successful merger with Paragon Commercial Corporation. At
$133.79 million, annual net income increased 52.62% over 2017, credit quality remained strong and our annual return on average
assets was 1.26%,” said G. Robert Aston, Jr., Executive Chairman.
Earnings in fourth quarter 2017 included an expense of $10.11 million related to the enactment of the Tax Cuts and Jobs Act
of 2017 (“Tax Reform”) and fourth quarter 2018 included an expense of $0.70 million due to the finalization of the provisional
component of the impact of Tax Reform. Excluding acquisition-related expenses and adjustments related to tax reform, earnings
for the year ended December 31, 2018 were $141.50 million (non-GAAP), or $1.98 (non-GAAP) per diluted share, compared to
$97.18 million (non-GAAP), or $1.56 (non-GAAP) per diluted share for the year ended December 31, 2017.
Earnings for the fourth quarter were $35.99 million, or $0.50 per diluted share, versus $12.33 million, or
$0.20 per diluted share, for the quarter ended December 31, 2017. Excluding acquisition-related expenses and
adjustments related to tax reform, earnings for the quarter ended December 31, 2018 were $35.52 million (non-GAAP), or
$0.49 (non-GAAP) per diluted share, compared to $22.87 million (non-GAAP), or $0.37 (non-GAAP) per diluted share for the
quarter ended December 31, 2017.
Highlights for the Fourth Quarter of 2018 Compared to the Fourth Quarter of
2017:
- Total revenues were $131.42 million, an increase of $22.28 million, or 20.41%.
- Loans held for investment increased $2.07 billion, or 34.83%, from December 31, 2017, and $0.14 billion, or
1.73%, from September 30, 2018, or 6.87% on an annualized basis. Excluding loans acquired in the Paragon merger of
$1.43 billion, loans increased $638.77 million, or 10.74% from December 31, 2017.
- Total deposits were $8.37 billion, an increase of $1.92 billion, or 29.81%.
- Noninterest bearing deposits increased by 21.57%, to $2.62 billion, representing 31.33% of total deposits.
- Annualized return on common shareholders' equity of 9.53% and annualized return on average tangible common shareholders'
equity of 15.11% (non-GAAP).
- Net interest margin of 3.53% and taxable equivalent net interest margin of 3.55% (non-GAAP).
- Effective tax rate of 22.33% benefiting from the lower federal rate related to Tax Reform, partially offset by the
finalization of the provisional component of the Tax Reform impact.
“Our team worked hard in 2018 as is evident by our stellar performance. Throughout the year we focused our efforts on
cultivating the benefits achieved through our successful Paragon merger and organic growth. These efforts resulted in annual
loan growth of 10.74%, balanced across legacy and new markets, excluding loans acquired in the Paragon merger. We have also
been working diligently to identify market opportunities in North Carolina where we can share our unique brand of Hometown
Banking,” said J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to the Fourth Quarter of 2017:
- Net interest income was $89.21 million compared to $65.66 million for the quarter ended December 31,
2017.
- Taxable equivalent net interest margin was 3.55%, including accretion of 12 basis points, compared to 3.41%,
including accretion of 9 basis points, for 2017.
- Total cost of deposits increased to 0.83% from 0.49% at December 31, 2017.
- Average interest-earning assets totaled $10.02 billion at December 31, 2018 compared to $7.73 billion at
December 31, 2017, an increase of 29.69%.
- Average loans held for investment represented 79.04% of average earning assets in the fourth quarter of 2018 compared to
76.59% in the fourth quarter of 2017.
- Average interest-bearing liabilities totaled $6.83 billion, an increase of $1.69 billion from the prior year.
The following table sets forth an estimate of the expected effects of the aggregate acquisition accounting adjustments on
pre-tax net interest income for the periods shown (in thousands):
| |
|
Discount Accretion (Premium Amortization) |
| |
|
For the three months ended |
| |
|
March 31, |
|
June 30, |
|
September 30, |
|
December 31, |
| |
|
2019 |
|
2019 |
|
2019 |
|
2019 |
| Assets: |
|
|
|
|
|
|
|
| Investment Securities |
|
$ |
(72 |
) |
|
$ |
(72 |
) |
|
$ |
(70 |
) |
|
$ |
(70 |
) |
| Loans |
|
1,730 |
|
|
2,040 |
|
|
1,482 |
|
|
1,469 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities: |
|
|
|
|
|
|
|
|
| Deposits |
|
60 |
|
|
54 |
|
|
51 |
|
|
47 |
|
| |
|
|
|
|
|
|
|
|
| Total estimated effect on net interest income |
|
$ |
1,598 |
|
|
$ |
1,914 |
|
|
$ |
1,361 |
|
|
$ |
1,352 |
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| Note: This information is intended for informational purposes only and is not necessarily
indicative of future results. |
| Actual results may differ due to factors such as changes in estimated prepayment
speeds or projected credit loss rates. |
Quarterly Provision for Loan Losses:
- Recorded a provision for loan losses of $2.29 million compared to $0.87 million one year ago and $1.24 million
in the prior quarter.
- Net charge-offs were $0.43 million compared to $0.14 million one year prior. The ratio of net charge-offs to
average loans on an annualized basis was 0.02% compared to 0.03% in the prior quarter and 0.01% for the fourth quarter of
2017.
- The allowance for loan losses represented 0.65% of total loans compared to 0.64% at September 30, 2018 and 0.76% at
December 31, 2017. Loan loss reserve as a percentage of total loans, excluding purchased loans, remained unchanged at
0.82%, from September 30, 2018, and decreased from 0.86% at December 31, 2017. The allowance for loan losses was
10.97 times nonperforming loans compared to 7.25 times at September 30, 2018 and 9.39 times at December 31, 2017.
Quarterly Noninterest Income Compared to the Fourth Quarter of 2017:
- Total noninterest income was $42.21 million compared to $43.48 million in 2017. Increases of
$1.16 million in real estate brokerage and property management income and $1.10 million in insurance commissions were
offset by a decrease in residential mortgage brokerage income of $4.59 million.
- Property management fee revenue increased 39.08%, or $1.07 million, primarily related to a change in the timing of
revenue recognition due to the adoption of new accounting guidance on revenue recognition. The change in accounting
guidance resulted in an increase of property management fee income for the fourth quarter of approximately
$0.84 million.
- Insurance segment total revenue increased $1.75 million or 12.31% to $15.92 million in the fourth quarter.
The increase is primarily attributable to revenue generated by insurance agencies acquired in the second and fourth quarters of
2018, in addition to a rise in revenue from benefit insurance.
- Residential mortgage banking income was $12.95 million compared to $17.54 million in fourth quarter 2017.
Loan volume in the current quarter was $600.07 million, with purchases comprising $531.87 million and refinancing
activity accounting for $68.20 million. Loan volume in fourth quarter 2017 was $797.74 million, with purchase
activity of $657.28 million and refinancing activity of $140.46 million. Lower volumes and continued pressure on
gain on sale margin led to the decline in revenue.
Quarterly Noninterest Expense Compared to the Fourth Quarter of 2017:
- Total noninterest expense was $82.34 million compared to $73.66 million, an increase of $8.68 million, or
11.78%. This reflects increases of $8.27 million in salary and benefits expense, $1.29 million in intangible
amortization expense, and $0.89 million in outside processing expenses.
- Noninterest expense included operational expenses of entities acquired subsequent to fourth quarter 2017 of
$8.75 million, primarily in our Banking and Insurance segments. Excluding acquired entity expenses, noninterest
expense was $73.59 million for the quarter ended December 31, 2018, or a decrease of 0.09% compared to 2017.
Quarterly Income Taxes Compared to the Fourth Quarter of 2017:
- Income tax expense was $10.35 million compared to $21.33 million, one year prior. This represents an
effective tax rate of 22.33% compared to 33.31% in the fourth quarter of 2017.
- The decrease in the effective tax rate from the prior year is due to Tax Reform, signed into law on December 22,
2017. The reduction from 35% to 21% of the U.S. federal corporate tax rate was among the key changes to U.S. tax law,
effective January 1, 2018. Included in income tax expense in fourth quarter 2017 was $10.11 million related to
the revaluation of deferred tax assets due to Tax Reform, and a final adjustment in fourth quarter 2018 to the Tax Reform
provision of $0.70 million.
Investment Securities:
- Total investment securities were $1.19 billion compared to $1.16 billion at September 30, 2018 and
$0.96 billion at December 31, 2017. The weighted average duration of the portfolio at December 31, 2018 was
3.0 years. The carrying value of the available-for-sale portfolio included $11.91 million of net unrealized losses compared
to $26.22 million at September 30, 2018 and $6.43 million in net unrealized losses at December 31,
2017. The change in net unrealized losses was primarily due to interest rate fluctuations. The carrying value of the
held-to-maturity portfolio does not reflect $0.67 million in net unrealized gains compared to $0.17 million in net
unrealized gains at September 30, 2018 and $1.58 million in net unrealized gains at December 31, 2017.
Loans:
- Total loans held for investment were $8.02 billion at December 31, 2018 compared to $7.88 billion at
September 30, 2018 and $5.95 billion at December 31, 2017.
| |
|
|
|
|
|
|
% Change |
| |
|
|
|
|
|
|
|
|
Annualized |
| |
Q4 |
|
Q4 |
|
Q3 |
|
Q4 18 vs. |
|
Q4 18 vs. |
| (dollars in thousands) |
2018 |
|
2017 |
|
2018 |
|
Q4 17 |
|
Q3 18 |
| Construction and land development |
$ |
1,067,239 |
|
|
$ |
930,426 |
|
|
$ |
1,016,120 |
|
|
14.70 |
% |
|
19.96 |
% |
| Commercial real estate - investment related properties |
1,978,592 |
|
|
1,344,774 |
|
|
1,957,297 |
|
|
47.13 |
% |
|
4.32 |
% |
| Commercial real estate - owner occupied |
1,262,748 |
|
|
938,767 |
|
|
1,259,368 |
|
|
34.51 |
% |
|
1.06 |
% |
| Multifamily real estate |
260,987 |
|
|
198,720 |
|
|
284,423 |
|
|
31.33 |
% |
|
(32.69 |
)% |
| 1-4 family residential real estate |
1,626,896 |
|
|
1,217,349 |
|
|
1,608,517 |
|
|
33.64 |
% |
|
4.53 |
% |
| Commercial and industrial business loans |
1,510,364 |
|
|
1,087,157 |
|
|
1,447,794 |
|
|
38.93 |
% |
|
17.15 |
% |
| Consumer loans and other |
311,407 |
|
|
229,772 |
|
|
308,173 |
|
|
35.53 |
% |
|
4.16 |
% |
| Total |
$ |
8,018,233 |
|
|
$ |
5,946,965 |
|
|
$ |
7,881,692 |
|
|
34.83 |
% |
|
6.87 |
% |
Asset Quality:
- Nonperforming assets declined to $24.17 million, or 0.22% of total assets, compared to $28.09 million, or 0.33% of
total assets, at December 31, 2017.
- Nonperforming loans were 0.06% of period end loans.
- Foreclosed property decreased to $17.16 million from $19.82 million at December 31, 2017.
Deposits and Borrowings:
- Total deposits were $8.37 billion compared to $8.30 billion at September 30, 2018 and $6.45 billion at
December 31, 2017. The increase in deposits includes $1.25 billion acquired in the Paragon merger.
- Total loans to total deposits were 95.79% compared to 94.97% at September 30, 2018 and 92.23% at December 31,
2017.
- Non-interest bearing deposits were 31.33% of total deposits at December 31, 2018 compared to 32.19% at
September 30, 2018 and 33.46% at December 31, 2017. Non-interest bearing deposits were affected by seasonality in
the fourth quarter.
- Total borrowings were $1.09 billion compared to $1.17 billion and $0.80 billion at September 30, 2018 and
December 31, 2017, respectively.
| |
|
|
|
|
|
|
% Change |
| |
|
|
|
|
|
|
|
|
Annualized |
| |
Q4 |
|
Q4 |
|
Q3 |
|
Q4 18 vs. |
|
Q4 18 vs. |
| (dollars in thousands) |
2018 |
|
2017 |
|
2018 |
|
Q4 17 |
|
Q3 18 |
| Noninterest-bearing demand |
$ |
2,622,761 |
|
|
$ |
2,157,338 |
|
|
$ |
2,671,558 |
|
|
21.57 |
% |
|
(7.25 |
)% |
| Interest-bearing: |
|
|
|
|
|
|
|
|
|
| Demand and money market accounts |
3,223,215 |
|
|
2,225,211 |
|
|
3,096,317 |
|
|
44.85 |
% |
|
16.26 |
% |
| Savings |
286,684 |
|
|
315,889 |
|
|
298,368 |
|
|
(9.25 |
)% |
|
(15.54 |
)% |
| Certificates of deposits |
2,237,762 |
|
|
1,749,782 |
|
|
2,233,188 |
|
|
27.89 |
% |
|
0.81 |
% |
| Total |
$ |
8,370,422 |
|
|
$ |
6,448,220 |
|
|
$ |
8,299,431 |
|
|
29.81 |
% |
|
3.39 |
% |
Capital:
- Common equity tier 1 capital ratio of 11.64%.
- Tier 1 leverage capital ratio of 9.87%.
- Tier 1 risk-based capital ratio of 11.67%.
- Total risk-based capital ratio of 15.00%.
- Book value was $21.05 compared to $20.54 at September 30, 2018 and $18.06 at December 31, 2017.
- Tangible book value was $14.26 compared to $13.83 at September 30, 2018 and $13.13 at December 31, 2017.
Annual Meeting of Shareholders:
TowneBank announced that its 2019 Annual Meeting of Shareholders would be held at 11:30 a.m. on Wednesday, May 22, 2019 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 40 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, 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 $11.16 billion as of
December 31, 2018, 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 accounting principles
generally accepted in the United States of America ("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:
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: 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; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes
in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to
time in filings made by TowneBank with the FDIC. 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, |
| |
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
| Income and Performance Ratios: |
|
|
|
|
|
|
|
|
|
| |
Total Revenue |
$ |
131,417 |
|
|
$ |
137,915 |
|
|
$ |
137,058 |
|
|
$ |
126,276 |
|
|
$ |
109,141 |
|
| |
Net income |
36,440 |
|
|
39,252 |
|
|
36,138 |
|
|
25,943 |
|
|
13,287 |
|
| |
Net income attributable to TowneBank |
35,990 |
|
|
38,293 |
|
|
34,804 |
|
|
24,705 |
|
|
12,333 |
|
| |
Net income per common share - diluted |
0.50 |
|
|
0.53 |
|
|
0.48 |
|
|
0.36 |
|
|
0.20 |
|
| |
Book value per common share |
21.05 |
|
|
20.54 |
|
|
20.22 |
|
|
19.90 |
|
|
18.06 |
|
| |
Tangible book value per share (non-GAAP) |
14.26 |
|
|
13.83 |
|
|
13.50 |
|
|
13.34 |
|
|
13.13 |
|
| |
Return on average assets |
1.28 |
% |
|
1.40 |
% |
|
1.32 |
% |
|
1.02 |
% |
|
0.57 |
% |
| |
Return on average assets - tangible (non-GAAP) |
1.43 |
% |
|
1.56 |
% |
|
1.48 |
% |
|
1.15 |
% |
|
0.65 |
% |
| |
Return on average equity |
9.44 |
% |
|
10.21 |
% |
|
9.55 |
% |
|
7.39 |
% |
|
4.26 |
% |
| |
Return on average equity - tangible (non-GAAP) |
14.91 |
% |
|
16.08 |
% |
|
15.19 |
% |
|
11.64 |
% |
|
6.39 |
% |
| |
Return on average common equity |
9.53 |
% |
|
10.30 |
% |
|
9.62 |
% |
|
7.45 |
% |
|
4.30 |
% |
| |
Return on average common equity - tangible (non-GAAP) |
15.11 |
% |
|
16.30 |
% |
|
15.36 |
% |
|
11.77 |
% |
|
6.47 |
% |
| |
Noninterest income as a percentage of total revenue |
32.12 |
% |
|
35.69 |
% |
|
36.65 |
% |
|
39.54 |
% |
|
39.84 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Regulatory Capital Ratios (1): |
|
|
|
|
|
|
|
|
|
| |
Common equity tier 1 |
11.64 |
% |
|
11.53 |
% |
|
11.33 |
% |
|
11.65 |
% |
|
12.19 |
% |
| |
Tier 1 |
11.67 |
% |
|
11.57 |
% |
|
11.36 |
% |
|
11.68 |
% |
|
12.23 |
% |
| |
Total |
15.00 |
% |
|
14.90 |
% |
|
14.71 |
% |
|
15.27 |
% |
|
16.48 |
% |
| |
Tier 1 leverage ratio |
9.87 |
% |
|
9.98 |
% |
|
10.00 |
% |
|
9.97 |
% |
|
10.17 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Asset Quality: |
|
|
|
|
|
|
|
|
|
| |
Allowance for loan losses to nonperforming loans |
10.97 |
x |
|
7.25 |
x |
|
12.64 |
x |
|
10.40 |
x |
|
9.39 |
x |
| |
Allowance for loan losses to period end loans |
0.65 |
% |
|
0.64 |
% |
|
0.64 |
% |
|
0.63 |
% |
|
0.76 |
% |
| |
Allowance for loan losses to period end loans excluding purchased loans |
0.82 |
% |
|
0.82 |
% |
|
0.84 |
% |
|
0.86 |
% |
|
0.86 |
% |
| |
Nonperforming loans to period end loans |
0.06 |
% |
|
0.09 |
% |
|
0.05 |
% |
|
0.06 |
% |
|
0.08 |
% |
| |
Nonperforming assets to period end assets |
0.22 |
% |
|
0.25 |
% |
|
0.24 |
% |
|
0.27 |
% |
|
0.33 |
% |
| |
Net charge-offs to average loans (annualized) |
0.02 |
% |
|
0.03 |
% |
|
0.01 |
% |
|
0.02 |
% |
|
0.01 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
Nonperforming loans |
$ |
4,749 |
|
|
$ |
6,926 |
|
|
$ |
3,919 |
|
|
$ |
4,495 |
|
|
$ |
4,807 |
|
| |
Former bank premises |
2,253 |
|
|
2,253 |
|
|
2,253 |
|
|
2,253 |
|
|
3,469 |
|
| |
Foreclosed property |
17,163 |
|
|
18,153 |
|
|
20,133 |
|
|
21,731 |
|
|
19,818 |
|
| |
Total nonperforming assets |
$ |
24,165 |
|
|
$ |
27,332 |
|
|
$ |
26,305 |
|
|
$ |
28,479 |
|
|
$ |
28,094 |
|
| |
Loans past due 90 days and still accruing interest |
$ |
394 |
|
|
$ |
153 |
|
|
$ |
22 |
|
|
$ |
199 |
|
|
$ |
103 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
Allowance for loan losses |
$ |
52,094 |
|
|
$ |
50,236 |
|
|
$ |
49,535 |
|
|
$ |
46,735 |
|
|
$ |
45,131 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Mortgage Banking: |
|
|
|
|
|
|
|
|
|
| |
Loans originated, mortgage |
$ |
531,871 |
|
|
$ |
561,543 |
|
|
$ |
667,189 |
|
|
$ |
478,039 |
|
|
$ |
585,567 |
|
| |
Loans originated, joint venture |
68,196 |
|
|
249,956 |
|
|
284,337 |
|
|
185,306 |
|
|
212,173 |
|
| |
Total loans originated |
$ |
600,067 |
|
|
$ |
811,499 |
|
|
$ |
951,526 |
|
|
$ |
663,345 |
|
|
$ |
797,740 |
|
| |
Number of loans originated |
2,472 |
|
|
3,068 |
|
|
3,687 |
|
|
2,603 |
|
|
3,061 |
|
| |
Average number of originators |
314 |
|
|
329 |
|
|
336 |
|
|
330 |
|
|
302 |
|
| |
Purchase % |
88.89 |
% |
|
90.00 |
% |
|
91.50 |
% |
|
81.80 |
% |
|
83.10 |
% |
| |
Loans sold |
$ |
695,521 |
|
|
$ |
853,981 |
|
|
$ |
827,575 |
|
|
$ |
679,167 |
|
|
$ |
806,323 |
|
| |
Realized gain on sales and fees as a % of loans sold |
3.18 |
% |
|
3.18 |
% |
|
3.11 |
% |
|
3.38 |
% |
|
3.45 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Other Ratios: |
|
|
|
|
|
|
|
|
|
| |
Net interest margin |
3.53 |
% |
|
3.62 |
% |
|
3.69 |
% |
|
3.51 |
% |
|
3.37 |
% |
| |
Net interest margin-fully tax equivalent (non-GAAP) |
3.55 |
% |
|
3.64 |
% |
|
3.71 |
% |
|
3.54 |
% |
|
3.41 |
% |
| |
Average earning assets/total average assets |
89.91 |
% |
|
89.69 |
% |
|
89.61 |
% |
|
89.45 |
% |
|
90.09 |
% |
| |
Average loans/average deposits |
95.32 |
% |
|
97.55 |
% |
|
97.79 |
% |
|
95.89 |
% |
|
91.10 |
% |
| |
Average noninterest deposits/total average deposits |
31.90 |
% |
|
32.61 |
% |
|
32.28 |
% |
|
31.75 |
% |
|
33.27 |
% |
| |
Period end equity/period end total assets |
13.78 |
% |
|
13.49 |
% |
|
13.63 |
% |
|
13.65 |
% |
|
13.41 |
% |
| |
Efficiency ratio |
62.65 |
% |
|
64.00 |
% |
|
65.10 |
% |
|
73.10 |
% |
|
67.49 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| |
(1) Current reporting period regulatory capital ratios are preliminary. |
|
|
|
|
|
|
| TOWNEBANK |
| Average Balances, Yields and Rate Paid (unaudited) |
| (dollars in thousands) |
| |
| |
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
| |
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
| |
|
|
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 |
$ |
7,923,978 |
|
|
$ |
99,895 |
|
|
5.00 |
% |
|
$ |
7,825,065 |
|
|
$ |
97,704 |
|
|
4.95 |
% |
|
$ |
5,920,302 |
|
|
$ |
70,019 |
|
|
4.69 |
% |
| Taxable investment securities |
1,101,892 |
|
|
7,515 |
|
|
2.73 |
% |
|
1,022,051 |
|
|
6,403 |
|
|
2.51 |
% |
|
644,875 |
|
|
3,237 |
|
|
2.01 |
% |
| Tax-exempt investment securities |
80,656 |
|
|
747 |
|
|
3.70 |
% |
|
82,235 |
|
|
766 |
|
|
3.73 |
% |
|
46,825 |
|
|
386 |
|
|
3.30 |
% |
| Interest-bearing deposits |
652,131 |
|
|
3,559 |
|
|
2.17 |
% |
|
450,455 |
|
|
2,149 |
|
|
1.89 |
% |
|
825,164 |
|
|
2,661 |
|
|
1.28 |
% |
| Loans held for sale |
266,058 |
|
|
3,176 |
|
|
4.77 |
% |
|
346,806 |
|
|
4,012 |
|
|
4.63 |
% |
|
292,697 |
|
|
2,874 |
|
|
3.93 |
% |
| Total earning assets |
10,024,715 |
|
|
114,892 |
|
|
4.55 |
% |
|
9,726,612 |
|
|
111,034 |
|
|
4.53 |
% |
|
7,729,863 |
|
|
79,177 |
|
|
4.06 |
% |
| Less: allowance for loan losses |
(50,792 |
) |
|
|
|
|
|
(50,144 |
) |
|
|
|
|
|
(44,704 |
) |
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total nonearning assets |
1,176,037 |
|
|
|
|
|
|
1,168,102 |
|
|
|
|
|
|
894,547 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
11,149,960 |
|
|
|
|
|
|
$ |
10,844,570 |
|
|
|
|
|
|
$ |
8,579,706 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand and money market |
$ |
3,122,973 |
|
|
$ |
5,670 |
|
|
0.72 |
% |
|
$ |
2,957,038 |
|
|
$ |
4,217 |
|
|
0.57 |
% |
|
$ |
2,247,745 |
|
|
$ |
2,091 |
|
|
0.37 |
% |
| Savings |
293,135 |
|
|
1,022 |
|
|
1.38 |
% |
|
301,311 |
|
|
984 |
|
|
1.30 |
% |
|
320,218 |
|
|
870 |
|
|
1.08 |
% |
| Certificates of deposit |
2,245,039 |
|
|
10,803 |
|
|
1.91 |
% |
|
2,147,337 |
|
|
9,339 |
|
|
1.73 |
% |
|
1,768,212 |
|
|
5,141 |
|
|
1.15 |
% |
| Total interest-bearing deposits |
5,661,147 |
|
|
17,495 |
|
|
1.23 |
% |
|
5,405,686 |
|
|
14,540 |
|
|
1.07 |
% |
|
4,336,175 |
|
|
8,102 |
|
|
0.74 |
% |
| Borrowings |
920,389 |
|
|
4,643 |
|
|
1.97 |
% |
|
920,380 |
|
|
4,195 |
|
|
1.78 |
% |
|
554,039 |
|
|
1,819 |
|
|
1.28 |
% |
| Subordinated debentures |
247,769 |
|
|
2,961 |
|
|
4.78 |
% |
|
247,615 |
|
|
2,962 |
|
|
4.78 |
% |
|
247,152 |
|
|
2,880 |
|
|
4.66 |
% |
| Total interest-bearing liabilities |
6,829,305 |
|
|
25,099 |
|
|
1.46 |
% |
|
6,573,681 |
|
|
21,697 |
|
|
1.31 |
% |
|
5,137,366 |
|
|
12,801 |
|
|
0.99 |
% |
| Noninterest bearing demand deposits |
2,651,495 |
|
|
|
|
|
|
2,615,946 |
|
|
|
|
|
|
2,162,271 |
|
|
|
|
|
| Other noninterest-bearing liabilities |
157,238 |
|
|
|
|
|
|
166,575 |
|
|
|
|
|
|
130,181 |
|
|
|
|
|
| Total liabilities |
9,638,038 |
|
|
|
|
|
|
9,356,202 |
|
|
|
|
|
|
7,429,818 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders’ equity |
1,511,922 |
|
|
|
|
|
|
1,488,368 |
|
|
|
|
|
|
1,149,888 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total liabilities and equity |
$ |
11,149,960 |
|
|
|
|
|
|
$ |
10,844,570 |
|
|
|
|
|
|
$ |
8,579,706 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income (tax-equivalent basis) |
|
|
$ |
89,793 |
|
|
|
|
|
|
$ |
89,337 |
|
|
|
|
|
|
$ |
66,376 |
|
|
|
| Reconcilement of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax-equivalent basis adjustment |
|
|
(585 |
) |
|
|
|
|
|
(640 |
) |
|
|
|
|
|
(712 |
) |
|
|
| Net interest income (GAAP) |
|
|
$ |
89,208 |
|
|
|
|
|
|
$ |
88,697 |
|
|
|
|
|
|
$ |
65,664 |
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest rate spread (1) |
|
|
|
|
3.09 |
% |
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
3.07 |
% |
| Interest expense as a percent of average earning assets |
|
|
|
0.99 |
% |
|
|
|
|
|
0.88 |
% |
|
|
|
|
|
0.66 |
% |
| Net interest margin (tax equivalent basis) (2) |
|
|
|
3.55 |
% |
|
|
|
|
|
3.64 |
% |
|
|
|
|
|
3.41 |
% |
| Total cost of deposits |
|
|
|
|
0.83 |
% |
|
|
|
|
|
0.72 |
% |
|
|
|
|
|
0.49 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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) |
| |
| |
Year Ended December 31, |
| |
2018 |
|
|
2017 |
|
|
2016 |
|
| |
|
|
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 |
$ |
7,567,570 |
|
|
$ |
373,057 |
|
|
4.93 |
% |
|
$ |
5,901,797 |
|
|
$ |
276,746 |
|
|
4.69 |
% |
|
$ |
5,129,990 |
|
|
$ |
234,318 |
|
|
4.57 |
% |
| Taxable investment securities |
1,004,080 |
|
|
24,729 |
|
|
2.46 |
% |
|
600,080 |
|
|
11,597 |
|
|
1.93 |
% |
|
695,082 |
|
|
11,254 |
|
|
1.62 |
% |
| Tax-exempt investment securities |
79,720 |
|
|
2,920 |
|
|
3.66 |
% |
|
48,228 |
|
|
1,582 |
|
|
3.28 |
% |
|
52,689 |
|
|
1,601 |
|
|
3.04 |
% |
| Interest-bearing deposits |
560,368 |
|
|
10,229 |
|
|
1.83 |
% |
|
696,507 |
|
|
7,480 |
|
|
1.07 |
% |
|
300,130 |
|
|
1,145 |
|
|
0.38 |
% |
| Mortgage loans held for sale |
293,017 |
|
|
13,124 |
|
|
4.48 |
% |
|
271,281 |
|
|
10,561 |
|
|
3.89 |
% |
|
264,494 |
|
|
9,152 |
|
|
3.46 |
% |
| Total earning assets |
9,504,755 |
|
|
424,059 |
|
|
4.46 |
% |
|
7,517,893 |
|
|
307,966 |
|
|
4.10 |
% |
|
6,442,385 |
|
|
257,470 |
|
|
4.00 |
% |
| Less: allowance for loan losses |
(48,737 |
) |
|
|
|
|
|
(43,760 |
) |
|
|
|
|
|
(39,547 |
) |
|
|
|
|
| Total nonearning assets |
1,143,167 |
|
|
|
|
|
|
860,866 |
|
|
|
|
|
|
802,398 |
|
|
|
|
|
| Total assets |
$ |
10,599,185 |
|
|
|
|
|
|
$ |
8,334,999 |
|
|
|
|
|
|
$ |
7,205,236 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Demand and money market |
$ |
2,951,038 |
|
|
$ |
16,458 |
|
|
0.56 |
% |
|
$ |
2,260,378 |
|
|
$ |
8,020 |
|
|
0.35 |
% |
|
$ |
2,012,061 |
|
|
$ |
6,043 |
|
|
0.30 |
% |
| Savings |
302,435 |
|
|
3,824 |
|
|
1.26 |
% |
|
319,940 |
|
|
3,305 |
|
|
1.03 |
% |
|
309,049 |
|
|
2,859 |
|
|
0.93 |
% |
| Certificates of deposit |
2,060,587 |
|
|
32,859 |
|
|
1.59 |
% |
|
1,668,252 |
|
|
17,467 |
|
|
1.05 |
% |
|
1,530,990 |
|
|
13,414 |
|
|
0.88 |
% |
| Total interest-bearing deposits |
5,314,060 |
|
|
53,141 |
|
|
1.00 |
% |
|
4,248,570 |
|
|
28,792 |
|
|
0.68 |
% |
|
3,852,100 |
|
|
22,316 |
|
|
0.58 |
% |
FHLB advances and repurchase
agreements |
897,574 |
|
|
15,542 |
|
|
1.71 |
% |
|
617,720 |
|
|
9,942 |
|
|
1.61 |
% |
|
523,366 |
|
|
13,424 |
|
|
2.56 |
% |
| Subordinated capital debentures |
251,097 |
|
|
12,067 |
|
|
4.81 |
% |
|
113,752 |
|
|
5,249 |
|
|
4.61 |
% |
|
— |
|
|
— |
|
|
— |
% |
| Total interest-bearing liabilities |
6,462,731 |
|
|
80,750 |
|
|
1.25 |
% |
|
4,980,042 |
|
|
43,983 |
|
|
0.88 |
% |
|
4,375,466 |
|
|
35,740 |
|
|
0.82 |
% |
| Noninterest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Noninterest bearing demand deposits |
2,517,173 |
|
|
|
|
|
|
2,094,753 |
|
|
|
|
|
|
1,720,093 |
|
|
|
|
|
| Other noninterest-bearing liabilities |
164,486 |
|
|
|
|
|
|
136,616 |
|
|
|
|
|
|
145,902 |
|
|
|
|
|
| Total liabilities |
9,144,390 |
|
|
|
|
|
|
7,211,411 |
|
|
|
|
|
|
6,241,461 |
|
|
|
|
|
| Shareholders' equity |
1,454,795 |
|
|
|
|
|
|
1,123,588 |
|
|
|
|
|
|
963,775 |
|
|
|
|
|
| Total liabilities and equity |
$ |
10,599,185 |
|
|
|
|
|
|
$ |
8,334,999 |
|
|
|
|
|
|
$ |
7,205,236 |
|
|
|
|
|
| Net interest income (tax-equivalent basis) |
|
$ |
343,309 |
|
|
|
|
|
|
$ |
263,983 |
|
|
|
|
|
|
$ |
221,730 |
|
|
|
| Reconcilement of Non-GAAP Financial Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax-equivalent basis adjustment |
|
(2,236 |
) |
|
|
|
|
|
(2,862 |
) |
|
|
|
|
|
(2,854 |
) |
|
|
| Net interest income (GAAP) |
|
$ |
341,073 |
|
|
|
|
|
|
$ |
261,121 |
|
|
|
|
|
|
$ |
218,876 |
|
|
|
| Interest rate spread (1) |
|
|
|
3.21 |
% |
|
|
|
|
|
3.22 |
% |
|
|
|
|
|
3.18 |
% |
| Interest expense as a percent of average earning assets |
|
|
|
0.85 |
% |
|
|
|
|
|
0.59 |
% |
|
|
|
|
|
0.55 |
% |
| Net interest margin (tax-equivalent basis) (2) |
|
|
|
3.61 |
% |
|
|
|
|
|
3.51 |
% |
|
|
|
|
|
3.44 |
% |
| Total cost of deposits |
|
|
|
0.68 |
% |
|
|
|
|
|
0.45 |
% |
|
|
|
|
|
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) |
| |
| |
|
| |
2018 |
|
2017 |
| |
(unaudited) |
|
(audited) |
| ASSETS |
|
|
|
| Cash and due from banks |
$ |
665,029 |
|
|
$ |
504,095 |
|
| Interest-bearing deposits in financial institutions |
21,667 |
|
|
17,094 |
|
| Total Cash and Cash Equivalents |
686,696 |
|
|
521,189 |
|
| Securities available for sale, at fair value |
1,095,339 |
|
|
866,138 |
|
| Securities held to maturity, at amortized cost |
50,598 |
|
|
61,304 |
|
| Other equity securities |
4,797 |
|
|
1,516 |
|
| Federal Home Loan Bank stock, at amortized cost |
43,229 |
|
|
29,595 |
|
| Total Securities |
1,193,963 |
|
|
958,553 |
|
| Mortgage loans held for sale |
220,986 |
|
|
313,256 |
|
| Loans, net of unearned income and deferred costs: |
|
|
|
| Real estate-residential 1-4 family |
1,626,896 |
|
|
1,217,349 |
|
| Real estate-commercial |
3,241,340 |
|
|
2,283,541 |
|
| Real estate-construction and development |
1,067,239 |
|
|
930,426 |
|
| Real estate-multi-family |
260,987 |
|
|
198,720 |
|
| Commercial and industrial business |
1,510,364 |
|
|
1,087,157 |
|
| Consumer and other loans |
311,407 |
|
|
229,772 |
|
| Loans, net of unearned income and deferred costs |
8,018,233 |
|
|
5,946,965 |
|
| Less: allowance for loan losses |
(52,094 |
) |
|
(45,131 |
) |
| Net Loans |
7,966,139 |
|
|
5,901,834 |
|
| Premises and equipment, net |
211,796 |
|
|
194,900 |
|
| Goodwill |
433,658 |
|
|
270,250 |
|
| Other intangible assets, net |
58,752 |
|
|
38,568 |
|
| Bank-owned life insurance policies |
237,371 |
|
|
195,775 |
|
| Other assets |
153,669 |
|
|
127,851 |
|
| TOTAL ASSETS |
$ |
11,163,030 |
|
|
$ |
8,522,176 |
|
| |
|
|
|
| LIABILITIES AND EQUITY |
|
|
|
| Deposits: |
|
|
|
| Noninterest-bearing demand |
$ |
2,622,761 |
|
|
$ |
2,157,338 |
|
| Interest-bearing: |
|
|
|
| Demand and money market accounts |
3,223,215 |
|
|
2,225,211 |
|
| Savings |
286,684 |
|
|
315,889 |
|
| Certificates of deposit |
2,237,762 |
|
|
1,749,782 |
|
| Total Deposits |
8,370,422 |
|
|
6,448,220 |
|
| Advances from the Federal Home Loan Bank |
799,315 |
|
|
526,923 |
|
| Subordinated debt, net |
247,861 |
|
|
247,196 |
|
| Repurchase agreements and other borrowings |
47,156 |
|
|
24,850 |
|
| Total Borrowings |
1,094,332 |
|
|
798,969 |
|
| Other liabilities |
159,856 |
|
|
132,482 |
|
| TOTAL LIABILITIES |
9,624,610 |
|
|
7,379,671 |
|
| Preferred stock |
|
|
|
| Authorized and unissued shares - 2,000,000 |
— |
|
|
— |
|
| Common stock, $1.667 par: Authorized shares - 120,000,000 |
|
|
|
| Issued and outstanding shares 72,465,923 in 2018 |
|
|
|
| and 62,629,001 in 2017 |
120,801 |
|
|
104,403 |
|
| Capital surplus |
1,034,676 |
|
|
749,800 |
|
| Retained earnings |
379,239 |
|
|
282,729 |
|
| Common stock issued to deferred compensation trust, at cost |
|
|
|
| 769,200 shares in 2018 and 729,919 shares in 2017 |
(13,955 |
) |
|
(12,524 |
) |
| Deferred compensation trust |
13,955 |
|
|
12,524 |
|
| Accumulated other comprehensive loss |
(9,190 |
) |
|
(5,692 |
) |
| TOTAL SHAREHOLDERS’ EQUITY |
1,525,526 |
|
|
1,131,240 |
|
| Noncontrolling interest |
12,894 |
|
|
11,265 |
|
| TOTAL EQUITY |
1,538,420 |
|
|
1,142,505 |
|
| TOTAL LIABILITIES AND EQUITY |
$ |
11,163,030 |
|
|
$ |
8,522,176 |
|
| TOWNEBANK |
| Consolidated Statements of Income |
| (dollars in thousands, except per share data) |
| |
|
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
December 31, |
| |
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
| INTEREST INCOME: |
|
|
|
|
|
|
|
| Loans, including fees |
$ |
99,446 |
|
|
$ |
69,332 |
|
|
$ |
371,343 |
|
|
$ |
273,999 |
|
| Investment securities |
8,126 |
|
|
3,598 |
|
|
27,127 |
|
|
13,064 |
|
Interest-bearing deposits in financial institutions and
federal funds sold |
3,559 |
|
|
2,661 |
|
|
10,229 |
|
|
7,480 |
|
| Mortgage loans held for sale |
3,176 |
|
|
2,874 |
|
|
13,124 |
|
|
10,561 |
|
| Total interest income |
114,307 |
|
|
78,465 |
|
|
421,823 |
|
|
305,104 |
|
| INTEREST EXPENSE: |
|
|
|
|
|
|
|
| Deposits |
17,495 |
|
|
8,102 |
|
|
53,141 |
|
|
28,792 |
|
| Advances from the Federal Home Loan Bank |
4,585 |
|
|
1,791 |
|
|
15,340 |
|
|
9,837 |
|
| Subordinated debt, net |
2,961 |
|
|
2,880 |
|
|
12,067 |
|
|
5,249 |
|
| Repurchase agreements and other borrowings |
58 |
|
|
28 |
|
|
202 |
|
|
105 |
|
| Total interest expense |
25,099 |
|
|
12,801 |
|
|
80,750 |
|
|
43,983 |
|
| Net interest income |
89,208 |
|
|
65,664 |
|
|
341,073 |
|
|
261,121 |
|
| |
|
|
|
|
|
|
|
| PROVISION FOR LOAN LOSSES |
2,292 |
|
|
869 |
|
|
8,541 |
|
|
5,426 |
|
| Net interest income after provision for loan losses |
86,916 |
|
|
64,795 |
|
|
332,532 |
|
|
255,695 |
|
| NONINTEREST INCOME: |
|
|
|
|
|
|
|
| Residential mortgage banking income, net |
12,951 |
|
|
17,537 |
|
|
65,104 |
|
|
75,851 |
|
| Insurance commissions and other title fees and income, net |
13,212 |
|
|
12,115 |
|
|
56,164 |
|
|
51,933 |
|
| Real estate brokerage and property management income, net |
5,982 |
|
|
4,823 |
|
|
31,863 |
|
|
27,487 |
|
| Service charges on deposit accounts |
2,928 |
|
|
2,809 |
|
|
11,808 |
|
|
10,594 |
|
| Credit card merchant fees, net |
1,298 |
|
|
1,204 |
|
|
5,472 |
|
|
5,008 |
|
| Bank owned life insurance |
2,014 |
|
|
1,941 |
|
|
6,836 |
|
|
6,262 |
|
| Other income |
3,824 |
|
|
3,048 |
|
|
14,343 |
|
|
10,987 |
|
| Gain (loss) on investment securities |
— |
|
|
— |
|
|
3 |
|
|
(1 |
) |
| Total noninterest income |
42,209 |
|
|
43,477 |
|
|
191,593 |
|
|
188,121 |
|
| NONINTEREST EXPENSE: |
|
|
|
|
|
|
|
| Salaries and employee benefits |
50,233 |
|
|
41,965 |
|
|
201,838 |
|
|
169,449 |
|
| Occupancy |
7,352 |
|
|
6,878 |
|
|
27,644 |
|
|
26,855 |
|
| Furniture and equipment |
3,587 |
|
|
3,456 |
|
|
14,477 |
|
|
14,072 |
|
| Other expenses |
21,165 |
|
|
21,361 |
|
|
108,165 |
|
|
85,838 |
|
| Total noninterest expense |
82,337 |
|
|
73,660 |
|
|
352,124 |
|
|
296,214 |
|
| Income before income tax expense & noncontrolling interest |
46,788 |
|
|
34,612 |
|
|
172,001 |
|
|
147,602 |
|
| Provision for income tax expense |
10,348 |
|
|
21,325 |
|
|
34,227 |
|
|
54,813 |
|
| Net income |
$ |
36,440 |
|
|
$ |
13,287 |
|
|
$ |
137,774 |
|
|
$ |
92,789 |
|
| Net income attributable to noncontrolling interest |
(450 |
) |
|
(954 |
) |
|
(3,981 |
) |
|
(5,126 |
) |
| Net income attributable to TowneBank |
$ |
35,990 |
|
|
$ |
12,333 |
|
|
$ |
133,793 |
|
|
$ |
87,663 |
|
| |
|
|
|
|
|
|
|
| Per common share information |
|
|
|
|
|
|
|
| Basic earnings |
$ |
0.50 |
|
|
$ |
0.20 |
|
|
$ |
1.88 |
|
|
$ |
1.41 |
|
| Diluted earnings |
$ |
0.50 |
|
|
$ |
0.20 |
|
|
$ |
1.88 |
|
|
$ |
1.41 |
|
| Cash dividends declared |
$ |
0.16 |
|
|
$ |
0.14 |
|
|
$ |
0.62 |
|
|
$ |
0.55 |
|
| TOWNEBANK |
| Consolidated Balance Sheets - Five Quarter Trend |
| (dollars in thousands, except share data) |
| |
| |
|
|
|
|
|
|
|
|
|
| |
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
| |
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(unaudited) |
|
(audited) |
| ASSETS |
|
|
|
|
|
|
|
|
|
| Cash and due from banks |
$ |
665,029 |
|
|
$ |
688,584 |
|
|
$ |
440,054 |
|
|
$ |
479,453 |
|
|
$ |
504,095 |
|
| Interest-bearing deposits in financial institutions |
21,667 |
|
|
20,910 |
|
|
17,749 |
|
|
17,728 |
|
|
17,094 |
|
| Total Cash and Cash Equivalents |
686,696 |
|
|
709,494 |
|
|
457,803 |
|
|
497,181 |
|
|
521,189 |
|
| Securities available for sale, at fair value |
1,095,339 |
|
|
1,051,773 |
|
|
1,057,663 |
|
|
1,237,179 |
|
|
866,138 |
|
| Securities held to maturity, at amortized cost |
50,598 |
|
|
52,002 |
|
|
53,954 |
|
|
55,283 |
|
|
61,304 |
|
| Other equity securities |
4,797 |
|
|
5,519 |
|
|
5,206 |
|
|
5,002 |
|
|
1,516 |
|
| Federal Home Loan Bank stock, at amortized cost |
43,229 |
|
|
46,393 |
|
|
46,393 |
|
|
46,400 |
|
|
29,595 |
|
| Total Securities |
1,193,963 |
|
|
1,155,687 |
|
|
1,163,216 |
|
|
1,343,864 |
|
|
958,553 |
|
| Mortgage loans held for sale |
220,986 |
|
|
333,354 |
|
|
396,185 |
|
|
293,731 |
|
|
313,256 |
|
| Loans, net of unearned income and deferred costs |
8,018,233 |
|
|
7,881,692 |
|
|
7,774,956 |
|
|
7,470,151 |
|
|
5,946,965 |
|
| Less: allowance for loan losses |
(52,094 |
) |
|
(50,236 |
) |
|
(49,535 |
) |
|
(46,735 |
) |
|
(45,131 |
) |
| Net Loans |
7,966,139 |
|
|
7,831,456 |
|
|
7,725,421 |
|
|
7,423,416 |
|
|
5,901,834 |
|
| Premises and equipment, net |
211,796 |
|
|
210,724 |
|
|
207,997 |
|
|
207,126 |
|
|
194,900 |
|
| Goodwill |
433,658 |
|
|
427,117 |
|
|
425,625 |
|
|
416,789 |
|
|
270,250 |
|
| Other intangible assets, net |
58,752 |
|
|
58,165 |
|
|
60,669 |
|
|
57,493 |
|
|
38,568 |
|
| Bank-owned life insurance policies |
237,371 |
|
|
235,348 |
|
|
233,682 |
|
|
232,039 |
|
|
195,775 |
|
| Other assets |
153,669 |
|
|
159,887 |
|
|
161,055 |
|
|
148,776 |
|
|
127,851 |
|
| TOTAL ASSETS |
$ |
11,163,030 |
|
|
$ |
11,121,232 |
|
|
$ |
10,831,653 |
|
|
$ |
10,620,415 |
|
|
$ |
8,522,176 |
|
| LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
| Noninterest-bearing demand |
$ |
2,622,761 |
|
|
$ |
2,671,558 |
|
|
$ |
2,597,320 |
|
|
$ |
2,503,246 |
|
|
$ |
2,157,338 |
|
| Interest-bearing: |
|
|
|
|
|
|
|
|
|
| Demand and money market accounts |
3,223,215 |
|
|
3,096,317 |
|
|
3,017,767 |
|
|
3,001,256 |
|
|
2,225,211 |
|
| Savings |
286,684 |
|
|
298,368 |
|
|
305,334 |
|
|
309,077 |
|
|
315,889 |
|
| Certificates of deposit |
2,237,762 |
|
|
2,233,188 |
|
|
2,070,790 |
|
|
2,011,843 |
|
|
1,749,782 |
|
| Total Deposits |
8,370,422 |
|
|
8,299,431 |
|
|
7,991,211 |
|
|
7,825,422 |
|
|
6,448,220 |
|
| Advances from the Federal Home Loan Bank |
799,315 |
|
|
873,469 |
|
|
873,622 |
|
|
873,773 |
|
|
526,923 |
|
| Subordinated debt, net |
247,861 |
|
|
247,712 |
|
|
247,563 |
|
|
257,723 |
|
|
247,196 |
|
| Repurchase agreements and other borrowings |
47,156 |
|
|
45,591 |
|
|
50,981 |
|
|
52,509 |
|
|
24,850 |
|
| Total Borrowings |
1,094,332 |
|
|
1,166,772 |
|
|
1,172,166 |
|
|
1,184,005 |
|
|
798,969 |
|
| Other liabilities |
159,856 |
|
|
155,205 |
|
|
191,490 |
|
|
161,638 |
|
|
132,482 |
|
| TOTAL LIABILITIES |
9,624,610 |
|
|
9,621,408 |
|
|
9,354,867 |
|
|
9,171,065 |
|
|
7,379,671 |
|
| Preferred stock |
|
|
|
|
|
|
|
|
|
| Authorized shares - 2,000,000 |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| |
|
|
|
|
|
|
|
|
|
| Common stock, $1.667 par value |
120,801 |
|
|
120,613 |
|
|
120,615 |
|
|
120,472 |
|
|
104,403 |
|
| Capital surplus |
1,034,676 |
|
|
1,032,863 |
|
|
1,031,965 |
|
|
1,028,985 |
|
|
749,800 |
|
| Retained earnings |
379,239 |
|
|
354,842 |
|
|
328,125 |
|
|
304,896 |
|
|
282,729 |
|
| Common stock issued to deferred compensation trust, at cost |
(13,955 |
) |
|
(13,780 |
) |
|
(13,500 |
) |
|
(12,612 |
) |
|
(12,524 |
) |
| Deferred compensation trust |
13,955 |
|
|
13,780 |
|
|
13,500 |
|
|
12,612 |
|
|
12,524 |
|
| Accumulated other comprehensive loss |
(9,190 |
) |
|
(22,348 |
) |
|
(17,944 |
) |
|
(15,873 |
) |
|
(5,692 |
) |
| TOTAL SHAREHOLDERS’ EQUITY |
1,525,526 |
|
|
1,485,970 |
|
|
1,462,761 |
|
|
1,438,480 |
|
|
1,131,240 |
|
| Noncontrolling interest |
12,894 |
|
|
13,854 |
|
|
14,025 |
|
|
10,870 |
|
|
11,265 |
|
| TOTAL EQUITY |
1,538,420 |
|
|
1,499,824 |
|
|
1,476,786 |
|
|
1,449,350 |
|
|
1,142,505 |
|
| TOTAL LIABILITIES AND EQUITY |
$ |
11,163,030 |
|
|
$ |
11,121,232 |
|
|
$ |
10,831,653 |
|
|
$ |
10,620,415 |
|
|
$ |
8,522,176 |
|
| 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, |
| |
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
| INTEREST INCOME: |
|
|
|
|
|
|
|
|
|
| Loans, including fees |
$ |
99,446 |
|
|
$ |
97,215 |
|
|
$ |
93,150 |
|
|
$ |
81,533 |
|
|
$ |
69,332 |
|
| Investment securities |
8,126 |
|
|
7,019 |
|
|
6,390 |
|
|
5,592 |
|
|
3,598 |
|
Interest-bearing deposits in financial institutions and
federal funds sold |
3,559 |
|
|
2,148 |
|
|
2,159 |
|
|
2,362 |
|
|
2,661 |
|
| Mortgage loans held for sale |
3,176 |
|
|
4,012 |
|
|
3,557 |
|
|
2,379 |
|
|
2,874 |
|
| Total interest income |
114,307 |
|
|
110,394 |
|
|
105,256 |
|
|
91,866 |
|
|
78,465 |
|
| INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
| Deposits |
17,495 |
|
|
14,540 |
|
|
11,620 |
|
|
9,486 |
|
|
8,102 |
|
| Advances from the Federal Home Loan Bank |
4,585 |
|
|
4,153 |
|
|
3,764 |
|
|
2,838 |
|
|
1,791 |
|
| Subordinated debt |
2,961 |
|
|
2,962 |
|
|
2,986 |
|
|
3,158 |
|
|
2,880 |
|
| Repurchase agreements and other borrowings |
58 |
|
|
42 |
|
|
63 |
|
|
40 |
|
|
28 |
|
| Total interest expense |
25,099 |
|
|
21,697 |
|
|
18,433 |
|
|
15,522 |
|
|
12,801 |
|
| Net interest income |
89,208 |
|
|
88,697 |
|
|
86,823 |
|
|
76,344 |
|
|
65,664 |
|
| |
|
|
|
|
|
|
|
|
|
| PROVISION FOR LOAN LOSSES |
2,292 |
|
|
1,241 |
|
|
3,056 |
|
|
1,953 |
|
|
869 |
|
| Net interest income after provision for loan
losses |
86,916 |
|
|
87,456 |
|
|
83,767 |
|
|
74,391 |
|
|
64,795 |
|
| NONINTEREST INCOME: |
|
|
|
|
|
|
|
|
|
| Residential mortgage banking income, net |
12,951 |
|
|
15,804 |
|
|
18,745 |
|
|
17,604 |
|
|
17,537 |
|
| Insurance commissions and other title fees and income, net |
13,212 |
|
|
14,493 |
|
|
15,087 |
|
|
13,372 |
|
|
12,115 |
|
| Real estate brokerage and property management income, net |
5,982 |
|
|
8,542 |
|
|
6,910 |
|
|
10,429 |
|
|
4,823 |
|
| Service charges on deposit accounts |
2,928 |
|
|
3,028 |
|
|
2,969 |
|
|
2,883 |
|
|
2,809 |
|
| Credit card merchant fees, net |
1,298 |
|
|
1,563 |
|
|
1,443 |
|
|
1,168 |
|
|
1,204 |
|
| Bank owned life insurance |
2,014 |
|
|
1,657 |
|
|
1,633 |
|
|
1,532 |
|
|
1,941 |
|
| Other income |
3,824 |
|
|
4,130 |
|
|
3,448 |
|
|
2,941 |
|
|
3,048 |
|
| Gain on investment securities |
— |
|
|
— |
|
|
— |
|
|
3 |
|
|
— |
|
| Total noninterest income |
42,209 |
|
|
49,217 |
|
|
50,235 |
|
|
49,932 |
|
|
43,477 |
|
| NONINTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
50,233 |
|
|
50,497 |
|
|
50,324 |
|
|
50,784 |
|
|
41,965 |
|
| Occupancy expense |
7,352 |
|
|
7,013 |
|
|
6,802 |
|
|
6,477 |
|
|
6,878 |
|
| Furniture and equipment |
3,587 |
|
|
3,646 |
|
|
3,546 |
|
|
3,698 |
|
|
3,456 |
|
| Other expenses |
21,165 |
|
|
27,106 |
|
|
28,549 |
|
|
31,344 |
|
|
21,361 |
|
| Total noninterest expense |
82,337 |
|
|
88,262 |
|
|
89,221 |
|
|
92,303 |
|
|
73,660 |
|
| Income before income tax expense and noncontrolling interest |
46,788 |
|
|
48,411 |
|
|
44,781 |
|
|
32,020 |
|
|
34,612 |
|
| Provision for income tax expense |
10,348 |
|
|
9,159 |
|
|
8,643 |
|
|
6,077 |
|
|
21,325 |
|
| Net income |
36,440 |
|
|
39,252 |
|
|
36,138 |
|
|
25,943 |
|
|
13,287 |
|
| Net income attributable to noncontrolling interest |
(450 |
) |
|
(959 |
) |
|
(1,334 |
) |
|
(1,238 |
) |
|
(954 |
) |
| Net income attributable to TowneBank |
$ |
35,990 |
|
|
$ |
38,293 |
|
|
$ |
34,804 |
|
|
$ |
24,705 |
|
|
$ |
12,333 |
|
| Per common share information |
|
|
|
|
|
|
|
|
|
| Basic earnings |
$ |
0.50 |
|
|
$ |
0.53 |
|
|
$ |
0.48 |
|
|
$ |
0.36 |
|
|
$ |
0.20 |
|
| Diluted earnings |
$ |
0.50 |
|
|
$ |
0.53 |
|
|
$ |
0.48 |
|
|
$ |
0.36 |
|
|
$ |
0.20 |
|
| Basic weighted average shares outstanding |
71,905,956 |
|
|
71,875,085 |
|
|
71,787,980 |
|
|
68,983,745 |
|
|
62,239,028 |
|
| Diluted weighted average shares outstanding |
72,043,369 |
|
|
72,044,355 |
|
|
71,949,590 |
|
|
69,156,809 |
|
|
62,462,629 |
|
| Cash dividends declared |
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.16 |
|
|
$ |
0.14 |
|
|
$ |
0.14 |
|
| TOWNEBANK |
| Banking Segment Financial Information |
| (dollars in thousands) |
| |
| |
|
|
|
| |
Three Months Ended |
|
Year Ended |
|
Increase/(Decrease) |
| |
December 31, |
|
September 30,
2018 |
|
December 31, |
|
2018 over 2017 |
| |
2018 |
|
2017 |
|
|
2018 |
|
2017 |
|
Amount |
|
Percent |
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net interest income |
$ |
86,433 |
|
|
$ |
63,030 |
|
|
$ |
85,423 |
|
|
$ |
329,584 |
|
|
$ |
251,003 |
|
|
$ |
78,581 |
|
|
31.31 |
% |
| Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Service charges on deposit accounts |
2,928 |
|
|
2,809 |
|
|
3,028 |
|
|
11,808 |
|
|
10,594 |
|
|
1,214 |
|
|
11.46 |
% |
| Credit card merchant fees |
1,298 |
|
|
1,203 |
|
|
1,563 |
|
|
5,472 |
|
|
5,008 |
|
|
464 |
|
|
9.27 |
% |
| Other income |
4,660 |
|
|
4,319 |
|
|
4,300 |
|
|
16,833 |
|
|
14,046 |
|
|
2,787 |
|
|
19.84 |
% |
| Subtotal |
8,886 |
|
|
8,331 |
|
|
8,891 |
|
|
34,113 |
|
|
29,648 |
|
|
4,465 |
|
|
15.06 |
% |
| Gain (loss) on investment securities |
— |
|
|
— |
|
|
— |
|
|
147 |
|
|
(1 |
) |
|
148 |
|
|
N/M |
| Total noninterest income |
8,886 |
|
|
8,331 |
|
|
8,891 |
|
|
34,260 |
|
|
29,647 |
|
|
4,613 |
|
|
15.56 |
% |
| Total revenue |
95,319 |
|
|
71,361 |
|
|
94,314 |
|
|
363,844 |
|
|
280,650 |
|
|
83,194 |
|
|
29.64 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for loan losses |
2,292 |
|
|
869 |
|
|
1,241 |
|
|
8,541 |
|
|
5,426 |
|
|
3,115 |
|
|
57.41 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
28,100 |
|
|
21,134 |
|
|
28,329 |
|
|
114,472 |
|
|
85,654 |
|
|
28,818 |
|
|
33.64 |
% |
| Occupancy expense |
4,789 |
|
|
4,418 |
|
|
4,331 |
|
|
17,410 |
|
|
16,365 |
|
|
1,045 |
|
|
6.39 |
% |
| Furniture and equipment |
2,426 |
|
|
2,326 |
|
|
2,463 |
|
|
9,912 |
|
|
9,406 |
|
|
506 |
|
|
5.38 |
% |
| Amortization of intangible assets |
1,428 |
|
|
536 |
|
|
1,479 |
|
|
5,658 |
|
|
2,288 |
|
|
3,370 |
|
|
147.29 |
% |
| Other expenses |
9,759 |
|
|
11,571 |
|
|
14,829 |
|
|
60,697 |
|
|
45,141 |
|
|
15,556 |
|
|
34.46 |
% |
| Total expenses |
46,502 |
|
|
39,985 |
|
|
51,431 |
|
|
208,149 |
|
|
158,854 |
|
|
49,295 |
|
|
31.03 |
% |
| Income before income tax, corporate allocation and noncontrolling interest |
46,525 |
|
|
30,507 |
|
|
41,642 |
|
|
147,154 |
|
|
116,370 |
|
|
30,784 |
|
|
26.45 |
% |
| Corporate allocation |
367 |
|
|
533 |
|
|
438 |
|
|
1,736 |
|
|
1,828 |
|
|
(92 |
) |
|
(5.03 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income before income tax provision and noncontrolling interest |
46,892 |
|
|
31,040 |
|
|
42,080 |
|
|
148,890 |
|
|
118,198 |
|
|
30,692 |
|
|
25.97 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for income tax expense |
10,252 |
|
|
19,510 |
|
|
7,604 |
|
|
28,880 |
|
|
44,584 |
|
|
(15,704 |
) |
|
(35.22 |
)% |
| Net income |
36,640 |
|
|
11,530 |
|
|
34,476 |
|
|
120,010 |
|
|
73,614 |
|
|
46,396 |
|
|
63.03 |
% |
| Noncontrolling interest |
4 |
|
|
— |
|
|
(4 |
) |
|
(8 |
) |
|
1 |
|
|
(9 |
) |
|
N/M |
| Net income attributable to TowneBank |
$ |
36,644 |
|
|
$ |
11,530 |
|
|
$ |
34,472 |
|
|
$ |
120,002 |
|
|
$ |
73,615 |
|
|
$ |
46,387 |
|
|
63.01 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio |
48.79 |
% |
|
56.03 |
% |
|
54.53 |
% |
|
57.21 |
% |
|
56.60 |
% |
|
|
|
|
| TOWNEBANK |
| Realty Segment Financial Information |
| (dollars in thousands) |
| |
| |
|
|
|
| |
Three Months Ended |
|
Year Ended |
|
Increase/(Decrease) |
| |
December 31, |
|
September 30, |
|
December 31, |
|
2018 over 2017 |
| |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
|
Amount |
|
Percent |
| Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage brokerage
income, net |
$ |
13,472 |
|
|
$ |
17,544 |
|
|
$ |
16,219 |
|
|
$ |
66,696 |
|
|
$ |
76,245 |
|
|
$ |
(9,549 |
) |
|
(12.52 |
)% |
| Real estate brokerage income, net |
2,183 |
|
|
2,092 |
|
|
2,758 |
|
|
9,458 |
|
|
7,991 |
|
|
1,467 |
|
|
18.36 |
% |
| Title insurance and settlement fees |
458 |
|
|
431 |
|
|
525 |
|
|
1,877 |
|
|
1,877 |
|
|
— |
|
|
— |
% |
| Property management fees, net |
3,799 |
|
|
2,731 |
|
|
5,783 |
|
|
22,405 |
|
|
19,496 |
|
|
2,909 |
|
|
14.92 |
% |
Income from unconsolidated
subsidiary |
54 |
|
|
116 |
|
|
122 |
|
|
370 |
|
|
704 |
|
|
(334 |
) |
|
(47.44 |
)% |
| Net interest and other income |
3,210 |
|
|
3,050 |
|
|
4,111 |
|
|
13,210 |
|
|
11,725 |
|
|
1,485 |
|
|
12.67 |
% |
| Total revenue |
23,176 |
|
|
25,964 |
|
|
29,518 |
|
|
114,016 |
|
|
118,038 |
|
|
(4,022 |
) |
|
(3.41 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
$ |
14,308 |
|
|
$ |
14,279 |
|
|
$ |
14,862 |
|
|
$ |
58,450 |
|
|
$ |
58,586 |
|
|
$ |
(136 |
) |
|
(0.23 |
)% |
| Occupancy expense |
1,928 |
|
|
1,894 |
|
|
2,084 |
|
|
7,871 |
|
|
8,171 |
|
|
(300 |
) |
|
(3.67 |
)% |
| Furniture and equipment |
930 |
|
|
960 |
|
|
952 |
|
|
3,697 |
|
|
3,865 |
|
|
(168 |
) |
|
(4.35 |
)% |
| Amortization of intangible assets |
767 |
|
|
571 |
|
|
672 |
|
|
2,782 |
|
|
2,566 |
|
|
216 |
|
|
8.42 |
% |
| Other expenses |
6,419 |
|
|
6,259 |
|
|
7,543 |
|
|
28,416 |
|
|
26,742 |
|
|
1,674 |
|
|
6.26 |
% |
| Total expenses |
24,352 |
|
|
23,963 |
|
|
26,113 |
|
|
101,216 |
|
|
99,930 |
|
|
1,286 |
|
|
1.29 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income (loss) before income tax, corporate allocation, and noncontrolling interest |
(1,176 |
) |
|
2,001 |
|
|
3,405 |
|
|
12,800 |
|
|
18,108 |
|
|
(5,308 |
) |
|
(29.31 |
)% |
| Corporate allocation |
(238 |
) |
|
(370 |
) |
|
(270 |
) |
|
(1,091 |
) |
|
(1,210 |
) |
|
119 |
|
|
(9.83 |
)% |
| Income (loss) before income tax provision and noncontrolling interest |
(1,414 |
) |
|
1,631 |
|
|
3,135 |
|
|
11,709 |
|
|
16,898 |
|
|
(5,189 |
) |
|
(30.71 |
)% |
| Provision for income tax |
(86 |
) |
|
1,160 |
|
|
786 |
|
|
2,892 |
|
|
5,791 |
|
|
(2,899 |
) |
|
(50.06 |
)% |
| Net income (loss) |
(1,328 |
) |
|
471 |
|
|
2,349 |
|
|
8,817 |
|
|
11,107 |
|
|
(2,290 |
) |
|
(20.62 |
)% |
| Noncontrolling interest |
(130 |
) |
|
(695 |
) |
|
(756 |
) |
|
(2,398 |
) |
|
(3,756 |
) |
|
1,358 |
|
|
(36.16 |
)% |
| Net income (loss) attributable to TowneBank |
$ |
(1,458 |
) |
|
$ |
(224 |
) |
|
$ |
1,593 |
|
|
$ |
6,419 |
|
|
$ |
7,351 |
|
|
$ |
(932 |
) |
|
(12.68 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio |
105.07 |
% |
|
92.29 |
% |
|
88.46 |
% |
|
88.77 |
% |
|
84.66 |
% |
|
|
|
|
| TOWNEBANK |
| Insurance Segment Financial Information |
| (dollars in thousands) |
| |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Year Ended |
|
Increase/(Decrease) |
| |
December 31, |
|
September 30, |
|
December 31, |
|
2018 over 2017 |
| |
2018 |
|
2017 |
|
2018 |
|
2018 |
|
2017 |
|
Amount |
|
Percent |
| Commission and fee income |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Property and casualty |
$ |
9,770 |
|
|
$ |
8,198 |
|
|
$ |
10,762 |
|
|
$ |
40,948 |
|
|
$ |
35,694 |
|
|
$ |
5,254 |
|
|
14.72 |
% |
| Employee benefits |
3,625 |
|
|
3,164 |
|
|
3,813 |
|
|
14,088 |
|
|
12,551 |
|
|
1,537 |
|
|
12.25 |
% |
| Travel insurance |
1,095 |
|
|
912 |
|
|
871 |
|
|
5,123 |
|
|
4,668 |
|
|
455 |
|
|
9.75 |
% |
| Specialized benefit services |
168 |
|
|
170 |
|
|
166 |
|
|
673 |
|
|
657 |
|
|
16 |
|
|
2.44 |
% |
| Total commissions and fees |
14,658 |
|
|
12,444 |
|
|
15,612 |
|
|
60,832 |
|
|
53,570 |
|
|
7,262 |
|
|
13.56 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Contingency and bonus revenue |
1,185 |
|
|
1,654 |
|
|
1,137 |
|
|
4,888 |
|
|
6,322 |
|
|
(1,434 |
) |
|
(22.68 |
)% |
| Other income |
79 |
|
|
80 |
|
|
75 |
|
|
295 |
|
|
308 |
|
|
(13 |
) |
|
(4.22 |
)% |
| Total revenue |
15,922 |
|
|
14,178 |
|
|
16,824 |
|
|
66,015 |
|
|
60,200 |
|
|
5,815 |
|
|
9.66 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee commission
expense |
3,000 |
|
|
2,362 |
|
|
2,742 |
|
|
11,209 |
|
|
9,646 |
|
|
1,563 |
|
|
16.20 |
% |
Revenue, net of commission
expense |
12,922 |
|
|
11,816 |
|
|
14,082 |
|
|
54,806 |
|
|
50,554 |
|
|
4,252 |
|
|
8.41 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee benefits |
$ |
7,825 |
|
|
$ |
6,552 |
|
|
$ |
7,306 |
|
|
$ |
28,916 |
|
|
$ |
25,209 |
|
|
$ |
3,707 |
|
|
14.71 |
% |
| Occupancy expense |
635 |
|
|
566 |
|
|
598 |
|
|
2,363 |
|
|
2,319 |
|
|
44 |
|
|
1.90 |
% |
| Furniture and equipment |
231 |
|
|
169 |
|
|
232 |
|
|
868 |
|
|
801 |
|
|
67 |
|
|
8.36 |
% |
| Amortization of intangible assets |
928 |
|
|
726 |
|
|
845 |
|
|
3,269 |
|
|
2,803 |
|
|
466 |
|
|
16.63 |
% |
| Other expenses |
1,865 |
|
|
1,698 |
|
|
1,737 |
|
|
7,343 |
|
|
6,298 |
|
|
1,045 |
|
|
16.59 |
% |
| Total operating expenses |
11,484 |
|
|
9,711 |
|
|
10,718 |
|
|
42,759 |
|
|
37,430 |
|
|
5,329 |
|
|
14.24 |
% |
| Income before income tax and noncontrolling interest |
1,438 |
|
|
2,105 |
|
|
3,364 |
|
|
12,047 |
|
|
13,124 |
|
|
(1,077 |
) |
|
(8.21 |
)% |
| Corporate allocation |
(128 |
) |
|
(164 |
) |
|
(168 |
) |
|
(645 |
) |
|
(618 |
) |
|
(27 |
) |
|
4.37 |
% |
| Income before income tax provision and noncontrolling interest |
1,310 |
|
|
1,941 |
|
|
3,196 |
|
|
11,402 |
|
|
12,506 |
|
|
(1,104 |
) |
|
(8.83 |
)% |
| Provision for income tax expense |
182 |
|
|
655 |
|
|
769 |
|
|
2,455 |
|
|
4,438 |
|
|
(1,983 |
) |
|
(44.68 |
)% |
| Net income |
1,128 |
|
|
1,286 |
|
|
2,427 |
|
|
8,947 |
|
|
8,068 |
|
|
879 |
|
|
10.89 |
% |
| Noncontrolling interest |
(324 |
) |
|
(259 |
) |
|
(199 |
) |
|
(1,575 |
) |
|
(1,371 |
) |
|
(204 |
) |
|
14.88 |
% |
| Net income attributable to TowneBank |
$ |
804 |
|
|
$ |
1,027 |
|
|
$ |
2,228 |
|
|
$ |
7,372 |
|
|
$ |
6,697 |
|
|
$ |
675 |
|
|
10.08 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provision for income taxes |
182 |
|
|
655 |
|
|
769 |
|
|
2,455 |
|
|
4,438 |
|
|
(1,983 |
) |
|
(44.68 |
)% |
| Depreciation, amortization and interest expense |
1,152 |
|
|
934 |
|
|
1,068 |
|
|
4,134 |
|
|
3,593 |
|
|
541 |
|
|
15.06 |
% |
| EBITDA |
$ |
2,138 |
|
|
$ |
2,616 |
|
|
$ |
4,065 |
|
|
$ |
13,961 |
|
|
$ |
14,728 |
|
|
$ |
(767 |
) |
|
(5.21 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Efficiency ratio |
88.87 |
% |
|
82.19 |
% |
|
76.11 |
% |
|
78.02 |
% |
|
74.04 |
% |
|
|
|
|
| TOWNEBANK |
| Reconcilement of Non-GAAP Financial Measures: |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| |
Three Months Ended |
|
Twelve Months Ended |
| |
December 31, |
|
September 30, |
|
December 31, |
|
December 31, |
| |
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
|
|
| Return on average assets (GAAP) |
1.28 |
% |
|
1.40 |
% |
|
0.57 |
% |
|
1.26 |
% |
|
1.05 |
% |
| Impact of excluding average goodwill and other intangibles and amortization |
0.15 |
% |
|
0.16 |
% |
|
0.08 |
% |
|
0.15 |
% |
|
0.10 |
% |
| Return on average tangible assets (non-GAAP) |
1.43 |
% |
|
1.56 |
% |
|
0.65 |
% |
|
1.41 |
% |
|
1.15 |
% |
| |
|
|
|
|
|
|
|
|
|
| Return on average equity (GAAP) |
9.44 |
% |
|
10.21 |
% |
|
4.26 |
% |
|
9.20 |
% |
|
7.80 |
% |
| Impact of excluding average goodwill and other intangibles and amortization |
5.47 |
% |
|
5.87 |
% |
|
2.13 |
% |
|
5.32 |
% |
|
3.55 |
% |
| Return on average tangible equity (non-GAAP) |
14.91 |
% |
|
16.08 |
% |
|
6.39 |
% |
|
14.52 |
% |
|
11.35 |
% |
| |
|
|
|
|
|
|
|
|
|
| Return on average common equity (GAAP) |
9.53 |
% |
|
10.30 |
% |
|
4.30 |
% |
|
9.27 |
% |
|
7.88 |
% |
| Impact of excluding average goodwill and other intangibles and amortization |
5.58 |
% |
|
6.00 |
% |
|
2.17 |
% |
|
5.43 |
% |
|
3.63 |
% |
| Return on average tangible common equity (non-GAAP) |
15.11 |
% |
|
16.30 |
% |
|
6.47 |
% |
|
14.70 |
% |
|
11.51 |
% |
| |
|
|
|
|
|
|
|
|
|
| Book value (GAAP) |
$ |
21.05 |
|
|
$ |
20.54 |
|
|
$ |
18.06 |
|
|
$ |
21.05 |
|
|
$ |
18.06 |
|
| Impact of excluding average goodwill and other intangibles and amortization |
(6.79 |
) |
|
(6.71 |
) |
|
(4.93 |
) |
|
(7.71 |
) |
|
(4.93 |
) |
| Tangible book value (non-GAAP) |
$ |
14.26 |
|
|
$ |
13.83 |
|
|
$ |
13.13 |
|
|
$ |
13.34 |
|
|
$ |
13.13 |
|
| TOWNEBANK |
| Reconcilement of Non-GAAP Financial Measures |
| (dollars in thousands, except per share data) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| Reconcilement of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting
Comparability |
|
Three Months Ended |
| |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
| |
|
2018 |
|
2018 |
|
2018 |
|
2018 |
|
2017 |
| |
|
|
|
|
|
|
|
|
|
|
| Net income (GAAP) |
|
$ |
35,990 |
|
|
$ |
38,293 |
|
|
$ |
34,804 |
|
|
$ |
24,705 |
|
|
$ |
12,333 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Acquisition-related expenses |
|
(1,518 |
) |
|
424 |
|
|
797 |
|
|
8,726 |
|
|
526 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Income tax expense - tax reform legislation |
|
696 |
|
|
— |
|
|
— |
|
|
— |
|
|
10,112 |
|
| Income tax expense (benefit) - other items |
|
355 |
|
|
(44 |
) |
|
(93 |
) |
|
(1,639 |
) |
|
(98 |
) |
| Total income tax expense (benefit) |
|
1,051 |
|
|
(44 |
) |
|
(93 |
) |
|
(1,639 |
) |
|
10,014 |
|
| Total charges, net of taxes |
|
(467 |
) |
|
380 |
|
|
704 |
|
|
7,087 |
|
|
10,540 |
|
Operating earnings, excluding certain items affecting
comparability (non-GAAP) |
|
$ |
35,523 |
|
|
$ |
38,673 |
|
|
$ |
35,508 |
|
|
$ |
31,792 |
|
|
$ |
22,873 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Weighted average diluted shares |
|
72,043,369 |
|
|
72,044,355 |
|
|
71,949,590 |
|
|
69,156,809 |
|
|
62,462,629 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Diluted EPS (GAAP) |
|
$ |
0.50 |
|
|
$ |
0.53 |
|
|
$ |
0.48 |
|
|
$ |
0.36 |
|
|
$ |
0.20 |
|
Diluted EPS, excluding certain items affecting
comparability (non-GAAP) |
|
$ |
0.49 |
|
|
$ |
0.54 |
|
|
$ |
0.49 |
|
|
$ |
0.46 |
|
|
$ |
0.37 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Average assets |
|
$ |
11,149,960 |
|
|
$ |
10,844,570 |
|
|
$ |
10,536,847 |
|
|
$ |
9,848,364 |
|
|
$ |
8,579,705 |
|
| Average tangible equity |
|
$ |
1,022,982 |
|
|
$ |
1,003,151 |
|
|
$ |
981,607 |
|
|
$ |
932,161 |
|
|
$ |
839,942 |
|
| |
|
|
|
|
|
|
|
|
|
|
Return on average assets, excluding certain items
affecting comparability (non-GAAP) |
|
1.26 |
% |
|
1.41 |
% |
|
1.35 |
% |
|
1.31 |
% |
|
1.06 |
% |
Return on average tangible equity, excluding certain
items affecting comparability (non-GAAP) |
|
14.73 |
% |
|
16.23 |
% |
|
15.48 |
% |
|
14.72 |
% |
|
11.37 |
% |
Return on average common tangible equity, excluding
certain items affecting comparability (non-GAAP) |
|
14.93 |
% |
|
16.45 |
% |
|
15.66 |
% |
|
14.89 |
% |
|
11.52 |
% |
Efficiency ratio, excluding certain items affecting
comparability (non-GAAP) |
|
63.81 |
% |
|
63.69 |
% |
|
64.52 |
% |
|
66.19 |
% |
|
67.01 |
% |
| TOWNEBANK |
| Reconcilement of Non-GAAP Financial Measures |
| (dollars in thousands, except per share data) |
| |
|
|
|
|
| |
|
|
|
|
| Reconcilement of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting
Comparability |
|
Year Ended |
| |
|
December 31, |
|
December 31, |
| |
|
2018 |
|
2017 |
| |
|
|
|
|
| Net income (GAAP) |
|
$ |
133,793 |
|
|
$ |
87,663 |
|
| |
|
|
|
|
| Purchase accounting adjustments |
|
— |
|
|
(3,889 |
) |
| |
|
|
|
|
| Acquisition-related expenses |
|
8,428 |
|
|
2,268 |
|
| |
|
|
|
|
| Total charges |
|
8,428 |
|
|
(1,621 |
) |
| |
|
|
|
|
| Income tax expense - tax reform legislation |
|
696 |
|
|
10,112 |
|
| Income tax expense (benefit) - other items |
|
(1,420 |
) |
|
1,027 |
|
| Total income tax expense (benefit) |
|
(724 |
) |
|
11,139 |
|
| Total charges, net of taxes |
|
7,704 |
|
|
9,518 |
|
| Operating earnings, excluding certain items affecting comparability (non-GAAP) |
|
$ |
141,497 |
|
|
$ |
97,181 |
|
| |
|
|
|
|
| Weighted average diluted shares |
|
71,293,129 |
|
|
62,394,282 |
|
| |
|
|
|
|
| Diluted EPS (GAAP) |
|
$ |
1.88 |
|
|
$ |
1.41 |
|
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) |
|
$ |
1.98 |
|
|
$ |
1.56 |
|
| |
|
|
|
|
| Average assets |
|
$ |
10,599,185 |
|
|
$ |
8,334,999 |
|
| Average tangible equity |
|
$ |
985,274 |
|
|
$ |
815,969 |
|
| |
|
|
|
|
| Return on average assets, excluding certain items affecting comparability (non-GAAP) |
|
1.33 |
% |
|
1.17 |
% |
Return on average tangible equity, excluding certain items affecting
comparability (non-GAAP) |
|
15.30 |
% |
|
12.52 |
% |
Return on average common tangible equity, excluding certain items affecting
comparability (non-GAAP) |
|
15.49 |
% |
|
12.69 |
% |
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) |
|
64.52 |
% |
|
65.43 |
% |
