SUFFOLK, Va., Oct. 24, 2019 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2019 of $37.66 million, or $0.52 per diluted share, compared to $38.29 million, or $0.53 per diluted share, for the quarter ended September 30, 2018.
“Our third quarter continued the trend of solid growth in top-line revenues which climbed to $145.88 million, or a 5.78% increase, over the same period in 2018 driven by strong performances in our noninterest income sources. Noninterest bearing deposits increased 10.74% on an annualized basis during the quarter and represents 32.11% of our total deposits. During the past year, we continued to increase our deposit market share and remain the market leader in the Hampton Roads, Virginia MSA while our leadership teams in Richmond and the North Carolina markets provided an outstanding deposit growth rate of 19.67% and 27.70%, respectively, compared to the quarter ended September 30, 2018," said G. Robert Aston, Jr., Executive Chairman. “The year 2019 has been a year of significant investment in the future, as we have absorbed the expense related to enhancements in company infrastructure driven by changing industry standards and increased regulatory expectations due to crossing the $10 billion asset threshold. Additionally, we have successfully recruited 27 new staff members on the production and revenue side of the bank, expanding Towne’s presence into Greensboro and Greenville, North Carolina as well as adding an eight person Corporate Banking team in the Hampton Roads market,” added Aston.
Highlights for the Third Quarter of 2019 Compared to the Third Quarter of 2018:
- Total revenues were $145.88 million, an increase of $7.97 million, or 5.78%.
- Loans held for investment increased $301.14 million, or 3.82%, from September 30, 2018, and $56.10 million, or 0.69%, from June 30, 2019, or 2.74% on an annualized basis.
- Total deposits were $9.44 billion, an increase of $1.14 billion, or 13.72%, compared to prior year and $0.17 billion, or 1.83%, from June 30, 2019, or 7.24% on an annualized basis. In comparison to September 30, 2018, total deposits increased 8.52% in our Hampton Roads region, 19.67% in our Richmond region, and 27.70% in our North Carolina region.
- Noninterest bearing deposits increased by 13.44%, to $3.03 billion, representing 32.11% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 2.71%, or 10.74% on an annualized basis.
- Annualized return on common shareholders' equity was 9.29% and annualized return on average tangible common shareholders' equity was 14.36% (non-GAAP).
- Net interest margin for the quarter was 3.41% and taxable equivalent net interest margin was 3.43% (non-GAAP).
- Effective tax rate of 16.95% in the quarter compared to 19.30% in the third quarter of 2018.
“Continued diversity in our revenue composition has been a consistent objective of our Company for many years. As pressures on net interest margin and required infrastructure investments continue to challenge our bottom line returns, it is important to keep our focus on growing top-line revenues. We were pleased to announce the completion of a strategic insurance acquisition in Charlotte, North Carolina, which will serve to strengthen our product delivery in one of our key growth markets,” stated J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to the Third Quarter of 2018:
- Net interest income was $91.10 million compared to $88.70 million at September 30, 2018.
- Taxable equivalent net interest margin (non-GAAP) was 3.43%, including accretion of 11 basis points, compared to 3.64%, including accretion of 18 basis points, for 2018.
- Average loans held for investment, with an average yield of 5.02%, represented 76.35% of average earning assets at September 30, 2019 compared to an average yield of 4.95% and 80.45% of average earning assets in the third quarter of 2018.
- Total cost of deposits increased to 1.01% from 0.72% at September 30, 2018.
- Average interest-earning assets totaled $10.60 billion at September 30, 2019 compared to $9.73 billion at September 30, 2018, an increase of 9.03%.
- Average interest-bearing liabilities totaled $7.03 billion, an increase of $0.46 billion from prior year.
Quarterly Provision for Loan Losses:
- Recorded a provision for loan losses of $1.51 million compared to $1.24 million one year ago and $2.82 million in the linked quarter.
- Net charge-offs were $0.61 million compared to $0.54 million one year prior. The ratio of net charge-offs to average loans on an annualized basis was 0.03% compared to 0.08% in the prior quarter and 0.03% in the third quarter of 2018.
- The allowance for loan losses represented 0.68% of total loans compared to 0.67% at June 30, 2019 and 0.64% at September 30, 2018. Loan loss reserve as a percentage of total loans, excluding purchased loans, was 0.81% at September 30, 2019, and June 30, 2019, compared to 0.82% at September 30, 2018. The allowance for loan losses was 3.95 times nonperforming loans compared to 3.00 times at June 30, 2019 and 7.25 times at September 30, 2018.
Quarterly Noninterest Income Compared to the Third Quarter of 2018:
- Total noninterest income was $54.78 million compared to $49.22 million in 2018, an increase of $5.56 million, or 11.29%. Residential mortgage banking income increased $3.05 million in the quarter, insurance commissions and other title fees increased $2.19 million, real estate brokerage and property management income increased $0.90 million, while service charges on deposit accounts decreased $0.78 million.
- Residential mortgage banking income was $18.86 million compared to $15.80 million in third quarter 2018. Loan volume in the current quarter was $963.66 million, with purchase activity comprising 68.83% of that volume. Loan volume in third quarter 2018 was $811.50 million, with purchase activity of 89.72%.
- Total Insurance segment revenue increased 16.59% to $19.62 million in the third quarter due primarily to additional commission income from insurance agencies that were acquired in November 2018 and January 2019. An additional insurance agency, Angel Insurance and Financial Services, Inc., was acquired, effective September 1, 2019.
- Property management fee revenue increased 13.47%, or $0.78 million, as compared to third quarter 2018 due to increases in reservation levels.
Quarterly Noninterest Expense Compared to the Third Quarter of 2018:
- Total noninterest expense was $97.29 million compared to $88.26 million in 2018, an increase of $9.03 million, or 10.23%. This reflects increases of $5.29 million in salary and benefits expense, $1.66 million in professional fees, $0.94 million in occupancy expense, and $0.56 million in advertising and marketing expenses.
- In addition to growth in production related expenses, changing industry standards and increased regulatory expectations related to exceeding $10 billion in assets, have resulted in enhancements to Company infrastructure, resulting in increased salary and benefits expense and professional fees. Areas of enhancement include: information technology, risk and compliance, accounting, and internal audit.
- Noninterest expense included operational expenses of $1.86 million related to insurance agencies acquired subsequent to third quarter 2018.
Quarterly Income Taxes Compared to the Third Quarter of 2018:
- Income tax expense was $7.68 million compared to $9.16 million one year prior. This represents an effective tax rate of 16.95% compared to 19.30% in the third quarter of 2018.
Consolidated Balance Sheet September 30, 2019 Compared to September 30, 2018
- Total assets were $12.02 billion for the quarter ended September 30, 2019, an increase of 7.69%, or 10.28% on an annualized basis, compared to $11.16 billion at December 31, 2018. Total assets increased $0.90 billion, or 8.09%, from $11.12 billion at September 30, 2018. This increase was driven primarily by growth in cash and cash equivalents, available for sale securities, and loans held for investment. Year-over-year, other assets increased $49.66 million due to the adoption of the leasing standard.
- Loans held for investment increased $0.16 billion, or 2.05%, or 2.74% on an annualized basis, compared to year end 2018, and $0.30 billion, or 3.82% compared to September 30, 2018.
- Total liabilities were $10.38 billion at September 30, 2019, an increase of $758.15 million, or 7.88%, compared to December 31, 2018 and $761.35 million, or 7.91%, compared to September 30, 2018.
- Total deposits increased $1.07 billion, or 12.75%, or 17.05% on an annualized basis, over December 31, 2018 and $1.14 billion, or 13.72%, over September 30, 2018.
- Total borrowings declined $0.42 billion, or 38.49%, or 51.46% on an annualized basis from December 31, 2018 and $0.49 billion from September 30, 2018.
Investment Securities:
- Total investment securities were $1.41 billion compared to $1.35 billion at June 30, 2019 and $1.16 billion at September 30, 2018. The weighted average duration of the portfolio at September 30, 2019 was 3.6 years. The carrying value of the available-for-sale portfolio included $26.07 million of net unrealized gains compared to $19.66 million at June 30, 2019 and $26.22 million in net unrealized losses at September 30, 2018. The increase in net unrealized gains was primarily due to further declines in interest rates. The carrying value of the held-to-maturity portfolio does not reflect $1.68 million in net unrealized gains compared to $1.58 million in net unrealized gains at June 30, 2019 and $0.17 million in net unrealized gains at September 30, 2018.
Loans and Asset Quality:
- Total loans held for investment were $8.18 billion at September 30, 2019 compared to $8.13 billion at June 30, 2019 and $7.88 billion at September 30, 2018.
- Nonperforming assets were $31.04 million, or 0.26% of total assets, compared to $27.33 million, or 0.25%, at September 30, 2018.
- Nonperforming loans were 0.17% of period end loans.
- Foreclosed property decreased to $15.52 million from $18.15 million at September 30, 2018.
Deposits and Borrowings:
- Total deposits were $9.44 billion compared to $9.27 billion at June 30, 2019 and $8.30 billion at September 30, 2018.
- Total loans to deposits were 86.70% compared to 87.68% at June 30, 2019 and 94.97% at September 30, 2018.
- Non-interest bearing deposits were 32.11% of total deposits at September 30, 2019 compared to 31.83% at June 30, 2019 and 32.19% at September 30, 2018.
- Total borrowings were $0.67 billion compared to $0.84 billion and $1.17 billion at June 30, 2019 and September 30, 2018, respectively.
Capital:
- Common equity tier 1 capital ratio of 11.52%.
- Tier 1 leverage capital ratio of 9.84%.
- Tier 1 risk-based capital ratio of 11.55%.
- Total risk-based capital ratio of 14.70%.
- Book value was $22.38 compared to $21.95 at June 30, 2019 and $20.54 at September 30, 2018.
- Tangible book value (non-GAAP)was $15.44 compared to $15.05 at June 30, 2019 and $13.83 at September 30, 2018.
Outlook:
Management reforecasts on a quarterly basis and anticipates:
- Annualized loan growth to be in the low-to-mid single digits for the remainder of 2019.
- Our quarterly noninterest expense run rate will range between $94 - $96 million for 2019.
About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 41 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, 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 $12.02 billion as of September 30, 2019, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:
This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.
Forward-Looking Statements:
Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank’s future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” or “project” or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank’s loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market area; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
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
|
| | September 30,
| | June 30,
| | March 31,
| | December 31,
| | September 30,
|
| | 2019
| | 2019
| | 2019
| | 2018
| | 2018
|
Income and Performance Ratios:
|
| | Total Revenue | $ | 145,879 | | | $ | 144,537 | | | $ | 133,854 | | | $ | 131,417 | | | $ | 137,914 | |
| | Net income | 39,400 | | | 36,242 | | | 32,082 | | | 36,440 | | | 39,252 | |
| | Net income attributable to TowneBank | 37,659 | | | 34,638 | | | 31,409 | | | 35,990 | | | 38,293 | |
| | Net income per common share - diluted | 0.52 | | | 0.48 | | | 0.44 | | | 0.50 | | | 0.53 | |
| | Book value per common share | 22.38 | | | 21.95 | | | 21.40 | | | 21.05 | | | 20.54 | |
| | Book value per common share - tangible (non-GAAP) | 15.44 | | | 15.05 | | | 14.46 | | | 14.26 | | | 13.83 | |
| | Return on average assets | 1.26 | % | | 1.20 | % | | 1.14 | % | | 1.28 | % | | 1.40 | % |
| | Return on average assets - tangible (non-GAAP) | 1.40 | % | | 1.35 | % | | 1.29 | % | | 1.43 | % | | 1.56 | % |
| | Return on average equity | 9.22 | % | | 8.83 | % | | 8.24 | % | | 9.44 | % | | 10.21 | % |
| | Return on average equity - tangible (non-GAAP) | 14.20 | % | | 13.90 | % | | 13.24 | % | | 14.91 | % | | 16.08 | % |
| | Return on average common equity | 9.29 | % | | 8.89 | % | | 8.30 | % | | 9.53 | % | | 10.30 | % |
| | Return on average common equity - tangible (non-GAAP) | 14.36 | % | | 14.05 | % | | 13.39 | % | | 15.11 | % | | 16.30 | % |
| | Noninterest income as a percentage of total revenue | 37.55 | % | | 37.86 | % | | 34.65 | % | | 32.12 | % | | 35.69 | % |
| | | | | | | | | | | |
| Regulatory Capital Ratios (1): | | | | | | | | | |
| | Common equity tier 1 | 11.52 | % | | 11.58 | % | | 11.49 | % | | 11.51 | % | | 11.53 | % |
| | Tier 1 | 11.55 | % | | 11.62 | % | | 11.52 | % | | 11.54 | % | | 11.57 | % |
| | Total | 14.70 | % | | 14.85 | % | | 14.79 | % | | 14.83 | % | | 14.90 | % |
| | Tier 1 leverage ratio | 9.84 | % | | 9.86 | % | | 9.92 | % | | 9.87 | % | | 9.98 | % |
| | | | | | | | | | | |
| Asset Quality: |
| | Allowance for loan losses to nonperforming loans | 3.95 | x | | 3.00 | x | | 9.36 | x | | 10.97 | x | | 7.25 | x |
| | Allowance for loan losses to period end loans | 0.68 | % | | 0.67 | % | | 0.66 | % | | 0.65 | % | | 0.64 | % |
| | Allowance for loan losses to period end loans excluding purchased loans | 0.81 | % | | 0.81 | % | | 0.81 | % | | 0.82 | % | | 0.82 | % |
| | Nonperforming loans to period end loans | 0.17 | % | | 0.22 | % | | 0.07 | % | | 0.06 | % | | 0.09 | % |
| | Nonperforming assets to period end assets | 0.26 | % | | 0.29 | % | | 0.22 | % | | 0.22 | % | | 0.25 | % |
| | Net charge-offs to average loans (annualized) | 0.03 | % | | 0.08 | % | | 0.01 | % | | 0.02 | % | | 0.03 | % |
| | | | | | | | | | | |
| | Nonperforming loans | $ | 14,016 | | | $ | 18,202 | | | $ | 5,696 | | | $ | 4,749 | | | $ | 6,926 | |
| | Former bank premises | 1,510 | | | 1,510 | | | 2,223 | | | 2,253 | | | 2,253 | |
| | Foreclosed property | 15,517 | | | 14,517 | | | 17,071 | | | 17,163 | | | 18,153 | |
| | Total nonperforming assets | $ | 31,043 | | | $ | 34,229 | | | $ | 24,990 | | | $ | 24,165 | | | $ | 27,332 | |
| | Loans past due 90 days and still accruing interest | $ | 636 | | | $ | 415 | | | $ | 117 | | | $ | 394 | | | $ | 153 | |
| | | | | | | | | | | |
| | Allowance for loan losses | $ | 55,428 | | | $ | 54,527 | | | $ | 53,303 | | | $ | 52,094 | | | $ | 50,236 | |
| | | | | | | | | | | |
| Mortgage Banking: | | | | | | | | | |
| | Loans originated, mortgage | $ | 703,922 | | | $ | 574,638 | | | $ | 366,643 | | | $ | 407,787 | | | $ | 561,543 | |
| | Loans originated, joint venture | 259,742 | | | 246,491 | | | 146,884 | | | 192,280 | | | 249,956 | |
| | Total loans originated | $ | 963,664 | | | $ | 821,129 | | | $ | 513,527 | | | $ | 600,067 | | | $ | 811,499 | |
| | Number of loans originated | 3,360 | | | 3,121 | | | 1,977 | | | 2,304 | | | 3,068 | |
| | Number of originators | 225 | | | 229 | | | 240 | | | 293 | | | 303 | |
| | Purchase % | 68.83 | % | | 84.97 | % | | 86.08 | % | | 88.64 | % | | 89.72 | % |
| | Loans sold | $ | 925,058 | | | $ | 694,832 | | | $ | 473,068 | | | $ | 694,341 | | | $ | 852,205 | |
| | Gross realized gain on sales and fees as a % of loans originated | 3.45 | % | | 3.43 | % | | 3.58 | % | | 3.37 | % | | 3.36 | % |
| | | | | | | | | | | |
| Other Ratios: | | | | | | | | | |
| | Net interest margin | 3.41 | % | | 3.49 | % | | 3.54 | % | | 3.53 | % | | 3.62 | % |
| | Net interest margin-fully tax equivalent (nonGAAP) | 3.43 | % | | 3.52 | % | | 3.57 | % | | 3.55 | % | | 3.64 | % |
| | Average earning assets/total average assets | 89.53 | % | | 89.46 | % | | 89.50 | % | | 89.91 | % | | 89.69 | % |
| | Average loans/average deposits | 87.63 | % | | 91.60 | % | | 95.83 | % | | 95.32 | % | | 97.55 | % |
| | Average noninterest deposits/total average deposits | 31.82 | % | | 31.63 | % | | 31.39 | % | | 31.90 | % | | 32.61 | % |
| | Period end equity/period end total assets | 13.63 | % | | 13.45 | % | | 13.53 | % | | 13.78 | % | | 13.49 | % |
| | Efficiency ratio | 66.66 | % | | 66.80 | % | | 68.43 | % | | 62.65 | % | | 64.00 | % |
| | | | | | | | | | | |
| | (1) Current reporting period regulatory capital ratios are preliminary | | | | | | |
| TOWNEBANK |
| Selected Data (unaudited) |
| (dollars in thousands) |
| |
| | | | | | | | | | |
| Investment Securities | | | | | | | % Change |
| | Q3 | | Q3 | | Q2 | | Q3 19 vs. | | Q3 19 vs. |
| Available-for-sale securities, at fair value | 2019 | | 2018 | | 2019 | | Q3 18 | | Q2 19 |
| U.S. agency securities | $ | 152,581 | | | $ | 388,904 | | | $ | 261,960 | | | (60.77 | )% | | (41.75 | )% |
| U.S. Treasury notes | 999 | | | 1,245 | | | 2,241 | | | (19.76 | )% | | (55.42 | )% |
| Municipal securities | 173,519 | | | 72,818 | | | 167,466 | | | 138.29 | % | | 3.61 | % |
| Trust preferred and other corporate securities | 52,006 | | | 30,648 | | | 43,799 | | | 69.69 | % | | 18.74 | % |
| Mortgage-backed securities issued by GSE and GNMA | 958,290 | | | 558,158 | | | 785,355 | | | 71.69 | % | | 22.02 | % |
| Total | $ | 1,337,395 | | | $ | 1,051,773 | | | $ | 1,260,821 | | | 27.16 | % | | 6.07 | % |
| | | | | | | | | | |
| Held-to-maturity securities, at amortized cost | | | | | | | | | |
| Municipal securities | $ | 29,166 | | | $ | 35,007 | | | $ | 34,458 | | | (16.69 | )% | | (15.36 | )% |
| Trust preferred corporate securities | 2,381 | | | 500 | | | 2,393 | | | 376.20 | % | | (0.50 | )% |
| Mortgage-backed securities issued by GSE and GNMA | 12,947 | | | 16,495 | | | 13,723 | | | (21.51 | )% | | (5.65 | )% |
| Total | $ | 44,494 | | | $ | 52,002 | | | $ | 50,574 | | | (14.44 | )% | | (12.02 | )% |
| | | | | | | | | | |
| | | | | | | | | | |
| Loans Held For Investment | | | | | | | % Change |
| | Q3 | | Q3 | | Q2 | | Q3 19 vs. | | Q3 19 vs. |
| | 2019 | | 2018 | | 2019 | | Q3 18 | | Q2 19 |
| Real estate - construction and development | $ | 1,142,225 | | | $ | 1,016,120 | | | $ | 1,107,762 | | | 12.41 | % | | 3.11 | % |
| Commercial real estate - investment related properties | 2,070,317 | | | 1,957,297 | | | 1,985,990 | | | 5.77 | % | | 4.25 | % |
| Commercial real estate - owner occupied | 1,286,137 | | | 1,259,368 | | | 1,288,478 | | | 2.13 | % | | (0.18 | )% |
| Real estate - multifamily | 219,901 | | | 284,423 | | | 267,528 | | | (22.69 | )% | | (17.80 | )% |
| Real estate - residential 1-4 family | 1,621,175 | | | 1,608,517 | | | 1,639,547 | | | 0.79 | % | | (1.12 | )% |
| Commercial and industrial business | 1,527,515 | | | 1,447,794 | | | 1,523,607 | | | 5.51 | % | | 0.26 | % |
| Consumer and other loans | 315,559 | | | 308,173 | | | 313,817 | | | 2.40 | % | | 0.56 | % |
| Total | $ | 8,182,829 | | | $ | 7,881,692 | | | $ | 8,126,729 | | | 3.82 | % | | 0.69 | % |
| | | | | | | | | | |
| | | | | | | | | | |
| Deposits | | | | | | | % Change |
| | Q3 | | Q3 | | Q2 | | Q3 19 vs. | | Q3 19 vs. |
| | 2019 | | 2018 | | 2019 | | Q3 18 | | Q2 19 |
| Noninterest-bearing demand | $ | 3,030,505 | | | $ | 2,671,558 | | | $ | 2,950,615 | | | 13.44 | % | | 2.71 | % |
| Interest-bearing: | | | | | | | | | |
| Demand and money market accounts | 3,534,252 | | | 3,096,317 | | | 3,409,322 | | | 14.14 | % | | 3.66 | % |
| Savings | 280,552 | | | 298,368 | | | 277,495 | | | (5.97 | )% | | 1.10 | % |
| Certificates of deposits | 2,592,705 | | | 2,233,188 | | | 2,631,386 | | | 16.10 | % | | (1.47 | )% |
| Total | $ | 9,438,014 | | | $ | 8,299,431 | | | $ | 9,268,818 | | | 13.72 | % | | 1.83 | % |
| | | | | | | | | | |
| 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: |
| | | Discount Accretion (Premium Amortization) |
| | | For the three months ended
|
| | | December 31,
|
| | | 2019
|
| Assets: | | $ | (74 | ) |
| Investment Securities | | 1,403 | |
| Loans | | |
| | | |
| Liabilities: | | |
| Deposits | | 47 | |
| Total estimated effect on net interest income | | $ | 1,282 | |
| | | |
| 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. |
TOWNEBANK
|
Average Balances, Yields and Rate Paid (unaudited)
|
(dollars in thousands)
|
| |
| | Three Months Ended
| | Three Months Ended
| | Three Months Ended
|
| | September 30, 2019
| | June 30, 2019
| | September 30, 2018
|
| | Average
Balance
| | Interest
Income/
Expense
| | Average
Yield/
Rate
| | Average
Balance
| | Interest
Income/
Expense
| | Average
Yield/
Rate
| | Average
Balance
| | Interest
Income/
Expense
| | Average
Yield/
Rate
|
| Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans (net of unearned income
and deferred costs), excluding
nonaccrual loans | $ | 8,096,908 | | | $ | 102,495 | | | 5.02 | % | | $ | 8,075,054 | | | $ | 102,366 | | | 5.08 | % | | $ | 7,825,065 | | | $ | 97,705 | | | 4.95 | % |
| Taxable investment securities | 1,266,447 | | | 9,087 | | | 2.87 | % | | 1,170,215 | | | 8,346 | | | 2.85 | % | | 1,022,051 | | | 6,402 | | | 2.51 | % |
| Tax-exempt investment securities | 121,738 | | | 997 | | | 3.28 | % | | 90,942 | | | 756 | | | 3.33 | % | | 82,235 | | | 766 | | | 3.73 | % |
| Total securities | 1,388,185 | | | 10,084 | | | 2.91 | % | | 1,261,157 | | | 9,102 | | | 2.89 | % | | 1,104,286 | | | 7,168 | | | 2.60 | % |
| Interest-bearing deposits | 711,030 | | | 3,745 | | | 2.09 | % | | 698,649 | | | 4,016 | | | 2.31 | % | | 450,455 | | | 2,148 | | | 1.89 | % |
| Loans held for sale | 408,377 | | | 3,956 | | | 3.87 | % | | 281,775 | | | 3,007 | | | 4.27 | % | | 346,806 | | | 4,012 | | | 4.63 | % |
| Total earning assets | 10,604,500 | | | 120,280 | | | 4.50 | % | | 10,316,635 | | | 118,491 | | | 4.61 | % | | 9,726,612 | | | 111,033 | | | 4.53 | % |
| Less: allowance for loan losses | (54,858 | ) | | | | | | (53,386 | ) | | | | | | (50,144 | ) | | | | |
| Total nonearning assets | 1,295,640 | | | | | | | 1,269,029 | | | | | | | 1,168,102 | | | | | |
| Total assets | $ | 11,845,282 | | | | | | | $ | 11,532,278 | | | | | | | $ | 10,844,570 | | | | | |
| Liabilities and Equity: | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | |
| Demand and money market | $ | 3,379,888 | | | $ | 7,223 | | | 0.85 | % | | $ | 3,312,313 | | | $ | 7,025 | | | 0.85 | % | | $ | 2,957,037 | | | $ | 4,217 | | | 0.57 | % |
| Savings | 278,048 | | | 702 | | | 1.00 | % | | 281,221 | | | 929 | | | 1.33 | % | | 301,311 | | | 984 | | | 1.30 | % |
| Certificates of deposit | 2,641,681 | | | 15,627 | | | 2.35 | % | | 2,433,479 | | | 13,830 | | | 2.28 | % | | 2,147,338 | | | 9,339 | | | 1.73 | % |
| Total interest-bearing deposits | 6,299,617 | | | 23,552 | | | 1.48 | % | | 6,027,013 | | | 21,784 | | | 1.45 | % | | 5,405,686 | | | 14,540 | | | 1.07 | % |
| Borrowings | 486,644 | | | 2,020 | | | 1.62 | % | | 678,799 | | | 3,318 | | | 1.93 | % | | 920,380 | | | 4,195 | | | 1.78 | % |
| Subordinated debt, net | 248,210 | | | 2,962 | | | 4.77 | % | | 248,064 | | | 2,962 | | | 4.78 | % | | 247,615 | | | 2,962 | | | 4.78 | % |
| Total interest-bearing liabilities | 7,034,471 | | | 28,534 | | | 1.61 | % | | 6,953,876 | | | 28,064 | | | 1.62 | % | | 6,573,681 | | | 21,697 | | | 1.31 | % |
| Demand deposits | 2,940,370 | | | | | | | 2,788,596 | | | | | | | 2,615,946 | | | | | |
| Other noninterest-bearing liabilities | 250,371 | | | | | | | 215,951 | | | | | | | 166,575 | | | | | |
| Total liabilities | 10,225,212 | | | | | | | 9,958,423 | | | | | | | 9,356,202 | | | | | |
| Shareholders’ equity | 1,620,070 | | | | | | | 1,573,855 | | | | | | | 1,488,368 | | | | | |
| Total liabilities and equity | $ | 11,845,282 | | | | | | | $ | 11,532,278 | | | | | | | $ | 10,844,570 | | | | | |
| Net interest income (tax-equivalent basis) | | | $ | 91,746 | | | | | | | $ | 90,427 | | | | | | | $ | 89,336 | | | |
| Reconcilement of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | |
| Tax-equivalent basis adjustment | | | (643 | ) | | | | | | (608 | ) | | | | | | (639 | ) | | |
| Net interest income (GAAP) | | | $ | 91,103 | | | | | | | $ | 89,819 | | | | | | | $ | 88,697 | | | |
| | | | | | | | | | | | | | | | | | |
| Interest rate spread (1)(3) | | | | | 2.89 | % | | | | | | 2.99 | % | | | | | | 3.22 | % |
| Interest expense as a percent of average earning assets | | | | 1.07 | % | | | | | | 1.09 | % | | | | | | 0.89 | % |
| Net interest margin (tax equivalent basis) (2)(3) | | | | 3.43 | % | | | | | | 3.52 | % | | | | | | 3.64 | % |
| Total cost of deposits | | | | | 1.01 | % | | | | | | 0.99 | % | | | | | | 0.72 | % |
| | | | | | | | | | | | | | | | | | |
(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.
(3) Non-GAAP.
| TOWNEBANK |
| Average Balances, Yields and Rate Paid (unaudited) |
| (dollars in thousands) |
| |
| | Nine Months Ended
September 30, 2019
| | Nine Months Ended
September 30, 2018
| | Nine Months Ended September 30,
2019 Compared with 2018
|
| | Average | | Interest
Income/ | | Average
Yield/ | | Average | | Interest
Income/ | | Average
Yield/ | | Increase | | Change due to |
| | Balance | | Expense | | Rate
| | Balance | | Expense | | Rate
| | (Decrease) | | Rate | | Volume |
| Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans (net of unearned income
and deferred costs), excluding
nonaccrual loans | $ | 8,067,894 | | | $ | 305,007 | | | 5.05 | % | | $ | 7,447,463 | | | $ | 273,162 | | | 4.90 | % | | $ | 31,845 | | | $ | 8,578 | | | $ | 23,267 | |
| Taxable investment securities | 1,158,611 | | | 24,962 | | | 2.87 | % | | 971,117 | | | 17,214 | | | 2.36 | % | | 7,748 | | | 4,086 | | | 3,662 | |
| Tax-exempt investment securities | 97,485 | | | 2,519 | | | 3.45 | % | | 79,404 | | | 2,174 | | | 3.65 | % | | 345 | | | (128 | ) | | 473 | |
| Total securities | 1,256,096 | | | 27,481 | | | 2.92 | % | | 1,050,521 | | | 19,388 | | | 2.46 | % | | 8,093 | | | 3,958 | | | 4,135 | |
| Interest-bearing deposits | 700,840 | | | 11,758 | | | 2.24 | % | | 521,361 | | | 6,670 | | | 1.71 | % | | 5,088 | | | 2,416 | | | 2,672 | |
| Loans held for sale | 290,384 | | | 8,966 | | | 4.12 | % | | 302,102 | | | 9,948 | | | 4.39 | % | | (982 | ) | | (605 | ) | | (377 | ) |
| Total earning assets | 10,315,214 | | | 353,212 | | | 4.58 | % | | 9,321,447 | | | 309,168 | | | 4.43 | % | | 44,044 | | | 14,347 | | | 29,697 | |
| Less: allowance for loan losses | (53,703 | ) | | | | | | (48,044 | ) | | | | | | | | | | |
| Total nonearning assets | 1,264,976 | | | | | | | 1,140,173 | | | | | | | | | | | |
| Total assets | $ | 11,526,487 | | | | | | | $ | 10,413,576 | | | | | | | | | | | |
| Liabilities and Equity: | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | |
| Demand and money market | $ | 3,289,539 | | | $ | 20,488 | | | 0.83 | % | | $ | 2,893,096 | | | $ | 10,788 | | | 0.50 | % | | $ | 9,700 | | | $ | 8,053 | | | $ | 1,647 | |
| Savings | 281,562 | | | 2,658 | | | 1.26 | % | | 305,570 | | | 2,802 | | | 1.23 | % | | (144 | ) | | 81 | | | (225 | ) |
| Certificates of deposit | 2,456,360 | | | 41,364 | | | 2.25 | % | | 1,998,427 | | | 22,057 | | | 1.48 | % | | 19,307 | | | 13,447 | | | 5,860 | |
| Total interest-bearing deposits | 6,027,461 | | | 64,510 | | | 1.43 | % | | 5,197,093 | | | 35,647 | | | 0.92 | % | | 28,863 | | | 21,581 | | | 7,282 | |
| Borrowings | 661,216 | | | 9,559 | | | 1.91 | % | | 889,885 | | | 10,899 | | | 1.62 | % | | (1,340 | ) | | 1,757 | | | (3,097 | ) |
| Subordinated debt, net | 248,064 | | | 8,885 | | | 4.78 | % | | 252,220 | | | 9,105 | | | 4.81 | % | | (220 | ) | | (71 | ) | | (149 | ) |
| Total interest-bearing liabilities | 6,936,741 | | | 82,954 | | | 1.60 | % | | 6,339,198 | | | 55,651 | | | 1.17 | % | | 27,303 | | | 23,267 | | | 4,036 | |
| Demand deposits | 2,787,727 | | | | | | | 2,471,906 | | | | | | | | | | | |
Other noninterest-bearing
liabilities | 221,806 | | | | | | | 166,928 | | | | | | | | | | | |
| Total liabilities | 9,946,274 | | | | | | | 8,978,032 | | | | | | | | | | | |
| Shareholders’ equity | 1,580,213 | | | | | | | 1,435,544 | | | | | | | | | | | |
| Total liabilities and equity | $ | 11,526,487 | | | | | | | $ | 10,413,576 | | | | | | | | | | | |
| Net interest income (tax-equivalent basis) | | | $ | 270,258 | | | | | | | $ | 253,517 | | | | | $ | 16,741 | | | $ | (8,920 | ) | | $ | 25,661 | |
| Reconcilement of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | |
| Tax-equivalent basis adjustment | | | (1,862 | ) | | | | | | (1,652 | ) | | | | (210 | ) | | | | |
| Net interest income (GAAP) | | | $ | 268,396 | | | | | | | $ | 251,865 | | | | | $ | 16,531 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Interest rate spread (1)(3) | | | | | 2.98 | % | | | | | | 3.26 | % | | | | | | |
| Interest expense as a percent of average earning assets | | | | | 1.08 | % | | | | | | 0.80 | % | | | | | | |
| Net interest margin (tax equivalent basis) (2)(3) | | | | | 3.50 | % | | | | | | 3.64 | % | | | | | | |
| Total cost of deposits | | | | | 0.98 | % | | | | | | 0.62 | % | | | | | | |
| | | | | | | | | | | | | | | | | | |
(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.
(3) Non-GAAP.
| TOWNEBANK |
| Consolidated Balance Sheets |
| (dollars in thousands, except share data) |
| | |
| | September 30, | | December 31, |
| | 2019 | | 2018 |
| | (unaudited) | | (audited) |
ASSETS
| | | |
| Cash and due from banks | $ | 124,439 | | | $ | 94,604 | |
| Interest-bearing deposits at Federal Reserve Bank | 675,288 | | | 570,425 | |
| Interest-bearing deposits in financial institutions | 21,663 | | | 21,667 | |
| Total Cash and Cash Equivalents | 821,390 | | | 686,696 | |
| Securities available for sale, at fair value | 1,337,395 | | | 1,095,339 | |
| Securities held to maturity, at amortized cost | 44,494 | | | 50,598 | |
| Other equity securities | 5,697 | | | 4,797 | |
| Federal Home Loan Bank stock | 26,282 | | | 43,229 | |
| Total Securities | 1,413,868 | | | 1,193,963 | |
| Mortgage loans held for sale | 456,719 | | | 220,986 | |
| Loans, net of unearned income and deferred costs | 8,182,829 | | | 8,018,233 | |
| Less: allowance for loan losses | (55,428 | ) | | (52,094 | ) |
| Net Loans | 8,127,401 | | | 7,966,139 | |
| Premises and equipment, net | 231,060 | | | 211,796 | |
| Goodwill | 446,423 | | | 433,658 | |
| Other intangible assets, net | 57,404 | | | 58,752 | |
| Bank-owned life insurance policies | 241,652 | | | 237,371 | |
| Other assets | 225,374 | | | 153,669 | |
| TOTAL ASSETS | $ | 12,021,291 | | | $ | 11,163,030 | |
| | | | |
| LIABILITIES AND EQUITY | | | |
| Deposits: | | | |
| Noninterest-bearing demand | $ | 3,030,505 | | | $ | 2,622,761 | |
| Interest-bearing: | | | |
| Demand and money market accounts | 3,534,252 | | | 3,223,215 | |
| Savings | 280,552 | | | 286,684 | |
| Certificates of deposit | 2,592,705 | | | 2,237,762 | |
| Total Deposits | 9,438,014 | | | 8,370,422 | |
| Advances from the Federal Home Loan Bank | 381,846 | | | 799,315 | |
| Subordinated debt, net | 248,309 | | | 247,861 | |
| Repurchase agreements and other borrowings | 42,971 | | | 47,156 | |
| Total Borrowings | 673,126 | | | 1,094,332 | |
| Other liabilities | 271,617 | | | 159,856 | |
| TOTAL LIABILITIES | 10,382,757 | | | 9,624,610 | |
| Preferred stock | | | |
| Authorized and unissued shares - 2,000,000 | — | | | — | |
| Common stock, $1.667 par: 150,000,000 shares authorized | | | |
| 72,633,517 and 72,465,923 shares issued at | | | |
| September 30, 2019 and December 31, 2018, respectively | 121,080 | | | 120,801 | |
| Capital surplus | 1,039,156 | | | 1,034,676 | |
| Retained earnings | 445,186 | | | 379,239 | |
| Common stock issued to deferred compensation trust, at cost | | | |
| 811,340 and 769,200 shares at | | | |
| September 30, 2019 and December 31, 2018, respectively | (15,317 | ) | | (13,955 | ) |
| Deferred compensation trust | 15,317 | | | 13,955 | |
| Accumulated other comprehensive income (loss) | 19,958 | | | (9,190 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 1,625,380 | | | 1,525,526 | |
| Noncontrolling interest | 13,154 | | | 12,894 | |
| TOTAL EQUITY | 1,638,534 | | | 1,538,420 | |
| TOTAL LIABILITIES AND EQUITY | $ | 12,021,291 | | | $ | 11,163,030 | |
| TOWNEBANK |
| Consolidated Statements of Income (unaudited) |
| (dollars in thousands, except per share data) |
| | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, | | September 30, |
| | 2019
| | 2018
| | 2019
| | 2018
|
| INTEREST INCOME: | | | | | | | | | | | | | | | |
| Loans, including fees | $ | 102,047 | | | $ | 97,215 | | | $ | 303,616 | | | $ | 271,897 | |
| Investment securities | 9,889 | | | 7,019 | | | 27,010 | | | 19,001 | |
| Interest-bearing deposits in financial institutions and federal funds sold | 3,745 | | | 2,148 | | | 11,758 | | | 6,670 | |
| Mortgage loans held for sale | 3,956 | | | 4,012 | | | 8,966 | | | 9,948 | |
| Total interest income | 119,637 | | | 110,394 | | | 351,350 | | | 307,516 | |
| INTEREST EXPENSE: | | | | | | | |
| Deposits | 23,552 | | | 14,540 | | | 64,510 | | | 35,647 | |
| Advances from the Federal Home Loan Bank | 1,935 | | | 4,153 | | | 9,288 | | | 10,755 | |
| Subordinated debt, net | 2,962 | | | 2,962 | | | 8,885 | | | 9,105 | |
| Repurchase agreements and other borrowings | 85 | | | 42 | | | 271 | | | 144 | |
| Total interest expense | 28,534 | | | 21,697 | | | 82,954 | | | 55,651 | |
| Net interest income | 91,103 | | | 88,697 | | | 268,396 | | | 251,865 | |
| | | | | | | | |
| PROVISION FOR LOAN LOSSES | 1,508 | | | 1,241 | | | 5,770 | | | 6,249 | |
| Net interest income after provision for loan losses | 89,595 | | | 87,456 | | | 262,626 | | | 245,616 | |
| NONINTEREST INCOME: | | | | | | | |
| Residential mortgage banking income, net | 18,855 | | | 15,804 | | | 50,929 | | | 52,152 | |
| Insurance commissions and other title fees and income, net | 16,681 | | | 14,493 | | | 49,477 | | | 42,952 | |
| Real estate brokerage and property management income, net | 9,444 | | | 8,542 | | | 27,555 | | | 25,881 | |
| Service charges on deposit accounts | 2,253 | | | 3,028 | | | 8,299 | | | 8,880 | |
| Credit card merchant fees, net | 1,514 | | | 1,563 | | | 3,357 | | | 4,174 | |
| Bank owned life insurance | 2,117 | | | 1,657 | | | 5,350 | | | 4,822 | |
| Other income | 3,981 | | | 4,130 | | | 11,754 | | | 10,520 | |
| Net gain/(loss) on investment securities | (69 | ) | | — | | | (845 | ) | | 3 | |
| Total noninterest income | 54,776 | | | 49,217 | | | 155,876 | | | 149,384 | |
| NONINTEREST EXPENSE: | | | | | | | |
| Salaries and employee benefits | 55,784 | | | 50,497 | | | 162,907 | | | 151,606 | |
| Occupancy expense | 7,953 | | | 7,013 | | | 23,866 | | | 20,292 | |
| Furniture and equipment | 3,805 | | | 3,646 | | | 10,753 | | | 10,890 | |
| Amortization - intangibles | 3,059 | | | 2,996 | | | 9,364 | | | 8,587 | |
| Software expense | 3,208 | | | 2,940 | | | 8,742 | | | 7,927 | |
| Outside data processing | 2,533 | | | 2,917 | | | 9,316 | | | 7,898 | |
| Professional fees | 3,566 | | | 1,908 | | | 9,952 | | | 6,295 | |
| Advertising and marketing | 3,429 | | | 2,874 | | | 9,440 | | | 8,649 | |
| Other expenses | 13,950 | | | 13,471 | | | 41,627 | | | 47,643 | |
| Total noninterest expense | 97,287 | | | 88,262 | | | 285,967 | | | 269,787 | |
| Income before income tax expense and noncontrolling interest | 47,084 | | | 48,411 | | | 132,535 | | | 125,213 | |
| Provision for income tax expense | 7,684 | | | 9,159 | | | 24,810 | | | 23,879 | |
| Net income | $ | 39,400 | | | $ | 39,252 | | | $ | 107,725 | | | $ | 101,334 | |
| Net income attributable to noncontrolling interest | (1,741 | ) | | (959 | ) | | (4,018 | ) | | (3,531 | ) |
| Net income attributable to TowneBank | $ | 37,659 | | | $ | 38,293 | | | $ | 103,707 | | | $ | 97,803 | |
| Per common share information | | | | | | | |
| Basic earnings | $ | 0.52 | | | $ | 0.53 | | | $ | 1.44 | | | $ | 1.38 | |
| Diluted earnings | $ | 0.52 | | | $ | 0.53 | | | $ | 1.44 | | | $ | 1.38 | |
| Cash dividends declared | $ | 0.18 | | | $ | 0.16 | | | $ | 0.52 | | | $ | 0.46 | |
| TOWNEBANK |
| Consolidated Balance Sheets - Five Quarter Trend |
| (dollars in thousands, except share data) |
| |
| | September 30, | | June 30, | | March 31, | | December 31, | | September 30, |
| | 2019 | | 2019 | | 2019 | | 2018 | | 2018 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (audited) | | (unaudited) |
| ASSETS: | | | | | | | | | |
| Cash and due from banks | $ | 124,439 | | | $ | 110,580 | | | $ | 104,091 | | | $ | 94,604 | | | $ | 106,485 | |
| Interest-bearing deposits at Federal Reserve Bank | 675,288 | | | 834,505 | | | 775,208 | | | 570,425 | | | 582,099 | |
| Interest-bearing deposits in financial institutions | 21,663 | | | 21,527 | | | 21,001 | | | 21,667 | | | 20,910 | |
| Total Cash and Cash Equivalents | 821,390 | | | 966,612 | | | 900,300 | | | 686,696 | | | 709,494 | |
| Securities available for sale, at fair value | 1,337,395 | | | 1,260,821 | | | 1,099,777 | | | 1,095,339 | | | 1,051,773 | |
| Securities held to maturity, at amortized cost | 44,494 | | | 50,574 | | | 49,687 | | | 50,598 | | | 52,002 | |
| Other equity securities | 5,697 | | | 5,396 | | | 5,022 | | | 4,797 | | | 5,519 | |
| Federal Home Loan Bank stock | 26,282 | | | 32,657 | | | 41,464 | | | 43,229 | | | 46,393 | |
| Total Securities | 1,413,868 | | | 1,349,448 | | | 1,195,950 | | | 1,193,963 | | | 1,155,687 | |
| Mortgage loans held for sale | 456,719 | | | 362,773 | | | 247,021 | | | 220,986 | | | 333,354 | |
| Loans, net of unearned income and deferred costs | 8,182,829 | | | 8,126,729 | | | 8,105,370 | | | 8,018,233 | | | 7,881,692 | |
| Less: allowance for loan losses | (55,428 | ) | | (54,527 | ) | | (53,303 | ) | | (52,094 | ) | | (50,236 | ) |
| Net Loans | 8,127,401 | | | 8,072,202 | | | 8,052,067 | | | 7,966,139 | | | 7,831,456 | |
| Premises and equipment, net | 231,060 | | | 230,177 | | | 227,458 | | | 211,796 | | | 210,724 | |
| Goodwill | 446,423 | | | 442,881 | | | 442,881 | | | 433,658 | | | 427,117 | |
| Other intangible assets, net | 57,404 | | | 58,391 | | | 61,333 | | | 58,752 | | | 58,165 | |
| Bank-owned life insurance policies | 241,652 | | | 240,621 | | | 238,977 | | | 237,371 | | | 235,348 | |
| Other assets | 225,374 | | | 219,375 | | | 202,276 | | | 153,669 | | | 159,887 | |
| TOTAL ASSETS | $ | 12,021,291 | | | $ | 11,942,480 | | | $ | 11,568,263 | | | $ | 11,163,030 | | | $ | 11,121,232 | |
| LIABILITIES AND EQUITY | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing demand | $ | 3,030,505 | | | $ | 2,950,615 | | | $ | 2,813,857 | | | $ | 2,622,761 | | | $ | 2,671,558 | |
| Interest-bearing: | | | | | | | | | |
| Demand and money market accounts | 3,534,252 | | | 3,409,322 | | | 3,290,907 | | | 3,223,215 | | | 3,096,317 | |
| Savings | 280,552 | | | 277,495 | | | 285,790 | | | 286,684 | | | 298,368 | |
| Certificates of deposit | 2,592,705 | | | 2,631,386 | | | 2,341,134 | | | 2,237,762 | | | 2,233,188 | |
| Total Deposits | 9,438,014 | | | 9,268,818 | | | 8,731,688 | | | 8,370,422 | | | 8,299,431 | |
| Advances from the Federal Home Loan Bank | 381,846 | | | 532,004 | | | 739,160 | | | 799,315 | | | 873,469 | |
| Subordinated debt, net | 248,309 | | | 248,160 | | | 248,010 | | | 247,861 | | | 247,712 | |
| Repurchase agreements and other borrowings | 42,971 | | | 56,355 | | | 44,775 | | | 47,156 | | | 45,591 | |
| Total Borrowings | 673,126 | | | 836,519 | | | 1,031,945 | | | 1,094,332 | | | 1,166,772 | |
| Other liabilities | 271,617 | | | 230,691 | | | 238,974 | | | 159,856 | | | 155,205 | |
| TOTAL LIABILITIES | 10,382,757 | | | 10,336,028 | | | 10,002,607 | | | 9,624,610 | | | 9,621,408 | |
| Preferred stock | | | | | | | | | |
| Authorized shares - 2,000,000 | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | |
| Common stock, $1.667 par value | 121,080 | | | 121,038 | | | 121,047 | | | 120,801 | | | 120,613 | |
| Capital surplus | 1,039,156 | | | 1,036,982 | | | 1,035,563 | | | 1,034,676 | | | 1,032,863 | |
| Retained earnings | 445,186 | | | 420,600 | | | 399,030 | | | 379,239 | | | 354,842 | |
| Common stock issued to deferred compensation | | | | | | | | | |
| trust, at cost | (15,317 | ) | | (15,160 | ) | | (14,067 | ) | | (13,955 | ) | | (13,780 | ) |
| Deferred compensation trust | 15,317 | | | 15,160 | | | 14,067 | | | 13,955 | | | 13,780 | |
| Accumulated other comprehensive income (loss) | 19,958 | | | 15,143 | | | (1,792 | ) | | (9,190 | ) | | (22,348 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 1,625,380 | | | 1,593,763 | | | 1,553,848 | | | 1,525,526 | | | 1,485,970 | |
| Noncontrolling interest | 13,154 | | | 12,689 | | | 11,808 | | | 12,894 | | | 13,854 | |
| TOTAL EQUITY | 1,638,534 | | | 1,606,452 | | | 1,565,656 | | | 1,538,420 | | | 1,499,824 | |
| TOTAL LIABILITIES AND EQUITY | $ | 12,021,291 | | | $ | 11,942,480 | | | $ | 11,568,263 | | | $ | 11,163,030 | | | $ | 11,121,232 | |
| TOWNEBANK | |
| Consolidated Statements of Income - Five Quarter Trend (unaudited) | |
| (dollars in thousands, except share data) | |
| | |
| | Three Months Ended | |
| | | | | | | | | | | |
| | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 | |
| INTEREST INCOME: | | | | | | | | | | | | | | | | | | | | |
| Loans, including fees | $ | 102,047 | | | $ | 101,874 | | | $ | 99,695 | | | $ | 99,446 | | | $ | 97,215 | | |
| Investment securities | 9,889 | | | 8,987 | | | 8,134 | | | 8,126 | | | 7,019 | | |
| Interest-bearing deposits in financial institutions and federal funds sold | 3,745 | | | 4,015 | | | 3,998 | | | 3,559 | | | 2,148 | | |
| Mortgage loans held for sale | 3,956 | | | 3,007 | | | 2,003 | | | 3,176 | | | 4,012 | | |
| Total interest income | 119,637 | | | 117,883 | | | 113,830 | | | 114,307 | | | 110,394 | | |
| INTEREST EXPENSE: | | | | | | | | | | |
| Deposits | 23,552 | | | 21,784 | | | 19,174 | | | 17,495 | | | 14,540 | | |
| Advances from the Federal Home Loan Bank | 1,935 | | | 3,201 | | | 4,153 | | | 4,585 | | | 4,153 | | |
| Subordinated debt | 2,962 | | | 2,962 | | | 2,962 | | | 2,961 | | | 2,962 | | |
| Repurchase agreements and other borrowings | 85 | | | 117 | | | 68 | | | 58 | | | 42 | | |
| Total interest expense | 28,534 | | | 28,064 | | | 26,357 | | | 25,099 | | | 21,697 | | |
| Net interest income | 91,103 | | | 89,819 | | | 87,473 | | | 89,208 | | | 88,697 | | |
| | | | | | | | | | | |
| PROVISION FOR LOAN LOSSES | 1,508 | | | 2,824 | | | 1,438 | | | 2,292 | | | 1,241 | | |
| Net interest income after provision for loan losses | 89,595 | | | 86,995 | | | 86,035 | | | 86,916 | | | 87,456 | | |
| NONINTEREST INCOME: | | | | | | | | | | |
| Residential mortgage banking income, net | 18,855 | | | 18,565 | | | 13,508 | | | 12,951 | | | 15,804 | | |
| Insurance commissions and other title fees and income, net | 16,681 | | | 17,213 | | | 15,582 | | | 13,212 | | | 14,493 | | |
| Real estate brokerage and property management income, net | 9,444 | | | 8,843 | | | 9,268 | | | 5,982 | | | 8,542 | | |
| Service charges on deposit accounts | 2,253 | | | 3,185 | | | 2,861 | | | 2,928 | | | 3,028 | | |
| Credit card merchant fees, net | 1,514 | | | 660 | | | 1,183 | | | 1,298 | | | 1,563 | | |
| Bank owned life insurance | 2,117 | | | 1,635 | | | 1,598 | | | 2,014 | | | 1,657 | | |
| Other income | 3,981 | | | 4,617 | | | 3,157 | | | 3,824 | | | 4,130 | | |
| Net gain/(loss) on investment securities | (69 | ) | | — | | | (776 | ) | | — | | | — | | |
| Total noninterest income | 54,776 | | | 54,718 | | | 46,381 | | | 42,209 | | | 49,217 | | |
| NONINTEREST EXPENSE: | | | | | | | | | | |
| Salaries and employee benefits | 55,784 | | | 54,263 | | | 52,860 | | | 50,233 | | | 50,497 | | |
| Occupancy expense | 7,953 | | | 7,662 | | | 8,251 | | | 7,352 | | | 7,013 | | |
| Furniture and equipment | 3,805 | | | 3,578 | | | 3,371 | | | 3,587 | | | 3,646 | | |
| Amortization - intangibles | 3,059 | | | 3,113 | | | 3,192 | | | 3,123 | | | 2,996 | | |
| Software expense | 3,208 | | | 2,788 | | | 2,745 | | | 2,694 | | | 2,940 | | |
| Outside data processing | 2,533 | | | 3,616 | | | 3,166 | | | 2,466 | | | 2,917 | | |
| Professional fees | 3,566 | | | 3,707 | | | 2,679 | | | 2,028 | | | 1,908 | | |
| Advertising and marketing | 3,429 | | | 3,182 | | | 2,829 | | | 2,546 | | | 2,874 | | |
| Other expenses | 13,950 | | | 14,647 | | | 13,030 | | | 8,308 | | | 13,471 | | |
| Total noninterest expense | 97,287 | | | 96,556 | | | 92,123 | | | 82,337 | | | 88,262 | | |
| Income before income tax expense and noncontrolling interest | 47,084 | | | 45,157 | | | 40,293 | | | 46,788 | | | 48,411 | | |
| Provision for income tax expense | 7,684 | | | 8,915 | | | 8,211 | | | 10,348 | | | 9,159 | | |
| Net income | 39,400 | | | 36,242 | | | 32,082 | | | 36,440 | | | 39,252 | | |
| Net income attributable to noncontrolling interest | (1,741 | ) | | (1,604 | ) | | (673 | ) | | (450 | ) | | (959 | ) | |
| Net income attributable to TowneBank | $ | 37,659 | | | $ | 34,638 | | | $ | 31,409 | | | $ | 35,990 | | | $ | 38,293 | | |
| Per common share information | | | | | | | | | | |
| Basic earnings | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | | | $ | 0.53 | | |
| Diluted earnings | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | | | $ | 0.53 | | |
| Basic weighted average shares outstanding | 72,091,221 | | | 72,044,817 | | | 71,992,330 | | | 71,905,956 | | | 71,875,085 | | |
| Diluted weighted average shares outstanding | 72,222,934 | | | $ | 72,145,600 | | | 72,099,558 | | | 72,043,369 | | | 72,044,355 | | |
| Cash dividends declared | $ | 0.18 | | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.16 | | | $ | 0.16 | | |
| | | | | | | | | | | |
| TOWNEBANK |
| Banking Segment Financial Information (unaudited) |
| (dollars in thousands) |
| |
| | Three Months Ended | | Nine Months Ended | | Increase/(Decrease) |
| | September 30, | | June 30, | | September 30, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Revenue | | | | | | | | | | | | | |
| Net interest income | $ | 89,490 | | | $ | 85,423 | | | $ | 88,442 | | | $ | 264,332 | | | $ | 243,151 | | | $ | 21,181 | | | 8.71 | % |
| Service charges on deposit | | | | | | | | | | | | | |
| accounts | 2,253 | | | 3,028 | | | 3,185 | | | 8,299 | | | 8,880 | | | (581 | ) | | (6.54 | )% |
| Credit card merchant fees | 1,514 | | | 1,563 | | | 660 | | | 3,357 | | | 4,174 | | | (817 | ) | | (19.57 | )% |
| Other income | 5,152 | | | 4,300 | | | 5,273 | | | 14,350 | | | 12,318 | | | 2,032 | | | 16.50 | % |
| Subtotal | 8,919 | | | 8,891 | | | 9,118 | | | 26,006 | | | 25,372 | | | 634 | | | 2.50 | % |
| Net gain/(loss) on investment securities | (69 | ) | | — | | | — | | | (845 | ) | | 3 | | | (848 | ) | | N/M |
| Total noninterest income | 8,850 | | | 8,891 | | | 9,118 | | | 25,161 | | | 25,375 | | | (214 | ) | | (0.84 | )% |
| Total revenue | 98,340 | | | 94,314 | | | 97,560 | | | 289,493 | | | 268,526 | | | 20,967 | | | 7.81 | % |
| | | | | | | | | | | | | | |
| Provision for loan losses | 1,508 | | | 1,241 | | | 2,824 | | | 5,770 | | | 6,249 | | | (479 | ) | | (7.67 | )% |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | 33,526 | | | 28,329 | | | 32,353 | | | 96,966 | | | 86,372 | | | 10,594 | | | 12.27 | % |
| Occupancy expense | 5,209 | | | 4,331 | | | 5,007 | | | 15,460 | | | 12,621 | | | 2,839 | | | 22.49 | % |
| Furniture and equipment | 2,779 | | | 2,463 | | | 2,517 | | | 7,662 | | | 7,485 | | | 177 | | | 2.36 | % |
| Amortization of intangibles | 1,265 | | | 1,479 | | | 1,315 | | | 3,946 | | | 4,230 | | | (284 | ) | | (6.71 | )% |
| Other expenses | 17,098 | | | 14,829 | | | 18,938 | | | 52,218 | | | 50,940 | | | 1,278 | | | 2.51 | % |
| Total expenses | 59,877 | | | 51,431 | | | 60,130 | | | 176,252 | | | 161,648 | | | 14,604 | | | 9.03 | % |
| Income before income tax, corporate allocation and noncontrolling interest | 36,955 | | | 41,642 | | | 34,606 | | | 107,471 | | | 100,629 | | | 6,842 | | | 6.80 | % |
| Corporate allocation | 384 | | | 438 | | | 546 | | | 1,383 | | | 1,370 | | | 13 | | | 0.95 | % |
| Income before income tax provision and noncontrolling interest | 37,339 | | | 42,080 | | | 35,152 | | | 108,854 | | | 101,999 | | | 6,855 | | | 6.72 | % |
| Provision for income tax expense | 5,495 | | | 7,604 | | | 6,650 | | | 19,337 | | | 18,629 | | | 708 | | | 3.80 | % |
| Net income | 31,844 | | | 34,476 | | | 28,502 | | | 89,517 | | | 83,370 | | | 6,147 | | | 7.37 | % |
| Noncontrolling interest | — | | | (4 | ) | | 1 | | | 4 | | | (12 | ) | | 16 | | | N/M |
| Net income attributable to TowneBank | $ | 31,844 | | | $ | 34,472 | | | $ | 28,503 | | | $ | 89,521 | | | $ | 83,358 | | | $ | 6,163 | | | 7.39 | % |
| | | | | | | | | | | | | | |
| Efficiency ratio | 60.85 | % | | 54.53 | % | | 61.63 | % | | 60.71 | % | | 60.20 | % | | 0.51 | % | | 0.85 | % |
| TOWNEBANK |
| Realty Segment Financial Information (unaudited) |
| (dollars in thousands) |
| |
| | Three Months Ended | | Nine Months Ended | | Increase/(Decrease) |
| | September 30, | | June 30, | | September 30, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Revenue | | | | | | | | | | | | | |
Residential mortgage brokerage
income, net | $ | 19,171 | | | $ | 16,219 | | | $ | 18,898 | | | $ | 51,826 | | | $ | 53,223 | | | $ | (1,397 | ) | | (2.62 | )% |
| Real estate brokerage income, net | 2,882 | | | 2,758 | | | 2,873 | | | 7,315 | | | 7,275 | | | 40 | | | 0.55 | % |
| Title insurance and settlement fees | 617 | | | 525 | | | 594 | | | 1,581 | | | 1,420 | | | 161 | | | 11.34 | % |
| Property management fees, net | 6,562 | | | 5,783 | | | 5,970 | | | 20,240 | | | 18,606 | | | 1,634 | | | 8.78 | % |
Income from unconsolidated
subsidiary | 185 | | | 122 | | | 162 | | | 441 | | | 316 | | | 125 | | | 39.56 | % |
| Net interest and other income | 1,885 | | | 4,111 | | | 1,677 | | | 4,937 | | | 9,999 | | | (5,062 | ) | | (50.63 | )% |
| Total revenue | 31,302 | | | 29,518 | | | 30,174 | | | 86,340 | | | 90,839 | | | (4,499 | ) | | (4.95 | )% |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | 13,474 | | | 14,862 | | | 13,309 | | | 39,678 | | | 44,142 | | | (4,464 | ) | | (10.11 | )% |
| Occupancy expense | 2,055 | | | 2,084 | | | 2,028 | | | 6,428 | | | 5,942 | | | 486 | | | 8.18 | % |
| Furniture and equipment | 754 | | | 952 | | | 803 | | | 2,326 | | | 2,768 | | | (442 | ) | | (15.97 | )% |
| Amortization of intangible assets | 666 | | | 672 | | | 695 | | | 2,086 | | | 2,015 | | | 71 | | | 3.52 | % |
| Other expenses | 7,478 | | | 7,543 | | | 7,234 | | | 20,953 | | | 21,996 | | | (1,043 | ) | | (4.74 | )% |
| Total expenses | 24,427 | | | 26,113 | | | 24,069 | | | 71,471 | | | 76,863 | | | (5,392 | ) | | (7.02 | )% |
| | | | | | | | | | | | | | |
| Income before income tax, corporate allocation and noncontrolling interest | 6,875 | | | 3,405 | | | 6,105 | | | 14,869 | | | 13,976 | | | 893 | | | 6.39 | % |
| Corporate allocation | (208 | ) | | (270 | ) | | (328 | ) | | (800 | ) | | (853 | ) | | 53 | | | (6.21 | )% |
| Income before income tax provision and noncontrolling interest | 6,667 | | | 3,135 | | | 5,777 | | | 14,069 | | | 13,123 | | | 946 | | | 7.21 | % |
| Provision for income tax expense | 1,454 | | | 786 | | | 1,287 | | | 3,292 | | | 2,977 | | | 315 | | | 10.58 | % |
| Net income | 5,213 | | | 2,349 | | | 4,490 | | | 10,777 | | | 10,146 | | | 631 | | | 6.22 | % |
| Noncontrolling interest | (1,496 | ) | | (756 | ) | | (1,248 | ) | | (2,997 | ) | | (2,268 | ) | | (729 | ) | | 32.14 | % |
| Net income attributable to TowneBank | $ | 3,717 | | | $ | 1,593 | | | $ | 3,242 | | | $ | 7,780 | | | $ | 7,878 | | | $ | (98 | ) | | (1.24 | )% |
| | | | | | | | | | | | | | |
| Efficiency ratio | 78.04 | % | | 88.46 | % | | 79.77 | % | | 82.78 | % | | 84.61 | % | | (1.83 | )% | | (2.16 | )% |
| | | | | | | | | | | | | | |
| TOWNEBANK |
| Insurance Segment Financial Information (unaudited) |
| (dollars in thousands) |
| |
| | Three Months Ended | | Nine Months Ended | | Increase/(Decrease) |
| | September 30, | | June 30, | | September 30, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Commission and fee income | | | | | | | | | | | | | |
| Property and casualty | $ | 13,481 | | | $ | 10,762 | | | $ | 13,067 | | | $ | 38,421 | | | $ | 31,178 | | | $ | 7,243 | | | 23.23 | % |
| Employee benefits | 3,629 | | | 3,813 | | | 3,833 | | | 10,968 | | | 10,463 | | | 505 | | | 4.83 | % |
| Travel insurance | 834 | | | 871 | | | 1,169 | | | 3,292 | | | 4,028 | | | (736 | ) | | (18.27 | )% |
| Specialized benefit services | 166 | | | 166 | | | 163 | | | 499 | | | 506 | | | (7 | ) | | (1.38 | )% |
| Total commissions and fees | 18,110 | | | 15,612 | | | 18,232 | | | 53,180 | | | 46,175 | | | 7,005 | | | 15.17 | % |
| | | | | | | | | | | | | | |
| Contingency and bonus revenue | 1,431 | | | 1,137 | | | 1,893 | | | 4,910 | | | 3,703 | | | 1,207 | | | 32.60 | % |
| Other income | 74 | | | 75 | | | 79 | | | 227 | | | 215 | | | 12 | | | 5.58 | % |
| Total revenue | 19,615 | | | 16,824 | | | 20,204 | | | 58,317 | | | 50,093 | | | 8,224 | | | 16.42 | % |
| | | | | | | | | | | | | | |
| Employee commission expense | 3,378 | | | 2,742 | | | 3,401 | | | 9,878 | | | 8,209 | | | 1,669 | | | 20.33 | % |
| Revenue, net of commission expense | 16,237 | | | 14,082 | | | 16,803 | | | 48,439 | | | 41,884 | | | 6,555 | | | 15.65 | % |
| | | | | | | | | | | | | | |
| Salaries and employee benefits | 8,784 | | | 7,306 | | | 8,601 | | | 26,263 | | | 21,092 | | | 5,171 | | | 24.52 | % |
| Occupancy expense | 689 | | | 598 | | | 627 | | | 1,978 | | | 1,729 | | | 249 | | | 14.40 | % |
| Furniture and equipment | 272 | | | 232 | | | 258 | | | 765 | | | 637 | | | 128 | | | 20.09 | % |
| Amortization of intangible assets | 1,128 | | | 845 | | | 1,103 | | | 3,332 | | | 2,342 | | | 990 | | | 42.27 | % |
| Other expenses | 2,110 | | | 1,737 | | | 1,768 | | | 5,906 | | | 5,476 | | | 430 | | | 7.85 | % |
| Total operating expenses | 12,983 | | | 10,718 | | | 12,357 | | | 38,244 | | | 31,276 | | | 6,968 | | | 22.28 | % |
| Income before income tax, corporate allocation and noncontrolling interest | 3,254 | | | 3,364 | | | 4,446 | | | 10,195 | | | 10,608 | | | (413 | ) | | (3.89 | )% |
| Corporate allocation | (176 | ) | | (168 | ) | | (218 | ) | | (583 | ) | | (517 | ) | | (66 | ) | | 12.77 | % |
| Income before income tax provision and noncontrolling interest | 3,078 | | | 3,196 | | | 4,228 | | | 9,612 | | | 10,091 | | | (479 | ) | | (4.75 | )% |
| Provision for income tax expense | 735 | | | 769 | | | 978 | | | 2,181 | | | 2,273 | | | (92 | ) | | (4.05 | )% |
| Net income | 2,343 | | | 2,427 | | | 3,250 | | | 7,431 | | | 7,818 | | | (387 | ) | | (4.95 | )% |
| Noncontrolling interest | (245 | ) | | (199 | ) | | (357 | ) | | (1,025 | ) | | (1,251 | ) | | 226 | | | (18.07 | )% |
| Net income attributable to TowneBank | $ | 2,098 | | | $ | 2,228 | | | $ | 2,893 | | | $ | 6,406 | | | $ | 6,567 | | | $ | (161 | ) | | (2.45 | )% |
| | | | | | | | | | | | | | |
| Provision for income taxes | 735 | | | 769 | | | 978 | | | 2,181 | | | 2,273 | | | (92 | ) | | (4.05 | )% |
| Depreciation, amortization and interest expense | 1,325 | | | 1,068 | | | 1,309 | | | 3,943 | | | 2,982 | | | 961 | | | 32.23 | % |
| EBITDA (non-GAAP) | $ | 4,158 | | | $ | 4,065 | | | $ | 5,180 | | | $ | 12,530 | | | $ | 11,822 | | | $ | 708 | | | 5.99 | % |
| | | | | | | | | | | | | | |
| Efficiency ratio | 79.96 | % | | 76.11 | % | | 73.54 | % | | 78.95 | % | | 74.67 | % | | 4.28 | % | | 5.73 | % |
| TOWNEBANK |
| Reconcilement of Non-GAAP Financial Measures |
| (dollars in thousands) |
| | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30,
2019
| | September 30,
2018
| | June 30,
2019
| | September 30,
2019
| | September 30,
2018
|
| Return on average assets (GAAP) | 1.26 | % | | 1.40 | % | | 1.20 | % | | 1.20 | % | | 1.26 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 0.14 | % | | 0.16 | % | | 0.15 | % | | 0.15 | % | | 0.15 | % |
| Return on average tangible assets (non-GAAP) | 1.40 | % | | 1.56 | % | | 1.35 | % | | 1.35 | % | | 1.41 | % |
| | | | | | | | | | |
| Return on average equity (GAAP) | 9.22 | % | | 10.21 | % | | 8.83 | % | | 8.77 | % | | 9.11 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 4.98 | % | | 5.87 | % | | 5.07 | % | | 5.02 | % | | 5.27 | % |
| Return on average tangible equity (non-GAAP) | 14.20 | % | | 16.08 | % | | 13.90 | % | | 13.79 | % | | 14.38 | % |
| | | | | | | | | | |
| Return on average common equity (GAAP) | 9.29 | % | | 10.30 | % | | 8.89 | % | | 8.84 | % | | 9.18 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 5.07 | % | | 6.00 | % | | 5.16 | % | | 5.11 | % | | 5.37 | % |
| Return on average tangible common equity (non-GAAP) | 14.36 | % | | 16.30 | % | | 14.05 | % | | 13.95 | % | | 14.55 | % |
| | | | | | | | | | |
| Book value (GAAP) | $ | 22.38 | | | $ | 20.54 | | | $ | 21.95 | | | $ | 22.38 | | | $ | 20.54 | |
| Impact of excluding average goodwill and other intangibles and amortization | (6.94 | ) | | (6.71 | ) | | (6.90 | ) | | (6.94 | ) | | (6.71 | ) |
| Tangible book value (non-GAAP) | $ | 15.44 | | | $ | 13.83 | | | $ | 15.05 | | | $ | 15.44 | | | $ | 13.83 | |
| | | | | | | | | | |
| Average assets (GAAP) | $ | 11,845,282 | | | $ | 10,844,570 | | | $ | 11,532,278 | | | $ | 11,526,487 | | | $ | 10,413,575 | |
| Less: average goodwill | 442,919 | | | 425,725 | | | 442,881 | | | 442,890 | | | 405,726 | |
| Less: average intangible assets | 57,327 | | | 59,492 | | | 60,339 | | | 60,333 | | | 57,251 | |
| Average tangible assets (non-GAAP) | $ | 11,345,036 | | | $ | 10,359,353 | | | $ | 11,029,058 | | | $ | 11,023,264 | | | $ | 9,950,598 | |
| | | | | | | | | | |
| Average equity (GAAP) | $ | 1,620,070 | | | $ | 1,488,368 | | | $ | 1,573,855 | | | $ | 1,580,213 | | | $ | 1,435,544 | |
| Less: average goodwill | 442,919 | | | 425,725 | | | 442,881 | | | 442,890 | | | 405,726 | |
| Less: average intangible assets | 57,327 | | | 59,492 | | | 60,339 | | | 60,333 | | | 57,251 | |
| Average tangible equity (non-GAAP) | $ | 1,119,824 | | | $ | 1,003,151 | | | $ | 1,070,635 | | | $ | 1,076,990 | | | $ | 972,567 | |
| | | | | | | | | | |
| Average common equity (GAAP) | $ | 1,607,853 | | | $ | 1,474,833 | | | $ | 1,562,214 | | | $ | 1,568,336 | | | $ | 1,423,787 | |
| Less: average goodwill | 442,919 | | | 425,725 | | | 442,881 | | | 442,890 | | | 405,726 | |
| Less: average intangible assets | 57,327 | | | 59,492 | | | 60,339 | | | 60,333 | | | 57,251 | |
| Average tangible common equity (non-GAAP) | $ | 1,107,607 | | | $ | 989,616 | | | $ | 1,058,994 | | | $ | 1,065,113 | | | $ | 960,810 | |
| 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
|
| | | September 30,
2019 | | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | September 30,
2018 |
| Net income (GAAP) | | $ | 37,659 | | | $ | 34,638 | | | $ | 31,409 | | | $ | 35,990 | | | $ | 38,293 | |
| | | | | | | | | | | |
| Acquisition-related expenses | | 207 | | | 20 | | | 411 | | | (1,518 | ) | | 424 | |
| Income tax expense -tax reform legislation | | — | | | — | | | — | | | 696 | | | — | |
| Income tax expense (benefit) - other items | | (20 | ) | | (3 | ) | | (52 | ) | | 355 | | | (44 | ) |
| Income tax expense (benefit) | | (20 | ) | | (3 | ) | | (52 | ) | | 1,051 | | | (44 | ) |
| Total charges, net of taxes | | 187 | | | 17 | | | 359 | | | (467 | ) | | 380 | |
| Operating earnings, excluding certain items affecting comparability (non-GAAP) | | $ | 37,846 | | | $ | 34,655 | | | $ | 31,768 | | | $ | 35,523 | | | $ | 38,673 | |
| Weighted average diluted shares | | 72,222,934 | | | 72,145,600 | | | 72,099,558 | | | 72,043,369 | | | 72,044,355 | |
| Diluted EPS (GAAP) | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | | | $ | 0.53 | |
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.49 | | | $ | 0.54 | |
| Average assets | | $ | 11,845,282 | | | $ | 11,532,278 | | | $ | 11,194,753 | | | $ | 11,149,960 | | | $ | 10,844,570 | |
| Average tangible equity | | $ | 1,119,824 | | | $ | 1,070,635 | | | 1,039,630 | | | $ | 1,022,982 | | | $ | 1,003,151 | |
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | | 1.27 | % | | 1.21 | % | | 1.15 | % | | 1.26 | % | | 1.41 | % |
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | | 14.26 | % | | 13.90 | % | | 13.38 | % | | 14.73 | % | | 16.23 | % |
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | | 14.42 | % | | 14.06 | % | | 13.53 | % | | 14.93 | % | | 16.45 | % |
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | | 66.52 | % | | 66.79 | % | | 68.12 | % | | 63.81 | % | | 63.69 | % |
| | | | | | | | | | | |
| 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 | | Nine months ended |
| | | September 30,
2019 | | September 30,
2018 |
| Net income (GAAP) | | $ | 103,707 | | | $ | 97,803 | |
| | | | | | | |
| Acquisition-related expenses | | 638 | | | 9,947 | |
| Total charges | | 638 | | | 9,947 | |
| Income tax expense (benefit) - other items | | (75 | ) | | (1,776 | ) |
| Income tax expense (benefit) | | (75 | ) | | (1,776 | ) |
| Total charges, net of taxes | | 563 | | | 8,171 | |
| Operating earnings, excluding certain items affecting comparability (non-GAAP) | | $ | 104,270 | | | $ | 105,974 | |
| Weighted average diluted shares | | 72,152,643 | | | 71,043,039 | |
| Diluted EPS (GAAP) | | $ | 1.44 | | | $ | 1.38 | |
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | | $ | 1.45 | | | $ | 1.49 | |
| Average assets | | $ | 11,526,487 | | | $ | 10,413,575 | |
| Average tangible equity | | $ | 1,076,990 | | | $ | 972,567 | |
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | | 1.21 | % | | 1.36 | % |
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | | 13.86 | % | | 15.50 | % |
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | | 14.02 | % | | 15.69 | % |
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | | 67.12 | % | | 64.76 | % |
