SUFFOLK, Va., Jan. 23, 2020 (GLOBE NEWSWIRE) -- TowneBank (the “Company”) (Nasdaq: TOWN) today reported financial results for the full year and the fourth quarter ended December 31, 2019. For the year ended December 31, 2019, earnings were $138.78 million, or $1.92 per diluted share, compared to $133.79 million, or $1.88 per diluted share for the year ended December 31, 2018. Earnings in the fourth quarter of 2019 were $35.08 million, or $0.49 per diluted share, compared to fourth quarter 2018 earnings of $35.99 million, or $0.50 per diluted share.
“In spite of downward pressure on interest rates our Company grew total revenues by 6% climbing to a record $564 million. Our continued focus on attracting noninterest bearing deposits produced an increase of 13% or $328 million during the year and represents approximately 32% of our total deposits. We are excited about the momentum we are building in North Carolina with our newest office in Greensboro recently opened and several new sites planned for the Charlotte market in 2020,” said G. Robert Aston, Jr., Executive Chairman.
Highlights for the Fourth Quarter of 2019 Compared to the Fourth Quarter of 2018:
- Total revenues were $139.67 million, an increase of $8.25 million, or 6.28%.
- Loans held for investment increased $401.06 million, or 5.00%, from December 31, 2018, and $236.46 million, or 2.89%, from September 30, 2019, or 11.46% on an annualized basis.
- Total deposits were $9.27 billion, an increase of $0.90 billion, or 10.76%, compared to prior year but a decrease, due to expected runoff and seasonality, of $0.17 billion, or 1.77%, from September 30, 2019, or a decline of 7.02% on an annualized basis.
- Noninterest bearing deposits increased by 12.52%, to $2.95 billion, representing 31.83% of total deposits. Compared to the linked quarter, noninterest bearing deposits decreased 2.62%, or 10.38% on an annualized basis.
- In the quarter comparison, annualized return on average common shareholders' equity was 8.51% and annualized return on average tangible common shareholders' equity was 13.12% (non-GAAP). For the full 12 months, return on average common shareholders' equity was 8.75% and return on average tangible common shareholders' equity was 13.73% (non-GAAP).
- Net interest margin of 3.33% and taxable equivalent net interest margin of 3.35% (non-GAAP).
- Effective tax rate of 18.17% compared to 22.33% at December 31, 2018.
“We ended 2019 on a positive note with a strong loan growth across our footprint. We are excited about the planned expansion in North Carolina and opportunities to add Banking, Wealth Management, Mortgage and Insurance talent in each of the markets we serve. 2020 will be an exciting year as we implement a state of the art banking platform to better serve the needs of our members,” said J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to the Fourth Quarter of 2018:
- Net interest income was $89.96 million compared to $89.21 million for the quarter ended December 31, 2018.
- Taxable equivalent net interest margin was 3.35%, including accretion of 9 basis points, compared to 3.55%, including accretion of 12 basis points, for 2018.
- Average loans held for investment, with an average yield of 4.81%, represented 77.25% of average earning assets in the fourth quarter of 2019 compared to an average yield of 5.00% and 79.04% of average earning assets in the fourth quarter of 2018.
- Total cost of deposits increased to 0.92% from 0.83% at December 31, 2018.
- Average interest-earning assets totaled $10.72 billion at December 31, 2019 compared to $10.02 billion at December 31, 2018, an increase of 6.96%.
- Average interest-bearing liabilities totaled $7.06 billion, an increase of $0.23 billion from the prior year.
- Total interest expense increased 5.65%, to $26.52 million in fourth quarter 2019 compared to $25.10 million in fourth quarter 2018, but decreased $2.02 million, or 7.07%, compared to the linked quarter. The average cost of deposits declined in fourth quarter 2019 after peaking in the third quarter.
Quarterly Provision for Loan Losses:
- Recorded a provision for loan losses of $3.60 million compared to $2.29 million one year ago and $1.51 million in the linked quarter, driven by strong fourth quarter 2019 growth.
- Net charge-offs were $0.80 million compared to $0.43 million one year prior. The ratio of net charge-offs to average loans on an annualized basis was 0.04% compared to 0.03% in the prior quarter and 0.02% for the fourth quarter of 2018.
- The allowance for loan losses represented 0.69% of total loans compared to 0.68% at September 30, 2019 and 0.65% at December 31, 2018. Loan loss reserve as a percentage of total loans, excluding purchased loans, remained unchanged at 0.81%, from September 30, 2019, and decreased from 0.82% at December 31, 2018. The allowance for loan losses was 3.34 times nonperforming loans compared to 3.95 times at September 30, 2019 and 10.97 times at December 31, 2018.
Quarterly Noninterest Income Compared to the Fourth Quarter of 2018:
- Total noninterest income was $49.71 million compared to $42.21 million in 2018, an increase of $7.50 million, or 17.78%. Residential mortgage brokerage income increased $2.93 million, insurance commissions increased $1.79 million, and real estate brokerage and property management income increased $0.76 million.
- Residential mortgage banking income was $15.88 million compared to $12.95 million in fourth quarter 2018. Loan volume in the current quarter was $860.16 million, with purchase activity comprising 70.32%. Loan volume in fourth quarter 2018 was $600.07 million, with purchase activity of 88.64%. Loan volume in the linked quarter was $963.66 million with purchase activity of 68.83%.
- Total Insurance segment revenue increased $3.96 million, or 24.88%, to $19.88 million in the fourth quarter of 2019. Revenue generated by insurance agencies acquired in January 2019 and September 2019 totaled $1.40 million in the fourth quarter of 2019.
- Property management fee revenue increased 10.21%, or $0.39 million, as compared to fourth quarter 2018 due to increases in reservation levels.
- Bank owned life insurance and other noninterest income increased $2.62 million, or 44.84%, as compared to fourth quarter 2018 due to proceeds from life insurance policies and investment commission income.
Quarterly Noninterest Expense Compared to the Fourth Quarter of 2018:
- Total noninterest expense was $92.34 million compared to $82.34 million, an increase of $10.00 million, or 12.14%. This reflects increases of $5.78 million in salary and benefits expense, $0.96 million in professional fees expense, and $0.29 million in advertising and marketing expenses.
- The Bank recorded small bank assessment credits from the FDIC of $1.66 million in the fourth quarter of 2019.
- 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.
Quarterly Income Taxes Compared to the Fourth Quarter of 2018:
- Income tax expense was $7.79 million compared to $10.35 million, one year prior. This represents an effective tax rate of 18.17% compared to 22.33% in the fourth quarter of 2018.
Consolidated Balance Sheet December 31, 2019 Compared to December 31, 2018
- Total assets were $11.95 billion for the quarter ended December 31, 2019, an increase of 7.03%, compared to $11.16 billion at December 31, 2018. This increase was driven primarily by growth in available for sale securities, mortgage loans held for sale, and loans held for investment. Year-over-year, other assets increased $47.52 million due to the adoption of the leasing standard.
- Loans held for investment increased $0.40 billion, or 5.00% compared to year end 2018.
- Total deposits increased $0.90 billion, or 10.76%, over December 31, 2018.
- Total borrowings declined $0.32 billion, or 29.41%, from December 31, 2018.
Investment Securities:
- Total investment securities were $1.52 billion compared to $1.41 billion at September 30, 2019 and $1.19 billion at December 31, 2018. The weighted average duration of the portfolio at December 31, 2019 was 3.90 years.
Loans and Asset Quality:
- Total loans held for investment were $8.42 billion at December 31, 2019 compared to $8.18 billion at September 30, 2019 and $8.02 billion at December 31, 2018.
- Nonperforming assets were $32.80 million, or 0.27% of total assets, compared to $24.17 million, or 0.22% of total assets, at December 31, 2018.
- Nonperforming loans were 0.21% of period end loans.
- Foreclosed property decreased to $13.84 million from $17.16 million at December 31, 2018.
Deposits and Borrowings:
- Total deposits were $9.27 billion compared to $9.44 billion at September 30, 2019 and $8.37 billion at December 31, 2018.
- Total loans to total deposits were 90.81% compared to 86.70% at September 30, 2019 and 95.79% at December 31, 2018.
- Non-interest bearing deposits were 31.83% of total deposits at December 31, 2019 compared to 32.11% at September 30, 2019 and 31.33% at December 31, 2018. Non-interest bearing deposits experienced typical seasonality during the fourth quarter.
- Total borrowings were $0.77 billion compared to $0.67 billion and $1.09 billion at September 30, 2019 and December 31, 2018, respectively.
Capital:
- Common equity tier 1 capital ratio of 11.45%.
- Tier 1 leverage capital ratio of 9.95%.
- Tier 1 risk-based capital ratio of 11.49%.
- Total risk-based capital ratio of 14.58%.
- Book value was $22.58 compared to $22.38 at September 30, 2019 and $21.05 at December 31, 2018.
- Tangible book value was $15.69 compared to $15.44 at September 30, 2019 and $14.26 at December 31, 2018.
Current Expected Credit Losses ("CECL"):
Effective January 1, 2020, we adopted ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. We currently estimate our loss reserves may increase up to 10% upon the finalization of our adoption of the new ASU.
This increase is driven by:
- The change in the timing of potential loss recognition from an incurred loss methodology to an expected loss methodology on loans and off-balance sheet commitments,
- the establishment of life-of-asset loss reserves,
- the change in accounting for purchased assets,
- utilization of reasonable and supportable forecasts.
Outlook:
Management reforecasts on a quarterly basis and anticipates:
- Annual loan growth to be in the mid-single digits in 2020.
- Our quarterly noninterest expense run rate will range between $94 - $97 million for 2020.
Annual Meeting of Shareholders:
TowneBank will hold its 2020 Annual Meeting of Shareholders at 11:30 a.m. on Wednesday, May 20, 2020 at the Virginia Beach Convention Center, 1000 19th Street in Virginia Beach, Virginia.
About TowneBank:
As one of the top community banks in Virginia and North Carolina, TowneBank operates 42 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Greensboro, Greenville, Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags Head in North Carolina. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group’s President and Board of Directors. With total assets of $11.95 billion as of December 31, 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 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 Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
J. Morgan Davis, President and Chief Executive Officer, 757-673-1673
Investor contact:
William B. Littreal, Chief Financial Officer, 757-638-6813
| |
| TOWNEBANK |
| Selected Financial Highlights (unaudited) |
| (dollars in thousands, except per share data) |
| | | |
| | | Three Months Ended |
| | | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
| | 2019 | | 2019 | | 2019 | | 2019 | | 2018 |
| Income and Performance Ratios: | | | | | | | | | |
| | Total Revenue | $ | 139,671 | | | $ | 145,879 | | | $ | 144,537 | | | $ | 133,854 | | | $ | 131,417 | |
| | Net income | 35,948 | | | 39,400 | | | 36,242 | | | 32,082 | | | 36,440 | |
| | Net income attributable to TowneBank | 35,075 | | | 37,659 | | | 34,638 | | | 31,409 | | | 35,990 | |
| | Net income per common share - diluted | 0.49 | | | 0.52 | | | 0.48 | | | 0.44 | | | 0.50 | |
| | Book value per common share | 22.58 | | | 22.38 | | | 21.95 | | | 21.40 | | | 21.05 | |
| | Book value per share - tangible (non-GAAP) | 15.69 | | | 15.44 | | | 15.05 | | | 14.46 | | | 14.26 | |
| | Return on average assets | 1.16 | % | | 1.26 | % | | 1.20 | % | | 1.14 | % | | 1.28 | % |
| | Return on average assets - tangible (non-GAAP) | 1.30 | % | | 1.40 | % | | 1.35 | % | | 1.29 | % | | 1.43 | % |
| | Return on average equity | 8.44 | % | | 9.22 | % | | 8.83 | % | | 8.24 | % | | 9.44 | % |
| | Return on average equity - tangible (non-GAAP) | 12.97 | % | | 14.20 | % | | 13.90 | % | | 13.24 | % | | 14.91 | % |
| | Return on average common equity | 8.51 | % | | 9.29 | % | | 8.89 | % | | 8.30 | % | | 9.53 | % |
| | Return on average common equity - tangible (non-GAAP) | 13.12 | % | | 14.36 | % | | 14.05 | % | | 13.39 | % | | 15.11 | % |
| | Noninterest income as a percentage of total revenue | 35.59 | % | | 37.55 | % | | 37.86 | % | | 34.65 | % | | 32.12 | % |
| | | | | | | | | | | |
| Regulatory Capital Ratios (1): | | | | | | | | | |
| | Common equity tier 1 | 11.45 | % | | 11.52 | % | | 11.58 | % | | 11.49 | % | | 11.51 | % |
| | Tier 1 | 11.49 | % | | 11.55 | % | | 11.62 | % | | 11.52 | % | | 11.54 | % |
| | Total | 14.58 | % | | 14.70 | % | | 14.85 | % | | 14.79 | % | | 14.83 | % |
| | Tier 1 leverage ratio | 9.95 | % | | 9.84 | % | | 9.86 | % | | 9.92 | % | | 9.87 | % |
| | | | | | | | | | | |
| Asset Quality: | | | | | | | | | |
| | Allowance for loan losses to nonperforming loans | | 3.34 | x | | | 3.95 | x | | | 3.00 | x | | | 9.36 | x | | | 10.97 | x |
| | Allowance for loan losses to period end loans | 0.69 | % | | 0.68 | % | | 0.67 | % | | 0.66 | % | | 0.65 | % |
| | Allowance for loan losses to period end loans excluding purchased loans | 0.81 | % | | 0.81 | % | | 0.81 | % | | 0.81 | % | | 0.82 | % |
| | Nonperforming loans to period end loans | 0.21 | % | | 0.17 | % | | 0.22 | % | | 0.07 | % | | 0.06 | % |
| | Nonperforming assets to period end assets | 0.27 | % | | 0.26 | % | | 0.29 | % | | 0.22 | % | | 0.22 | % |
| | Net charge-offs to average loans (annualized) | 0.04 | % | | 0.03 | % | | 0.08 | % | | 0.01 | % | | 0.02 | % |
| | | | | | | | | | | |
| | Nonperforming loans | $ | 17,437 | | | $ | 14,016 | | | $ | 18,202 | | | $ | 5,696 | | | $ | 4,749 | |
| | Former bank premises | 1,521 | | | 1,510 | | | 1,510 | | | 2,223 | | | 2,253 | |
| | Foreclosed property | 13,839 | | | 15,517 | | | 14,517 | | | 17,071 | | | 17,163 | |
| | Total nonperforming assets | $ | 32,797 | | | $ | 31,043 | | | $ | 34,229 | | | $ | 24,990 | | | $ | 24,165 | |
| | Loans past due 90 days and still accruing interest | $ | 309 | | | $ | 636 | | | $ | 415 | | | $ | 117 | | | $ | 394 | |
| | | | | | | | | | | |
| | Allowance for loan losses | $ | 58,234 | | | $ | 55,428 | | | $ | 54,527 | | | $ | 53,303 | | | $ | 52,094 | |
| | | | | | | | | | | |
| Mortgage Banking: | | | | | | | | | |
| | Loans originated, mortgage | $ | 628,279 | | | $ | 703,922 | | | $ | 574,638 | | | $ | 366,643 | | | $ | 407,787 | |
| | Loans originated, joint venture | 231,879 | | | 259,742 | | | 246,491 | | | 146,884 | | | 192,280 | |
| | Total loans originated | $ | 860,158 | | | $ | 963,664 | | | $ | 821,129 | | | $ | 513,527 | | | $ | 600,067 | |
| | Number of loans originated | 2,984 | | | 3,360 | | | 3,121 | | | 1,977 | | | 2,304 | |
| | Number of originators | 228 | | | 225 | | | 229 | | | 240 | | | 293 | |
| | Purchase % | 70.32 | % | | 68.83 | % | | 84.97 | % | | 86.08 | % | | 88.64 | % |
| | Loans sold | $ | 879,910 | | | $ | 925,058 | | | $ | 694,832 | | | $ | 473,068 | | | $ | 694,341 | |
| | Gross realized gain on sales and fees as a % of loans originated | 3.38 | % | | 3.45 | % | | 3.43 | % | | 3.58 | % | | 3.37 | % |
| | | | | | | | | | | |
| Other Ratios: | | | | | | | | | |
| | Net interest margin | 3.33 | % | | 3.41 | % | | 3.49 | % | | 3.54 | % | | 3.53 | % |
| | Net interest margin-fully tax equivalent (non-GAAP) | 3.35 | % | | 3.43 | % | | 3.52 | % | | 3.57 | % | | 3.55 | % |
| | Average earning assets/total average assets | 89.57 | % | | 89.53 | % | | 89.46 | % | | 89.50 | % | | 89.91 | % |
| | Average loans/average deposits | 88.41 | % | | 87.63 | % | | 91.60 | % | | 95.83 | % | | 95.32 | % |
| | Average noninterest deposits/total average deposits | 32.14 | % | | 31.82 | % | | 31.63 | % | | 31.39 | % | | 31.90 | % |
| | Period end equity/period end total assets | 13.84 | % | | 13.63 | % | | 13.45 | % | | 13.53 | % | | 13.78 | % |
| | Efficiency ratio | 66.11 | % | | 66.66 | % | | 66.80 | % | | 68.43 | % | | 62.65 | % |
| | | | | | | | | | | |
| | (1) Current reporting period regulatory capital ratios are preliminary. | | | | | | |
| | | | | | | | |
| |
| TOWNEBANK |
| Selected Data (unaudited) |
| (dollars in thousands) |
| |
| | | | | | | | | | |
| Investment Securities | | | | | | | % Change |
| | Q4 | | Q4 | | Q3 | | Q4 19 vs. | | Q4 19 vs. |
| Available-for-sale securities, at fair value | 2019 | | 2018 | | 2019 | | Q4 18 | | Q3 19 |
| U.S. agency securities | $ | 129,038 | | | $ | 358,542 | | | $ | 152,581 | | | (64.01 | )% | | (15.43 | )% |
| U.S. Treasury notes | 1,000 | | | 1,246 | | | 999 | | | (19.74 | )% | | 0.10 | % |
| Municipal securities | 223,106 | | | 87,308 | | | 173,519 | | | 155.54 | % | | 28.58 | % |
| Trust preferred and other corporate securities | 53,367 | | | 30,992 | | | 52,006 | | | 72.20 | % | | 2.62 | % |
| Mortgage-backed securities issued by GSE and GNMA | 1,034,797 | | | 617,251 | | | 958,290 | | | 67.65 | % | | 7.98 | % |
| Total | $ | 1,441,308 | | | $ | 1,095,339 | | | $ | 1,337,395 | | | 31.59 | % | | 7.77 | % |
| | | | | | | | | | |
| Gross unrealized gains (losses) reflected in financial statements | | | | | | | | | |
| Total gross unrealized gains | $ | 23,950 | | | $ | 3,423 | | | $ | 28,114 | | | 599.68 | % | | (14.81 | )% |
| Total gross unrealized losses | (4,215 | ) | | (15,333 | ) | | (2,046 | ) | | (72.51 | )% | | 106.01 | % |
| Net unrealized gain (loss) on AFS securities | $ | 19,735 | | | $ | (11,910 | ) | | $ | 26,068 | | | (265.70 | )% | | (24.29 | )% |
| | | | | | | | | | |
| Held-to-maturity securities, at amortized cost | | | | | | | | | |
| Municipal securities | $ | 29,167 | | | $ | 34,488 | | | $ | 29,166 | | | (15.43 | )% | | — | % |
| Trust preferred corporate securities | 2,369 | | | 500 | | | 2,381 | | | 373.80 | % | | (0.50 | )% |
| Mortgage-backed securities issued by GSE and GNMA | 12,152 | | | 15,610 | | | 12,947 | | | (22.15 | )% | | (6.14 | )% |
| Total | $ | 43,688 | | | $ | 50,598 | | | $ | 44,494 | | | (13.66 | )% | | (1.81 | )% |
| | | | | | | | | | |
| Gross unrealized gains (losses) not reflected in financial statements | | | | | | | | | |
| Total gross unrealized gains | $ | 1,520 | | | $ | 1,271 | | | $ | 1,688 | | | 19.59 | % | | (9.95 | )% |
| Total gross unrealized losses | (37 | ) | | (601 | ) | | (5 | ) | | (93.84 | )% | | 640.00 | % |
| Net unrealized gain (loss) on HTM securities | $ | 1,483 | | | $ | 670 | | | $ | 1,683 | | | 121.34 | % | | (11.88 | )% |
| | | | | | | | | | |
| Loans Held For Investment | | | | | | | % Change |
| | Q4 | | Q4 | | Q3 | | Q4 19 vs. | | Q4 19 vs. |
| | 2019 | | 2018 | | 2019 | | Q4 18 | | Q3 19 |
| Real estate - construction and development | $ | 1,120,533 | | | $ | 1,067,239 | | | $ | 1,142,225 | | | 4.99 | % | | (1.90 | )% |
| Commercial real estate - investment related properties | 2,183,232 | | | 1,978,592 | | | 2,070,317 | | | 10.34 | % | | 5.45 | % |
| Commercial real estate - owner occupied | 1,329,144 | | | 1,262,748 | | | 1,286,137 | | | 5.26 | % | | 3.34 | % |
| Real estate - multifamily | 243,041 | | | 260,987 | | | 219,901 | | | (6.88 | )% | | 10.52 | % |
| Real estate - residential 1-4 family | 1,653,084 | | | 1,626,896 | | | 1,621,175 | | | 1.61 | % | | 1.97 | % |
| Commercial and industrial business | 1,574,275 | | | 1,510,364 | | | 1,527,515 | | | 4.23 | % | | 3.06 | % |
| Consumer and other loans | 315,979 | | | 311,407 | | | 315,559 | | | 1.47 | % | | 0.13 | % |
| Total | $ | 8,419,288 | | | $ | 8,018,233 | | | $ | 8,182,829 | | | 5.00 | % | | 2.89 | % |
| | | | | | | | | | |
| Deposits | | | | | | | % Change |
| | Q4 | | Q4 | | Q3 | | Q4 19 vs. | | Q4 19 vs. |
| | 2019 | | 2018 | | 2019 | | Q4 18 | | Q3 19 |
| Noninterest-bearing demand | $ | 2,951,225 | | | $ | 2,622,761 | | | $ | 3,030,505 | | | 12.52 | % | | (2.62 | )% |
| Interest-bearing: | | | | | | | | | |
| Demand and money market accounts | 3,586,364 | | | 3,223,215 | | | 3,534,252 | | | 11.27 | % | | 1.47 | % |
| Savings | 276,205 | | | 286,684 | | | 280,552 | | | (3.66 | )% | | (1.55 | )% |
| Certificates of deposits | 2,457,123 | | | 2,237,762 | | | 2,592,705 | | | 9.80 | % | | (5.23 | )% |
| Total | $ | 9,270,917 | | | $ | 8,370,422 | | | $ | 9,438,014 | | | 10.76 | % | | (1.77 | )% |
| | | | | | | | | | |
| |
| TOWNEBANK |
| Average Balances, Yields and Rate Paid (unaudited) |
| (dollars in thousands) |
| |
| | Three Months Ended | | Three Months Ended | | Three Months Ended |
| | December 31, 2019 | | September 30, 2019 | | December 31, 2018 |
| | | | Interest | | Average | | | | Interest | | Average | | | | Interest | | Average |
| | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ | | Average | | Income/ | | Yield/ |
| | Balance | | Expense | | Rate | | Balance | | Expense | | Rate | | Balance | | Expense | | Rate |
| Assets: | | | | | | | | | | | | | | | | | |
| Loans (net of unearned income and deferred costs), excluding nonaccrual loans | $ | 8,283,388 | | | $ | 100,504 | | | 4.81 | % | | $ | 8,096,908 | | | $ | 102,495 | | | 5.02 | % | | $ | 7,923,978 | | | $ | 99,895 | | | 5.00 | % |
| Taxable investment securities | 1,331,175 | | | 9,179 | | | 2.76 | % | | 1,266,447 | | | 9,087 | | | 2.87 | % | | 1,101,892 | | | 7,515 | | | 2.73 | % |
| Tax-exempt investment securities | 118,298 | | | 908 | | | 3.07 | % | | 121,738 | | | 997 | | | 3.28 | % | | 80,656 | | | 747 | | | 3.70 | % |
| Total securities | 1,449,473 | | | 10,087 | | | 2.78 | % | | 1,388,185 | | | 10,084 | | | 2.91 | % | | 1,182,548 | | | 8,262 | | | 2.79 | % |
| Interest-bearing deposits | 519,737 | | | 2,067 | | | 1.58 | % | | 711,030 | | | 3,745 | | | 2.09 | % | | 652,131 | | | 3,559 | | | 2.17 | % |
| Loans held for sale | 469,725 | | | 4,413 | | | 3.76 | % | | 408,377 | | | 3,956 | | | 3.87 | % | | 266,058 | | | 3,176 | | | 4.77 | % |
| Total earning assets | 10,722,323 | | | 117,071 | | | 4.33 | % | | 10,604,500 | | | 120,280 | | | 4.50 | % | | 10,024,715 | | | 114,892 | | | 4.55 | % |
| Less: allowance for loan losses | (56,766 | ) | | | | | | (54,858 | ) | | | | | | (50,792 | ) | | | | |
| Total nonearning assets | 1,305,036 | | | | | | | 1,295,640 | | | | | | | 1,176,037 | | | | | |
| Total assets | $ | 11,970,593 | | | | | | | $ | 11,845,282 | | | | | | | $ | 11,149,960 | | | | | |
| Liabilities and Equity: | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | |
| Demand and money market | $ | 3,533,912 | | | $ | 6,421 | | | 0.72 | % | | $ | 3,379,888 | | | $ | 7,223 | | | 0.85 | % | | $ | 3,122,973 | | | $ | 5,670 | | | 0.72 | % |
| Savings | 278,910 | | | 638 | | | 0.91 | % | | 278,048 | | | 702 | | | 1.00 | % | | 293,135 | | | 1,022 | | | 1.38 | % |
| Certificates of deposit | 2,544,845 | | | 14,685 | | | 2.29 | % | | 2,641,681 | | | 15,627 | | | 2.35 | % | | 2,245,039 | | | 10,803 | | | 1.91 | % |
| Total interest-bearing deposits | 6,357,667 | | | 21,744 | | | 1.36 | % | | 6,299,617 | | | 23,552 | | | 1.48 | % | | 5,661,147 | | | 17,495 | | | 1.23 | % |
| Borrowings | 454,621 | | | 1,810 | | | 1.56 | % | | 486,644 | | | 2,020 | | | 1.62 | % | | 920,389 | | | 4,643 | | | 1.97 | % |
| Subordinated debt, net | 248,361 | | | 2,962 | | | 4.77 | % | | 248,210 | | | 2,962 | | | 4.77 | % | | 247,769 | | | 2,961 | | | 4.78 | % |
| Total interest-bearing liabilities | 7,060,649 | | | 26,516 | | | 1.49 | % | | 7,034,471 | | | 28,534 | | | 1.61 | % | | 6,829,305 | | | 25,099 | | | 1.46 | % |
| Demand deposits | 3,011,688 | | | | | | | 2,940,370 | | | | | | | 2,651,495 | | | | | |
| Other noninterest-bearing liabilities | 250,327 | | | | | | | 250,371 | | | | | | | 157,238 | | | | | |
| Total liabilities | 10,322,664 | | | | | | | 10,225,212 | | | | | | | 9,638,038 | | | | | |
| Shareholders’ equity | 1,647,929 | | | | | | | 1,620,070 | | | | | | | 1,511,922 | | | | | |
| Total liabilities and equity | $ | 11,970,593 | | | | | | | $ | 11,845,282 | | | | | | | $ | 11,149,960 | | | | | |
| Net interest income (tax-equivalent basis) | | | $ | 90,555 | | | | | | | $ | 91,746 | | | | | | | $ | 89,793 | | | |
| Reconcilement of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent basis adjustment | | | (596 | ) | | | | | | (643 | ) | | | | | | (585 | ) | | |
| Net interest income (GAAP) | | | $ | 89,959 | | | | | | | $ | 91,103 | | | | | | | $ | 89,208 | | | |
| Interest rate spread (1)(3) | | | | | 2.84 | % | | | | | | 2.89 | % | | | | | | 3.09 | % |
| Interest expense as a percent of average earning assets | | | | | | | 0.98 | % | | | | | | 1.07 | % | | | | | | 0.99 | % |
| Net interest margin (tax equivalent basis) (2)(3) | | | | | | | 3.35 | % | | | | | | 3.43 | % | | | | | | 3.55 | % |
| Total cost of deposits | | | | | 0.92 | % | | | | | | 1.01 | % | | | | | | 0.83 | % |
| | | | | | | | | | | | | | | | | | |
| (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) |
| |
| | Year Ended December 31, |
| | 2019 | | 2018 | | 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 | $ | 8,122,210 | | | $ | 405,511 | | | 4.99 | % | | $ | 7,567,570 | | | $ | 373,057 | | | 4.93 | % | | $ | 5,901,797 | | | $ | 276,747 | | | 4.69 | % |
| Taxable investment securities | 1,202,107 | | | 34,141 | | | 2.84 | % | | 1,004,080 | | | 24,729 | | | 2.46 | % | | 600,080 | | | 11,597 | | | 1.93 | % |
| Tax-exempt investment securities | 102,731 | | | 3,426 | | | 3.34 | % | | 79,720 | | | 2,920 | | | 3.66 | % | | 48,228 | | | 1,590 | | | 3.28 | % |
| Total securities | 1,304,838 | | | 37,567 | | | 2.88 | % | | 1,083,800 | | | 27,649 | | | 2.55 | % | | 648,308 | | | 13,187 | | | 2.03 | % |
| Interest-bearing deposits | 665,903 | | | 13,825 | | | 2.08 | % | | 560,368 | | | 10,229 | | | 1.83 | % | | 696,507 | | | 7,480 | | | 1.07 | % |
| Mortgage loans held for sale | 335,588 | | | 13,379 | | | 3.99 | % | | 293,017 | | | 13,124 | | | 4.48 | % | | 271,281 | | | 10,561 | | | 3.89 | % |
| Total earning assets | 10,428,539 | | | 470,282 | | | 4.51 | % | | 9,504,755 | | | 424,059 | | | 4.46 | % | | 7,517,893 | | | 307,975 | | | 4.10 | % |
| Less: allowance for loan losses | (54,476 | ) | | | | | | (48,737 | ) | | | | | | (43,760 | ) | | | | |
| Total nonearning assets | 1,264,363 | | | | | | | 1,143,167 | | | | | | | 860,866 | | | | | |
| Total assets | $ | 11,638,426 | | | | | | | $ | 10,599,185 | | | | | | | $ | 8,334,999 | | | | | |
| Liabilities and Equity: | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits | | | | | | | | | | | | | | | | | |
| Demand and money market | $ | 3,351,135 | | | $ | 26,909 | | | 0.80 | % | | $ | 2,951,038 | | | $ | 16,458 | | | 0.56 | % | | $ | 2,260,378 | | | $ | 8,020 | | | 0.35 | % |
| Savings | 280,894 | | | 3,296 | | | 1.17 | % | | 302,435 | | | 3,824 | | | 1.26 | % | | 319,940 | | | 3,305 | | | 1.03 | % |
| Certificates of deposit | 2,478,663 | | | 56,050 | | | 2.26 | % | | 2,060,587 | | | 32,859 | | | 1.59 | % | | 1,668,252 | | | 17,467 | | | 1.05 | % |
| Total interest-bearing deposits | 6,110,692 | | | 86,255 | | | 1.41 | % | | 5,314,060 | | | 53,141 | | | 1.00 | % | | 4,248,570 | | | 28,792 | | | 0.68 | % |
| Borrowings | 609,142 | | | 11,368 | | | 1.84 | % | | 897,574 | | | 15,542 | | | 1.71 | % | | 617,720 | | | 9,942 | | | 1.61 | % |
| Subordinated debt, net | 248,139 | | | 11,847 | | | 4.77 | % | | 251,097 | | | 12,067 | | | 4.81 | % | | 113,752 | | | 5,249 | | | 4.61 | % |
| Total interest-bearing liabilities | 6,967,973 | | | 109,470 | | | 1.57 | % | | 6,462,731 | | | 80,750 | | | 1.25 | % | | 4,980,042 | | | 43,983 | | | 0.88 | % |
| Demand deposits | 2,844,178 | | | | | | | 2,517,173 | | | | | | | 2,094,753 | | | | | |
| Other noninterest-bearing liabilities | 228,994 | | | | | | | 164,486 | | | | | | | 136,616 | | | | | |
| Total liabilities | 10,041,145 | | | | | | | 9,144,390 | | | | | | | 7,211,411 | | | | | |
| Shareholders' equity | 1,597,281 | | | | | | | 1,454,795 | | | | | | | 1,123,588 | | | | | |
| Total liabilities and equity | $ | 11,638,426 | | | | | | | $ | 10,599,185 | | | | | | | $ | 8,334,999 | | | | | |
| Net interest income (tax-equivalent basis) | | | | | $ | 360,812 | | | | | | | $ | 343,309 | | | | | | | $ | 263,992 | | | |
| Reconcilement of Non-GAAP Financial Measures | | | | | | | | | | | | | | | | | | | |
| Tax-equivalent basis adjustment | | | | | (2,457 | ) | | | | | | (2,236 | ) | | | | | | (2,871 | ) | | |
| Net interest income (GAAP) | | | | | $ | 358,355 | | | | | | | $ | 341,073 | | | | | | | $ | 261,121 | | | |
| Interest rate spread (1)(3) | | | | | | | 2.94 | % | | | | | | 3.21 | % | | | | | | 3.22 | % |
| Interest expense as a percent of average earning assets | | | | | | | 1.05 | % | | | | | | 0.85 | % | | | | | | 0.59 | % |
| Net interest margin (tax-equivalent basis) (2)(3) | | | | | | | 3.46 | % | | | | | | 3.61 | % | | | | | | 3.51 | % |
| Total cost of deposits | | | | | | | 0.96 | % | | | | | | 0.68 | % | | | | | | 0.45 | % |
| | | | | | | | | | | | | | | | | | |
| (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 per share data) |
| | | | |
| | 2019 | | 2018 |
| | (unaudited) | | (audited) |
| ASSETS | | | |
| Cash and due from banks | $ | 97,593 | | | $ | 94,604 | |
| Interest-bearing deposits at Federal Reserve Bank | 322,505 | | | 570,425 | |
| Interest-bearing deposits in financial institutions | 22,518 | | | 21,667 | |
| Total Cash and Cash Equivalents | 442,616 | | | 686,696 | |
| Securities available for sale, at fair value | 1,441,308 | | | 1,095,339 | |
| Securities held to maturity, at amortized cost | 43,688 | | | 50,598 | |
| Other equity securities | 6,462 | | | 4,797 | |
| Federal Home Loan Bank stock | 30,094 | | | 43,229 | |
| Total Securities | 1,521,552 | | | 1,193,963 | |
| Mortgage loans held for sale | 419,233 | | | 220,986 | |
| Loans, net of unearned income and deferred costs | 8,419,288 | | | 8,018,233 | |
| Less: allowance for loan losses | (58,234 | ) | | (52,094 | ) |
| Net Loans | 8,361,054 | | | 7,966,139 | |
| Premises and equipment, net | 231,806 | | | 211,796 | |
| Goodwill | 446,816 | | | 433,658 | |
| Other intangible assets, net | 54,399 | | | 58,752 | |
| Bank-owned life insurance policies | 243,062 | | | 237,371 | |
| Other assets | 227,125 | | | 153,669 | |
| TOTAL ASSETS | $ | 11,947,663 | | | $ | 11,163,030 | |
| LIABILITIES AND EQUITY | | | |
| Deposits: | | | |
| Noninterest-bearing demand | $ | 2,951,225 | | | $ | 2,622,761 | |
| Interest-bearing: | | | |
| Demand and money market accounts | 3,586,364 | | | 3,223,215 | |
| Savings | 276,205 | | | 286,684 | |
| Certificates of deposit | 2,457,123 | | | 2,237,762 | |
| Total Deposits | 9,270,917 | | | 8,370,422 | |
| Advances from the Federal Home Loan Bank | 471,687 | | | 799,315 | |
| Subordinated debt, net | 248,458 | | | 247,861 | |
| Repurchase agreements and other borrowings | 52,391 | | | 47,156 | |
| Total Borrowings | 772,536 | | | 1,094,332 | |
| Other liabilities | 250,516 | | | 159,856 | |
| TOTAL LIABILITIES | 10,293,969 | | | 9,624,610 | |
| Preferred stock | | | |
| Authorized and unissued shares - 2,000,000 | — | | | — | |
| Common stock, $1.667 par: Authorized shares - 150,000,000 | | | |
| Issued and outstanding shares 72,649,682 in 2019 and 72,465,923 in 2018 | 121,107 | | | 120,801 | |
| Capital surplus | 1,041,160 | | | 1,034,676 | |
| Retained earnings | 467,186 | | | 379,239 | |
| Common stock issued to deferred compensation trust, at cost | | | |
| 818,578 shares in 2019 and 769,200 shares in 2018 | (15,555 | ) | | (13,955 | ) |
| Deferred compensation trust | 15,555 | | | 13,955 | |
| Accumulated other comprehensive income (loss) | 11,302 | | | (9,190 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 1,640,755 | | | 1,525,526 | |
| Noncontrolling interest | 12,939 | | | 12,894 | |
| TOTAL EQUITY | 1,653,694 | | | 1,538,420 | |
| TOTAL LIABILITIES AND EQUITY | $ | 11,947,663 | | | $ | 11,163,030 | |
| | | | | | | | |
| |
| TOWNEBANK |
| Consolidated Statements of Income |
| (dollars in thousands, except per share data) |
| | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | December 31, |
| | 2019 | | 2018 | | 2019 | | 2018 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (audited) |
| INTEREST INCOME: | | | | | | | |
| Loans, including fees | $ | 100,059 | | | $ | 99,446 | | | $ | 403,675 | | | $ | 371,343 | |
| Investment securities | 9,936 | | | 8,126 | | | 36,946 | | | 27,127 | |
| Interest-bearing deposits in financial institutions and federal funds sold | 2,067 | | | 3,559 | | | 13,825 | | | 10,229 | |
| Mortgage loans held for sale | 4,413 | | | 3,176 | | | 13,379 | | | 13,124 | |
| Total interest income | 116,475 | | | 114,307 | | | 467,825 | | | 421,823 | |
| INTEREST EXPENSE: | | | | | | | |
| Deposits | 21,744 | | | 17,495 | | | 86,255 | | | 53,141 | |
| Advances from the Federal Home Loan Bank | 1,730 | | | 4,585 | | | 11,018 | | | 15,340 | |
| Subordinated debt, net | 2,962 | | | 2,961 | | | 11,847 | | | 12,067 | |
| Repurchase agreements and other borrowings | 80 | | | 58 | | | 350 | | | 202 | |
| Total interest expense | 26,516 | | | 25,099 | | | 109,470 | | | 80,750 | |
| Net interest income | 89,959 | | | 89,208 | | | 358,355 | | | 341,073 | |
| PROVISION FOR LOAN LOSSES | 3,601 | | | 2,292 | | | 9,371 | | | 8,541 | |
| Net interest income after provision for loan losses | 86,358 | | | 86,916 | | | 348,984 | | | 332,532 | |
| NONINTEREST INCOME: | | | | | | | |
| Residential mortgage banking income, net | 15,884 | | | 12,951 | | | 66,812 | | | 65,104 | |
| Insurance commissions and other title fees and income, net | 15,001 | | | 13,212 | | | 64,478 | | | 56,164 | |
| Real estate brokerage and property management income, net | 6,737 | | | 5,982 | | | 34,292 | | | 31,863 | |
| Service charges on deposit accounts | 2,245 | | | 2,928 | | | 10,544 | | | 11,808 | |
| Credit card merchant fees, net | 1,389 | | | 1,298 | | | 4,746 | | | 5,472 | |
| Bank owned life insurance | 3,865 | | | 2,014 | | | 9,215 | | | 6,836 | |
| Other income | 4,591 | | | 3,824 | | | 16,346 | | | 14,343 | |
| Gain (loss) on investment securities | — | | | — | | | (845 | ) | | 3 | |
| Total noninterest income | 49,712 | | | 42,209 | | | 205,588 | | | 191,593 | |
| NONINTEREST EXPENSE: | | | | | | | |
| Salaries and employee benefits | 56,013 | | | 50,233 | | | 218,920 | | | 201,838 | |
| Occupancy | 7,516 | | | 7,352 | | | 31,381 | | | 27,644 | |
| Furniture and equipment | 3,598 | | | 3,587 | | | 14,351 | | | 14,477 | |
| Amortization - intangibles | 3,005 | | | 3,123 | | | 12,370 | | | 11,710 | |
| Software expense | 2,976 | | | 2,694 | | | 11,717 | | | 10,621 | |
| Data processing | 2,510 | | | 2,466 | | | 11,825 | | | 10,364 | |
| Professional fees | 2,990 | | | 2,028 | | | 12,943 | | | 8,323 | |
| Advertising and marketing | 2,839 | | | 2,546 | | | 12,279 | | | 11,194 | |
| Other expenses | 10,889 | | | 8,308 | | | 52,516 | | | 55,953 | |
| Total noninterest expense | 92,336 | | | 82,337 | | | 378,302 | | | 352,124 | |
| Income before income tax expense & noncontrolling interest | 43,734 | | | 46,788 | | | 176,270 | | | 172,001 | |
| Provision for income tax expense | 7,786 | | | 10,348 | | | 32,596 | | | 34,227 | |
| Net income | $ | 35,948 | | | $ | 36,440 | | | $ | 143,674 | | | $ | 137,774 | |
| Net income attributable to noncontrolling interest | (873 | ) | | (450 | ) | | (4,891 | ) | | (3,981 | ) |
| Net income attributable to TowneBank | $ | 35,075 | | | $ | 35,990 | | | $ | 138,783 | | | $ | 133,793 | |
| | | | | | | | |
| Per common share information | | | | | | | |
| Basic earnings | $ | 0.49 | | | $ | 0.50 | | | $ | 1.93 | | | $ | 1.88 | |
| Diluted earnings | $ | 0.49 | | | $ | 0.50 | | | $ | 1.92 | | | $ | 1.88 | |
| Cash dividends declared | $ | 0.18 | | | $ | 0.16 | | | $ | 0.70 | | | $ | 0.62 | |
| | | | | | | | | | | | | | | | |
| |
| TOWNEBANK |
| Consolidated Balance Sheets - Five Quarter Trend |
| (dollars in thousands, except per share data) |
| |
| | | | | | | | | | |
| | December 31, | | September 30, | | June 30, | | March 31, | | December 31, |
| | 2019 | | 2019 | | 2019 | | 2019 | | 2018 |
| | (unaudited) | | (unaudited) | | (unaudited) | | (unaudited) | | (audited) |
| ASSETS | | | | | | | | | |
| Cash and due from banks | $ | 97,593 | | | $ | 124,439 | | | $ | 110,580 | | | $ | 104,091 | | | $ | 94,604 | |
| Interest-bearing deposits at Federal Reserve Bank | 322,505 | | | 675,288 | | | 834,505 | | | 775,208 | | | 570,425 | |
| Interest-bearing deposits in financial institutions | 22,518 | | | 21,663 | | | 21,527 | | | 21,001 | | | 21,667 | |
| Total Cash and Cash Equivalents | 442,616 | | | 821,390 | | | 966,612 | | | 900,300 | | | 686,696 | |
| Securities available for sale, at fair value | 1,441,308 | | | 1,337,395 | | | 1,260,821 | | | 1,099,777 | | | 1,095,339 | |
| Securities held to maturity, at amortized cost | 43,688 | | | 44,494 | | | 50,574 | | | 49,687 | | | 50,598 | |
| Other equity securities | 6,462 | | | 5,697 | | | 5,396 | | | 5,022 | | | 4,797 | |
| Federal Home Loan Bank stock | 30,094 | | | 26,282 | | | 32,657 | | | 41,464 | | | 43,229 | |
| Total Securities | 1,521,552 | | | 1,413,868 | | | 1,349,448 | | | 1,195,950 | | | 1,193,963 | |
| Mortgage loans held for sale | 419,233 | | | 456,719 | | | 362,773 | | | 247,021 | | | 220,986 | |
| Loans, net of unearned income and deferred costs | 8,419,288 | | | 8,182,829 | | | 8,126,729 | | | 8,105,370 | | | 8,018,233 | |
| Less: allowance for loan losses | (58,234 | ) | | (55,428 | ) | | (54,527 | ) | | (53,303 | ) | | (52,094 | ) |
| Net Loans | 8,361,054 | | | 8,127,401 | | | 8,072,202 | | | 8,052,067 | | | 7,966,139 | |
| Premises and equipment, net | 231,806 | | | 231,060 | | | 230,177 | | | 227,458 | | | 211,796 | |
| Goodwill | 446,816 | | | 446,423 | | | 442,881 | | | 442,881 | | | 433,658 | |
| Other intangible assets, net | 54,399 | | | 57,404 | | | 58,391 | | | 61,333 | | | 58,752 | |
| Bank-owned life insurance policies | 243,062 | | | 241,652 | | | 240,621 | | | 238,977 | | | 237,371 | |
| Other assets | 227,125 | | | 225,374 | | | 219,375 | | | 202,276 | | | 153,669 | |
| TOTAL ASSETS | $ | 11,947,663 | | | $ | 12,021,291 | | | $ | 11,942,480 | | | $ | 11,568,263 | | | $ | 11,163,030 | |
| LIABILITIES AND EQUITY | | | | | | | | | |
| Deposits: | | | | | | | | | |
| Noninterest-bearing demand | $ | 2,951,225 | | | $ | 3,030,505 | | | $ | 2,950,615 | | | $ | 2,813,857 | | | $ | 2,622,761 | |
| Interest-bearing: | | | | | | | | | |
| Demand and money market accounts | 3,586,364 | | | 3,534,252 | | | 3,409,322 | | | 3,290,907 | | | 3,223,215 | |
| Savings | 276,205 | | | 280,552 | | | 277,495 | | | 285,790 | | | 286,684 | |
| Certificates of deposit | 2,457,123 | | | 2,592,705 | | | 2,631,386 | | | 2,341,134 | | | 2,237,762 | |
| Total Deposits | 9,270,917 | | | 9,438,014 | | | 9,268,818 | | | 8,731,688 | | | 8,370,422 | |
| Advances from the Federal Home Loan Bank | 471,687 | | | 381,846 | | | 532,004 | | | 739,160 | | | 799,315 | |
| Subordinated debt, net | 248,458 | | | 248,309 | | | 248,160 | | | 248,010 | | | 247,861 | |
| Repurchase agreements and other borrowings | 52,391 | | | 42,971 | | | 56,355 | | | 44,775 | | | 47,156 | |
| Total Borrowings | 772,536 | | | 673,126 | | | 836,519 | | | 1,031,945 | | | 1,094,332 | |
| Other liabilities | 250,516 | | | 271,617 | | | 230,691 | | | 238,974 | | | 159,856 | |
| TOTAL LIABILITIES | 10,293,969 | | | 10,382,757 | | | 10,336,028 | | | 10,002,607 | | | 9,624,610 | |
| Preferred stock | | | | | | | | | |
| Authorized shares - 2,000,000 | — | | | — | | | — | | | — | | | — | |
| Common stock, $1.667 par value | 121,107 | | | 121,080 | | | 121,038 | | | 121,047 | | | 120,801 | |
| Capital surplus | 1,041,160 | | | 1,039,156 | | | 1,036,982 | | | 1,035,563 | | | 1,034,676 | |
| Retained earnings | 467,186 | | | 445,186 | | | 420,600 | | | 399,030 | | | 379,239 | |
| Common stock issued to deferred compensation trust, at cost | (15,555 | ) | | (15,317 | ) | | (15,160 | ) | | (14,067 | ) | | (13,955 | ) |
| Deferred compensation trust | 15,555 | | | 15,317 | | | 15,160 | | | 14,067 | | | 13,955 | |
| Accumulated other comprehensive income (loss) | 11,302 | | | 19,958 | | | 15,143 | | | (1,792 | ) | | (9,190 | ) |
| TOTAL SHAREHOLDERS’ EQUITY | 1,640,755 | | | 1,625,380 | | | 1,593,763 | | | 1,553,848 | | | 1,525,526 | |
| Noncontrolling interest | 12,939 | | | 13,154 | | | 12,689 | | | 11,808 | | | 12,894 | |
| TOTAL EQUITY | 1,653,694 | | | 1,638,534 | | | 1,606,452 | | | 1,565,656 | | | 1,538,420 | |
| TOTAL LIABILITIES AND EQUITY | $ | 11,947,663 | | | $ | 12,021,291 | | | $ | 11,942,480 | | | $ | 11,568,263 | | | $ | 11,163,030 | |
| | | | | | | | | | | | | | | | | | | | |
| |
| 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, |
| | 2019 | | 2019 | | 2019 | | 2019 | | 2018 |
| INTEREST INCOME: | | | | | | | | | |
| Loans, including fees | $ | 100,059 | | | $ | 102,047 | | | $ | 101,874 | | | $ | 99,695 | | | $ | 99,446 | |
| Investment securities | 9,936 | | | 9,889 | | | 8,987 | | | 8,134 | | | 8,126 | |
| Interest-bearing deposits in financial institutions and federal funds sold | 2,067 | | | 3,745 | | | 4,015 | | | 3,998 | | | 3,559 | |
| Mortgage loans held for sale | 4,413 | | | 3,956 | | | 3,007 | | | 2,003 | | | 3,176 | |
| Total interest income | 116,475 | | | 119,637 | | | 117,883 | | | 113,830 | | | 114,307 | |
| INTEREST EXPENSE: | | | | | | | | | |
| Deposits | 21,744 | | | 23,552 | | | 21,784 | | | 19,174 | | | 17,495 | |
| Advances from the Federal Home Loan Bank | 1,730 | | | 1,935 | | | 3,201 | | | 4,153 | | | 4,585 | |
| Subordinated debt | 2,962 | | | 2,962 | | | 2,962 | | | 2,962 | | | 2,961 | |
| Repurchase agreements and other borrowings | 80 | | | 85 | | | 117 | | | 68 | | | 58 | |
| Total interest expense | 26,516 | | | 28,534 | | | 28,064 | | | 26,357 | | | 25,099 | |
| Net interest income | 89,959 | | | 91,103 | | | 89,819 | | | 87,473 | | | 89,208 | |
| PROVISION FOR LOAN LOSSES | 3,601 | | | 1,508 | | | 2,824 | | | 1,438 | | | 2,292 | |
| Net interest income after provision for loan losses | 86,358 | | | 89,595 | | | 86,995 | | | 86,035 | | | 86,916 | |
| NONINTEREST INCOME: | | | | | | | | | |
| Residential mortgage banking income, net | 15,884 | | | 18,855 | | | 18,565 | | | 13,508 | | | 12,951 | |
| Insurance commissions and other title fees and income, net | 15,001 | | | 16,681 | | | 17,213 | | | 15,582 | | | 13,212 | |
| Real estate brokerage and property management income, net | 6,737 | | | 9,444 | | | 8,843 | | | 9,268 | | | 5,982 | |
| Service charges on deposit accounts | 2,245 | | | 2,253 | | | 3,185 | | | 2,861 | | | 2,928 | |
| Credit card merchant fees, net | 1,389 | | | 1,514 | | | 660 | | | 1,183 | | | 1,298 | |
| Bank owned life insurance | 3,865 | | | 2,117 | | | 1,635 | | | 1,598 | | | 2,014 | |
| Other income | 4,591 | | | 3,981 | | | 4,617 | | | 3,157 | | | 3,824 | |
| Loss on investment securities | — | | | (69 | ) | | — | | | (776 | ) | | — | |
| Total noninterest income | 49,712 | | | 54,776 | | | 54,718 | | | 46,381 | | | 42,209 | |
| NONINTEREST EXPENSE: | | | | | | | | | |
| Salaries and employee benefits | 56,013 | | | 55,784 | | | 54,263 | | | 52,860 | | | 50,233 | |
| Occupancy expense | 7,516 | | | 7,953 | | | 7,662 | | | 8,251 | | | 7,352 | |
| Furniture and equipment | 3,598 | | | 3,805 | | | 3,578 | | | 3,371 | | | 3,587 | |
| Amortization - intangibles | 3,005 | | | 3,059 | | | 3,113 | | | 3,192 | | | 3,123 | |
| Software expense | 2,976 | | | 3,208 | | | 2,788 | | | 2,745 | | | 2,694 | |
| Data processing | 2,510 | | | 2,533 | | | 3,616 | | | 3,166 | | | 2,466 | |
| Professional fees | 2,990 | | | 3,566 | | | 3,707 | | | 2,679 | | | 2,028 | |
| Advertising and marketing | 2,839 | | | 3,429 | | | 3,182 | | | 2,829 | | | 2,546 | |
| Other expenses | 10,889 | | | 13,950 | | | 14,647 | | | 13,030 | | | 8,308 | |
| Total noninterest expense | 92,336 | | | 97,287 | | | 96,556 | | | 92,123 | | | 82,337 | |
| Income before income tax expense and noncontrolling interest | 43,734 | | | 47,084 | | | 45,157 | | | 40,293 | | | 46,788 | |
| Provision for income tax expense | 7,786 | | | 7,684 | | | 8,915 | | | 8,211 | | | 10,348 | |
| Net income | 35,948 | | | 39,400 | | | 36,242 | | | 32,082 | | | 36,440 | |
| Net income attributable to noncontrolling interest | (873 | ) | | (1,741 | ) | | (1,604 | ) | | (673 | ) | | (450 | ) |
| Net income attributable to TowneBank | $ | 35,075 | | | $ | 37,659 | | | $ | 34,638 | | | $ | 31,409 | | | $ | 35,990 | |
| Per common share information | | | | | | | | | |
| Basic earnings | $ | 0.49 | | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | |
| Diluted earnings (1) | $ | 0.49 | | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | |
| Basic weighted average shares outstanding | 72,132,041 | | | 72,091,221 | | | 72,044,817 | | | 71,992,330 | | | 71,905,956 | |
| Diluted weighted average shares outstanding | 72,311,979 | | | 72,222,934 | | | 72,145,600 | | | 72,099,558 | | | 72,043,369 | |
| Cash dividends declared | $ | 0.18 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.16 | |
| (1) The quarterly diluted EPS do not sum to the total year diluted EPS due to rounding. |
| | | | | | | | | | | | | | | | | | | | |
| |
| TOWNEBANK |
| Banking Segment Financial Information |
| (dollars in thousands) |
| |
| | | | |
| | Three Months Ended | | Year Ended | | Increase/(Decrease) |
| | December 31, | | September 30,
| | December 31, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Revenue | | | | | | | | | | | | | |
| Net interest income | $ | 87,637 | | | $ | 86,433 | | | $ | 89,490 | | | $ | 351,969 | | | $ | 329,584 | | | $ | 22,385 | | | 6.79 | % |
| Noninterest income | | | | | | | | | | | | | |
| Service charges on deposit accounts | 2,245 | | | 2,928 | | | 2,253 | | | 10,544 | | | 11,808 | | | (1,264 | ) | | (10.70 | )% |
| Credit card merchant fees | 1,389 | | | 1,298 | | | 1,514 | | | 4,746 | | | 5,472 | | | (726 | ) | | (13.27 | )% |
| Other income | 5,271 | | | 4,660 | | | 5,152 | | | 19,620 | | | 16,977 | | | 2,643 | | | 15.57 | % |
| Subtotal | 8,905 | | | 8,886 | | | 8,919 | | | 34,910 | | | 34,257 | | | 653 | | | 1.91 | % |
| Gain (loss) on investment securities | — | | | — | | | (69 | ) | | (845 | ) | | 3 | | | (848 | ) | | N/M | |
| Total noninterest income | 8,905 | | | 8,886 | | | 8,850 | | | 34,065 | | | 34,260 | | | (195 | ) | | (0.57 | )% |
| Total revenue | 96,542 | | | 95,319 | | | 98,340 | | | 386,034 | | | 363,844 | | | 22,190 | | | 6.10 | % |
| | | | | | | | | | | | | | |
| Provision for loan losses | 3,601 | | | 2,292 | | | 1,508 | | | 9,371 | | | 8,541 | | | 830 | | | 9.72 | % |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | 34,183 | | | 28,100 | | | 33,526 | | | 131,149 | | | 114,472 | | | 16,677 | | | 14.57 | % |
| Occupancy expense | 4,959 | | | 4,789 | | | 5,209 | | | 20,419 | | | 17,410 | | | 3,009 | | | 17.28 | % |
| Furniture and equipment | 2,577 | | | 2,426 | | | 2,779 | | | 10,240 | | | 9,912 | | | 328 | | | 3.31 | % |
| Amortization of intangible assets | 1,214 | | | 1,428 | | | 1,265 | | | 5,160 | | | 5,658 | | | (498 | ) | | (8.80 | )% |
| Other expenses | 14,078 | | | 9,759 | | | 17,098 | | | 66,295 | | | 60,697 | | | 5,598 | | | 9.22 | % |
| Total expenses | 57,011 | | | 46,502 | | | 59,877 | | | 233,263 | | | 208,149 | | | 25,114 | | | 12.07 | % |
| Income before income tax, corporate allocation and noncontrolling interest | 35,930 | | | 46,525 | | | 36,955 | | | 143,400 | | | 147,154 | | | (3,754 | ) | | (2.55 | )% |
| Corporate allocation | 627 | | | 367 | | | 384 | | | 2,011 | | | 1,736 | | | 275 | | | 15.84 | % |
| Income before income tax provision and noncontrolling interest | 36,557 | | | 46,892 | | | 37,339 | | | 145,411 | | | 148,890 | | | (3,479 | ) | | (2.34 | )% |
| Provision for income tax expense | 6,368 | | | 10,252 | | | 5,495 | | | 25,706 | | | 28,880 | | | (3,174 | ) | | (10.99 | )% |
| Net income | 30,189 | | | 36,640 | | | 31,844 | | | 119,705 | | | 120,010 | | | (305 | ) | | (0.25 | )% |
| Noncontrolling interest | (1 | ) | | 4 | | | — | | | 2 | | | (8 | ) | | 10 | | | N/M | |
| Net income attributable to TowneBank | $ | 30,188 | | | $ | 36,644 | | | $ | 31,844 | | | $ | 119,707 | | | $ | 120,002 | | | $ | (295 | ) | | (0.25 | )% |
| | | | | | | | | | | | | | |
| Efficiency ratio | 59.05 | % | | 48.79 | % | | 60.85 | % | | 60.43 | % | | 57.21 | % | | | | |
| | | | | | | | | | | | | | | | | | | |
| |
| TOWNEBANK |
| Realty Segment Financial Information |
| (dollars in thousands) |
| |
| | | | |
| | Three Months Ended | | Year Ended | | Increase/(Decrease) |
| | December 31, | | September 30, | | December 31, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Revenue | | | | | | | | | | | | | |
| Residential mortgage brokerage income, net | $ | 16,617 | | | $ | 13,472 | | | $ | 19,171 | | | $ | 68,443 | | | $ | 66,696 | | | $ | 1,747 | | | 2.62 | % |
| Real estate brokerage income, net | 2,550 | | | 2,183 | | | 2,882 | | | 9,865 | | | 9,458 | | | 407 | | | 4.30 | % |
| Title insurance and settlement fees | 531 | | | 458 | | | 617 | | | 2,111 | | | 1,877 | | | 234 | | | 12.47 | % |
| Property management fees, net | 4,187 | | | 3,799 | | | 6,562 | | | 24,427 | | | 22,405 | | | 2,022 | | | 9.02 | % |
| Income from unconsolidated subsidiary | 75 | | | 54 | | | 185 | | | 516 | | | 370 | | | 146 | | | 39.46 | % |
| Net interest and other income | 2,787 | | | 3,210 | | | 1,885 | | | 7,724 | | | 13,210 | | | (5,486 | ) | | (41.53 | )% |
| Total revenue | 26,747 | | | 23,176 | | | 31,302 | | | 113,086 | | | 114,016 | | | (930 | ) | | (0.82 | )% |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | $ | 12,941 | | | $ | 14,308 | | | $ | 13,474 | | | $ | 52,619 | | | $ | 58,450 | | | $ | (5,831 | ) | | (9.98 | )% |
| Occupancy expense | 1,857 | | | 1,928 | | | 2,055 | | | 8,285 | | | 7,871 | | | 414 | | | 5.26 | % |
| Furniture and equipment | 773 | | | 930 | | | 754 | | | 3,099 | | | 3,697 | | | (598 | ) | | (16.18 | )% |
| Amortization of intangible assets | 655 | | | 767 | | | 666 | | | 2,741 | | | 2,782 | | | (41 | ) | | (1.47 | )% |
| Other expenses | 7,030 | | | 6,419 | | | 7,478 | | | 27,982 | | | 28,416 | | | (434 | ) | | (1.53 | )% |
| Total expenses | 23,256 | | | 24,352 | | | 24,427 | | | 94,726 | | | 101,216 | | | (6,490 | ) | | (6.41 | )% |
| | | | | | | | | | | | | | |
| Income (loss) before income tax, corporate allocation, and noncontrolling interest | 3,491 | | | (1,176 | ) | | 6,875 | | | 18,360 | | | 12,800 | | | 5,560 | | | 43.44 | % |
| Corporate allocation | (362 | ) | | (238 | ) | | (208 | ) | | (1,163 | ) | | (1,091 | ) | | (72 | ) | | 6.60 | % |
| Income (loss) before income tax provision and noncontrolling interest | 3,129 | | | (1,414 | ) | | 6,667 | | | 17,197 | | | 11,709 | | | 5,488 | | | 46.87 | % |
| Provision for income tax | 416 | | | (86 | ) | | 1,454 | | | 3,707 | | | 2,892 | | | 815 | | | 28.18 | % |
| Net income (loss) | 2,713 | | | (1,328 | ) | | 5,213 | | | 13,490 | | | 8,817 | | | 4,673 | | | 53.00 | % |
| Noncontrolling interest | (715 | ) | | (130 | ) | | (1,496 | ) | | (3,711 | ) | | (2,398 | ) | | (1,313 | ) | | 54.75 | % |
| Net income (loss) attributable to TowneBank | $ | 1,998 | | | $ | (1,458 | ) | | $ | 3,717 | | | $ | 9,779 | | | $ | 6,419 | | | $ | 3,360 | | | 52.34 | % |
| | | | | | | | | | | | | | |
| Efficiency ratio | 86.95 | % | | 105.07 | % | | 78.04 | % | | 83.76 | % | | 88.77 | % | | | | |
| | | | | | | | | | | | | | | | | | | |
| |
| TOWNEBANK |
| Insurance Segment Financial Information |
| (dollars in thousands) |
| |
| | | | | | | | | | | | | | |
| | Three Months Ended | | Year Ended | | Increase/(Decrease) |
| | December 31, | | September 30, | | December 31, | | 2019 over 2018 |
| | 2019 | | 2018 | | 2019 | | 2019 | | 2018 | | Amount | | Percent |
| Commission and fee income | | | | | | | | | | | | | |
| Property and casualty | $ | 11,957 | | | $ | 9,770 | | | $ | 13,481 | | | $ | 50,380 | | | $ | 40,948 | | | $ | 9,432 | | | 23.03 | % |
| Employee benefits | 3,758 | | | 3,625 | | | 3,629 | | | 14,726 | | | 14,088 | | | 638 | | | 4.53 | % |
| Travel insurance | 794 | | | 1,095 | | | 834 | | | 4,085 | | | 5,123 | | | (1,038 | ) | | (20.26 | )% |
| Specialized benefit services | 173 | | | 168 | | | 166 | | | 672 | | | 673 | | | (1 | ) | | (0.15 | )% |
| Total commissions and fees | 16,682 | | | 14,658 | | | 18,110 | | | 69,863 | | | 60,832 | | | 9,031 | | | 14.85 | % |
| Contingency and bonus revenue | 1,396 | | | 1,185 | | | 1,431 | | | 6,307 | | | 4,888 | | | 1,419 | | | 29.03 | % |
| Other income | 1,805 | | | 79 | | | 74 | | | 2,032 | | | 295 | | | 1,737 | | | 588.81 | % |
| Total revenue | 19,883 | | | 15,922 | | | 19,615 | | | 78,202 | | | 66,015 | | | 12,187 | | | 18.46 | % |
| Employee commission expense | 3,501 | | | 3,000 | | | 3,378 | | | 13,379 | | | 11,209 | | | 2,170 | | | 19.36 | % |
| Revenue, net of commission expense | 16,382 | | | 12,922 | | | 16,237 | | | 64,823 | | | 54,806 | | | 10,017 | | | 18.28 | % |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Salaries and employee benefits | $ | 8,889 | | | $ | 7,825 | | | $ | 8,784 | | | $ | 35,152 | | | $ | 28,916 | | | $ | 6,236 | | | 21.57 | % |
| Occupancy expense | 700 | | | 635 | | | 689 | | | 2,677 | | | 2,363 | | | 314 | | | 13.29 | % |
| Furniture and equipment | 248 | | | 231 | | | 272 | | | 1,012 | | | 868 | | | 144 | | | 16.59 | % |
| Amortization of intangible assets | 1,136 | | | 928 | | | 1,128 | | | 4,469 | | | 3,269 | | | 1,200 | | | 36.71 | % |
| Other expenses | 1,096 | | | 1,865 | | | 2,110 | | | 7,003 | | | 7,343 | | | (340 | ) | | (4.63 | )% |
| Total operating expenses | 12,069 | | | 11,484 | | | 12,983 | | | 50,313 | | | 42,759 | | | 7,554 | | | 17.67 | % |
| Income before income tax and noncontrolling interest | 4,313 | | | 1,438 | | | 3,254 | | | 14,510 | | | 12,047 | | | 2,463 | | | 20.44 | % |
| Corporate allocation | (265 | ) | | (128 | ) | | (176 | ) | | (848 | ) | | (645 | ) | | (203 | ) | | 31.47 | % |
| Income before income tax provision and noncontrolling interest | 4,048 | | | 1,310 | | | 3,078 | | | 13,662 | | | 11,402 | | | 2,260 | | | 19.82 | % |
| Provision for income tax expense | 1,002 | | | 182 | | | 735 | | | 3,183 | | | 2,455 | | | 728 | | | 29.65 | % |
| Net income | 3,046 | | | 1,128 | | | 2,343 | | | 10,479 | | | 8,947 | | | 1,532 | | | 17.12 | % |
| Noncontrolling interest | (157 | ) | | (324 | ) | | (245 | ) | | (1,182 | ) | | (1,575 | ) | | 393 | | | (24.95 | )% |
| Net income attributable to TowneBank | $ | 2,889 | | | $ | 804 | | | $ | 2,098 | | | $ | 9,297 | | | $ | 7,372 | | | $ | 1,925 | | | 26.11 | % |
| | | | | | | | | | | | | | |
| Provision for income taxes | 1,002 | | | 182 | | | 735 | | | 3,183 | | | 2,455 | | | 728 | | | 29.65 | % |
| Depreciation, amortization and interest expense | 1,333 | | | 1,152 | | | 1,325 | | | 5,312 | | | 4,134 | | | 1,178 | | | 28.50 | % |
| EBITDA (non-GAAP) | $ | 5,224 | | | $ | 2,138 | | | $ | 4,158 | | | $ | 17,792 | | | $ | 13,961 | | | $ | 3,831 | | | 27.44 | % |
| | | | | | | | | | | | | | |
| Efficiency ratio | 73.67 | % | | 88.87 | % | | 79.96 | % | | 77.62 | % | | 78.02 | % | | | | |
| | | | | | | | | | | | | | | | | | | |
| |
| TOWNEBANK |
| Reconcilement of Non-GAAP Financial Measures: |
| | | | | | | |
| | | | | | | | |
| | Three Months Ended | | Twelve Months Ended |
| | December 31, | | September 30, | | December 31, | | December 31, |
| | 2019 | | 2019 | | 2018 | | 2019 | | 2018 |
| | | | | | | | | | |
| Return on average assets (GAAP) | 1.16 | % | | 1.26 | % | | 1.28 | % | | 1.19 | % | | 1.26 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 0.14 | % | | 0.14 | % | | 0.15 | % | | 0.14 | % | | 0.15 | % |
| Return on average tangible assets (non-GAAP) | 1.30 | % | | 1.40 | % | | 1.43 | % | | 1.33 | % | | 1.41 | % |
| | | | | | | | | | |
| Return on average equity (GAAP) | 8.44 | % | | 9.22 | % | | 9.44 | % | | 8.69 | % | | 9.20 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 4.53 | % | | 4.98 | % | | 5.47 | % | | 4.89 | % | | 5.32 | % |
| Return on average tangible equity (non-GAAP) | 12.97 | % | | 14.20 | % | | 14.91 | % | | 13.58 | % | | 14.52 | % |
| | | | | | | | | | |
| Return on average common equity (GAAP) | 8.51 | % | | 9.29 | % | | 9.53 | % | | 8.75 | % | | 9.27 | % |
| Impact of excluding average goodwill and other intangibles and amortization | 4.61 | % | | 5.07 | % | | 5.58 | % | | 4.98 | % | | 5.43 | % |
| Return on average tangible common equity (non-GAAP) | 13.12 | % | | 14.36 | % | | 15.11 | % | | 13.73 | % | | 14.70 | % |
| | | | | | | | | | |
| Book value (GAAP) | $ | 22.58 | | | $ | 22.38 | | | $ | 21.05 | | | $ | 22.58 | | | $ | 21.05 | |
| Impact of excluding average goodwill and other intangibles and amortization | (6.89 | ) | | (6.94 | ) | | (6.79 | ) | | (6.89 | ) | | (7.71 | ) |
| Tangible book value (non-GAAP) | $ | 15.69 | | | $ | 15.44 | | | $ | 14.26 | | | $ | 15.69 | | | 13.34 | |
| | | | | | | | | | |
| Average assets (GAAP) | $ | 11,970,593 | | | $ | 11,845,282 | | | $ | 11,149,960 | | | $ | 11,638,426 | | | $ | 10,599,185 | |
| Less: average goodwill | 446,428 | | | 442,919 | | | 429,931 | | | 443,781 | | | 411,827 | |
| Less: average intangible assets | 56,339 | | | 57,327 | | | 59,009 | | | 59,327 | | | 57,694 | |
| Average tangible assets (non-GAAP) | $ | 11,467,826 | | | $ | 11,345,036 | | | $ | 10,661,020 | | | $ | 11,135,318 | | | $ | 10,129,664 | |
| | | | | | | | | | |
| Average equity (GAAP) | $ | 1,647,929 | | | $ | 1,620,070 | | | $ | 1,511,922 | | | $ | 1,597,281 | | | $ | 1,454,795 | |
| Less: average goodwill | 446,428 | | | 442,919 | | | 429,931 | | | 443,781 | | | 411,827 | |
| Less: average intangible assets | 56,339 | | | 57,327 | | | 59,009 | | | 59,327 | | | 57,694 | |
| Average tangible equity (non-GAAP) | $ | 1,145,162 | | | $ | 1,119,824 | | | $ | 1,022,982 | | | $ | 1,094,173 | | | $ | 985,274 | |
| | | | | | | | | | |
| Average common equity (GAAP) | $ | 1,635,394 | | | $ | 1,607,853 | | | $ | 1,498,594 | | | $ | 1,585,238 | | | $ | 1,442,642 | |
| Less: average goodwill | 446,428 | | | 442,919 | | | 429,931 | | | 443,781 | | | 411,827 | |
| Less: average intangible assets | 56,339 | | | 57,327 | | | 59,009 | | | 59,327 | | | 57,694 | |
| Average tangible common equity (non-GAAP) | $ | 1,132,627 | | | $ | 1,107,607 | | | $ | 1,009,654 | | | $ | 1,082,130 | | | $ | 973,121 | |
| | | | | | | | | | |
| |
| 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, |
| | | 2019 | | 2019 | | 2019 | | 2019 | | 2018 |
| Net income (GAAP) | | $ | 35,075 | | | $ | 37,659 | | | $ | 34,638 | | | $ | 31,409 | | | $ | 35,990 | |
| Acquisition-related expenses | | 19 | | | 207 | | | 20 | | | 411 | | | (1,518 | ) |
| Income tax expense - tax reform legislation | | — | | | — | | | — | | | — | | | 696 | |
| Income tax expense (benefit) - other items | | (3 | ) | | (20 | ) | | (3 | ) | | (52 | ) | | 355 | |
| Total income tax expense (benefit) | | (3 | ) | | (20 | ) | | (3 | ) | | (52 | ) | | 1,051 | |
| Total charges, net of taxes | | 16 | | | 187 | | | 17 | | | 359 | | | (467 | ) |
| Operating earnings, excluding certain items affecting comparability (non-GAAP) | | $ | 35,091 | | | $ | 37,846 | | | $ | 34,655 | | | $ | 31,768 | | | $ | 35,523 | |
| | | | | | | | | | | | | | | | |
| Weighted average diluted shares | | 72,311,979 | | | 72,222,934 | | | 72,145,600 | | | 72,099,558 | | | 72,043,369 | |
| | | | | | | | | | | | | | | | |
| Diluted EPS (GAAP) | | $ | 0.49 | | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.50 | |
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | | $ | 0.49 | | | $ | 0.52 | | | $ | 0.48 | | | $ | 0.44 | | | $ | 0.49 | |
| | | | | | | | | | | | | | | | | | | | | |
| Average assets | | $ | 11,970,593 | | | $ | 11,845,282 | | | $ | 11,532,278 | | | $ | 11,194,753 | | | $ | 11,149,960 | |
| Average tangible equity | | $ | 1,145,162 | | | $ | 1,119,824 | | | $ | 1,070,635 | | | $ | 1,039,630 | | | $ | 1,022,982 | |
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | | 1.16 | % | | 1.27 | % | | 1.21 | % | | 1.15 | % | | 1.26 | % |
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | | 12.98 | % | | 14.26 | % | | 13.90 | % | | 13.38 | % | | 14.73 | % |
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | | 13.12 | % | | 14.42 | % | | 14.06 | % | | 13.53 | % | | 14.93 | % |
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | | 66.10 | % | | 66.52 | % | | 66.79 | % | | 68.12 | % | | 63.81 | % |
| | | | | | | | | | | | | | | | |
| |
| 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, |
| | | 2019 | | 2018 |
| Net income (GAAP) | | $ | 138,783 | | | $ | 133,793 | |
| Acquisition-related expenses | | 657 | | | 8,428 | |
| Income tax expense - tax reform legislation | | — | | | 696 | |
| Income tax expense (benefit) - other items | | (78 | ) | | (1,420 | ) |
| Total income tax expense (benefit) | | (78 | ) | | (724 | ) |
| Total charges, net of taxes | | 579 | | | 7,704 | |
| Operating earnings, excluding certain items affecting comparability (non-GAAP) | | $ | 139,362 | | | $ | 141,497 | |
| | | | | | | |
| Weighted average diluted shares | | 72,172,635 | | | 71,293,129 | |
| | | | | | | |
| Diluted EPS (GAAP) | | $ | 1.92 | | | $ | 1.88 | |
| Diluted EPS, excluding certain items affecting comparability (non-GAAP) | | $ | 1.93 | | | $ | 1.98 | |
| | | | | | | | | |
| Average assets | | $ | 11,638,426 | | | $ | 10,599,185 | |
| Average tangible equity | | $ | 1,094,173 | | | $ | 985,274 | |
| Return on average assets, excluding certain items affecting comparability (non-GAAP) | | 1.20 | % | | 1.33 | % |
| Return on average tangible equity, excluding certain items affecting comparability (non-GAAP) | | 13.63 | % | | 15.30 | % |
| Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP) | | 13.78 | % | | 15.49 | % |
| Efficiency ratio, excluding certain items affecting comparability (non-GAAP) | | 66.86 | % | | 64.52 | % |
