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Share Name | Share Symbol | Market | Type |
---|---|---|---|
TowneBank | NASDAQ:TOWN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.23 | -0.85% | 26.92 | 25.29 | 42.48 | 27.38 | 26.88 | 27.07 | 216,702 | 22:47:17 |
“We were pleased to deliver our 21St consecutive year of increased earnings during a year filled with challenges and opportunities. We achieved solid financial results while facing economic headwinds and prudently building substantial reserves to address future economic uncertainty. Our unique business model enabled our HomeTowne bankers to support our members and the communities we serve with more than $1.1 billion in funds through the Paycheck Protection Program. Additionally, our diverse sources of revenue resulted in record levels of total revenues which eclipsed $664 million for the year. TowneMortgage achieved record volumes and delivered a strong performance by closing more than $5.88 billion in mortgages. These accomplishments were the result of hard work and dedication from our more than 2,800 team members who work each day defining our culture of caring,” said G. Robert Aston, Jr., Executive Chairman.
Quarter Highlights:
“In addition to our financial results, we concluded a multi-year system conversion during the fourth quarter. This system will enable us to improve our digital capabilities and drive revenue growth. We opened the door to over 700 new relationships through our efforts with the Paycheck Protection Program, having onboarded 65% of those new banking relationships throughout 2020. We continue to have strong interest in nonbank acquisitions and completed an insurance agency acquisition in late December,” said J. Morgan Davis, President and Chief Executive Officer.
Quarterly Net Interest Income Compared to the Fourth Quarter of 2019:
Quarterly Provision for Loan Losses:
Quarterly Noninterest Income Compared to the Fourth Quarter of 2019:
Quarterly Noninterest Expense Compared to the Fourth Quarter of 2019:
Quarterly Income Taxes Compared to the Fourth Quarter of 2019:
Consolidated Balance Sheet December 31, 2020 Compared to December 31, 2019
Investment Securities:
Loans and Asset Quality:
Deposits and Borrowings:
Capital:
Annual Meeting of Shareholders:TowneBank intends to hold its 2021 Annual Meeting of Shareholders at 11:30 a.m. on Wednesday, May 26, 2021 at the Virginia Beach Convention Center, 1000 19th Street in Virginia Beach, Virginia.
About TowneBank:As one of the top community banks in Virginia and North Carolina, TowneBank operates 42 banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Greensboro, Greenville, Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags Head in North Carolina. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group’s President and Board of Directors. With total assets of $14.63 billion as of December 31, 2020, TowneBank is one of the largest banks headquartered in Virginia.
Non-GAAP Financial Measures:
This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in their analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company’s core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.
Forward-Looking Statements:
Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank’s future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as “believe,” “expect,” “intend,” “anticipate,” “estimate,” or “project” or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank’s ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: the impact of the COVID-19 pandemic and the associated efforts to limit its spread, changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank’s loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank’s market areas; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.
Media contact:G. Robert Aston, Jr., Executive Chairman, 757-638-6780J. Morgan Davis, President and Chief Executive Officer, 757-673-1673
Investor contact:William B. Littreal, Chief Financial Officer, 757-638-6813
TOWNEBANK | ||||||||||||||||||||
Selected Financial Highlights (unaudited) | ||||||||||||||||||||
(dollars in thousands, except per share data) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | ||||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | ||||||||||||||||
Income and Performance Ratios: | ||||||||||||||||||||
Total Revenue | $ | 171,848 | $ | 192,135 | $ | 162,656 | $ | 137,696 | $ | 139,671 | ||||||||||
Net income | 53,891 | 50,715 | 37,222 | 27,605 | 35,948 | |||||||||||||||
Net income available to common shareholders | 50,082 | 34,464 | 34,605 | 26,384 | 35,075 | |||||||||||||||
Pre-provision, pre-tax, net revenues (non-GAAP) | 62,107 | 73,903 | 69,014 | 39,587 | 46,462 | |||||||||||||||
Net income per common share - diluted | 0.69 | 0.48 | 0.48 | 0.36 | 0.49 | |||||||||||||||
Book value per common share | 24.31 | 23.83 | 23.50 | 22.77 | 22.58 | |||||||||||||||
Book value per share - tangible (non-GAAP) | 17.46 | 17.06 | 16.68 | 15.91 | 15.69 | |||||||||||||||
Return on average assets | 1.35 | % | 0.89 | % | 0.97 | % | 0.88 | % | 1.16 | % | ||||||||||
Return on average assets - tangible (non-GAAP) | 1.46 | % | 0.97 | % | 1.07 | % | 1.00 | % | 1.30 | % | ||||||||||
Return on average equity | 11.26 | % | 7.85 | % | 8.18 | % | 6.37 | % | 8.44 | % | ||||||||||
Return on average equity - tangible (non-GAAP) | 16.28 | % | 11.66 | % | 12.32 | % | 9.91 | % | 12.97 | % | ||||||||||
Return on average common equity | 11.36 | % | 7.91 | % | 8.24 | % | 6.42 | % | 8.51 | % | ||||||||||
Return on average common equity - tangible (non-GAAP) | 16.48 | % | 11.79 | % | 12.44 | % | 10.01 | % | 13.12 | % | ||||||||||
Noninterest income as a percentage of total revenue | 41.45 | % | 49.64 | % | 42.66 | % | 35.00 | % | 35.59 | % | ||||||||||
Regulatory Capital Ratios (1): | ||||||||||||||||||||
Common equity tier 1 | 11.87 | % | 11.75 | % | 11.54 | % | 11.23 | % | 11.46 | % | ||||||||||
Tier 1 | 12.04 | % | 11.91 | % | 11.67 | % | 11.35 | % | 11.49 | % | ||||||||||
Total | 15.42 | % | 15.35 | % | 14.91 | % | 14.40 | % | 14.58 | % | ||||||||||
Tier 1 leverage ratio | 8.99 | % | 8.89 | % | 9.05 | % | 10.11 | % | 9.95 | % | ||||||||||
Asset Quality: | ||||||||||||||||||||
Allowance for loan losses to nonperforming loans | 10.74x | 7.31x | 5.34x | 3.85x | 3.34x | |||||||||||||||
Allowance for loan losses to period end loans | 1.25 | % | 1.22 | % | 0.92 | % | 0.73 | % | 0.69 | % | ||||||||||
Allowance for loan losses to period end loans excluding PPP loans (non-GAAP) | 1.37 | % | 1.37 | % | 1.04 | % | 0.73 | % | 0.69 | % | ||||||||||
Nonperforming loans to period end loans | 0.12 | % | 0.17 | % | 0.17 | % | 0.19 | % | 0.21 | % | ||||||||||
Nonperforming assets to period end assets | 0.11 | % | 0.19 | % | 0.19 | % | 0.24 | % | 0.27 | % | ||||||||||
Net charge-offs (recoveries) to average loans (annualized) | — | % | (0.01 | )% | — | % | 0.03 | % | 0.04 | % | ||||||||||
Nonperforming loans | $ | 11,188 | $ | 16,295 | $ | 16,935 | $ | 16,700 | $ | 17,437 | ||||||||||
Former bank premises | 750 | 750 | — | — | 1,521 | |||||||||||||||
Foreclosed property | 4,276 | 11,695 | 12,315 | 13,053 | 13,839 | |||||||||||||||
Total nonperforming assets | $ | 16,214 | $ | 28,740 | $ | 29,250 | $ | 29,753 | $ | 32,797 | ||||||||||
Loans past due 90 days and still accruing interest | $ | 528 | $ | 19 | $ | 464 | $ | 91 | $ | 309 | ||||||||||
Allowance for loan losses | 120,157 | 119,058 | 90,467 | 64,372 | 58,234 | |||||||||||||||
Mortgage Banking: | ||||||||||||||||||||
Loans originated, mortgage | $ | 1,257,963 | $ | 1,292,801 | $ | 1,116,782 | $ | 718,681 | $ | 628,279 | ||||||||||
Loans originated, joint venture | 429,848 | 498,100 | 357,815 | 204,522 | 231,879 | |||||||||||||||
Total loans originated | $ | 1,687,811 | $ | 1,790,901 | $ | 1,474,597 | $ | 923,203 | $ | 860,158 | ||||||||||
Number of loans originated | 5,481 | 5,817 | 4,818 | 3,025 | 2,984 | |||||||||||||||
Number of originators | 228 | 224 | 216 | 223 | 217 | |||||||||||||||
Purchase % | 59.76 | % | 61.21 | % | 51.26 | % | 61.31 | % | 70.32 | % | ||||||||||
Loans sold | $ | 1,845,926 | $ | 1,833,590 | $ | 1,398,649 | $ | 809,834 | $ | 879,910 | ||||||||||
Rate lock asset | $ | 11,781 | $ | 10,480 | $ | 7,202 | $ | 3,691 | $ | 1,525 | ||||||||||
Gross realized gain on sales and fees as a % of loans originated | 4.02 | % | 3.65 | % | 3.17 | % | 1.80 | % | 3.38 | % | ||||||||||
Other Ratios: | ||||||||||||||||||||
Net interest margin | 2.97 | % | 2.70 | % | 2.85 | % | 3.35 | % | 3.33 | % | ||||||||||
Net interest margin-fully tax equivalent (non-GAAP) | 2.98 | % | 2.72 | % | 2.87 | % | 3.37 | % | 3.35 | % | ||||||||||
Average earning assets/total average assets | 91.59 | % | 92.09 | % | 91.33 | % | 89.15 | % | 89.57 | % | ||||||||||
Average loans/average deposits | 83.42 | % | 86.29 | % | 91.81 | % | 92.99 | % | 88.41 | % | ||||||||||
Average noninterest deposits/total average deposits | 39.61 | % | 37.76 | % | 36.52 | % | 32.21 | % | 32.14 | % | ||||||||||
Period end equity/period end total assets | 12.20 | % | 11.82 | % | 11.05 | % | 13.19 | % | 13.84 | % | ||||||||||
Efficiency ratio (non-GAAP) | 60.02 | % | 57.36 | % | 55.17 | % | 70.79 | % | 63.96 | % | ||||||||||
(1) Current reporting period regulatory capital ratios are preliminary. | ||||||||||||||||||||
TOWNEBANK | |||||||||||||||||
Selected Data (unaudited) | |||||||||||||||||
(dollars in thousands) | |||||||||||||||||
Investment Securities | % Change | ||||||||||||||||
Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
Available-for-sale securities, at fair value | 2020 | 2019 | 2020 | Q4 19 | Q3 20 | ||||||||||||
U.S. agency securities | $ | 184,657 | $ | 129,038 | $ | 167,275 | 43.10 | % | 10.39 | % | |||||||
U.S. Treasury notes | 1,000 | 1,000 | 1,006 | — | % | (0.60 | )% | ||||||||||
Municipal securities | 353,651 | 223,106 | 292,792 | 58.51 | % | 20.79 | % | ||||||||||
Trust preferred and other corporate securities | 31,499 | 53,367 | 24,236 | (40.98 | )% | 29.97 | % | ||||||||||
Mortgage-backed securities issued by GSE and GNMA | 797,765 | 1,034,797 | 825,378 | (22.91 | )% | (3.35 | )% | ||||||||||
Allowance for credit losses | (348 | ) | — | (4 | ) | n/m | n/m | ||||||||||
Total | $ | 1,368,224 | $ | 1,441,308 | $ | 1,310,683 | (5.07 | )% | 4.39 | % | |||||||
Gross unrealized gains (losses) reflected in financial statements | |||||||||||||||||
Total gross unrealized gains | $ | 60,025 | $ | 23,950 | $ | 62,206 | 150.63 | % | (3.51 | )% | |||||||
Total gross unrealized losses | (1,703 | ) | (4,215 | ) | (773 | ) | (59.60 | )% | 120.31 | % | |||||||
Net unrealized gain (loss) on AFS securities | $ | 58,322 | $ | 19,735 | $ | 61,433 | 195.53 | % | (5.06 | )% | |||||||
Held-to-maturity securities, at amortized cost | |||||||||||||||||
Municipal securities | $ | 5,012 | $ | 29,167 | $ | 2,333 | (82.82 | )% | 114.83 | % | |||||||
Trust preferred corporate securities | 2,321 | 2,369 | 4,992 | (2.03 | )% | (53.51 | )% | ||||||||||
Mortgage-backed securities issued by GSE and GNMA | 9,179 | 12,152 | 9,806 | (24.47 | )% | (6.39 | )% | ||||||||||
Allowance for credit losses | (97 | ) | — | (90 | ) | n/a | 7.78 | % | |||||||||
Total | $ | 16,415 | $ | 43,688 | $ | 17,041 | (62.43 | )% | (3.67 | )% | |||||||
Gross unrealized gains (losses) not reflected in financial statements | |||||||||||||||||
Total gross unrealized gains | $ | 1,957 | $ | 1,520 | $ | 1,971 | 28.75 | % | (0.71 | )% | |||||||
Total gross unrealized losses | — | (37 | ) | — | (100.00 | )% | n/m | ||||||||||
Net unrealized gain (loss) on HTM securities | $ | 1,957 | $ | 1,483 | $ | 1,971 | 31.96 | % | (0.71 | )% | |||||||
Loans Held For Investment (1) | % Change | ||||||||||||||||
Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
2020 | 2019 | 2020 | Q4 19 | Q3 20 | |||||||||||||
Real estate - construction and development | $ | 1,199,772 | $ | 1,120,533 | $ | 1,143,202 | 7.07 | % | 4.95 | % | |||||||
Commercial real estate - investment related properties | 2,335,235 | 2,183,232 | 2,338,532 | 6.96 | % | (0.14 | )% | ||||||||||
Commercial real estate - owner occupied | 1,380,516 | 1,329,144 | 1,378,443 | 3.87 | % | 0.15 | % | ||||||||||
Real estate - multifamily | 295,488 | 243,041 | 289,270 | 21.58 | % | 2.15 | % | ||||||||||
Real estate - residential 1-4 family | 1,629,105 | 1,653,084 | 1,660,535 | (1.45 | )% | (1.89 | )% | ||||||||||
Commercial and industrial business | 2,370,051 | 1,574,275 | 2,499,801 | 50.55 | % | (5.19 | )% | ||||||||||
Consumer and other loans | 418,901 | 315,979 | 460,787 | 32.57 | % | (9.09 | )% | ||||||||||
Total | $ | 9,629,068 | $ | 8,419,288 | $ | 9,770,570 | 14.37 | % | (1.45 | )% | |||||||
(1) PPP loans totaling $0.86 billion and $1.10 billion, primarily in C&I, are included in Q4 2020 and Q3 2020, respectively. | |||||||||||||||||
Deposits | % Change | ||||||||||||||||
Q4 | Q4 | Q3 | Q4 20 vs. | Q4 20 vs. | |||||||||||||
2020 | 2019 | 2020 | Q4 19 | Q3 20 | |||||||||||||
Noninterest-bearing demand | $ | 4,374,566 | $ | 2,951,225 | $ | 4,464,178 | 48.23 | % | (2.01 | )% | |||||||
Interest-bearing: | |||||||||||||||||
Demand and money market accounts | 4,819,604 | 3,586,364 | 4,642,482 | 34.39 | % | 3.82 | % | ||||||||||
Savings | 330,091 | 276,205 | 312,444 | 19.51 | % | 5.65 | % | ||||||||||
Certificates of deposits | 2,048,905 | 2,457,123 | 2,285,859 | (16.61 | )% | (10.37 | )% | ||||||||||
Total | $ | 11,573,166 | $ | 9,270,917 | $ | 11,704,963 | 24.83 | % | (1.13 | )% | |||||||
TOWNEBANK | ||||||||||||||||||||||||||||||||
Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
December 31, 2020 | September 30, 2020 | December 31, 2019 | ||||||||||||||||||||||||||||||
Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,752,150 | $ | 104,799 | 4.28 | % | $ | 9,752,746 | $ | 103,401 | 4.22 | % | $ | 8,283,388 | $ | 100,504 | 4.81 | % | ||||||||||||||
Taxable investment securities | 1,250,375 | 6,878 | 2.20 | % | 1,206,679 | 6,726 | 2.23 | % | 1,331,175 | 9,179 | 2.76 | % | ||||||||||||||||||||
Tax-exempt investment securities | 139,572 | 520 | 1.49 | % | 144,999 | 779 | 2.15 | % | 118,298 | 908 | 3.07 | % | ||||||||||||||||||||
Total securities | 1,389,947 | 7,398 | 2.13 | % | 1,351,678 | 7,505 | 2.22 | % | 1,449,473 | 10,087 | 2.78 | % | ||||||||||||||||||||
Interest-bearing deposits | 1,754,365 | 435 | 0.10 | % | 2,523,644 | 632 | 0.10 | % | 519,737 | 2,067 | 1.58 | % | ||||||||||||||||||||
Loans held for sale | 587,517 | 3,867 | 2.63 | % | 634,309 | 4,587 | 2.89 | % | 469,725 | 4,413 | 3.76 | % | ||||||||||||||||||||
Total earning assets | 13,483,979 | 116,499 | 3.44 | % | 14,262,377 | 116,125 | 3.24 | % | 10,722,323 | 117,071 | 4.33 | % | ||||||||||||||||||||
Less: allowance for loan losses | (121,402 | ) | (95,594 | ) | (56,766 | ) | ||||||||||||||||||||||||||
Total nonearning assets | 1,359,808 | 1,320,369 | 1,305,036 | |||||||||||||||||||||||||||||
Total assets | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | ||||||||||||||||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||||||||||
Demand and money market | $ | 4,582,588 | $ | 2,633 | 0.23 | % | $ | 4,311,920 | $ | 2,663 | 0.25 | % | $ | 3,533,912 | $ | 6,421 | 0.72 | % | ||||||||||||||
Savings | 317,561 | 552 | 0.69 | % | 304,753 | 555 | 0.72 | % | 278,910 | 638 | 0.91 | % | ||||||||||||||||||||
Certificates of deposit | 2,159,573 | 7,578 | 1.40 | % | 2,417,772 | 9,747 | 1.60 | % | 2,544,845 | 14,685 | 2.29 | % | ||||||||||||||||||||
Total interest-bearing deposits | 7,059,722 | 10,763 | 0.61 | % | 7,034,445 | 12,965 | 0.73 | % | 6,357,667 | 21,744 | 1.36 | % | ||||||||||||||||||||
Borrowings | 722,291 | 1,645 | 0.89 | % | 1,931,120 | 2,841 | 0.58 | % | 454,621 | 1,810 | 1.56 | % | ||||||||||||||||||||
Subordinated debt, net | 248,965 | 2,962 | 4.76 | % | 248,807 | 2,962 | 4.76 | % | 248,361 | 2,962 | 4.77 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 8,030,978 | 15,370 | 0.76 | % | 9,214,372 | 18,768 | 0.81 | % | 7,060,649 | 26,516 | 1.49 | % | ||||||||||||||||||||
Demand deposits | 4,630,665 | 4,268,443 | 3,011,688 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 291,836 | 257,304 | 250,327 | |||||||||||||||||||||||||||||
Total liabilities | 12,953,479 | 13,740,119 | 10,322,664 | |||||||||||||||||||||||||||||
Shareholders’ equity | 1,768,906 | 1,747,033 | 1,647,929 | |||||||||||||||||||||||||||||
Total liabilities and equity | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | ||||||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 101,129 | $ | 97,357 | $ | 90,555 | ||||||||||||||||||||||||||
Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
Tax-equivalent basis adjustment | (515 | ) | (598 | ) | (596 | ) | ||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 100,614 | $ | 96,759 | $ | 89,959 | ||||||||||||||||||||||||||
Interest rate spread (2)(3) | 2.68 | % | 2.43 | % | 2.84 | % | ||||||||||||||||||||||||||
Interest expense as a percent of average earning assets | 0.45 | % | 0.52 | % | 0.98 | % | ||||||||||||||||||||||||||
Net interest margin (tax equivalent basis) (3)(4) | 2.98 | % | 2.72 | % | 3.35 | % | ||||||||||||||||||||||||||
Total cost of deposits | 0.37 | % | 0.46 | % | 0.92 | % | ||||||||||||||||||||||||||
(1) December 31, and September 30, 2020 balances include average PPP balances of $1.04 billion and $1.10 billion, and related interest and fee income of $11.29 million and $9.82 million, respectively. There were no PPP balances at December 31, 2019.(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.(4) Non-GAAP.
TOWNEBANK | ||||||||||||||||||||||||||||||||
Average Balances, Yields and Rate Paid (unaudited) | ||||||||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||||||||
Year Ended December 31, | ||||||||||||||||||||||||||||||||
2020 | 2019 | 2018 | ||||||||||||||||||||||||||||||
Interest | Average | Interest | Average | Interest | Average | |||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||||||||
Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1) | $ | 9,420,584 | $ | 411,421 | 4.37 | % | $ | 8,122,210 | $ | 405,511 | 4.99 | % | $ | 7,567,570 | $ | 373,057 | 4.93 | % | ||||||||||||||
Taxable investment securities | 1,252,926 | 30,181 | 2.41 | % | 1,202,107 | 34,141 | 2.84 | % | 1,004,080 | 24,729 | 2.46 | % | ||||||||||||||||||||
Tax-exempt investment securities | 140,078 | 2,997 | 2.14 | % | 102,731 | 3,426 | 3.34 | % | 79,720 | 2,920 | 3.66 | % | ||||||||||||||||||||
Total securities | 1,393,004 | 33,178 | 2.38 | % | 1,304,838 | 37,567 | 2.88 | % | 1,083,800 | 27,649 | 2.55 | % | ||||||||||||||||||||
Interest-bearing deposits | 689,715 | 2,603 | 0.38 | % | 665,903 | 13,825 | 2.08 | % | 560,368 | 10,229 | 1.83 | % | ||||||||||||||||||||
Mortgage loans held for sale | 505,502 | 15,252 | 3.02 | % | 335,588 | 13,379 | 3.99 | % | 293,017 | 13,124 | 4.48 | % | ||||||||||||||||||||
Total earning assets | 12,008,805 | 462,454 | 3.85 | % | 10,428,539 | 470,282 | 4.51 | % | 9,504,755 | 424,059 | 4.46 | % | ||||||||||||||||||||
Less: allowance for loan losses | (85,570 | ) | (54,476 | ) | (48,737 | ) | ||||||||||||||||||||||||||
Total nonearning assets | 2,248,971 | 1,264,363 | 1,143,167 | |||||||||||||||||||||||||||||
Total assets | $ | 14,172,206 | $ | 11,638,426 | $ | 10,599,185 | ||||||||||||||||||||||||||
Liabilities and Equity: | ||||||||||||||||||||||||||||||||
Interest-bearing deposits | ||||||||||||||||||||||||||||||||
Demand and money market | $ | 4,070,562 | $ | 13,105 | 0.32 | % | $ | 3,351,135 | $ | 26,909 | 0.80 | % | $ | 2,951,038 | $ | 16,458 | 0.56 | % | ||||||||||||||
Savings | 297,441 | 2,254 | 0.76 | % | 280,894 | 3,296 | 1.17 | % | 302,435 | 3,824 | 1.26 | % | ||||||||||||||||||||
Certificates of deposit | 2,378,281 | 42,502 | 1.79 | % | 2,478,663 | 56,050 | 2.26 | % | 2,060,587 | 32,859 | 1.59 | % | ||||||||||||||||||||
Total interest-bearing deposits | 6,746,284 | 57,861 | 0.86 | % | 6,110,692 | 86,255 | 1.41 | % | 5,314,060 | 53,141 | 1.00 | % | ||||||||||||||||||||
Borrowings | 1,269,064 | 10,306 | 0.80 | % | 609,142 | 11,368 | 1.84 | % | 897,574 | 15,542 | 1.71 | % | ||||||||||||||||||||
Subordinated debt, net | 248,736 | 11,847 | 4.76 | % | 248,139 | 11,847 | 4.77 | % | 251,097 | 12,067 | 4.81 | % | ||||||||||||||||||||
Total interest-bearing liabilities | 8,264,084 | 80,014 | 0.97 | % | 6,967,973 | 109,470 | 1.57 | % | 6,462,731 | 80,750 | 1.25 | % | ||||||||||||||||||||
Demand deposits | 3,924,797 | 2,844,178 | 2,517,173 | |||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 262,266 | 228,994 | 164,486 | |||||||||||||||||||||||||||||
Total liabilities | 12,451,147 | 10,041,145 | 9,144,390 | |||||||||||||||||||||||||||||
Shareholders' equity | 1,721,059 | 1,597,281 | 1,454,795 | |||||||||||||||||||||||||||||
Total liabilities and equity | $ | 14,172,206 | $ | 11,638,426 | $ | 10,599,185 | ||||||||||||||||||||||||||
Net interest income (tax-equivalent basis) | $ | 382,440 | $ | 360,812 | $ | 343,309 | ||||||||||||||||||||||||||
Reconcilement of Non-GAAP Financial Measures | ||||||||||||||||||||||||||||||||
Tax-equivalent basis adjustment | (2,296 | ) | (2,457 | ) | (2,236 | ) | ||||||||||||||||||||||||||
Net interest income (GAAP) | $ | 380,144 | $ | 358,355 | $ | 341,073 | ||||||||||||||||||||||||||
Interest rate spread (2)(4) | 2.88 | % | 2.94 | % | 3.21 | % | ||||||||||||||||||||||||||
Interest expense as a percent of average earning assets | 0.67 | % | 1.05 | % | 0.85 | % | ||||||||||||||||||||||||||
Net interest margin (tax-equivalent basis) (3)(4) | 3.18 | % | 3.46 | % | 3.61 | % | ||||||||||||||||||||||||||
Total cost of deposits | 0.54 | % | 0.96 | % | 0.68 | % | ||||||||||||||||||||||||||
(1) December 31, 2020 balances include average PPP balances of $0.74 billion and related interest and fee income of $26.94 million. There were no PPP balances at December 31, 2019 or 2018.(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.(4) Non-GAAP.
TOWNEBANK | |||||||
Consolidated Balance Sheets | |||||||
(dollars in thousands, except per share data) | |||||||
2020 | 2019 | ||||||
(unaudited) | (audited) | ||||||
ASSETS | |||||||
Cash and due from banks | $ | 41,514 | $ | 97,593 | |||
Interest-bearing deposits at FRB - Richmond | 1,795,241 | 322,505 | |||||
Interest-bearing deposits in financial institutions | 27,532 | 22,518 | |||||
Total Cash and Cash Equivalents | 1,864,287 | 442,616 | |||||
Securities available for sale, at fair value (amortized cost $1,310,250, allowance for credit losses of $348)(1) | 1,368,224 | 1,441,308 | |||||
Securities held to maturity, at amortized cost (fair value $18,469)(1) | 16,512 | 43,688 | |||||
Less: allowance for credit losses | (97 | ) | — | ||||
Securities held to maturity, net of allowance for credit losses | 16,415 | 43,688 | |||||
Other equity securities | 6,492 | 6,462 | |||||
FHLB stock | 30,135 | 30,094 | |||||
Total Securities | 1,421,266 | 1,521,552 | |||||
Mortgage loans held for sale | 540,798 | 419,233 | |||||
Loans, net of unearned income and deferred costs | 9,629,068 | 8,419,288 | |||||
Less: allowance for credit losses | (120,157 | ) | (58,234 | ) | |||
Net Loans | 9,508,911 | 8,361,054 | |||||
Premises and equipment, net | 260,242 | 231,806 | |||||
Goodwill | 452,328 | 446,816 | |||||
Other intangible assets, net | 45,533 | 54,399 | |||||
BOLI | 246,109 | 243,062 | |||||
Other assets | 286,970 | 227,125 | |||||
TOTAL ASSETS | $ | 14,626,444 | $ | 11,947,663 | |||
LIABILITIES AND EQUITY | |||||||
Deposits: | |||||||
Noninterest-bearing demand | $ | 4,374,566 | $ | 2,951,225 | |||
Interest-bearing: | |||||||
Demand and money market accounts | 4,819,604 | 3,586,364 | |||||
Savings | 330,091 | 276,205 | |||||
Certificates of deposit | 2,048,905 | 2,457,123 | |||||
Total Deposits | 11,573,166 | 9,270,917 | |||||
Advances from the FHLB | 456,038 | 471,687 | |||||
Subordinated debt, net | 249,055 | 248,458 | |||||
FRB PPP Lending Facility | 182,852 | — | |||||
Repurchase agreements and other borrowings | 67,786 | 52,391 | |||||
Total Borrowings | 955,731 | 772,536 | |||||
Other liabilities | 313,719 | 250,516 | |||||
TOTAL LIABILITIES | 12,842,616 | 10,293,969 | |||||
Preferred stock | |||||||
Authorized and unissued shares - 2,000,000 | — | — | |||||
Common stock, $1.667 par: Authorized shares - 150,000,000 | |||||||
Issued and outstanding shares 72,667,541 in 2020 and 72,649,682 in 2019 | 121,132 | 121,107 | |||||
Capital surplus | 1,046,642 | 1,041,160 | |||||
Retained earnings | 557,889 | 467,186 | |||||
Common stock issued to deferred compensation trust, at cost | |||||||
873,486 shares in 2020 and 818,578 shares in 2019 | (16,969 | ) | (15,555 | ) | |||
Deferred compensation trust | 16,969 | 15,555 | |||||
Accumulated other comprehensive income (loss) | 41,184 | 11,302 | |||||
TOTAL SHAREHOLDERS’ EQUITY | 1,766,847 | 1,640,755 | |||||
Noncontrolling interest | 16,981 | 12,939 | |||||
TOTAL EQUITY | 1,783,828 | 1,653,694 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 14,626,444 | $ | 11,947,663 | |||
(1) For 2020, disclosures are presented in compliance with ASC 326.
TOWNEBANK | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
(unaudited) | (unaudited) | (unaudited) | (audited) | ||||||||||||
INTEREST INCOME: | |||||||||||||||
Loans, including fees | $ | 104,182 | $ | 100,059 | $ | 409,252 | $ | 403,675 | |||||||
Investment securities | 7,499 | 9,936 | 33,052 | 36,946 | |||||||||||
Interest-bearing deposits in financial institutions and federal funds sold | 435 | 2,067 | 2,603 | 13,825 | |||||||||||
Mortgage loans held for sale | 3,867 | 4,413 | 15,252 | 13,379 | |||||||||||
Total interest income | 115,983 | 116,475 | 460,159 | 467,825 | |||||||||||
INTEREST EXPENSE: | |||||||||||||||
Deposits | 10,762 | 21,744 | 57,862 | 86,255 | |||||||||||
Advances from the FHLB | 1,404 | 1,730 | 8,393 | 11,018 | |||||||||||
Subordinated debt, net | 2,962 | 2,962 | 11,847 | 11,847 | |||||||||||
Repurchase agreements and other borrowings | 241 | 80 | 1,913 | 350 | |||||||||||
Total interest expense | 15,369 | 26,516 | 80,015 | 109,470 | |||||||||||
Net interest income | 100,614 | 89,959 | 380,144 | 358,355 | |||||||||||
PROVISION FOR CREDIT LOSSES | 1,617 | 3,601 | 67,177 | 9,371 | |||||||||||
Net interest income after provision for credit losses | 98,997 | 86,358 | 312,967 | 348,984 | |||||||||||
NONINTEREST INCOME: | |||||||||||||||
Residential mortgage banking income, net | 37,504 | 15,884 | 112,166 | 66,812 | |||||||||||
Insurance commissions and other title fees and income, net | 13,868 | 15,001 | 65,840 | 64,478 | |||||||||||
Real estate brokerage and property management income, net | 9,229 | 6,737 | 38,249 | 34,292 | |||||||||||
Service charges on deposit accounts | 1,707 | 2,245 | 8,021 | 10,544 | |||||||||||
Credit card merchant fees, net | 1,377 | 1,389 | 5,170 | 4,746 | |||||||||||
BOLI | 1,990 | 3,865 | 8,285 | 9,215 | |||||||||||
Other income | 5,559 | 4,591 | 36,826 | 16,346 | |||||||||||
Net gain/(loss) on investment securities | — | — | 9,634 | (845 | ) | ||||||||||
Total noninterest income | 71,234 | 49,712 | 284,191 | 205,588 | |||||||||||
NONINTEREST EXPENSE: | |||||||||||||||
Salaries and employee benefits | 61,475 | 56,013 | 235,676 | 218,920 | |||||||||||
Occupancy expense | 8,193 | 7,516 | 31,317 | 31,381 | |||||||||||
Furniture and equipment | 3,462 | 3,598 | 13,914 | 14,351 | |||||||||||
Amortization - intangibles | 2,797 | 3,005 | 11,498 | 12,370 | |||||||||||
Software expense | 4,066 | 2,976 | 14,622 | 11,717 | |||||||||||
Data processing | 2,363 | 2,510 | 10,985 | 11,825 | |||||||||||
Professional fees | 2,591 | 2,990 | 11,268 | 12,943 | |||||||||||
Advertising and marketing | 2,204 | 2,839 | 9,643 | 12,279 | |||||||||||
Other expenses | 18,781 | 10,889 | 56,902 | 52,516 | |||||||||||
Total noninterest expense | 105,932 | 92,336 | 395,825 | 378,302 | |||||||||||
Income before income tax expense and noncontrolling interest | 64,299 | 43,734 | 201,333 | 176,270 | |||||||||||
Provision for income tax expense | 10,408 | 7,786 | 31,900 | 32,596 | |||||||||||
Net income | $ | 53,891 | $ | 35,948 | $ | 169,433 | $ | 143,674 | |||||||
Net income attributable to noncontrolling interest | (3,809 | ) | (873 | ) | (23,898 | ) | (4,891 | ) | |||||||
Net income attributable to TowneBank | $ | 50,082 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||
Per common share information | |||||||||||||||
Basic earnings | $ | 0.69 | $ | 0.49 | $ | 2.01 | $ | 1.93 | |||||||
Diluted earnings | $ | 0.69 | $ | 0.49 | $ | 2.01 | $ | 1.92 | |||||||
Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.72 | $ | 0.70 | |||||||
TOWNEBANK | |||||||||||||||||||
Consolidated Balance Sheets - Five Quarter Trend | |||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (audited) | |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 41,514 | $ | 114,604 | $ | 115,724 | $ | 108,929 | $ | 97,593 | |||||||||
Interest-bearing deposits at FRB - Richmond | 1,795,241 | 1,670,186 | 2,511,152 | 753,643 | 322,505 | ||||||||||||||
Interest-bearing deposits in financial institutions | 27,532 | 24,890 | 24,374 | 23,564 | 22,518 | ||||||||||||||
Total Cash and Cash Equivalents | 1,864,287 | 1,809,680 | 2,651,250 | 886,136 | 442,616 | ||||||||||||||
Securities available for sale, at fair value | 1,368,224 | 1,310,683 | 1,266,624 | 1,248,420 | 1,441,308 | ||||||||||||||
Securities held to maturity | 16,512 | 17,131 | 41,595 | 42,431 | 43,688 | ||||||||||||||
Less: allowance for credit losses | (97 | ) | (90 | ) | (121 | ) | (133 | ) | — | ||||||||||
Securities held to maturity, net of allowance for credit losses | 16,415 | 17,041 | 41,474 | 42,298 | 43,688 | ||||||||||||||
Other equity securities | 6,492 | 6,497 | 6,497 | 6,462 | 6,462 | ||||||||||||||
Federal Home Loan Bank stock | 30,135 | 41,829 | 49,277 | 52,042 | 30,094 | ||||||||||||||
Total Securities | 1,421,266 | 1,376,050 | 1,363,872 | 1,349,222 | 1,521,552 | ||||||||||||||
Mortgage loans held for sale | 540,798 | 669,020 | 610,369 | 453,143 | 419,233 | ||||||||||||||
Loans, net of unearned income and deferred costs | 9,629,068 | 9,770,570 | 9,801,889 | 8,784,195 | 8,419,288 | ||||||||||||||
Less: allowance for credit losses | (120,157 | ) | (119,058 | ) | (90,467 | ) | (64,372 | ) | (58,234 | ) | |||||||||
Net Loans | 9,508,911 | 9,651,512 | 9,711,422 | 8,719,823 | 8,361,054 | ||||||||||||||
Premises and equipment, net | 260,242 | 256,909 | 257,533 | 236,735 | 231,806 | ||||||||||||||
Goodwill | 452,328 | 446,725 | 446,725 | 446,725 | 446,816 | ||||||||||||||
Other intangible assets, net | 45,533 | 45,781 | 48,632 | 51,448 | 54,399 | ||||||||||||||
BOLI | 246,109 | 244,103 | 242,493 | 240,924 | 243,062 | ||||||||||||||
Other assets | 286,970 | 295,637 | 247,962 | 239,670 | 227,125 | ||||||||||||||
TOTAL ASSETS | $ | 14,626,444 | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | |||||||||
LIABILITIES AND EQUITY | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Noninterest-bearing demand | $ | 4,374,566 | $ | 4,464,178 | $ | 4,226,208 | $ | 3,060,515 | $ | 2,951,225 | |||||||||
Interest-bearing: | |||||||||||||||||||
Demand and money market accounts | 4,819,604 | 4,642,482 | 4,223,391 | 3,573,926 | 3,586,364 | ||||||||||||||
Savings | 330,091 | 312,444 | 298,673 | 280,807 | 276,205 | ||||||||||||||
Certificates of deposit | 2,048,905 | 2,285,859 | 2,516,666 | 2,392,744 | 2,457,123 | ||||||||||||||
Total Deposits | 11,573,166 | 11,704,963 | 11,264,938 | 9,307,992 | 9,270,917 | ||||||||||||||
Advances from the FHLB | 456,038 | 731,202 | 906,365 | 971,527 | 471,687 | ||||||||||||||
Subordinated debt, net | 249,055 | 248,906 | 248,756 | 248,607 | 248,458 | ||||||||||||||
FRB PPP Lending Facility | 182,852 | — | 1,111,429 | — | — | ||||||||||||||
Repurchase agreements and other borrowings | 67,786 | 58,061 | 60,913 | 171,762 | 52,391 | ||||||||||||||
Total Borrowings | 955,731 | 1,038,169 | 2,327,463 | 1,391,896 | 772,536 | ||||||||||||||
Other liabilities | 313,719 | 303,582 | 266,314 | 258,306 | 250,516 | ||||||||||||||
TOTAL LIABILITIES | 12,842,616 | 13,046,714 | 13,858,715 | 10,958,194 | 10,293,969 | ||||||||||||||
Preferred stock | |||||||||||||||||||
Authorized shares - 2,000,000 | — | — | — | — | — | ||||||||||||||
Common stock, $1.667 par value | 121,132 | 121,115 | 121,101 | 121,057 | 121,107 | ||||||||||||||
Capital surplus | 1,046,642 | 1,045,170 | 1,043,774 | 1,041,870 | 1,041,160 | ||||||||||||||
Retained earnings | 557,889 | 520,888 | 499,502 | 477,972 | 467,186 | ||||||||||||||
Common stock issued to deferred compensation trust, at cost | (16,969 | ) | (16,951 | ) | (16,776 | ) | (15,562 | ) | (15,555 | ) | |||||||||
Deferred compensation trust | 16,969 | 16,951 | 16,776 | 15,562 | 15,555 | ||||||||||||||
Accumulated other comprehensive income (loss) | 41,184 | 44,569 | 43,218 | 12,301 | 11,302 | ||||||||||||||
TOTAL SHAREHOLDERS’ EQUITY | 1,766,847 | 1,731,742 | 1,707,595 | 1,653,200 | 1,640,755 | ||||||||||||||
Noncontrolling interest | 16,981 | 16,961 | 13,948 | 12,432 | 12,939 | ||||||||||||||
TOTAL EQUITY | 1,783,828 | 1,748,703 | 1,721,543 | 1,665,632 | 1,653,694 | ||||||||||||||
TOTAL LIABILITIES AND EQUITY | $ | 14,626,444 | $ | 14,795,417 | $ | 15,580,258 | $ | 12,623,826 | $ | 11,947,663 | |||||||||
TOWNEBANK | |||||||||||||||||||
Consolidated Statements of Income - Five Quarter Trend (unaudited) | |||||||||||||||||||
(dollars in thousands, except per share data) | |||||||||||||||||||
Three Months Ended | |||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||
2020 | 2020 | 2020 | 2020 | 2019 | |||||||||||||||
INTEREST INCOME: | |||||||||||||||||||
Loans, including fees | $ | 104,182 | $ | 102,869 | $ | 102,139 | $ | 100,062 | $ | 100,059 | |||||||||
Investment securities | 7,499 | 7,440 | 8,163 | 9,949 | 9,936 | ||||||||||||||
Interest-bearing deposits in financial institutions and federal funds sold | 435 | 632 | 433 | 1,102 | 2,067 | ||||||||||||||
Mortgage loans held for sale | 3,867 | 4,587 | 3,811 | 2,988 | 4,413 | ||||||||||||||
Total interest income | 115,983 | 115,528 | 114,546 | 114,101 | 116,475 | ||||||||||||||
INTEREST EXPENSE: | |||||||||||||||||||
Deposits | 10,762 | 12,966 | 15,072 | 19,062 | 21,744 | ||||||||||||||
Advances from the FHLB | 1,404 | 1,901 | 2,595 | 2,492 | 1,730 | ||||||||||||||
Subordinated debt | 2,962 | 2,962 | 2,962 | 2,962 | 2,962 | ||||||||||||||
Repurchase agreements and other borrowings | 241 | 940 | 643 | 89 | 80 | ||||||||||||||
Total interest expense | 15,369 | 18,769 | 21,272 | 24,605 | 26,516 | ||||||||||||||
Net interest income | 100,614 | 96,759 | 93,274 | 89,496 | 89,959 | ||||||||||||||
PROVISION FOR CREDIT LOSSES | 1,617 | 31,598 | 26,945 | 7,016 | 3,601 | ||||||||||||||
Net interest income after provision for credit losses | 98,997 | 65,161 | 66,329 | 82,480 | 86,358 | ||||||||||||||
NONINTEREST INCOME: | |||||||||||||||||||
Residential mortgage banking income, net | 37,504 | 37,531 | 29,715 | 7,416 | 15,884 | ||||||||||||||
Insurance commissions and other title fees and income, net | 13,868 | 17,468 | 17,612 | 16,893 | 15,001 | ||||||||||||||
Real estate brokerage and property management income, net | 9,229 | 11,301 | 10,781 | 6,938 | 6,737 | ||||||||||||||
Service charges on deposit accounts | 1,707 | 1,986 | 1,888 | 2,440 | 2,245 | ||||||||||||||
Credit card merchant fees, net | 1,377 | 1,506 | 1,109 | 1,179 | 1,389 | ||||||||||||||
BOLI | 1,990 | 1,605 | 1,584 | 3,105 | 3,865 | ||||||||||||||
Other income | 5,559 | 22,278 | 3,763 | 5,227 | 4,591 | ||||||||||||||
Net gain/(loss) on investment securities | — | 1,701 | 2,930 | 5,002 | — | ||||||||||||||
Total noninterest income | 71,234 | 95,376 | 69,382 | 48,200 | 49,712 | ||||||||||||||
NONINTEREST EXPENSE: | |||||||||||||||||||
Salaries and employee benefits | 61,475 | 61,408 | 56,926 | 55,867 | 56,013 | ||||||||||||||
Occupancy expense | 8,193 | 8,396 | 7,227 | 7,502 | 7,516 | ||||||||||||||
Furniture and equipment | 3,462 | 3,247 | 3,564 | 3,640 | 3,598 | ||||||||||||||
Amortization - intangibles | 2,797 | 2,851 | 2,901 | 2,950 | 3,005 | ||||||||||||||
Software expense | 4,066 | 3,572 | 3,492 | 3,492 | 2,976 | ||||||||||||||
Data processing | 2,363 | 3,113 | 2,718 | 2,791 | 2,510 | ||||||||||||||
Professional fees | 2,591 | 2,637 | 2,972 | 3,067 | 2,990 | ||||||||||||||
Advertising and marketing | 2,204 | 1,870 | 1,986 | 3,584 | 2,839 | ||||||||||||||
Other expenses | 18,781 | 14,887 | 9,239 | 13,995 | 10,889 | ||||||||||||||
Total noninterest expense | 105,932 | 101,981 | 91,025 | 96,888 | 92,336 | ||||||||||||||
Income before income tax expense and noncontrolling interest | 64,299 | 58,556 | 44,686 | 33,792 | 43,734 | ||||||||||||||
Provision for income tax expense | 10,408 | 7,841 | 7,464 | 6,187 | 7,786 | ||||||||||||||
Net income | 53,891 | 50,715 | 37,222 | 27,605 | 35,948 | ||||||||||||||
Net income attributable to noncontrolling interest | (3,809 | ) | (16,251 | ) | (2,617 | ) | (1,221 | ) | (873 | ) | |||||||||
Net income attributable to TowneBank | $ | 50,082 | $ | 34,464 | $ | 34,605 | $ | 26,384 | $ | 35,075 | |||||||||
Per common share information | |||||||||||||||||||
Basic earnings | $ | 0.69 | $ | 0.48 | $ | 0.48 | $ | 0.37 | $ | 0.49 | |||||||||
Diluted earnings (1) | $ | 0.69 | $ | 0.48 | $ | 0.48 | $ | 0.36 | $ | 0.49 | |||||||||
Basic weighted average shares outstanding | 72,357,177 | 72,307,961 | 72,280,555 | 72,206,228 | 72,122,476 | ||||||||||||||
Diluted weighted average shares outstanding | 72,455,096 | 72,344,284 | 72,317,988 | 72,299,721 | 72,302,414 | ||||||||||||||
Cash dividends declared | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | $ | 0.18 | |||||||||
(1) The quarterly diluted EPS do not sum to the total year diluted EPS due to rounding.
TOWNEBANKBanking Segment Financial Information(dollars in thousands) | ||||||||||||||||||||||||||
Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Net interest income | $ | 97,412 | $ | 87,637 | $ | 92,869 | $ | 367,353 | $ | 351,969 | $ | 15,384 | 4.37 | % | ||||||||||||
Noninterest income | ||||||||||||||||||||||||||
Service charges on deposit accounts | 1,707 | 2,245 | 1,986 | 8,021 | 10,544 | (2,523 | ) | (23.93 | )% | |||||||||||||||||
Credit card merchant fees | 1,377 | 1,389 | 1,506 | 5,169 | 4,746 | 423 | 8.91 | % | ||||||||||||||||||
Other income | 5,983 | 5,271 | 4,876 | 21,809 | 19,620 | 2,189 | 11.16 | % | ||||||||||||||||||
Subtotal | 9,067 | 8,905 | 8,368 | 34,999 | 34,910 | 89 | 0.25 | % | ||||||||||||||||||
Gain (loss) on investment securities | — | — | 1,701 | 9,634 | (845 | ) | 10,479 | n/m | ||||||||||||||||||
Total noninterest income | 9,067 | 8,905 | 10,069 | 44,633 | 34,065 | 10,568 | 31.02 | % | ||||||||||||||||||
Total revenue | 106,479 | 96,542 | 102,938 | 411,986 | 386,034 | 25,952 | 6.72 | % | ||||||||||||||||||
Provision for credit losses | 1,628 | 3,601 | 31,070 | 65,799 | 9,371 | 56,428 | 602.16 | % | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Salaries and employee benefits | 37,358 | 34,183 | 36,535 | 142,328 | 131,149 | 11,179 | 8.52 | % | ||||||||||||||||||
Occupancy expense | 5,681 | 4,959 | 5,829 | 21,237 | 20,419 | 818 | 4.01 | % | ||||||||||||||||||
Furniture and equipment | 2,625 | 2,577 | 2,424 | 10,425 | 10,240 | 185 | 1.81 | % | ||||||||||||||||||
Amortization of intangible assets | 1,013 | 1,214 | 1,063 | 4,354 | 5,160 | (806 | ) | (15.62 | )% | |||||||||||||||||
Other expenses | 19,892 | 14,078 | 15,793 | 65,107 | 66,295 | (1,188 | ) | (1.79 | )% | |||||||||||||||||
Total expenses | 66,569 | 57,011 | 61,644 | 243,451 | 233,263 | 10,188 | 4.37 | % | ||||||||||||||||||
Income before income tax, corporate allocation and noncontrolling interest | 38,282 | 35,930 | 10,224 | 102,736 | 143,400 | (40,664 | ) | (28.36 | )% | |||||||||||||||||
Corporate allocation | 643 | 627 | 595 | 2,534 | 2,011 | 523 | 26.01 | % | ||||||||||||||||||
Income before income tax provision and noncontrolling interest | 38,925 | 36,557 | 10,819 | 105,270 | 145,411 | (40,141 | ) | (27.61 | )% | |||||||||||||||||
Provision for income tax expense | 5,163 | 6,368 | 474 | 14,467 | 25,706 | (11,239 | ) | (43.72 | )% | |||||||||||||||||
Net income | 33,762 | 30,189 | 10,345 | 90,803 | 119,705 | (28,902 | ) | (24.14 | )% | |||||||||||||||||
Noncontrolling interest | 4 | (1 | ) | (2 | ) | 6 | 2 | 4 | n/m | |||||||||||||||||
Net income attributable to TowneBank | $ | 33,766 | $ | 30,188 | $ | 10,343 | $ | 90,809 | $ | 119,707 | $ | (28,898 | ) | (24.14 | )% | |||||||||||
Efficiency ratio (non-GAAP) | 61.57 | % | 57.80 | % | 59.84 | % | 59.42 | % | 58.96 | % | ||||||||||||||||
TOWNEBANK | ||||||||||||||||||||||||||
Realty Segment Financial Information | ||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
Revenue | ||||||||||||||||||||||||||
Residential mortgage brokerage income, net | $ | 38,040 | $ | 16,617 | $ | 38,074 | $ | 114,589 | $ | 68,443 | $ | 46,146 | 67.42 | % | ||||||||||||
Real estate brokerage income, net | 3,564 | 2,550 | 3,688 | 11,776 | 9,865 | 1,911 | 19.37 | % | ||||||||||||||||||
Title insurance and settlement fees | 669 | 531 | 654 | 2,397 | 2,111 | 286 | 13.55 | % | ||||||||||||||||||
Property management fees, net | 5,665 | 4,187 | 7,613 | 26,473 | 24,427 | 2,046 | 8.38 | % | ||||||||||||||||||
Income from unconsolidated subsidiary | 398 | 75 | 451 | 1,336 | 516 | 820 | 158.91 | % | ||||||||||||||||||
Net interest and other income | 3,627 | 2,787 | 4,101 | 13,889 | 7,724 | 6,165 | 79.82 | % | ||||||||||||||||||
Total revenue | 51,963 | 26,747 | 54,581 | 170,460 | 113,086 | 57,374 | 50.73 | % | ||||||||||||||||||
Provision for (recovery of) credit losses | (11 | ) | — | 528 | 1,378 | — | $ | 1,378 | n/m | |||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Salaries and employee benefits | $ | 16,168 | $ | 12,941 | $ | 15,744 | $ | 58,263 | $ | 52,619 | $ | 5,644 | 10.73 | % | ||||||||||||
Occupancy expense | 1,869 | 1,857 | 1,906 | 7,465 | 8,285 | (820 | ) | (9.90 | )% | |||||||||||||||||
Furniture and equipment | 614 | 773 | 620 | 2,622 | 3,099 | (477 | ) | (15.39 | )% | |||||||||||||||||
Amortization of intangible assets | 658 | 655 | 658 | 2,630 | 2,741 | (111 | ) | (4.05 | )% | |||||||||||||||||
Other expenses | 8,779 | 7,030 | 9,226 | 33,143 | 27,982 | 5,161 | 18.44 | % | ||||||||||||||||||
Total expenses | 28,088 | 23,256 | 28,154 | 104,123 | 94,726 | 9,397 | 9.92 | % | ||||||||||||||||||
Income (loss) before income tax, corporate allocation, and noncontrolling interest | 23,886 | 3,491 | 25,899 | 64,959 | 18,360 | 46,599 | 253.81 | % | ||||||||||||||||||
Corporate allocation | (403 | ) | (362 | ) | (356 | ) | (1,522 | ) | (1,163 | ) | (359 | ) | 30.87 | % | ||||||||||||
Income (loss) before income tax provision and noncontrolling interest | 23,483 | 3,129 | 25,543 | 63,437 | 17,197 | 46,240 | 268.88 | % | ||||||||||||||||||
Provision for income tax | 4,421 | 416 | 4,780 | 12,035 | 3,707 | 8,328 | 224.66 | % | ||||||||||||||||||
Net income (loss) | 19,062 | 2,713 | 20,763 | 51,402 | 13,490 | 37,912 | 281.04 | % | ||||||||||||||||||
Noncontrolling interest | (3,813 | ) | (715 | ) | (4,790 | ) | (11,809 | ) | (3,711 | ) | (8,098 | ) | 218.22 | % | ||||||||||||
Net income (loss) attributable to TowneBank | $ | 15,249 | $ | 1,998 | $ | 15,973 | $ | 39,593 | $ | 9,779 | $ | 29,814 | 304.88 | % | ||||||||||||
Efficiency ratio (non-GAAP) | 52.79 | % | 84.50 | % | 50.38 | % | 59.54 | % | 81.34 | % | ||||||||||||||||
TOWNEBANK | ||||||||||||||||||||||||||
Insurance Segment Financial Information | ||||||||||||||||||||||||||
(dollars in thousands) | ||||||||||||||||||||||||||
Three Months Ended | Year Ended | Increase/(Decrease) | ||||||||||||||||||||||||
December 31, | September 30, | December 31, | 2020 over 2019 | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2020 | 2019 | Amount | Percent | ||||||||||||||||||||
Commission and fee income | ||||||||||||||||||||||||||
Property and casualty | $ | 11,942 | $ | 11,957 | $ | 14,072 | $ | 52,726 | $ | 50,380 | $ | 2,346 | 4.66 | % | ||||||||||||
Employee benefits | 3,725 | 3,758 | 3,825 | 15,259 | 14,726 | 533 | 3.62 | % | ||||||||||||||||||
Travel insurance (1) | — | 794 | 1,399 | 3,526 | 4,085 | (559 | ) | (13.68 | )% | |||||||||||||||||
Specialized benefit services | 175 | 173 | 165 | 664 | 672 | (8 | ) | (1.19 | )% | |||||||||||||||||
Total commissions and fees | 15,842 | 16,682 | 19,461 | 72,175 | 69,863 | 2,312 | 3.31 | % | ||||||||||||||||||
Contingency and bonus revenue | 1,087 | 1,396 | 1,112 | 6,230 | 6,307 | (77 | ) | (1.22 | )% | |||||||||||||||||
Other income (1) | 69 | 1,805 | 17,697 | 17,976 | 2,032 | 15,944 | 784.65 | % | ||||||||||||||||||
Total revenue | 16,998 | 19,883 | 38,270 | 96,381 | 78,202 | 18,179 | 23.25 | % | ||||||||||||||||||
Employee commission expense | 3,592 | 3,501 | 3,654 | 14,492 | 13,379 | 1,113 | 8.32 | % | ||||||||||||||||||
Revenue, net of commission expense | 13,406 | 16,382 | 34,616 | 81,889 | 64,823 | 17,066 | 26.33 | % | ||||||||||||||||||
Expenses | ||||||||||||||||||||||||||
Salaries and employee benefits | $ | 7,949 | $ | 8,889 | $ | 9,129 | $ | 35,085 | $ | 35,152 | $ | (67 | ) | (0.19 | )% | |||||||||||
Occupancy expense | 643 | 700 | 661 | 2,615 | 2,677 | (62 | ) | (2.32 | )% | |||||||||||||||||
Furniture and equipment | 223 | 248 | 203 | 867 | 1,012 | (145 | ) | (14.33 | )% | |||||||||||||||||
Amortization of intangible assets | 1,126 | 1,136 | 1,130 | 4,514 | 4,469 | 45 | 1.01 | % | ||||||||||||||||||
Other expenses | 1,334 | 1,096 | 1,060 | 5,170 | 7,003 | (1,833 | ) | (26.17 | )% | |||||||||||||||||
Total operating expenses | 11,275 | 12,069 | 12,183 | 48,251 | 50,313 | (2,062 | ) | (4.10 | )% | |||||||||||||||||
Income before income tax and noncontrolling interest | 2,131 | 4,313 | 22,433 | 33,638 | 14,510 | 19,128 | 131.83 | % | ||||||||||||||||||
Corporate allocation | (240 | ) | (265 | ) | (239 | ) | (1,012 | ) | (848 | ) | (164 | ) | 19.34 | % | ||||||||||||
Income before income tax provision and noncontrolling interest | 1,891 | 4,048 | 22,194 | 32,626 | 13,662 | 18,964 | 138.81 | % | ||||||||||||||||||
Provision for income tax expense | 824 | 1,002 | 2,587 | 5,398 | 3,183 | 2,215 | 69.59 | % | ||||||||||||||||||
Net income | 1,067 | 3,046 | 19,607 | 27,228 | 10,479 | 16,749 | 159.83 | % | ||||||||||||||||||
Noncontrolling interest (1) | — | (157 | ) | (11,459 | ) | (12,095 | ) | (1,182 | ) | (10,913 | ) | 923.27 | % | |||||||||||||
Net income attributable to TowneBank | $ | 1,067 | $ | 2,889 | $ | 8,148 | $ | 15,133 | $ | 9,297 | $ | 5,836 | 62.77 | % | ||||||||||||
Provision for income taxes | 824 | 1,002 | 2,587 | 5,398 | 3,183 | 2,215 | 69.59 | % | ||||||||||||||||||
Depreciation, amortization and interest expense | 1,274 | 1,333 | 1,285 | 5,151 | 5,312 | (161 | ) | (3.03 | )% | |||||||||||||||||
EBITDA (non-GAAP) | $ | 3,165 | $ | 5,224 | $ | 12,020 | $ | 25,682 | $ | 17,792 | $ | 7,890 | 44.35 | % | ||||||||||||
Efficiency ratio (non-GAAP) | 75.70 | % | 66.74 | % | 65.06 | % | 68.06 | % | 70.72 | % | ||||||||||||||||
(1) In third quarter 2020 we sold Red Sky Insurance, our travel insurance joint venture. We recorded a gross gain on sale in other income of $17,626. Our re-tax net gain, after distributions to noncontrolling interest was $6,521. | ||||||||||||||||||||||||||
TOWNEBANK | |||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures: | |||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||
December 31, | September 30, | December 31, | December 31, | ||||||||||||||||
2020 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||
Return on average assets (GAAP) | 1.35 | % | 0.89 | % | 1.16 | % | 1.03 | % | 1.19 | % | |||||||||
Impact of excluding average goodwill and other intangibles and amortization | 0.11 | % | 0.08 | % | 0.14 | % | 0.10 | % | 0.15 | % | |||||||||
Return on average tangible assets (non-GAAP) | 1.46 | % | 0.97 | % | 1.30 | % | 1.13 | % | 1.33 | % | |||||||||
Return on average equity (GAAP) | 11.26 | % | 7.85 | % | 8.44 | % | 8.46 | % | 8.69 | % | |||||||||
Impact of excluding average goodwill and other intangibles and amortization | 5.02 | % | 3.81 | % | 4.53 | % | 4.16 | % | 4.89 | % | |||||||||
Return on average tangible equity (non-GAAP) | 16.28 | % | 11.66 | % | 12.97 | % | 12.62 | % | 13.58 | % | |||||||||
Return on average common equity (GAAP) | 11.36 | % | 7.91 | % | 8.51 | % | 8.52 | % | 8.75 | % | |||||||||
Impact of excluding average goodwill and other intangibles and amortization | 5.12 | % | 3.88 | % | 4.61 | % | 4.24 | % | 4.98 | % | |||||||||
Return on average tangible common equity (non-GAAP) | 16.48 | % | 11.79 | % | 13.12 | % | 12.76 | % | 13.73 | % | |||||||||
Book value (GAAP) | $ | 24.31 | $ | 23.83 | $ | 22.58 | $ | 24.31 | $ | 22.58 | |||||||||
Impact of excluding average goodwill and other intangibles and amortization | (6.85 | ) | (6.77 | ) | (6.89 | ) | (6.85 | ) | (6.89 | ) | |||||||||
Tangible book value (non-GAAP) | $ | 17.46 | $ | 17.06 | $ | 15.69 | $ | 17.46 | 15.69 | ||||||||||
Efficiency ratio (GAAP) | 61.64 | % | 53.08 | % | 66.11 | % | 59.58 | % | 67.08 | % | |||||||||
Impact of excluding g/l on investments and amortization expense | (1.62 | )% | 4.28 | % | (2.15 | )% | (0.88 | )% | (2.29 | )% | |||||||||
Efficiency ratio (non-GAAP) | 60.02 | % | 57.36 | % | 63.96 | % | 58.70 | % | 64.79 | % | |||||||||
Average assets (GAAP) | $ | 14,722,385 | $ | 15,487,152 | $ | 11,970,593 | $ | 14,172,206 | $ | 11,638,426 | |||||||||
Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
Average tangible assets (non-GAAP) | $ | 14,230,932 | $ | 14,992,914 | $ | 11,467,826 | $ | 13,676,499 | $ | 11,135,318 | |||||||||
Average equity (GAAP) | $ | 1,768,906 | $ | 1,747,033 | $ | 1,647,929 | $ | 1,721,059 | $ | 1,597,281 | |||||||||
Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
Average tangible equity (non-GAAP) | $ | 1,277,453 | $ | 1,252,795 | $ | 1,145,162 | $ | 1,225,352 | $ | 1,094,173 | |||||||||
Average common equity (GAAP) | $ | 1,753,596 | $ | 1,732,881 | $ | 1,635,394 | $ | 1,707,635 | $ | 1,585,238 | |||||||||
Less: average goodwill and intangible assets | 491,453 | 494,238 | 502,767 | 495,707 | 503,108 | ||||||||||||||
Average tangible common equity (non-GAAP) | $ | 1,262,143 | $ | 1,238,643 | $ | 1,132,627 | $ | 1,211,928 | $ | 1,082,130 | |||||||||
Net income (GAAP) | $ | 50,082 | $ | 34,464 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||||
Amortization of intangibles, net of tax | 2,210 | 2,252 | 2,374 | 9,086 | 9,772 | ||||||||||||||
Tangible net income (non-GAAP) | $ | 52,292 | $ | 36,716 | $ | 37,449 | $ | 154,621 | $ | 148,555 | |||||||||
Net income (GAAP) | $ | 50,082 | $ | 34,464 | $ | 35,075 | $ | 145,535 | $ | 138,783 | |||||||||
Provision for credit losses | 1,617 | 31,598 | 3,601 | 67,177 | 9,371 | ||||||||||||||
Provision for income taxes | 10,408 | 7,841 | 7,786 | 31,900 | 32,596 | ||||||||||||||
Pre-provision, pre-tax net revenues (non-GAAP) | $ | 62,107 | $ | 73,903 | $ | 46,462 | $ | 244,612 | $ | 180,750 | |||||||||
Total revenue (GAAP) | $ | 171,848 | $ | 192,135 | $ | 139,671 | $ | 664,335 | $ | 563,943 | |||||||||
Net (gain) loss on equity investment | — | (17,625 | ) | — | — | — | |||||||||||||
Net (gain)/loss on investment securities | — | (1,701 | ) | — | (9,634 | ) | 845 | ||||||||||||
Total revenue for efficiency calculation (non-GAAP) | $ | 171,848 | $ | 172,809 | $ | 139,671 | $ | 654,701 | $ | 564,788 | |||||||||
Noninterest expense (GAAP) | $ | 105,932 | $ | 101,981 | $ | 92,336 | $ | 395,825 | $ | 378,302 | |||||||||
Less: Amortization of intangibles | 2,797 | 2,851 | 3,005 | 11,498 | 12,370 | ||||||||||||||
Noninterest expense net of amortization (non-GAAP) | $ | 103,135 | $ | 99,130 | $ | 89,331 | $ | 384,327 | $ | 365,932 | |||||||||
1 Year TowneBank Chart |
1 Month TowneBank Chart |
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