TowneBank Reports Full Year and Fourth Quarter Financial Results for 2024

SUFFOLK, Va., Jan. 22, 2025 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (Nasdaq: TOWN) today reported financial results for the full year and fourth quarter ended December 31, 2024.  For the year ended December 31, 2024, earnings were $161.76 million, or $2.15 per diluted share, compared to $153.72 million, or $2.06 per diluted share, for the year ended December 31, 2023.  Excluding certain items affecting comparability, core earnings (non-GAAP) for 2024 were $163.65 million, or $2.18 per diluted share, compared to $160.94 million, or $2.16 per diluted share, for 2023.  Earnings in the fourth quarter of 2024 were $41.27 million, or $0.55 per diluted share, compared to fourth quarter 2023 earnings of $28.80 million, or $0.39 per diluted share.  Excluding certain items affecting comparability, core earnings (non-GAAP) for fourth quarter 2024 were $41.42 million, or $0.55 per diluted share, compared to $31.10 million, or $0.42 per diluted share, for fourth quarter 2023.

"Diluted earnings per share increased $0.09, or 4.4%, year over year driven by stronger net interest income which improved each quarter throughout the year and stronger fee-based income contributions which demonstrates the value of our diversified business model.  We continue to prudently manage our liquidity and capital levels consistent with our conservative Main Street banking model.  In closing, I would like to thank the more than 2,700 Towne teammates across the Towne family of companies who work each day to execute our mission of Serving Others and Enriching Lives.  That’s the true measure of our success," said G. Robert Aston, Jr., Executive Chairman.

Annual Highlights for 2024 Compared to 2023:

• Total revenues decreased slightly to $693.75 million, compared to $694.12 million in the prior year.  Net interest income decreased $15.18 million as higher deposit costs outpaced increases in interest income.  Noninterest income increased $14.80 million driven by growth in residential mortgage banking income and insurance commissions, serving to largely offset the decline in net interest income.
• The insurance segment's gross revenue was $118.11 million compared to $109.46 million in 2023.
• Loans held for investment increased $130.03 million, or 1.15%, from December 31, 2023.
• Total deposits were $14.44 billion, an increase of $0.54 billion, or 3.92%, compared to prior year.
• As rates continued to rise, noninterest-bearing deposits declined 2.06% to $4.25 billion driven by a mix shift into interest-bearing accounts.  Noninterest-bearing deposits represented 29.46% of total deposits at December 31, 2024.
• Return on average common shareholders' equity was 7.82%, and return on average tangible common shareholders' equity (non-GAAP) was 11.11%.
• Net interest margin was 2.87% and taxable equivalent net interest margin (non-GAAP) was 2.90% compared to a prior year net interest margin of 3.03% and taxable equivalent net interest margin (non-GAAP) of 3.06%.
• Effective tax rate of 14.60% compared to 16.82% in 2023.  The decline in effective tax rate was primarily due to the impact on state and federal taxes from the increase in credits and losses related to LIHTC investment properties placed in service during the year.

Highlights for Fourth Quarter 2024:

• Total revenues were $177.16 million in fourth quarter 2024, an increase of $21.61 million, or 13.90% from the prior year quarter.  This increase was attributable to a combination of margin expansion and growth in noninterest income.  Net interest income increased $10.32 million, or 9.58%, driven by increases in loan interest income offset by only marginal increases in deposit costs between quarters.  Noninterest income increased $11.29 million, or 23.61%, in the quarterly comparison.
• Loans held for investment increased $46.54 million, or 1.62% on an annualized basis, from September 30, 2024.
• Total deposits increased $74.13 million, or 2.05% on an annualized basis, compared to September 30, 2024.
• Noninterest-bearing deposits decreased $14.58 million, or 1.36% on an annualized basis, compared to the linked quarter.
• In the quarter ended December 31, 2024, annualized return on average common shareholders' equity was 7.70% and annualized return on average tangible common shareholders' equity (non-GAAP) was 10.79%.
• Net interest margin was 2.99% and taxable equivalent net interest margin (non-GAAP) was 3.02% compared to the prior year quarter net interest margin of 2.83% and taxable equivalent net interest margin (non-GAAP) of 2.86%.
• Effective tax rate of 13.92% compared to 8.46% in fourth quarter 2023 and 11.52% in the linked quarter.  The increase in the effective tax rate from fourth quarter 2023 to 2024 was due to a fourth quarter adjustment in 2023 to deferred income taxes related to the sale of BHHS that decreased the tax rate.  The higher tax rate in the fourth quarter versus the linked quarter was due to an increase in state tax expense.

“As we look ahead to next year, we are excited about closing our partnership with Village Bank during the first quarter.  We are optimistic about loan and deposit growth opportunities across our banking footprint which operates in some of the most vibrant markets in the country.  We also plan to aggressively evaluate opportunities for enhancing our fee based businesses on an organic basis coupled with a disciplined acquisition strategy," said William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

• Net interest income was $118.06 million compared to $107.73 million for the quarter ended December 31, 2023.  Higher yields impacting interest income on loan and investment securities were the primary source of this growth.
• Taxable equivalent net interest margin (non-GAAP) was 3.02%, including purchase accounting accretion of 4 basis points, compared to 2.86%, including purchase accounting accretion of 4 basis points, for fourth quarter 2023.
• On an average basis, loans held for investment had a yield of 5.41%, which represented 72.90% of  earning assets in the fourth quarter of 2024, compared to a yield of 5.22%, and 74.39% of earning assets in the fourth quarter of 2023.
• Total cost of deposits decreased to 2.07% from 2.29% in the linked quarter and 2.09% in the quarter ended December 31, 2023.  Deposits costs began declining in third quarter 2024 as the Federal Reserve lowered short term rates by 100 basis points in the final four months of 2024.
• Average interest-earning assets totaled $15.71 billion at December 31, 2024 compared to $15.10 billion at December 31, 2023, an increase of 4.09%.
• Average interest-bearing liabilities totaled $10.46 billion, an increase of $0.59 billion, or 5.96%, compared to the prior year.

Quarterly Provision for Credit Losses:

• The provision for credit losses was an expense of $1.61 million in the current quarter compared to a benefit of $1.10 million in the linked quarter, and an expense of $2.45 million one year ago.
• The allowance for credit losses on loans increased $0.73 million, compared to the linked quarter.  The increase in the allowance was driven by a combination of modest loan growth and an increase to our weightings of the more adverse macroeconomic forecast scenarios utilized in our models.
• Net charge-offs were $382 thousand compared to $68 thousand one year prior and $677 thousand in the linked quarter.  The ratio of net charge-offs to average loans on an annualized basis was 0.01% in fourth quarter 2024, 0.00% in fourth quarter 2023, and 0.02% in the linked quarter.
• The allowance for credit losses on loans represented 1.08% of total loans at both December 31, 2024 and September 30, 2024, compared to 1.12% at December 31, 2023.  The allowance for credit losses on loans was 16.69 times nonperforming loans compared to 18.70 times at September 30, 2024 and 18.48 times at December 31, 2023.

Quarterly Noninterest Income:

• Total noninterest income was $59.10 million compared to $47.81 million in 2023, an increase of $11.29 million, or 23.61%.
• Residential mortgage banking income was $11.27 million compared to $8.04 million in fourth quarter 2023.  Loan volume in the current quarter was $565.43 million, with purchase activity comprising 89.46%.  Loan volume in fourth quarter 2023 was $428.95 million, with purchase activity of 95.06%.  Home purchases appear to be on the rise despite a continuation of elevated mortgage rates and home sale inventory limitations.
• Gross margins on residential mortgages increased 19 basis points from 3.06% in fourth quarter 2023 to 3.25% in the current quarter.  Gross margins declined 3 basis points from 3.28%, when compared to the linked quarter.
• Property management fee revenue increased 11.25%, or $828 thousand, in comparison to fourth quarter 2023 driven by an acquisition in early 2024.
• Total insurance commissions and other income increased $2.06 million, or 9.70%, to $23.27 million in the fourth quarter of 2024 due to organic growth.
• Investment commissions increased $0.82 million, or 34.24%, driven by higher production levels.

Quarterly Noninterest Expense:

• Total noninterest expense was $127.44 million compared to $121.90 million, an increase of $5.55 million, or 4.55%.  This reflects increases in salary and benefits expense of $8.36 million, occupancy expense of $0.51 million, and furniture and equipment expense of $0.41 million.
• Salaries and benefits expense increases were driven by annual base salary adjustments that went into effect October 2024 and increases in performance based compensation and employee benefit costs.
• Increases in occupancy expense and furniture and equipment expense were driven by Company expansion and relocation activities.  Towne has opened two full service branches since November 2023, completed a branch relocation in Greenville, NC, and relocated our regional headquarters in Greensboro, NC.

Consolidated Balance Sheet Highlights:

• Total assets were $17.25 billion at December 31, 2024, an increase of 2.45%, compared to $16.84 billion at December 31, 2023.  The increase was driven by modest growth in loans and investment securities.
• Loans held for investment increased $130.03 million, or 1.15%, compared to year end 2023 and $46.54 million compared to the linked quarter, 1.62% on an annualized basis.  Management has focused on maintaining a strong balance sheet in 2024 by controlling loan growth through pricing.
• Mortgage loans held for sale increased $50.47 million, or 33.65%, compared to prior year but declined $63.86 million, or 24.16%, compared to the linked quarter due to seasonality.
• Total deposits increased $544.09 million, or 3.92%, compared to December 31, 2023 and $74.13 million, or 0.52%, or 2.05% on an annualized basis compared to the linked quarter.
• Noninterest-bearing deposits decreased $89.65 million, or 2.06%, compared to prior year, and $14.58 million, or 0.34%, compared to the linked quarter.
• Total loans held for investment to total deposits were 79.37% compared to 79.46% at September 30, 2024 and 81.54% at December 31, 2023.
• Total borrowings decreased $195.68 million, or 39.73%, from prior year.

Investment Securities:

• Total investment securities were $2.59 billion compared to $2.60 billion at September 30, 2024 and $2.64 billion at December 31, 2023.  The weighted average duration of the portfolio at December 31, 2024 was 3.3 years.  The carrying value of the AFS debt securities portfolio included $155.28 million in net unrealized losses, related to changes in interest rates, at December 31, 2024 compared to $162.12 million in net unrealized losses at December 31, 2023.

Loans and Asset Quality:

• Total loans held for investment were $11.46 billion at December 31, 2024 compared to $11.41 billion at September 30, 2024 and $11.33 billion at December 31, 2023.
• Nonperforming assets were $7.87 million, or 0.05% of total assets, compared to $7.75 million, or 0.05% of total assets, at December 31, 2023.
• Nonperforming loans were 0.06% of period end loans at both December 31, 2024 and 2023.
• Foreclosed property which consisted of repossessed autos at December 31, 2024 totaled $0.44 million, declining from $0.91 million at December 31, 2023.

Deposits and Borrowings:

• Total deposits were $14.44 billion compared to $14.36 billion at September 30, 2024 and $13.89 billion at December 31, 2023.
• Noninterest-bearing deposits were 29.46% of total deposits at December 31, 2024 compared to 29.71% at September 30, 2024 and 31.26% at December 31, 2023. 
• Total borrowings were $296.90 million compared to $290.82 million at September 30, 2024 and $492.58 million at December 31, 2023.

Capital:

• Common equity tier 1 capital ratio of 12.77% ⁽¹⁾.
• Tier 1 leverage capital ratio of 10.36% ⁽¹⁾.
• Tier 1 risk-based capital ratio of 12.89% ⁽¹⁾.
• Total risk-based capital ratio of 15.68% ⁽¹⁾.
• Book value per share was $28.43 compared to $28.59 at September 30, 2024 and $27.24 at December 31, 2023.
• Tangible book value per share (non-GAAP) was $21.55 compared to $21.65 at September 30, 2024 and $20.28 at December 31, 2023.

⁽¹⁾ Preliminary.

Acquisition of Village Bank and Trust Financial Corp:

We anticipate the previously announced acquisition of Village Bank and Trust Financial Corp. and its wholly owned bank subsidiary, Village Bank to close by the end of first quarter 2025.

Annual Meeting of Shareholders:

TowneBank intends to hold its 2025 Annual Meeting of Shareholders at 11:30 a.m. on Wednesday, May 14, 2025 at the Virginia Beach Convention Center, 1000 19th Street in Virginia Beach, Virginia.

About TowneBank:
Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives.  Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

Now celebrating 25 years, TowneBank operates over 50 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community.  Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards.  Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy.  TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations.  With total assets of $17.25 billion as of December 31, 2024, TowneBank is one of the largest banks headquartered in Virginia.

Non-GAAP Financial Measures:

This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”).  Such non-GAAP financial measures include the following: core operating earnings, fully tax-equivalent net interest margin, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio.  Management uses these non-GAAP financial measures to assess the performance of TowneBank’s core business and the strength of its capital position.  Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization.  The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors.  These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies.  The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.

Forward-Looking Statements:
This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: "believe," "expect," "anticipate," "intend," "plan,” "estimate," or words of similar meaning, or future or conditional terms, such as "will," "would," "should," "could," "may," "likely," "probably," or "possibly."  These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the recent bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; our ability to close the transaction with Village Bank when expected or at all because required approvals and other conditions to closing are not received or satisfied on the proposed terms or on the anticipated schedule; our integration of Village Bank's business to the extent that it may take longer or be more difficult, time-consuming, or costly to accomplish than expected; deposit attrition, operating costs, customer losses, and business disruption following the Village Bank transaction, including adverse effects on relationships with employees and customers; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected growth opportunities or cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the "Risk Factors" in TowneBank’s Annual Report on Form 10-K for the year ended December 31, 2023, and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

Media contact:
G. Robert Aston, Jr., Executive Chairman, 757-638-6780
William I. Foster III, President and Chief Executive Officer, 757-417-6482

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,
		2024				2024				2024				2024				2023
Income and Performance Ratios:
	Total revenue	$	177,160			$	174,518			$	174,970			$	167,102			$	155,546
	Net income		41,441				43,126				43,039				35,127				28,545
	Net income available to common shareholders		41,265				42,949				42,856				34,687				28,804
	Net income per common share - diluted		0.55				0.57				0.57				0.46				0.39
	Book value per common share		28.43				28.59				27.62				27.33				27.24
	Book value per share - tangible (non-GAAP)		21.55				21.65				20.65				20.31				20.28
	Return on average assets		0.95	%			1.00	%			1.01	%			0.83	%			0.68	%
	Return on average assets - tangible (non-GAAP)		1.03	%			1.09	%			1.11	%			0.92	%			0.77	%
	Return on average equity		7.64	%			8.12	%			8.43	%			6.84	%			5.75	%
	Return on average equity - tangible (non-GAAP)		10.68	%			11.42	%			12.03	%			9.87	%			8.53	%
	Return on average common equity		7.70	%			8.18	%			8.49	%			6.89	%			5.79	%
	Return on average common equity - tangible (non-GAAP)		10.79	%			11.54	%			12.16	%			9.98	%			8.62	%
	Noninterest income as a percentage of total revenue		33.36	%			35.66	%			37.68	%			38.23	%			30.74	%
Regulatory Capital Ratios (1):
	Common equity tier 1		12.77	%			12.63	%			12.43	%			12.20	%			12.18	%
	Tier 1		12.89	%			12.76	%			12.55	%			12.32	%			12.29	%
	Total		15.68	%			15.54	%			15.34	%			15.10	%			15.06	%
	Tier 1 leverage ratio		10.36	%			10.38	%			10.25	%			10.15	%			10.17	%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans		16.69x				18.70x				19.08x				18.01x				18.48x
	Allowance for credit losses on loans to period end loans		1.08	%			1.08	%			1.10	%			1.10	%			1.12	%
	Nonperforming loans to period end loans		0.06	%			0.06	%			0.06	%			0.06	%			0.06	%
	Nonperforming assets to period end assets		0.05	%			0.04	%			0.04	%			0.05	%			0.05	%
	Net charge-offs (recoveries) to average loans (annualized)		0.01	%			0.02	%			—	%			0.02	%			—	%
	Net charge-offs (recoveries)	$	382			$	677			$	(19	)		$	520			$	68
	Nonperforming loans	$	7,424			$	6,588			$	6,582			$	6,987			$	6,843
	Foreclosed property		443				884				581				780				908
	Total nonperforming assets	$	7,867			$	7,472			$	7,163			$	7,767			$	7,751
	Loans past due 90 days and still accruing interest	$	1,264			$	510			$	368			$	323			$	735
	Allowance for credit losses on loans	$	123,923			$	123,191			$	125,552			$	125,835			$	126,461
Mortgage Banking:
	Loans originated, mortgage	$	385,238			$	421,571			$	430,398			$	289,191			$	302,616
	Loans originated, joint venture		180,188				176,612				196,583				135,197				126,332
	Total loans originated	$	565,426			$	598,183			$	626,981			$	424,388			$	428,948
	Number of loans originated		1,489				1,637				1,700				1,247				1,237
	Number of originators		160				159				169				176				181
	Purchase %		89.46	%			91.49	%			94.85	%			95.66	%			95.06	%
	Loans sold	$	629,120			$	526,998			$	605,134			$	410,895			$	468,014
	Rate lock asset	$	1,150			$	1,548			$	1,930			$	1,681			$	895
	Gross realized gain on sales and fees as a % of loans originated		3.25	%			3.28	%			3.28	%			3.34	%			3.06	%
Other Ratios:
	Net interest margin		2.99	%			2.90	%			2.86	%			2.72	%			2.83	%
	Net interest margin-fully tax equivalent (non-GAAP)		3.02	%			2.93	%			2.89	%			2.75	%			2.86	%
	Average earning assets/total average assets		90.57	%			90.43	%			90.36	%			90.52	%			90.48	%
	Average loans/average deposits		78.71	%			80.07	%			80.80	%			81.48	%			80.72	%
	Average noninterest deposits/total average deposits		30.14	%			30.19	%			30.06	%			30.25	%			31.69	%
	Period end equity/period end total assets		12.50	%			12.58	%			12.24	%			12.24	%			12.21	%
	Efficiency ratio (non-GAAP)		70.28	%			70.93	%			68.98	%			73.25	%			76.17	%
	(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
Investment Securities													% Change
	Q4				Q4				Q3				Q4 24 vs.			Q4 24 vs.
Available-for-sale securities, at fair value	2024				2023				2024				Q4 23			Q3 24
U.S. agency securities	$	293,917			$	306,386			$	291,814			(4.07	)%		0.72	%
U.S. Treasury notes		28,429				27,684				28,655			2.69	%		(0.79	)%
Municipal securities		439,115				510,134				455,722			(13.92	)%		(3.64	)%
Trust preferred and other corporate securities		95,279				86,011				91,525			10.78	%		4.10	%
Mortgage-backed securities issued by GSE		1,497,951				1,200,625				1,496,631			24.76	%		0.09	%
Allowance for credit losses		(1,326	)			(1,498	)			(1,171	)		(11.48	)%		13.24	%
Total	$	2,353,365			$	2,129,342			$	2,363,176			10.52	%		(0.42	)%
Gross unrealized gains (losses) reflected in financial statements
Total gross unrealized gains	$	2,572			$	3,740			$	6,703			(31.23	)%		(61.63	)%
Total gross unrealized losses		(157,851	)			(165,863	)			(117,319	)		(4.83	)%		34.55	%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(155,279	)		$	(162,123	)		$	(110,616	)		(4.22	)%		40.38	%
Held-to-maturity securities, at amortized cost
U.S. agency securities	$	102,622			$	101,850			$	102,428			0.76	%		0.19	%
U.S. Treasury notes		96,710				362,593				96,942			(73.33	)%		(0.24	)%
Municipal securities		5,366				5,272				5,342			1.78	%		0.45	%
Trust preferred corporate securities		2,121				2,172				2,133			(2.35	)%		(0.56	)%
Mortgage-backed securities issued by GSE		5,533				5,705				5,577			(3.01	)%		(0.79	)%
Allowance for credit losses		(77	)			(84	)			(77	)		(8.33	)%		—	%
Total	$	212,275			$	477,508			$	212,345			(55.55	)%		(0.03	)%
Total gross unrealized gains	$	178			$	380			$	323			(53.16	)%		(44.89	)%
Total gross unrealized losses		(8,647	)			(15,316	)			(7,929	)		N/M			9.06	%
Net unrealized gains (losses) on HTM securities	$	(8,469	)		$	(14,936	)		$	(7,606	)		(43.30	)%		11.35	%
Total unrealized (losses) gains on AFS and HTM securities	$	(163,748	)		$	(177,059	)		$	(118,222	)		(7.52	)%		38.51	%
													% Change
Loans Held For Investment	Q4				Q4				Q3				Q4 24 vs.			Q4 24 vs.
	2024				2023				2024				Q4 23			Q3 24
Real estate - construction and development	$	1,082,161			$	1,249,735			$	1,118,669			(13.41	)%		(3.26	)%
Commercial real estate - owner occupied		1,628,731				1,699,386				1,655,345			(4.16	)%		(1.61	)%
Commercial real estate - non owner occupied		3,196,665				3,117,071				3,179,699			2.55	%		0.53	%
Real estate - multifamily		801,079				583,209				750,906			37.36	%		6.68	%
Residential 1-4 family		1,891,470				1,852,891				1,891,216			2.08	%		0.01	%
HELOC		410,594				382,979				408,565			7.21	%		0.50	%
Commercial and industrial business (C&I)		1,280,394				1,265,169				1,256,511			1.20	%		1.90	%
Government		513,039				525,261				521,681			(2.33	)%		(1.66	)%
Indirect		567,245				558,789				546,887			1.51	%		3.72	%
Consumer loans and other		87,677				94,531				83,039			(7.25	)%		5.59	%
Total	$	11,459,055			$	11,329,021			$	11,412,518			1.15	%		0.41	%
													% Change
Deposits	Q4				Q4				Q3				Q4 24 vs.			Q4 24 vs.
	2024				2023				2024				Q4 23			Q3 24
Noninterest-bearing demand	$	4,253,053			$	4,342,701			$	4,267,628			(2.06	)%		(0.34	)%
Interest-bearing:
Demand and money market accounts		7,329,669				6,757,619				6,990,103			8.47	%		4.86	%
Savings		311,841				336,492				319,970			(7.33	)%		(2.54	)%
Certificates of deposits		2,542,735				2,456,394				2,785,469			3.51	%		(8.71	)%
Total	$	14,437,298			$	13,893,206			$	14,363,170			3.92	%		0.52	%

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
	Three Months Ended											Three Months Ended											Three Months Ended
	December 31, 2024											September 30, 2024											December 31, 2023
					Interest				Average							Interest				Average							Interest				Average
	Average				Income/				Yield/			Average				Income/				Yield/			Average				Income/				Yield/
	Balance				Expense				Rate (1)			Balance				Expense				Rate (1)			Balance				Expense				Rate (1)
Assets:
Loans (net of unearned income and deferred costs)	$	11,455,253			$	155,710			5.41	%		$	11,419,428			$	156,610			5.46	%		$	11,229,965			$	147,647			5.22	%
Taxable investment securities		2,421,253				20,722			3.42	%			2,376,102				20,940			3.53	%			2,365,928				18,820			3.18	%
Tax-exempt investment securities		176,266				1,832			4.16	%			168,768				1,686			4.00	%			195,603				1,989			4.07	%
Total securities		2,597,519				22,554			3.47	%			2,544,870				22,626			3.56	%			2,561,531				20,809			3.25	%
Interest-bearing deposits		1,451,121				15,796			4.33	%			1,226,445				15,249			4.95	%			1,141,086				13,967			4.86	%
Mortgage loans held for sale		209,315				3,088			5.90	%			208,513				3,247			6.23	%			162,543				2,886			7.10	%
Total earning assets		15,713,208				197,148			4.99	%			15,399,256				197,732			5.11	%			15,095,125				185,309			4.87	%
Less: allowance for credit losses		(123,068	)										(125,331	)										(126,205	)
Total nonearning assets		1,758,988											1,754,216											1,714,121
Total assets	$	17,349,128										$	17,028,141										$	16,683,041
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,157,076			$	43,894			2.44	%		$	6,917,622			$	48,896			2.81	%		$	6,786,850			$	46,833			2.74	%
Savings		315,414				777			0.98	%			315,338				842			1.06	%			345,172				962			1.11	%
Certificates of deposit		2,694,236				31,214			4.61	%			2,723,437				32,390			4.73	%			2,370,723				25,405			4.25	%
Total interest-bearing deposits		10,166,726				75,885			2.97	%			9,956,397				82,128			3.28	%			9,502,745				73,200			3.06	%
Borrowings		36,708				(151	)		(1.61	)%			33,867				(25	)		(0.29	)%			114,151				958			3.28	%
Subordinated debt, net		257,667				2,261			3.51	%			256,309				2,237			3.49	%			255,663				2,236			3.50	%
Total interest-bearing liabilities		10,461,101				77,995			2.97	%			10,246,573				84,340			3.27	%			9,872,559				76,394			3.07	%
Demand deposits		4,386,911											4,305,783											4,408,712
Other noninterest-bearing liabilities		353,005											370,736											413,468
Total liabilities		15,201,017											14,923,092											14,694,739
Shareholders’ equity		2,148,111											2,105,049											1,988,302
Total liabilities and equity	$	17,349,128										$	17,028,141										$	16,683,041
Net interest income (tax-equivalent basis) (4)					$	119,153										$	113,392										$	108,915
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment						(1,096	)										(1,110	)										(1,182	)
Net interest income (GAAP)					$	118,057										$	112,282										$	107,733
Interest rate spread (2)(4)									2.02	%										1.84	%										1.80	%
Interest expense as a percent of average earning assets									1.97	%										2.18	%										2.01	%
Net interest margin (tax-equivalent basis) (3)(4)									3.02	%										2.93	%										2.86	%
Total cost of deposits									2.07	%										2.29	%										2.09	%

(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory tax rate of 21%.
(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,
	2024											2023
					Interest				Average							Interest				Average
	Average				Income/				Yield/			Average				Income/				Yield/
	Balance				Expense				Rate (1)			Balance				Expense				Rate (1)
Assets:
Loans (net of unearned income and deferred costs)	$	11,431,451			$	619,505			5.42	%		$	11,177,132			$	565,453			5.06	%
Taxable investment securities		2,401,605				82,049			3.42	%			2,406,845				71,476			2.97	%
Tax-exempt investment securities		165,806				6,588			3.97	%			200,040				7,872			3.94	%
Total securities		2,567,411				88,637			3.45	%			2,606,885				79,348			3.04	%
Interest-bearing deposits		1,257,373				59,791			4.76	%			1,170,156				54,135			4.63	%
Mortgage loans held for sale		175,207				10,995			6.28	%			167,240				10,965			6.56	%
Total earning assets		15,431,442				778,928			5.05	%			15,121,413				709,901			4.69	%
Less: allowance for credit losses		(125,643	)										(121,878	)
Total nonearning assets		1,750,922											1,657,151
Total assets	$	17,056,721										$	16,656,686
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	6,950,210			$	188,936			2.72	%		$	6,459,679			$	143,574			2.22	%
Savings		319,369				3,345			1.05	%			368,440				3,639			0.99	%
Certificates of deposit		2,679,468				126,143			4.71	%			2,067,053				72,763			3.52	%
Total interest-bearing deposits		9,949,047				318,424			3.20	%			8,895,172				219,976			2.47	%
Borrowings		95,448				4,529			4.67	%			407,125				18,600			4.51	%
Subordinated debt, net		256,489				8,970			3.50	%			254,129				8,886			3.50	%
Total interest-bearing liabilities		10,300,984				331,923			3.22	%			9,556,426				247,462			2.59	%
Demand deposits		4,296,372											4,756,681
Other noninterest-bearing liabilities		374,372											368,585
Total liabilities		14,971,728											14,681,692
Shareholders' equity		2,084,993											1,974,994
Total liabilities and equity	$	17,056,721										$	16,656,686
Net interest income (tax-equivalent basis) (4)					$	447,005										$	462,439
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment						(4,400	)										(4,659	)
Net interest income (GAAP)					$	442,605										$	457,780
Interest rate spread  (2)(4)									1.83	%										2.10	%
Interest expense as a percent of average earning assets									2.15	%										1.64	%
Net interest margin (tax-equivalent basis) (3)(4)									2.90	%										3.06	%
Total cost of deposits									2.24	%										1.61	%

(1) Yields and interest income are presented on a tax-equivalent basis using the federal statutory rate of 21%.
(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)
	2024				2023
	(unaudited)				(audited)
ASSETS
Cash and due from banks	$	108,750			$	85,584
Interest-bearing deposits at FRB		1,127,878				939,356
Interest-bearing deposits in financial institutions		102,847				103,417
Total Cash and Cash Equivalents		1,339,475				1,128,357
Securities available for sale, at fair value (amortized cost of $2,509,970 and $2,292,963, and allowance for credit losses of  $1,326 and $1,498 at December 31, 2024 and December 31, 2023, respectively.		2,353,365				2,129,342
Securities held to maturity, at amortized cost (fair value $203,883 and $462,656 at December 31, 2024 and December 31, 2023, respectively.		212,352				477,592
Less: allowance for credit losses		(77	)			(84	)
Securities held to maturity, net of allowance for credit losses		212,275				477,508
Other equity securities		12,100				13,792
FHLB stock		12,136				21,372
Total Securities		2,589,876				2,642,014
Mortgage loans held for sale		200,460				149,987
Loans, net of unearned income and deferred costs		11,459,055				11,329,021
Less: allowance for credit losses		(123,923	)			(126,461	)
Net Loans		11,335,132				11,202,560
Premises and equipment, net		368,876				337,598
Goodwill		457,619				456,335
Other intangible assets, net		60,171				64,634
BOLI		279,802				277,445
Other assets		615,479				576,109
TOTAL ASSETS	$	17,246,890			$	16,835,039
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,253,053			$	4,342,701
Interest-bearing:
Demand and money market accounts		7,329,669				6,757,619
Savings		311,841				336,492
Certificates of deposit		2,542,735				2,456,394
Total Deposits		14,437,298				13,893,206
Advances from the FHLB		3,218				203,958
Subordinated debt, net		260,001				255,796
Repurchase agreements and other borrowings		33,683				32,826
Total Borrowings		296,902				492,580
Other liabilities		357,063				393,375
TOTAL LIABILITIES		15,091,263				14,779,161
Preferred stock, authorized and unissued shares - 2,000,000		—				—
Common stock, $1.667 par: Authorized shares - 150,000,000
Issued and outstanding shares 75,255,205 in 2024 and 74,893,462 in 2023		125,455				124,847
Capital surplus		1,122,147				1,112,761
Retained earnings		1,007,775				921,126
Common stock issued to deferred compensation trust, at cost
1,046,121 shares in 2024 and 1,004,717 shares in 2023		21,868				20,813
Deferred compensation trust		(21,868	)			(20,813	)
Accumulated other comprehensive income (loss)		(116,045	)			(118,762	)
TOTAL SHAREHOLDERS’ EQUITY		2,139,332				2,039,972
Noncontrolling interest		16,295				15,906
TOTAL EQUITY		2,155,627				2,055,878
TOTAL LIABILITIES AND EQUITY	$	17,246,890			$	16,835,039

    

TOWNEBANK
Consolidated Statements of Income
(dollars in thousands, except per share data)
	Three Months Ended								Twelve Months Ended
	December 31,								December 31,
	2024				2023				2024				2023
	(unaudited)				(unaudited)				(unaudited)				(audited)
INTEREST INCOME:
Loans, including fees	$	154,933			$	146,810			$	616,248			$	562,160
Investment securities		22,236				20,464				87,494				77,982
Interest-bearing deposits in financial institutions and federal funds sold		15,796				13,967				59,791				54,135
Mortgage loans held for sale		3,087				2,886				10,995				10,965
Total interest income		196,052				184,127				774,528				705,242
INTEREST EXPENSE:
Deposits		75,885				73,200				318,424				219,976
Advances from the FHLB		26				917				3,435				17,754
Subordinated debt, net		2,261				2,236				8,970				8,886
Repurchase agreements and other borrowings		(177	)			41				1,094				846
Total interest expense		77,995				76,394				331,923				247,462
Net interest income		118,057				107,733				442,605				457,780
PROVISION FOR CREDIT LOSSES		1,606				2,446				(548	)			18,679
Net interest income after provision for credit losses		116,451				105,287				443,153				439,101
NONINTEREST INCOME:
Residential mortgage banking income, net		11,272				8,035				46,957				39,415
Insurance commissions and related income, net		23,265				21,207				98,562				90,305
Property management income, net		8,186				7,358				50,492				47,791
Real estate brokerage (loss) income, net		—				(32	)			—				3,530
Service charges on deposit accounts		3,289				3,056				12,838				11,631
Credit card merchant fees, net		1,486				1,476				6,529				6,709
Investment commissions, net		3,195				2,380				10,953				8,962
BOLI		4,478				2,206				11,444				7,402
Gain (loss) on sale of equity investment		218				(10	)			238				9,377
Other income		3,714				2,137				13,058				11,220
Net gain on investment securities		—				—				74				—
Total noninterest income		59,103				47,813				251,145				236,342
NONINTEREST EXPENSE:
Salaries and employee benefits		74,399				66,035				289,248				270,158
Occupancy		9,819				9,308				38,309				36,886
Furniture and equipment		4,850				4,445				18,619				17,178
Amortization - intangibles		3,095				3,411				12,769				14,155
Software expense		6,870				6,743				26,816				24,666
Data processing		3,788				3,529				17,011				15,033
Professional fees		3,446				3,339				15,134				12,286
Advertising and marketing		3,359				3,377				15,627				15,390
Other expenses		17,815				21,708				70,383				83,470
Total noninterest expense		127,441				121,895				503,916				489,222
Income before income tax expense and noncontrolling interest		48,113				31,205				190,382				186,221
Provision for income tax expense		6,672				2,660				27,649				31,085
Net income	$	41,441			$	28,545			$	162,733			$	155,136
Net (income) loss attributable to noncontrolling interest		(176	)			259				(976	)			(1,421	)
Net income attributable to TowneBank	$	41,265			$	28,804			$	161,757			$	153,715
Per common share information
Basic earnings	$	0.55			$	0.39			$	2.16			$	2.06
Diluted earnings	$	0.55			$	0.39			$	2.15			$	2.06
Cash dividends declared	$	0.25			$	0.25			$	1.00			$	0.98

TOWNEBANK
Consolidated Balance Sheets - Five Quarter Trend
(dollars in thousands, except per share data)
	December 31,				September 30,				June 30,				March 31,				December 31,
	2024				2024				2024				2024				2023
	(unaudited)				(unaudited)				(unaudited)				(unaudited)				(audited)
ASSETS
Cash and due from banks	$	108,750			$	131,068			$	140,028			$	75,802			$	85,584
Interest-bearing deposits at FRB		1,127,878				1,061,596				1,062,115				926,635				939,356
Federal funds sold and interest-bearing deposits in financial institutions		102,847				103,400				99,303				98,673				103,417
Total Cash and Cash Equivalents		1,339,475				1,296,064				1,301,446				1,101,110				1,128,357
Securities available for sale		2,353,365				2,363,176				2,250,679				2,204,101				2,129,342
Securities held to maturity		212,352				212,422				212,488				312,510				477,592
Less: allowance for credit losses		(77	)			(77	)			(79	)			(82	)			(84	)
Securities held to maturity, net of allowance for credit losses		212,275				212,345				212,409				312,428				477,508
Other equity securities		12,100				12,681				13,566				13,661				13,792
FHLB stock		12,136				12,134				12,134				12,139				21,372
Total Securities		2,589,876				2,600,336				2,488,788				2,542,329				2,642,014
Mortgage loans held for sale		200,460				264,320				200,762				150,727				149,987
Loans, net of unearned income and deferred costs		11,459,055				11,412,518				11,451,747				11,452,343				11,329,021
Less: allowance for credit losses		(123,923	)			(123,191	)			(125,552	)			(125,835	)			(126,461	)
Net Loans		11,335,132				11,289,327				11,326,195				11,326,508				11,202,560
Premises and equipment, net		368,876				365,764				340,348				342,569				337,598
Goodwill		457,619				457,619				457,619				457,619				456,335
Other intangible assets, net		60,171				63,265				65,460				68,758				64,634
BOLI		279,802				279,325				277,434				279,293				277,445
Other assets		615,479				572,000				610,791				615,324				576,109
TOTAL ASSETS	$	17,246,890			$	17,188,020			$	17,068,843			$	16,884,237			$	16,835,039
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,253,053			$	4,267,628			$	4,303,773			$	4,194,132			$	4,342,701
Interest-bearing:
Demand and money market accounts		7,329,669				6,990,103				6,940,086				6,916,701				6,757,619
Savings		311,841				319,970				312,881				326,179				336,492
Certificates of deposit		2,542,735				2,785,469				2,715,848				2,689,062				2,456,394
Total Deposits		14,437,298				14,363,170				14,272,588				14,126,074				13,893,206
Advances from the FHLB		3,218				3,405				3,591				3,775				203,958
Subordinated debt, net		260,001				256,444				256,227				256,011				255,796
Repurchase agreements and other borrowings		33,683				30,970				35,351				31,198				32,826
Total Borrowings		296,902				290,819				295,169				290,984				492,580
Other liabilities		357,063				371,316				411,770				401,307				393,375
TOTAL LIABILITIES		15,091,263				15,025,305				14,979,527				14,818,365				14,779,161
Preferred stock		—				—				—				—				—
Common stock, $1.667 par value		125,455				125,139				125,090				125,009				124,847
Capital surplus		1,122,147				1,117,279				1,115,759				1,114,038				1,112,761
Retained earnings		1,007,775				985,343				961,162				937,065				921,126
Common stock issued to deferred compensation trust, at cost		(21,868	)			(22,224	)			(22,756	)			(20,915	)			(20,813	)
Deferred compensation trust		21,868				22,224				22,756				20,915				20,813
Accumulated other comprehensive income (loss)		(116,045	)			(81,482	)			(129,224	)			(126,586	)			(118,762	)
TOTAL SHAREHOLDERS’ EQUITY		2,139,332				2,146,279				2,072,787				2,049,526				2,039,972
Noncontrolling interest		16,295				16,436				16,529				16,346				15,906
TOTAL EQUITY		2,155,627				2,162,715				2,089,316				2,065,872				2,055,878
TOTAL LIABILITIES AND EQUITY	$	17,246,890			$	17,188,020			$	17,068,843			$	16,884,237			$	16,835,039

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,
	2024				2024				2024				2024				2022
INTEREST INCOME:
Loans, including fees	$	154,933			$	155,792			$	154,549			$	150,974			$	146,810
Investment securities		22,236				22,334				22,928				19,996				20,464
Interest-bearing deposits in financial institutions and federal funds sold		15,796				15,249				14,512				14,234				13,967
Mortgage loans held for sale		3,087				3,247				2,945				1,716				2,886
Total interest income		196,052				196,622				194,934				186,920				184,127
INTEREST EXPENSE:
Deposits		75,885				82,128				82,023				78,388				73,200
Advances from the FHLB		26				29				942				2,438				917
Subordinated debt, net		2,261				2,237				2,236				2,236				2,236
Repurchase agreements and other borrowings		(177	)			(54	)			685				640				41
Total interest expense		77,995				84,340				85,886				83,702				76,394
Net interest income		118,057				112,282				109,048				103,218				107,733
PROVISION FOR CREDIT LOSSES		1,606				(1,100	)			(177	)			(877	)			2,446
Net interest income after provision for credit losses		116,451				113,382				109,225				104,095				105,287
NONINTEREST INCOME:
Residential mortgage banking income, net		11,272				11,786				13,422				10,477				8,035
Insurance commissions and related income, net		23,265				25,727				24,031				25,539				21,207
Property management income, net		8,186				11,221				14,312				16,773				7,358
Real estate brokerage (loss) income, net		—				—				—				—				(32	)
Service charges on deposit accounts		3,289				3,117				3,353				3,079				3,056
Credit card merchant fees, net		1,486				1,830				1,662				1,551				1,476
Investment commissions, net		3,195				2,835				2,580				2,343				2,380
BOLI		4,478				1,886				3,238				1,842				2,206
Other income		3,932				3,834				3,324				2,206				2,127
Net gain/(loss) on investment securities		—				—				—				74				—
Total noninterest income		59,103				62,236				65,922				63,884				47,813
NONINTEREST EXPENSE:
Salaries and employee benefits		74,399				72,123				71,349				71,377				66,035
Occupancy		9,819				9,351				9,717				9,422				9,308
Furniture and equipment		4,850				4,657				4,634				4,478				4,445
Amortization - intangibles		3,095				3,130				3,298				3,246				3,411
Software		6,870				6,790				7,056				6,100				6,743
Data processing		3,788				4,701				4,606				3,916				3,529
Professional fees		3,446				4,720				3,788				3,180				3,339
Advertising and marketing		3,359				4,162				3,524				4,582				3,377
Other expenses		17,815				17,266				16,012				19,290				21,708
Total noninterest expense		127,441				126,900				123,984				125,591				121,895
Income before income tax expense and noncontrolling interest		48,113				48,718				51,163				42,388				31,205
Provision for income tax expense		6,672				5,592				8,124				7,261				2,660
Net income	$	41,441			$	43,126			$	43,039			$	35,127			$	28,545
Net (income) loss attributable to noncontrolling interest		(176	)			(177	)			(183	)			(440	)			259
Net income attributable to TowneBank	$	41,265			$	42,949			$	42,856			$	34,687			$	28,804
Per common share information
Basic earnings	$	0.55			$	0.57			$	0.57			$	0.46			$	0.39
Diluted earnings	$	0.55			$	0.57			$	0.57			$	0.46			$	0.39
Basic weighted average shares outstanding		75,034,688				74,940,827				74,925,877				74,816,420				74,773,335
Diluted weighted average shares outstanding		75,309,989				75,141,661				75,037,955				74,979,501				74,793,557
Cash dividends declared	$	0.25			$	0.25			$	0.25			$	0.25			$	0.25

TOWNEBANK
Banking Segment Financial Information
(dollars in thousands)
	Three Months Ended												Year Ended								Increase/(Decrease)
	December 31,								September 30, 2024				December 31,								2024 over 2023
	2024				2023								2024				2023				Amount				Percent
Revenue
Net interest income	$	117,137			$	106,906			$	111,569			$	439,417			$	456,071			$	(16,654	)		(3.65	)%
Service charges on deposit accounts		3,289				3,055				3,117				12,838				11,631				1,207			10.38	%
Credit card merchant fees		1,486				1,476				1,830				6,529				6,709				(180	)		(2.68	)%
Investment commissions, net		3,195				2,380				2,835				10,953				8,962				1,991			22.22	%
Other income		6,456				4,144				4,828				19,551				16,156				3,395			21.01	%
Subtotal		14,426				11,055				12,610				49,871				43,458				6,413			14.76	%
Gain on investment securities		—				—				—				74				—				74			n/m
Total noninterest income		14,426				11,055				12,610				49,945				43,458				6,487			14.93	%
Total revenue		131,563				117,961				124,179				489,362				499,529				(10,167	)		(2.04	)%
Provision for credit losses		1,525				2,831				(1,043	)			(665	)			19,273				(19,938	)		103.45	%
Expenses
Salaries and employee benefits		50,130				42,573				47,148				190,391				170,733				19,658			11.51	%
Occupancy		7,362				6,981				6,963				28,579				26,698				1,881			7.05	%
Furniture and equipment		4,087				3,621				3,878				15,423				13,771				1,652			12.00	%
Amortization of intangible assets		1,027				1,236				1,072				4,378				5,154				(776	)		(15.06	)%
Other expenses		25,590				29,602				26,674				102,806				109,819				(7,013	)		(6.39	)%
Total expenses		88,196				84,013				85,735				341,577				326,175				15,402			4.72	%
Income before income tax, corporate allocation and noncontrolling interest		41,842				31,117				39,487				148,450				154,081				(5,631	)		(3.65	)%
Corporate allocation		1,172				1,054				1,223				4,696				4,817				(121	)		(2.51	)%
Income before income tax provision and noncontrolling interest		43,014				32,171				40,710				153,146				158,898				(5,752	)		(3.62	)%
Provision for income tax expense		5,275				2,661				3,495				18,006				23,866				(5,860	)		(24.55	)%
Net income		37,739				29,510				37,215				135,140				135,032				108			0.08	%
Noncontrolling interest		(63	)			—				(29	)			(29	)			—				(29	)		n/m
Net income attributable to TowneBank	$	37,676			$	29,510			$	37,186			$	135,111			$	135,032			$	79			0.06	%
Efficiency ratio (non-GAAP)		66.26	%			70.17	%			68.18	%			68.92	%			64.26	%

TOWNEBANK
Realty Segment Financial Information
(dollars in thousands)
	Three Months Ended												Year Ended								Increase/(Decrease)
	December 31,								September 30,				December 31,								2024 over 2023
	2024				2023				2024				2024				2023				Amount				Percent
Revenue
Residential mortgage banking income, net	$	11,580			$	8,322			$	12,211			$	48,586			$	41,287			$	7,299			17.68	%
Real estate brokerage (loss) income, net		—				(32	)			—				—				3,530				(3,530	)		(100.00	)%
Title insurance and settlement fees		—				—				—				—				443				(443	)		(100.00	)%
Property management fees, net		8,186				7,358				11,221				50,492				47,791				2,701			5.65	%
Income (loss) from unconsolidated subsidiary		68				(425	)			51				216				(1,309	)			1,525			116.50	%
Gain on sale of equity investment		—				—				—				—				8,833				(8,833	)		(100.00	)%
Net interest and other income		1,664				1,111				906				4,671				3,095				1,576			50.92	%
Total revenue		21,498				16,334				24,389				103,965				103,670				295			0.28	%
Provision for credit losses		81				(385	)			(57	)			117				(594	)		$	711			119.70	%
Expenses
Salaries and employee benefits	$	11,508			$	11,288			$	12,355			$	48,421			$	52,958			$	(4,537	)		(8.57	)%
Occupancy		1,621				1,600				1,638				6,640				7,158				(518	)		(7.24	)%
Furniture and equipment		593				611				604				2,387				2,544				(157	)		(6.17	)%
Amortization of intangible assets		637				737				637				2,731				2,903				(172	)		(5.92	)%
Other expenses		7,817				7,240				8,839				33,992				34,559				(567	)		(1.64	)%
Total expenses		22,176				21,476				24,073				94,171				100,122				(5,951	)		(5.94	)%
Income (loss) before income tax, corporate allocation, and noncontrolling interest		(759	)			(4,757	)			373				9,677				4,142				5,535			133.63	%
Corporate allocation		(437	)			(352	)			(484	)			(1,759	)			(2,152	)			393			18.26	%
Income (loss) before income tax provision and noncontrolling interest		(1,196	)			(5,109	)			(111	)			7,918				1,990				5,928			297.89	%
Provision for income tax		(216	)			(1,072	)			18				2,120				698				1,422			203.72	%
Net income (loss)		(980	)			(4,037	)			(129	)			5,798				1,292				4,506			348.76	%
Noncontrolling interest		(113	)			259				(148	)			(947	)			(1,421	)			474			(33.36	)%
Net income (loss) attributable to TowneBank	$	(1,093	)		$	(3,778	)		$	(277	)		$	4,851			$	(129	)		$	4,980			3,860.47	%
Efficiency ratio (non-GAAP)		100.19	%			126.97	%			96.09	%			87.95	%			102.51	%

TOWNEBANK
Insurance Segment Financial Information
(dollars in thousands)
	Three Months Ended												Year Ended								Increase/(Decrease)
	December 31,								September 30,				December 31,								2024 over 2023
	2024				2023				2024				2024				2023				Amount				Percent
Commission and fee income
Property and casualty	$	20,576			$	19,795			$	23,157			$	86,679			$	80,054			$	6,625			8.28	%
Employee benefits		4,335				4,332				4,483				18,047				17,726				321			1.81	%
Specialized benefit services		1				36				—				10				481				(471	)		(97.92	)%
Total commissions and fees		24,912				24,163				27,640				104,736				98,261				6,475			6.59	%
Contingency and bonus revenue		2,924				1,276				2,731				13,110				10,619				2,491			23.46	%
Other income		221				8				25				263				580				(317	)		(54.66	)%
Total revenue		28,057				25,447				30,396				118,109				109,460				8,649			7.90	%
Employee commission expense		3,958				4,197				4,446				17,686				18,537				(851	)		(4.59	)%
Revenue, net of commission expense		24,099				21,250				25,950				100,423				90,923				9,500			10.45	%
Expenses
Salaries and employee benefits	$	12,761			$	12,174			$	12,620			$	50,436			$	46,467			$	3,969			8.54	%
Occupancy		836				727				750				3,090				3,030				60			1.98	%
Furniture and equipment		170				213				175				809				863				(54	)		(6.26	)%
Amortization of intangible assets		1,431				1,438				1,421				5,660				6,098				(438	)		(7.18	)%
Other expenses		1,871				1,853				2,126				8,173				6,467				1,706			26.38	%
Total operating expenses		17,069				16,405				17,092				68,168				62,925				5,243			8.33	%
Income before income tax and noncontrolling interest		7,030				4,845				8,858				32,255				27,998				4,257			15.20	%
Corporate allocation		(735	)			(702	)			(739	)			(2,937	)			(2,665	)			(272	)		10.21	%
Income (loss) before income tax, corporate allocation, and noncontrolling interest		6,295				4,143				8,119				29,318				25,333				3,985			15.73	%
Provision for income tax expense		1,613				1,071				2,079				7,523				6,521				1,002			15.37	%
Net income		4,682				3,072				6,040				21,795				18,812				2,983			15.86	%
Noncontrolling interest		—				—				—				—				—				—			N/M
Net income attributable to TowneBank	$	4,682			$	3,072			$	6,040			$	21,795			$	18,812			$	2,983			15.86	%
Provision for income taxes		1,613				1,071				2,079				7,523				6,521				1,002			15.37	%
Depreciation, amortization and interest expense		1,550				1,588				1,550				6,182				6,702				(520	)		(7.76	)%
EBITDA (non-GAAP)	$	7,845			$	5,731			$	9,669			$	35,500			$	32,035			$	3,465			10.82	%
Efficiency ratio (non-GAAP)		65.48	%			70.43	%			60.44	%			62.39	%			62.88	%

TOWNEBANK
Reconciliation of Non-GAAP Financial Measures:
	Three Months Ended												Twelve Months Ended
	December 31,				September 30,				December 31,				December 31,
	2024				2024				2023				2024				2023
Return on average assets (GAAP)		0.95	%			1.00	%			0.68	%			0.95	%			0.92	%
Impact of excluding average goodwill and other intangibles and amortization		0.08	%			0.09	%			0.09	%			0.09	%			0.10	%
Return on average tangible assets (non-GAAP)		1.03	%			1.09	%			0.77	%			1.04	%			1.02	%
Return on average equity (GAAP)		7.64	%			8.12	%			5.75	%			7.76	%			7.78	%
Impact of excluding average goodwill and other intangibles and amortization		3.04	%			3.30	%			2.78	%			3.24	%			3.60	%
Return on average tangible equity (non-GAAP)		10.68	%			11.42	%			8.53	%			11.00	%			11.38	%
Return on average common equity (GAAP)		7.70	%			8.18	%			5.79	%			7.82	%			7.85	%
Impact of excluding average goodwill and other intangibles and amortization		3.09	%			3.36	%			2.83	%			3.29	%			3.65	%
Return on average tangible common equity (non-GAAP)		10.79	%			11.54	%			8.62	%			11.11	%			11.50	%
Book value (GAAP)	$	28.43			$	28.59			$	27.24			$	28.43			$	27.24
Impact of excluding average goodwill and other intangibles and amortization		(6.88	)			(6.94	)			(6.96	)			(6.88	)			(6.96	)
Tangible book value (non-GAAP)	$	21.55			$	21.65			$	20.28			$	21.55			$	20.28
Efficiency ratio (GAAP)		71.94	%			72.71	%			78.36	%			72.64	%			70.48	%
Impact of exclusions		(1.66	)%			(1.78	)%			(2.19	)%			(1.81	)%			(1.10	)%
Efficiency ratio (non-GAAP)		70.28	%			70.93	%			76.17	%			70.83	%			69.38	%
Average assets (GAAP)	$	17,349,128			$	17,028,141			$	16,683,041			$	17,056,721			$	16,656,686
Less: average goodwill and intangible assets		519,691				522,219				523,086				522,419				525,546
Average tangible assets (non-GAAP)	$	16,829,437			$	16,505,922			$	16,159,955			$	16,534,302			$	16,131,140
Average equity (GAAP)	$	2,148,111			$	2,105,049			$	1,988,302			$	2,084,993			$	1,974,994
Less: average goodwill and intangible assets		519,691				522,219				523,086				522,419				525,546
Average tangible equity (non-GAAP)	$	1,628,420			$	1,582,830			$	1,465,216			$	1,562,574			$	1,449,448
Average common equity (GAAP)	$	2,131,778			$	2,088,674			$	1,972,138			$	2,068,671			$	1,959,208
Less: average goodwill and intangible assets		519,691				522,219				523,086				522,419				525,546
Average tangible common equity (non-GAAP)	$	1,612,087			$	1,566,455			$	1,449,052			$	1,546,252			$	1,433,662
Net income (GAAP)	$	41,265			$	42,949			$	28,804			$	161,757			$	153,715
Amortization of intangibles, net of tax		2,445				2,473				2,695				10,088				11,182
Tangible net income (non-GAAP)	$	43,710			$	45,422			$	31,499			$	171,845			$	164,897
Total revenue (GAAP)	$	177,160			$	174,518			$	155,546			$	693,750			$	694,122
Net (gain) loss on  investment securities		—				—				—				(74	)			—
Net (gain) loss on equity investment		(218	)			(20	)			10				(238	)			(9,377	)
Total revenue for efficiency calculation  (non-GAAP)	$	176,942			$	174,498			$	155,556			$	693,438			$	684,745
Noninterest expense (GAAP)	$	127,441			$	126,900			$	121,895			$	503,916			$	489,222
Less: Amortization of intangibles		3,095				3,130				3,411				12,769				14,155
Noninterest expense net of amortization (non-GAAP)	$	124,346			$	123,770			$	118,484			$	491,147			$	475,067

TOWNEBANK
Reconciliation 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,
	2024				2024				2024				2024				2023
Net income (GAAP)	$	41,265			$	42,949			$	42,856			$	34,687			$	28,804
Adjustments
Plus: Acquisition-related expenses, net of tax		250				460				18				564				56
Plus: Initial provision for acquired loans, net of tax		—				—				—				—				—
Plus: FDIC special assessment, net of tax		—				—				(310	)			1,021				4,083
Less: Gain on sale of equity investments, net of noncontrolling interest		(99	)			(16	)			—		0		—				(1,846	)
Core operating earnings, excluding certain items affecting comparability (non-GAAP)	$	41,416			$	43,393			$	42,564			$	36,272			$	31,097
Weighted average diluted shares		75,309,989				75,141,661				75,037,955				74,979,501				74,793,557
Diluted EPS (GAAP)	$	0.55			$	0.57			$	0.57			$	0.46			$	0.39
Diluted EPS, excluding certain items affecting comparability (non-GAAP)	$	0.55			$	0.58			$	0.57			$	0.48			$	0.42
Average assets	$	17,349,128			$	17,028,141			$	16,982,482			$	16,864,235			$	16,683,041
Average tangible equity	$	1,628,420			$	1,582,830			$	1,520,500			$	1,517,600			$	1,465,216
Average common tangible equity	$	1,612,087			$	1,566,455			$	1,504,028			$	1,501,494			$	1,449,052
Return on average assets, excluding certain items affecting comparability (non-GAAP)		0.95	%			1.01	%			1.01	%			0.87	%			0.74	%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)		10.72	%			11.53	%			11.95	%			10.29	%			9.15	%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)		10.82	%			11.65	%			12.08	%			10.40	%			9.25	%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)		71.87	%			72.46	%			70.85	%			74.84	%			78.33	%

TOWNEBANK
Reconciliation 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,
	2024				2023
Net income (GAAP)	$	161,757			$	153,715
Plus: Acquisition-related expenses, net of tax		1,292				7,774
Plus: Initial provision for acquired loans, net of tax		—				3,166
Plus: FDIC special assessment, net of tax		711				4,083
Less: Gain on sale of equity investments, net of noncontrolling interest		(115	)			(7,797	)
Core operating earnings, excluding certain items affecting comparability (non-GAAP)	$	163,645			$	160,941
Weighted average diluted shares		75,161,109				74,661,576
Diluted EPS (GAAP)	$	2.15			$	2.06
Diluted EPS, excluding certain items affecting comparability (non-GAAP)	$	2.18			$	2.16
Average assets	$	17,056,721			$	16,656,686
Average tangible equity	$	1,562,574			$	1,449,448
Average tangible common equity	$	1,546,252			$	1,433,662
Return on average assets, excluding certain items affecting comparability (non-GAAP)		0.96	%			0.97	%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)		11.12	%			11.88	%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)		11.24	%			12.01	%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)		72.48	%			70.04	%