SUFFOLK, Va., April 23, 2025 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ:TOWN) today reported earnings for the quarter ended March 31, 2025 of $50.59 million, or $0.67 per diluted share, compared to $34.69 million, or $0.46 per diluted share, for the quarter ended March 31, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $50.98 million, or $0.68 per diluted share, in the current quarter compared to $36.27 million, or $0.48 per diluted share, for the quarter ended March 31, 2024.

"Our Company had a very strong start to the year earning $0.67 per share and delivering nearly 7% annualized loan growth. Our continued focus on measured growth aligned with a deliberate strategy to maintain healthy liquidity and capital levels should position our Company well during periods of economic uncertainty. While growth could be challenged in the short run, we believe our conservative Main Street approach to relationship banking coupled with our diversified fee income businesses can serve as a pillar of strength for our members, shareholders and the communities we serve," said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2025:

Total revenues were $192.04 million, an increase of $24.94 million, or 14.93%, compared to first quarter 2024. Net interest income increased $17.26 million, driven primarily by lower deposit costs, while noninterest income increased $7.68 million.
Total deposits were $14.61 billion, an increase of $482.47 million, or 3.42%, compared to first quarter 2024. Total deposits increased 1.19%, or $171.25 million, in comparison to December 31, 2024, 4.81% on an annualized basis.
Noninterest-bearing deposits increased 2.85%, to $4.31 billion, compared to first quarter 2024 and represented 29.53% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 1.42%.
Loans held for investment were $11.65 billion, an increase of $200.40 million, or 1.75%, compared to March 31, 2024, and $193.69 million, 1.69%, or 6.86% on an annualized basis, compared to December 31, 2024.
Annualized return on common shareholders' equity was 9.57% compared to 6.89% in first quarter 2024. Annualized return on average tangible common shareholders' equity (non-GAAP) was 13.21% compared to 9.98% in first quarter 2024.
Net interest margin was 3.14% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.17%, including purchase accounting accretion of 3 basis points, compared to the prior year quarter net interest margin of 2.72% and tax-equivalent net interest margin (non-GAAP) of 2.75%, including purchase accounting accretion of 4 basis points.
Compared to the linked quarter, net interest margin increased 15 basis points and spread increased 26 basis points.
The effective tax rate was 13.95% in the quarter compared to 17.31% in first quarter 2024 and 13.92% in the linked quarter. The lower effective tax rate in the current quarter as compared to first quarter 2024 was primarily due to the impact on state and federal taxes from the increase in credits and losses related to tax advantaged investment properties placed in service over the past 12 months and purchase accounting adjustments for a prior partnership acquisition.

"We were pleased to close our partnership with Village Bank and Trust Financial Corp. on April 1, 2025 followed by our latest announcement of the signing of a definitive agreement with Old Point Financial Corporation. Both transactions are strategically important for our Company and follow our disciplined model of targeting partnerships that enhance shareholder returns with low execution risk," stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

Net interest income was $120.48 million compared to $103.22 million for the quarter ended March 31, 2024.
On an average basis, loans held for investment, with a yield of 5.38%, represented 74.15% of earning assets at March 31, 2025 compared to a yield of 5.37% and 74.54% of earning assets at March 31, 2024.
The cost of interest-bearing deposits was 2.69% for the quarter ended March 31, 2025, compared to 3.24% in first quarter 2024. Interest expense on deposits decreased $11.26 million, or 14.36%, from the prior year quarter driven by decreases in rate.
Our total cost of deposits decreased to 1.89% from 2.26% for the quarter ended March 31, 2024 due to lower interest-bearing deposit rates. The Federal Reserve Open Market Committee lowered the overnight funds rate a total of 100 basis points in the last four months of 2024.
Average interest-earning assets totaled $15.55 billion at March 31, 2025 compared to $15.27 billion at March 31, 2024, an increase of 1.84%. The Company anticipates approximately $760 million of cash flows from its securities portfolio to be available for reinvestment in the next 24 months.
Average interest-bearing liabilities totaled $10.42 billion, an increase of $212.32 million, or 2.08%, from prior year, driven by demand and money market deposit growth. Borrowings have declined between periods. There were no short term FHLB borrowings in first quarter 2025, compared to an average of $174.73 million in the prior year quarter.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $2.42 million compared to a benefit of $0.88 million in the prior year quarter and an expense of $1.61 million in the linked quarter.
The allowance for credit losses on loans increased $2.21 million in first quarter 2025, compared to the linked quarter. The increase in the allowance was driven by increases in the loan portfolio combined with a continuation of our use of higher weightings of more adverse macroeconomic forecast scenarios utilized in our model.
Net loan charge-offs were $626 thousand in the quarter compared to $520 thousand in the prior year quarter and $382 thousand in the linked quarter.
The ratio of net charge-offs to average loans on an annualized basis was 0.02% in first quarter 2025, compared to 0.02% in first quarter 2024 and 0.01% in the linked quarter.
The allowance for credit losses on loans represented 1.08% of total loans at March 31, 2025, compared to 1.10% at March 31, 2024, and 1.08% at December 31, 2024. The allowance for credit losses on loans was 19.15 times nonperforming loans compared to 18.01 times at March 31, 2024 and 16.69 times at December 31, 2024.

Quarterly Noninterest Income:

Total noninterest income was $71.57 million compared to $63.88 million in 2024, an increase of $7.68 million, or 12.02%.
Total net insurance commissions increased $0.89 million, or 3.47%, to $26.42 million in first quarter 2025 compared to 2024. This increase was primarily attributable to increases in property and casualty commissions, which were driven by organic growth.
Property management fee revenue increased 16.26%, or $2.73 million, to $19.50 million in first quarter 2025 compared to 2024. Future reservations increased compared to the prior year, primarily driven by an acquisition in 2024.
Residential mortgage banking income was $10.36 million compared to $10.48 million in first quarter 2024. Loan volume increased to $445.19 million in first quarter 2025 from $424.39 million in first quarter 2024. Residential purchase activity was 89.94% of production volume in the first quarter of 2025 compared to 95.66% in first quarter 2024.
At 3.18% gross margins on residential mortgage sales decreased 7 basis points from the linked quarter and 16 basis points from 3.34% in first quarter 2024.

Quarterly Noninterest Expense:

Total noninterest expense was $130.54 million compared to $125.59 million in 2024, an increase of $4.95 million, or 3.94%. This increase was primarily attributable to growth in salaries and employee benefits of $3.70 million.
Salaries and benefits expense increases were driven by annual base salary adjustments that went into effect October 2024, an increase in banking personnel, and production incentives.

Consolidated Balance Sheet Highlights:

Total assets were $17.51 billion for the quarter ended March 31, 2025, a $264.99 million increase compared to $17.25 billion at December 31, 2024. Total assets increased $627.64 million, or 3.72%, from $16.88 billion at March 31, 2024.
Loans held for investment increased $193.69 million, or 1.69%, compared to the linked quarter and $200.40 million, or 1.75%, compared to prior year. Real estate construction and development loans declined, but were offset by growth in non owner occupied and multifamily commercial real estate. The Company continues to maintain a strong credit discipline.
Mortgage loans held for sale increased $17.78 million, or 11.80%, compared to prior year but decreased $31.95 million, or 15.94%, compared to the linked quarter, driven by production levels.
Total deposits increased $482.47 million, or 3.42%, driven by interest-bearing demand deposits, compared to prior year. In the linked quarter comparison, total deposits increased $171.25 million, or 4.81% on an annualized basis.
Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to prior year and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter.
Total borrowings decreased $6.88 million, or 2.37%, compared to first quarter 2024 and $12.80 million, or 4.31%, compared to the linked quarter, due to declines in repurchase agreements and other borrowings.

Investment Securities:

Total investment securities were $2.70 billion compared to $2.59 billion at December 31, 2024 and $2.54 billion at March 31, 2024. The weighted average duration of the portfolio at March 31, 2025 was 3.3 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $119.25 million at March 31, 2025, compared to $155.28 million at December 31, 2024 and $170.84 million at March 31, 2024, with the changes in fair value due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $11.65 billion at March 31, 2025, $11.46 billion at December 31, 2024, and $11.45 billion at March 31, 2024.
Nonperforming assets were $7.37 million, or 0.04% of total assets, compared to $7.77 million, or 0.05%, at March 31, 2024, and $7.87 million, or 0.05%, in the linked quarter end.
Nonperforming loans were 0.06% of period end loans at March 31, 2025, March 31, 2024, and the linked quarter end.
Foreclosed property consisted of $235 thousand in other real estate owned and $551 thousand in repossessed autos, for a total of $786 thousand in foreclosed property at March 31, 2025, compared to $175 thousand in other real estate owned and $605 thousand in repossessed autos, for a total of $780 thousand in foreclosed property at March 31, 2024.

Deposits and Borrowings:

Total deposits were $14.61 billion compared to $14.44 billion at December 31, 2024 and $14.13 billion at March 31, 2024.
The ratio of period end loans held for investment to deposits was 79.77% compared to 79.37% at December 31, 2024 and 81.07% at March 31, 2024.
Noninterest-bearing deposits were 29.53% of total deposits at March 31, 2025 compared to 29.46% at December 31, 2024 and 29.69% at March 31, 2024. Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to March 31, 2024, and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter.
Total borrowings were $284.10 million compared to $296.90 million at December 31, 2024 and $290.98 million at March 31, 2024.

Capital:

Common equity tier 1 capital ratio of 12.75%⁽¹⁾.
Tier 1 leverage capital ratio of 10.61%⁽¹⁾.
Tier 1 risk-based capital ratio of 12.87%⁽¹⁾.
Total risk-based capital ratio of 15.65%⁽¹⁾.
Book value per common share was $29.19 compared to $28.43 at December 31, 2024 and $27.33 at March 31, 2024.
Tangible book value per common share (non-GAAP) was $22.36 compared to $21.55 at December 31, 2024 and $20.31 at March 31, 2024.

⁽¹⁾ Preliminary.

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.

Today, TowneBank operates over 55 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 $17.51 billion as of March 31, 2025, 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: fully tax-equivalent net interest margin, core operating earnings, core net income, 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 2023 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, trade restrictions and tariffs, 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 successfully integrate the businesses of Old Point Financial Corporation ("Old Point"), a pending merger, and Village Bank and Trust Financial Corp. ("Village"), a recently completed merger, to the extent that it may take longer or be more difficult, time-consuming, or costly to accomplish than expected, our ability to close the transaction with Old Point 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; deposit attrition, operating costs, customer losses, and business disruption associated with pending or recently completed acquisitions, including reputational risk and adverse effects on relationships with employees, customers or other business partners, that may be greater than expected; costs or difficulties related to the integration of the businesses we have acquired that 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; the diversion of management's attention and time from ongoing business operations and opportunities on merger related matters; 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, including any adverse impact of actual and proposed cuts to federal spending, including defense, security and military spending, on the Greater Hampton Roads economy. 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, 2024 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
		March 31,			December 31,			September 30,			June 30,			March 31,
			2025			2024			2024			2024			2024
Income and Performance Ratios:
	Total revenue	$	192,044		$	177,160		$	174,518		$	174,970		$	167,102
	Net income		50,887			41,441			43,126			43,039			35,127
	Net income available to common shareholders		50,592			41,265			42,949			42,856			34,687
	Net income per common share - diluted		0.67			0.55			0.57			0.57			0.46
	Book value per common share		29.19			28.43			28.59			27.62			27.33
	Book value per common share - tangible ^(non-GAAP)		22.36			21.55			21.65			20.65			20.31
	Return on average assets		1.19	%		0.95	%		1.00	%		1.01	%		0.83	%
	Return on average assets - tangible ^(non-GAAP)		1.29	%		1.03	%		1.09	%		1.11	%		0.92	%
	Return on average equity		9.50	%		7.64	%		8.12	%		8.43	%		6.84	%
	Return on average equity - tangible ^(non-GAAP)		13.08	%		10.68	%		11.42	%		12.03	%		9.87	%
	Return on average common equity		9.57	%		7.70	%		8.18	%		8.49	%		6.89	%
	Return on average common equity - tangible ^(non-GAAP)		13.21	%		10.79	%		11.54	%		12.16	%		9.98	%
	Noninterest income as a percentage of total revenue		37.27	%		33.36	%		35.66	%		37.68	%		38.23	%
Regulatory Capital Ratios (1):
	Common equity tier 1		12.75	%		12.77	%		12.63	%		12.43	%		12.20	%
	Tier 1		12.87	%		12.89	%		12.76	%		12.55	%		12.32	%
	Total		15.65	%		15.68	%		15.54	%		15.34	%		15.10	%
	Tier 1 leverage ratio		10.61	%		10.36	%		10.38	%		10.25	%		10.15	%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans	19.15x			16.69x			18.70x			19.08x			18.01x
	Allowance for credit losses on loans to period end loans		1.08	%		1.08	%		1.08	%		1.10	%		1.10	%
	Nonperforming loans to period end loans		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
	Nonperforming assets to period end assets		0.04	%		0.05	%		0.04	%		0.04	%		0.05	%
	Net charge-offs (recoveries) to average loans (annualized)		0.02	%		0.01	%		0.02	%		—	%		0.02	%
	Net charge-offs (recoveries)	$	626		$	382		$	677		$	(19	)	$	520

	Nonperforming loans	$	6,586		$	7,424		$	6,588		$	6,582		$	6,987
	Foreclosed property		786			443			884			581			780
	Total nonperforming assets	$	7,372		$	7,867		$	7,472		$	7,163		$	7,767
	Loans past due 90 days and still accruing interest	$	15		$	1,264		$	510		$	368		$	323
	Allowance for credit losses on loans	$	126,131		$	123,923		$	123,191		$	125,552		$	125,835
Mortgage Banking:
	Loans originated, mortgage	$	300,699		$	385,238		$	421,571		$	430,398		$	289,191
	Loans originated, joint venture		144,495			180,188			176,612			196,583			135,197
	Total loans originated	$	445,194		$	565,426		$	598,183		$	626,981		$	424,388
	Number of loans originated		1,181			1,489			1,637			1,700			1,247
	Number of originators		161			160			159			169			176
	Purchase %		89.94	%		89.46	%		91.49	%		94.85	%		95.66	%
	Loans sold	$	475,518		$	629,120		$	526,998		$	605,134		$	410,895
	Rate lock asset	$	1,880		$	1,150		$	1,548		$	1,930		$	1,681
	Gross realized gain on sales and fees as a % of loans originated		3.18	%		3.25	%		3.28	%		3.28	%		3.34	%
Other Ratios:
	Net interest margin		3.14	%		2.99	%		2.90	%		2.86	%		2.72	%
	Net interest margin-fully tax-equivalent ^(non-GAAP)		3.17	%		3.02	%		2.93	%		2.89	%		2.75	%
	Average earning assets/total average assets		90.32	%		90.57	%		90.43	%		90.36	%		90.52	%
	Average loans/average deposits		80.01	%		78.71	%		80.07	%		80.80	%		81.48	%
	Average noninterest deposits/total average deposits		29.68	%		30.14	%		30.19	%		30.06	%		30.25	%
	Period end equity/period end total assets		12.66	%		12.50	%		12.58	%		12.24	%		12.24	%
	Efficiency ratio^(non-GAAP)		67.10	%		70.28	%		70.93	%		68.98	%		73.25	%
	(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
*Available-for-sale securities, at fair value*		2025			2024			2024		Q1 24		Q4 24
U.S. agency securities	$	320,190		$	294,723		$	293,917		8.64	%	8.94	%
U.S. Treasury notes		78,184			27,534			28,429		183.95	%	175.01	%
Municipal securities		439,379			447,323			439,115		(1.78	)%	0.06	%
Trust preferred and other corporate securities		98,463			87,983			95,279		11.91	%	3.34	%
Mortgage-backed securities issued by GSEs and GNMA		1,535,217			1,347,920			1,497,951		13.90	%	2.49	%
Allowance for credit losses		(1,262	)		(1,382	)		(1,326	)	(8.68	)%	(4.83	)%
Total	$	2,470,171		$	2,204,101		$	2,353,365		12.07	%	4.96	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	5,909		$	1,868		$	2,572		216.33	%	129.74	%
Total gross unrealized losses		(125,156	)		(172,708	)		(157,851	)	(27.53	)%	(20.71	)%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(119,247	)	$	(170,840	)	$	(155,279	)	(30.20	)%	(23.20	)%
*Held-to-maturity securities, at amortized cost*
U.S. agency securities	$	92,805		$	102,042		$	102,622		(9.05	)%	(9.57	)%
U.S. Treasury notes		96,481			197,356			96,710		(51.11	)%	(0.24	)%
Municipal securities		5,390			5,294			5,366		1.81	%	0.45	%
Trust preferred corporate securities		2,107			2,159			2,121		(2.41	)%	(0.66	)%
Mortgage-backed securities issued by GSEs		5,235			5,659			5,533		(7.49	)%	(5.39	)%
Allowance for credit losses		(68	)		(82	)		(77	)	(17.07	)%	(11.69	)%
Total	$	201,950		$	312,428		$	212,275		(35.36	)%	(4.86	)%

Total gross unrealized gains	$	176		$	265		$	178		(33.58	)%	(1.12	)%
Total gross unrealized losses		(6,563	)		(14,262	)		(8,647	)	(53.98	)%	(24.10	)%
Net unrealized gains (losses) in HTM securities	$	(6,387	)	$	(13,997	)	$	(8,469	)	(54.37	)%	(24.58	)%
Total unrealized gains (losses) on AFS and HTM securities	$	(125,634	)	$	(184,837	)	$	(163,748	)	(32.03	)%	(23.28	)%
										% Change
Loans Held For Investment	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
		2025			2024			2024		Q1 24		Q4 24
Real estate - construction and development	$	1,006,086		$	1,255,741		$	1,082,161		(19.88	)%	(7.03	)%
Commercial real estate - owner occupied		1,654,401			1,700,753			1,628,731		(2.73	)%	1.58	%
Commercial real estate - non owner occupied		3,329,728			3,178,947			3,196,665		4.74	%	4.16	%
Real estate - multifamily		841,330			595,075			801,079		41.38	%	5.02	%
Residential 1-4 family		1,886,107			1,882,296			1,891,470		0.20	%	(0.28	)%
HELOC		429,152			386,361			410,594		11.08	%	4.52	%
Commercial and industrial business (C&I)		1,337,254			1,288,550			1,280,394		3.78	%	4.44	%
Government		511,676			528,341			513,039		(3.15	)%	(0.27	)%
Indirect		570,795			555,482			567,245		2.76	%	0.63	%
Consumer loans and other		86,217			80,797			87,677		6.71	%	(1.67	)%
Total	$	11,652,746		$	11,452,343		$	11,459,055		1.75	%	1.69	%

										% Change
Deposits	Q1			Q1			Q4			Q1 25 vs.		Q1 25 vs.
		2025			2024			2024		Q1 24		Q4 24
Noninterest-bearing demand	$	4,313,553		$	4,194,132		$	4,253,053		2.85	%	1.42	%
Interest-bearing:
Demand and money market accounts		7,463,355			6,916,701			7,329,669		7.90	%	1.82	%
Savings		312,151			326,179			311,841		(4.30	)%	0.10	%
Certificates of deposits		2,519,489			2,689,062			2,542,735		(6.31	)%	(0.91	)%
Total		14,608,548			14,126,074			14,437,298		3.42	%	1.19	%

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)

	Three Months Ended								Three Months Ended								Three Months Ended
	March 31, 2025								December 31, 2024								March 31, 2024
				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)	$	11,527,915		$	153,068		5.38	%	$	11,455,253		$	155,710		5.41	%	$	11,379,323		$	151,811		5.37	%
Taxable investment securities		2,478,048			21,301		3.44	%		2,421,253			20,722		3.42	%		2,440,652			18,716		3.07	%
Tax-exempt investment securities		176,081			1,860		4.23	%		176,266			1,832		4.16	%		161,538			1,549		3.84	%
Total securities		2,654,129			23,161		3.49	%		2,597,519			22,554		3.47	%		2,602,190			20,265		3.12	%
Interest-bearing deposits		1,199,650			11,801		3.99	%		1,451,121			15,796		4.33	%		1,167,322			14,234		4.90	%
Mortgage loans held for sale		164,358			2,653		6.46	%		209,315			3,088		5.90	%		116,868			1,716		5.87	%
Total earning assets		15,546,052			190,683		4.97	%		15,713,208			197,148		4.99	%		15,265,703			188,026		4.95	%
Less: allowance for loan losses		(124,265	)							(123,068	)							(127,413	)
Total nonearning assets		1,790,075								1,758,988								1,725,945
Total assets	$	17,211,862							$	17,349,128							$	16,864,235
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,279,365		$	40,606		2.26	%	$	7,157,076		$	43,894		2.44	%	$	6,828,053		$	47,985		2.83	%
Savings		312,118			714		0.93	%		315,414			777		0.98	%		329,036			881		1.08	%
Certificates of deposit		2,540,438			25,813		4.12	%		2,694,236			31,214		4.61	%		2,583,938			29,522		4.60	%
Total interest-bearing deposits		10,131,921			67,133		2.69	%		10,166,726			75,885		2.97	%		9,741,027			78,388		3.24	%
Borrowings		29,606			(300	)	(4.05	)%		36,708			(151	)	(1.61	)%		212,375			3,078		5.73	%
Subordinated debt, net		260,070			2,304		3.54	%		257,667			2,261		3.51	%		255,878			2,236		3.50	%
Total interest-bearing liabilities		10,421,597			69,137		2.69	%		10,461,101			77,995		2.97	%		10,209,280			83,702		3.30	%
Demand deposits		4,276,586								4,386,911								4,224,104
Other noninterest-bearing liabilities		353,665								353,005								390,576
Total liabilities		15,051,848								15,201,017								14,823,960
Shareholders' equity		2,160,014								2,148,111								2,040,275
Total liabilities and equity	$	17,211,862							$	17,349,128							$	16,864,235
Net interest income (tax-equivalent basis) (4)				$	121,546							$	119,153							$	104,324
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment					(1,068	)							(1,096	)							(1,106	)
Net interest income (GAAP)				$	120,478							$	118,057							$	103,218

Interest rate spread (2)(4)							2.28	%							2.02	%							1.65	%
Interest expense as a percent of average earning assets							1.80	%							1.97	%							2.21	%
Net interest margin (tax-equivalent basis) (3)(4)							3.17	%							3.02	%							2.75	%
Total cost of deposits							1.89	%							2.07	%							2.26	%

(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
Consolidated Balance Sheets
(dollars in thousands, except share data)


	March 31,			December 31,
		2025			2024
	(unaudited)			(audited)
ASSETS
Cash and due from banks	$	126,526		$	108,750
Interest-bearing deposits at FRB		1,090,555			1,127,878
Interest-bearing deposits in financial institutions		100,249			102,847
Total Cash and Cash Equivalents		1,317,330			1,339,475
Securities available for sale, at fair value (amortized cost of $2,590,680 and $2,509,970, and allowance for credit losses of $1,262 and $1,326 at March 31, 2025 and December 31, 2024, respectively)		2,470,171			2,353,365
Securities held to maturity, at amortized cost (fair value of $195,631 and $203,883 at March 31, 2025 and December 31, 2024, respectively)		202,018			212,352
Less: allowance for credit losses		(68	)		(77	)
Securities held to maturity, net of allowance for credit losses		201,950			212,275
Other equity securities		12,223			12,100
FHLB stock		12,425			12,136
Total Securities		2,696,769			2,589,876
Mortgage loans held for sale		168,510			200,460
Loans, net of unearned income and deferred costs		11,652,746			11,459,055
Less: allowance for credit losses		(126,131	)		(123,923	)
Net Loans		11,526,615			11,335,132
Premises and equipment, net		373,111			368,876
Goodwill		457,619			457,619
Other intangible assets, net		57,145			60,171
BOLI		280,344			279,802
Other assets		634,437			615,479
TOTAL ASSETS	$	17,511,880		$	17,246,890

LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,313,553		$	4,253,053
Interest-bearing:
Demand and money market accounts		7,463,355			7,329,669
Savings		312,151			311,841
Certificates of deposit		2,519,489			2,542,735
Total Deposits		14,608,548			14,437,298
Advances from the FHLB		3,029			3,218
Subordinated debt, net		260,198			260,001
Repurchase agreements and other borrowings		20,875			33,683
Total Borrowings		284,102			296,902
Other liabilities		402,252			357,063
TOTAL LIABILITIES		15,294,902			15,091,263
Preferred stock, authorized and unissued shares - 2,000,000		—			—
Common stock, $1.667 par value: 150,000,000 shares authorized;
75,392,225 and 75,255,205 shares issued at
March 31, 2025 and December 31, 2024, respectively		125,679			125,455
Capital surplus		1,123,330			1,122,147
Retained earnings		1,039,518			1,007,775
Common stock issued to deferred compensation trust, at cost:
1,049,002 and 1,046,121 shares at March 31, 2025 and December 31, 2024, respectively		(21,969	)		(21,868	)
Deferred compensation trust		21,969			21,868
Accumulated other comprehensive income (loss)		(87,869	)		(116,045	)
TOTAL SHAREHOLDERS' EQUITY		2,200,658			2,139,332
Noncontrolling interest		16,320			16,295
TOTAL EQUITY		2,216,978			2,155,627
TOTAL LIABILITIES AND EQUITY	$	17,511,880		$	17,246,890

TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)


	Three Months Ended
	March 31,
		2025			2024
INTEREST INCOME:
Loans, including fees	$	152,322		$	150,974
Investment securities		22,839			19,996
Interest-bearing deposits in financial institutions and federal funds sold		11,801			14,234
Mortgage loans held for sale		2,653			1,716
Total interest income		189,615			186,920
INTEREST EXPENSE:
Deposits		67,133			78,388
Advances from the FHLB		25			2,438
Subordinated debt, net		2,304			2,236
Repurchase agreements and other borrowings		(325	)		640
Total interest expense		69,137			83,702
Net interest income		120,478			103,218
PROVISION FOR CREDIT LOSSES		2,420			(877	)
Net interest income after provision for credit losses		118,058			104,095
NONINTEREST INCOME:
Residential mortgage banking income, net		10,361			10,477
Insurance commissions and related income, net		26,424			25,539
Property management income, net		19,500			16,773
Service charges on deposit accounts		3,327			3,079
Credit card merchant fees, net		1,697			1,551
Investment commissions, net		3,075			2,343
BOLI		1,872			1,842
Gain on sale of equity investment		2,000			—
Other income		3,310			2,206
Net gain on investment securities		—			74
Total noninterest income		71,566			63,884
NONINTEREST EXPENSE:
Salaries and employee benefits		75,078			71,377
Occupancy		9,333			9,422
Furniture and equipment		4,621			4,478
Amortization - intangibles		3,026			3,246
Software		6,293			6,100
Data processing		3,835			3,916
Professional fees		2,653			3,180
Advertising and marketing		4,472			4,582
FDIC and other insurance		2,860			4,358
Acquisition related expenses		420			595
Other expenses		17,945			14,337
Total noninterest expense		130,536			125,591
Income before income tax expense and noncontrolling interest		59,088			42,388
Provision for income tax expense		8,201			7,261
Net income	$	50,887		$	35,127
Net income attributable to noncontrolling interest		(295	)		(440	)
Net income attributable to TowneBank	$	50,592		$	34,687
Per common share information
Basic earnings	$	0.67		$	0.46
Diluted earnings	$	0.67		$	0.46
Cash dividends declared	$	0.25		$	0.25

TOWNEBANK
Consolidated Balance Sheets - Five Quarter Trend
(dollars in thousands, except share data)


	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
	(unaudited)			(audited)			(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	126,526		$	108,750		$	131,068		$	140,028		$	75,802
Interest-bearing deposits at FRB		1,090,555			1,127,878			1,061,596			1,062,115			926,635
Interest-bearing deposits in financial institutions		100,249			102,847			103,400			99,303			98,673
Total Cash and Cash Equivalents		1,317,330			1,339,475			1,296,064			1,301,446			1,101,110
Securities available for sale		2,470,171			2,353,365			2,363,176			2,250,679			2,204,101
Securities held to maturity		202,018			212,352			212,422			212,488			312,510
Less: allowance for credit losses		(68	)		(77	)		(77	)		(79	)		(82	)
Securities held to maturity, net of allowance for credit losses		201,950			212,275			212,345			212,409			312,428
Other equity securities		12,223			12,100			12,681			13,566			13,661
FHLB stock		12,425			12,136			12,134			12,134			12,139
Total Securities		2,696,769			2,589,876			2,600,336			2,488,788			2,542,329
Mortgage loans held for sale		168,510			200,460			264,320			200,762			150,727
Loans, net of unearned income and deferred costs		11,652,746			11,459,055			11,412,518			11,451,747			11,452,343
Less: allowance for credit losses		(126,131	)		(123,923	)		(123,191	)		(125,552	)		(125,835	)
Net Loans		11,526,615			11,335,132			11,289,327			11,326,195			11,326,508
Premises and equipment, net		373,111			368,876			365,764			340,348			342,569
Goodwill		457,619			457,619			457,619			457,619			457,619
Other intangible assets, net		57,145			60,171			63,265			65,460			68,758
BOLI		280,344			279,802			279,325			277,434			279,293
Other assets		634,437			615,479			572,000			610,791			615,324
TOTAL ASSETS	$	17,511,880		$	17,246,890		$	17,188,020		$	17,068,843		$	16,884,237
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,313,553		$	4,253,053		$	4,267,628		$	4,303,773		$	4,194,132
Interest-bearing:
Demand and money market accounts		7,463,355			7,329,669			6,990,103			6,940,086			6,916,701
Savings		312,151			311,841			319,970			312,881			326,179
Certificates of deposit		2,519,489			2,542,735			2,785,469			2,715,848			2,689,062
Total Deposits		14,608,548			14,437,298			14,363,170			14,272,588			14,126,074
Advances from the FHLB		3,029			3,218			3,405			3,591			3,775
Subordinated debt, net		260,198			260,001			256,444			256,227			256,011
Repurchase agreements and other borrowings		20,875			33,683			30,970			35,351			31,198
Total Borrowings		284,102			296,902			290,819			295,169			290,984
Other liabilities		402,252			357,063			371,316			411,770			401,307
TOTAL LIABILITIES		15,294,902			15,091,263			15,025,305			14,979,527			14,818,365

Preferred stock		—			—			—			—			—
Common stock, $1.667 par value		125,679			125,455			125,139			125,090			125,009
Capital surplus		1,123,330			1,122,147			1,117,279			1,115,759			1,114,038
Retained earnings		1,039,518			1,007,775			985,343			961,162			937,065
Common stock issued to deferred compensation
trust, at cost		(21,969	)		(21,868	)		(22,224	)		(22,756	)		(20,915	)
Deferred compensation trust		21,969			21,868			22,224			22,756			20,915
Accumulated other comprehensive income (loss)		(87,869	)		(116,045	)		(81,482	)		(129,224	)		(126,586	)
TOTAL SHAREHOLDERS' EQUITY		2,200,658			2,139,332			2,146,279			2,072,787			2,049,526
Noncontrolling interest		16,320			16,295			16,436			16,529			16,346
TOTAL EQUITY		2,216,978			2,155,627			2,162,715			2,089,316			2,065,872
TOTAL LIABILITIES AND EQUITY	$	17,511,880		$	17,246,890		$	17,188,020		$	17,068,843		$	16,884,237

TOWNEBANK
Consolidated Statements of Income - Five Quarter Trend (unaudited)
(dollars in thousands, except share data)


	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
		2025			2024			2024			2024			2024
INTEREST INCOME:
Loans, including fees	$	152,322		$	154,933		$	155,792		$	154,549		$	150,974
Investment securities		22,839			22,236			22,334			22,928			19,996
Interest-bearing deposits in financial institutions and federal funds sold		11,801			15,796			15,249			14,512			14,234
Mortgage loans held for sale		2,653			3,087			3,247			2,945			1,716
Total interest income		189,615			196,052			196,622			194,934			186,920
INTEREST EXPENSE:
Deposits		67,133			75,885			82,128			82,023			78,388
Advances from the FHLB		25			26			29			942			2,438
Subordinated debt, net		2,304			2,261			2,237			2,236			2,236
Repurchase agreements and other borrowings		(325	)		(177	)		(54	)		685			640
Total interest expense		69,137			77,995			84,340			85,886			83,702
Net interest income		120,478			118,057			112,282			109,048			103,218
PROVISION FOR CREDIT LOSSES		2,420			1,606			(1,100	)		(177	)		(877	)
Net interest income after provision for credit losses		118,058			116,451			113,382			109,225			104,095
NONINTEREST INCOME:
Residential mortgage banking income, net		10,361			11,272			11,786			13,422			10,477
Insurance commissions and related income, net		26,424			23,265			25,727			24,031			25,539
Property management income, net		19,500			8,186			11,221			14,312			16,773
Service charges on deposit accounts		3,327			3,289			3,117			3,353			3,079
Credit card merchant fees, net		1,697			1,486			1,830			1,662			1,551
Investment commissions, net		3,075			3,195			2,835			2,580			2,343
BOLI		1,872			4,478			1,886			3,238			1,842
Other income		5,310			3,932			3,834			3,324			2,206
Net gain on investment securities		—			—			—			—			74
Total noninterest income		71,566			59,103			62,236			65,922			63,884
NONINTEREST EXPENSE:
Salaries and employee benefits		75,078			74,399			72,123			71,349			71,377
Occupancy