SUFFOLK, Va., Oct. 22, 2025 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ:TOWN) today reported earnings for the quarter ended September 30, 2025 of $38.98 million, or $0.51 per diluted share, compared to $42.95 million, or $0.57 per diluted share, for the quarter ended September 30, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $63.45 million, or $0.83 per diluted share, in the current quarter compared to $43.39 million, or $0.58 per diluted share, for the quarter ended September 30, 2024.

"We delivered another strong quarter with total revenue up nearly 24% year-over-year. During the period, we announced a new partnership with Dogwood and completed the Old Point acquisition. Our disciplined approach, partnering with leading organizations in high growth markets, continues to drive earnings momentum, reflected in a 3.50% tax-equivalent margin. Towne's resilient business model and flexible balance sheet position us well to navigate an uncertain economic environment," said G. Robert Aston, Jr., Executive Chairman.

Highlights for Third Quarter 2025:

Towne successfully completed the acquisition of Old Point Financial Corporation ("Old Point"), the parent company of The Old Point National Bank of Phoebus ("Old Point National Bank"), in September 2025. Included in that acquisition were $961.35 million in loans, $208.83 million in securities, and $1.21 billion in deposits.
As previously announced, Towne successfully completed the acquisition of Village Bank and Trust Financial Corp. and its wholly-owned bank subsidiary, Village Bank ("Village"), in April 2025. Included in that acquisition were $576.51 million in loans, $74.31 million in securities, and $637.49 million in deposits.
Total revenues were $215.67 million, an increase of $41.15 million, or 23.58%, compared to third quarter 2024. Net interest income increased $34.67 million, driven by a combination of increased interest income and lower deposit costs, and noninterest income increased $6.48 million.
Total deposits were $16.53 billion, an increase of $2.17 billion, or 15.09%, compared to third quarter 2024. Total deposits increased 7.84%, or $1.20 billion, in comparison to June 30, 2025. Excluding $1.21 billion in Old Point acquired deposits, total deposits would have increased $0.96 billion, or 6.66% compared to the prior year but declined $9.67 million, compared to the linked quarter.
Noninterest-bearing deposits increased 20.43%, to $5.14 billion, compared to third quarter 2024 and represented 31.09% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 8.10%, including $306.07 million acquired from Old Point.
Loans held for investment were $13.38 billion, an increase of $1.97 billion, or 17.23%, compared to September 30, 2024, and $1.02 billion, or 8.25% compared to June 30, 2025. Excluding loans acquired in the quarter, total loans would have increased $1.01 billion, or 8.81%, compared to the prior year and $58.01 million, or 1.86% on an annualized basis, compared to the linked quarter.
Annualized return on common shareholders' equity was 6.80% compared to 8.18% in third quarter 2024. Annualized return on average tangible common shareholders' equity (non-GAAP) was 10.15% compared to 11.54% in third quarter 2024.
Net interest margin was 3.48% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.50%, including purchase accounting accretion of 8 basis points, compared to the prior year quarter net interest margin of 2.90% and tax-equivalent net interest margin (non-GAAP) of 2.93%, including purchase accounting accretion of 3 basis points.
Compared to the linked quarter, which included purchase accounting accretion of 6 basis points, net interest margin increased 10 basis points and spread increased 11 basis points.
The effective tax rate was 15.88% in the quarter compared to 11.52% in third quarter 2024 and 22.23% in the linked quarter. The increase in the effective rate from third quarter 2024 to 2025 was due to an increase in state tax expense and nondeductible expenses related to the Old Point acquisition. The lower effective tax rate in the current quarter compared to prior quarter was primarily due to LIHTC investment properties placed in service during the period and the prior quarter nonrecurring adjustment to deferred income tax related to the repurchase of noncontrolling interests in Resort Property Management.

"We're excited to have completed most of the Village integration and system conversions, marking a major milestone for our team. Our immediate priority is to finalize the Dogwood partnership and integrate Old Point systems which we expect could occur in the first quarter of 2026. Looking ahead, we anticipate scheduling the Dogwood system integration in the second half of 2026. I want to express my sincere gratitude to our dedicated teammates whose leadership and commitment to our mission of Serving Others and Enriching Lives make these achievements possible," stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

Net interest income was $146.95 million in third quarter 2025 compared to $112.28 million for the quarter ended September 30, 2024.
On an average basis, loans held for investment, with a yield of 5.65%, represented 75.52% of earning assets at September 30, 2025 compared to a yield of 5.46% and 74.16% of earning assets at September 30, 2024.
The cost of interest-bearing deposits was 2.55% for the quarter ended September 30, 2025, compared to 3.28% in second quarter 2024. Interest expense on deposits decreased $12.99 million, or 15.81%, from the prior year quarter driven by decreases in rate.
Our total cost of deposits decreased to 1.75% from 2.29% for the quarter ended September 30, 2024 due to lower interest-bearing deposit rates, as short-term Treasury rates continued to fall.
Average interest-earning assets totaled $16.77 billion at September 30, 2025 compared to $15.40 billion at September 30, 2024, an increase of 8.89%.
Average interest-bearing liabilities totaled $11.07 billion, an increase of $0.82 billion, or 8.01%, from prior year, driven by demand and money market deposit growth. Borrowings increased by $68.12 million over the linked quarter, driven by debt assumed in the Old Point acquisition.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $15.28 million compared to a benefit of $1.10 million in the prior year quarter and an expense of $6.41 million in the linked quarter. The provision includes an initial provision for credit losses of $12.00 million related to loans and commitments acquired in the Old Point transaction.
The allowance for credit losses on loans increased $14.99 million in third quarter 2025, compared to the linked quarter, $13.50 million of which resulted from the September 2025 acquisition of Old Point. In addition to the $11.45 million initial acquisition related provision for the purchased loan portfolio we increased our allowance $2.05 million for purchased credit deteriorated loan marks. Additional allowance increases were primarily driven by loan portfolio growth.
Net loan charge-offs were $254 thousand in the quarter, $19 thousand in the linked quarter, and $677 thousand in the prior year quarter.
The ratio of net charge-offs to average loans on an annualized basis was 0.01% in third quarter 2025, 0.02% in third quarter 2024, and 0.00% in the linked quarter.
The allowance for credit losses on loans represented 1.11% of total loans at September 30, 2025, compared to 1.08% at September 30, 2024, and 1.09% at June 30, 2025. The allowance for credit losses on loans was 19.38 times nonperforming loans compared to 18.70 times at September 30, 2024 and 16.81 times at June 30, 2025.

Quarterly Noninterest Income:

Total noninterest income was $68.71 million compared to $62.24 million in 2024, an increase of $6.48 million, or 10.41%.
Property management fee revenue increased $2.31 million, or 20.57%, to $13.53 million in third quarter 2025, compared to third quarter 2024. The increase was driven by changes to our fee structure resulting in revenue growth.
Residential mortgage banking income was $13.12 million compared to $11.79 million in third quarter 2024. Loan volume increased to $636.36 million in third quarter 2025 from $598.18 million in third quarter 2024. Residential purchase activity was 91.84% of production volume in the third quarter of 2025 compared to 91.49% in third quarter 2024.
Gross margins on residential mortgage sales increased 19 basis points to 3.32%, from the linked quarter and 4 basis points from 3.28% in third quarter 2024.
Investment income, net, increased 1.10 million, or 38.73%, from third quarter 2024, $0.50 million of this increase was attributable to the acquisition of Old Point.

Quarterly Noninterest Expense:

Total noninterest expense was $153.74 million compared to $126.90 million in 2024, an increase of $26.84 million, or 21.15%. This increase was primarily attributable to acquisition-related expenses and growth in salaries and employee benefits.
The acquisitions of Village and Old Point, and the pending acquisition of Dogwood State Bank, which is expected to be completed first quarter 2026, resulted in $17.81 million in acquisition-related expenses in the quarter.
An increase in banking personnel related to the Village and Old Point acquisitions represented $3.03 million of the $6.84 million increase in salaries and benefits expenses, compared to the prior year quarter. Additional contributing factors were annual base salary adjustments that went into effect October 2024 and higher performance-based incentives.

Consolidated Balance Sheet Highlights:

Total assets were $19.68 billion for the quarter ended September 30, 2025, a $1.42 billion increase compared to $18.26 billion at June 30, 2025. Total assets increased $2.49 billion, or 14.51%, from $17.19 billion at September 30, 2024.
Loans held for investment increased $1.97 billion, or 17.23%, compared to prior year and $1.02 billion, or 8.25%, compared to the linked quarter. The Company continues to maintain a strong credit discipline.
Mortgage loans held for sale decreased $51.81 million, or 19.60%, compared to prior year and $26.24 million, or 10.99%, compared to the linked quarter, driven by production seasonality.
Total deposits increased $2.17 billion, or 15.09%, compared to prior year, driven by acquisition-related increases in both noninterest bearing and interest-bearing demand deposits. In the linked quarter comparison, total deposits increased $1.20 billion, or 7.84%.
Noninterest-bearing deposits increased $871.86 million, or 20.43%, compared to prior year and $385.15 million, or 8.10%, compared to the linked quarter.
Total borrowings increased $71.41 million, or 24.56%, compared to third quarter 2024 and $68.12 million, or 23.16%, compared to the linked quarter, due to acquired FHLB borrowings and subordinated debt.

Investment Securities:

Total investment securities were $2.87 billion compared to $2.78 billion at June 30, 2025 and $2.60 billion at September 30, 2024. The weighted average duration of the portfolio at September 30, 2025 was 3.2 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $87.87 million at September 30, 2025, compared to $113.14 million at June 30, 2025 and $110.62 million at September 30, 2024, with the changes in fair value marks due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $13.38 billion at September 30, 2025, $12.36 billion at June 30, 2025, and $11.41 billion at September 30, 2024. Excluding loans acquired in the quarter, total loans would have increased $1.01 billion, or 8.81%, compared to the prior year and $58.01 million, or 1.86% on an annualized basis, compared to the linked quarter.
Nonperforming assets were $10.38 million, or 0.05% of total assets, compared to $7.47 million, or 0.04%, at September 30, 2024, and $9.29 million, or 0.05%, at the linked quarter end.
Nonperforming loans were 0.06% of period end loans at September 30, 2025, September 30, 2024, and the linked quarter end.
Foreclosed property consisted of $712 thousand in other real estate owned, $885 thousand in former bank premises and $1.09 million in repossessed autos, for a total of $2.68 million in foreclosed property at September 30, 2025, compared to $884 thousand in repossessed autos at September 30, 2024.

Deposits and Borrowings:

Total deposits were $16.53 billion compared to $15.33 billion at June 30, 2025 and $14.36 billion at September 30, 2024. Excluding $1.21 billion in acquired deposits, total deposits would have increased $0.96 billion, or 6.66%, compared to the prior year but declined $9.67 million, or 0.25% on an annualized basis from the linked quarter.
The ratio of period end loans held for investment to deposits was 80.93% compared to 80.63% at June 30, 2025 and 79.46% at September 30, 2024.
Noninterest-bearing deposits were 31.09% of total deposits at September 30, 2025 compared to 31.02% at June 30, 2025 and 29.71% at September 30, 2024. Noninterest-bearing deposits increased $0.87 billion, or 20.43%, compared to September 30, 2024, and $385.15 million, or 8.10%, compared to the linked quarter.
Total borrowings were $362.23 million compared to $294.12 million at June 30, 2025 and $290.82 million at September 30, 2024.

Capital:

Common equity tier 1 capital ratio of 11.18%⁽¹⁾.
Tier 1 leverage capital ratio of 9.84%⁽¹⁾.
Tier 1 risk-based capital ratio of 11.23%⁽¹⁾.
Total risk-based capital ratio of 13.99%⁽¹⁾.
Book value per common share was $30.38 compared to $29.58 at June 30, 2025 and $28.59 at September 30, 2024.
Tangible book value per common share (non-GAAP) was $21.59 compared to $21.98 at June 30, 2025 and $21.65 at September 30, 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 60 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, and Towne Vacations. With total assets of $19.68 billion as of September 30, 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 from recently completed and pending acquisitions, including our recent merger with Old Point Financial Corporation and our pending merger with Dogwood State Bank ("Dogwood"), 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 Dogwood 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 recently completed or pending 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 that we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with recently completed or pending acquisitions that 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; competitors that 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 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
		September 30,			June 30,			March 31,			December 31,			September 30,
			2025			2025			2025			2024			2024
Income and Performance Ratios:
	Total revenue	$	215,665		$	207,442		$	192,044		$	177,160		$	174,518
	Net income		39,294			39,269			50,887			41,441			43,126
	Net income available to common shareholders		38,977			38,837			50,592			41,265			42,949
	Net income per common share - diluted		0.51			0.51			0.67			0.55			0.57
	Book value per common share		30.38			29.58			29.19			28.43			28.59
	Book value per common share - tangible ^(non-GAAP)		21.59			21.98			22.36			21.55			21.65
	Return on average assets		0.83	%		0.86	%		1.19	%		0.95	%		1.00	%
	Return on average assets - tangible ^(non-GAAP)		0.94	%		0.96	%		1.29	%		1.03	%		1.09	%
	Return on average equity		6.78	%		7.12	%		9.50	%		7.64	%		8.12	%
	Return on average equity - tangible ^(non-GAAP)		10.10	%		10.39	%		13.08	%		10.68	%		11.42	%
	Return on average common equity		6.80	%		7.14	%		9.57	%		7.70	%		8.18	%
	Return on average common equity - tangible ^(non-GAAP)		10.15	%		10.44	%		13.21	%		10.79	%		11.54	%
	Noninterest income as a percentage of total revenue		31.86	%		33.85	%		37.27	%		33.36	%		35.66	%
Regulatory Capital Ratios (1):
	Common equity tier 1		11.18	%		11.77	%		12.75	%		12.77	%		12.63	%
	Tier 1		11.23	%		11.82	%		12.87	%		12.89	%		12.76	%
	Total		13.99	%		14.49	%		15.65	%		15.68	%		15.54	%
	Tier 1 leverage ratio		9.84	%		9.93	%		10.61	%		10.36	%		10.38	%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans		19.38	x		16.81	x		19.15	x		16.69	x		18.70	x
	Allowance for credit losses on loans to period end loans		1.11	%		1.09	%		1.08	%		1.08	%		1.08	%
	Nonperforming loans to period end loans		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
	Nonperforming assets to period end assets		0.05	%		0.05	%		0.04	%		0.05	%		0.04	%
	Net charge-offs (recoveries) to average loans (annualized)		0.01	%		—	%		0.02	%		0.01	%		0.02	%
	Net charge-offs (recoveries)	$	254		$	19		$	626		$	382		$	677

	Nonperforming loans	$	7,698		$	7,982		$	6,586		$	7,424		$	6,588
	Former bank premises		885			—			—			—			—
	Foreclosed property		1,798			1,306			786			443			884
	Total nonperforming assets	$	10,381		$	9,288		$	7,372		$	7,867		$	7,472
	Loans past due 90 days and still accruing interest	$	1,863		$	210		$	15		$	1,264		$	510
	Allowance for credit losses on loans	$	149,175		$	134,187		$	126,131		$	123,923		$	123,191
Mortgage Banking:
	Loans originated, mortgage	$	491,921		$	494,108		$	300,699		$	385,238		$	421,571
	Loans originated, joint venture		144,440			177,359			144,495			180,188			176,612
	Total loans originated	$	636,361		$	671,467		$	445,194		$	565,426		$	598,183
	Number of loans originated		1,679			1,750			1,181			1,489			1,637
	Number of originators		169			166			161			160			159
	Purchase %		91.84	%		92.37	%		89.94	%		89.46	%		91.49	%
	Loans sold	$	657,822		$	596,009		$	475,518		$	629,120		$	526,998
	Rate lock asset	$	2,213		$	2,186		$	1,880		$	1,150		$	1,548
	Gross realized gain on sales and fees as a % of loans originated		3.32	%		3.13	%		3.18	%		3.25	%		3.28	%
Other Ratios:
	Net interest margin		3.48	%		3.38	%		3.14	%		2.99	%		2.90	%
	Net interest margin-fully tax-equivalent ^(non-GAAP)		3.50	%		3.40	%		3.17	%		3.02	%		2.93	%
	Average earning assets/total average assets		90.03	%		90.23	%		90.32	%		90.57	%		90.43	%
	Average loans/average deposits		80.92	%		81.09	%		80.01	%		78.71	%		80.07	%
	Average noninterest deposits/total average deposits		31.30	%		30.88	%		29.68	%		30.14	%		30.19	%
	Period end equity/period end total assets		12.22	%		12.26	%		12.66	%		12.50	%		12.58	%
	Efficiency ratio^(non-GAAP)		69.23	%		70.71	%		67.10	%		70.28	%		70.93	%
	(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q3			Q3			Q2			Q3 25 vs.		Q3 25 vs.
*Available-for-sale securities, at fair value*		2025			2024			2025		Q3 24		Q2 25
U.S. agency securities	$	364,889		$	291,814		$	345,808		25.04	%	5.52	%
U.S. Treasury notes		83,246			28,655			78,746		190.51	%	5.71	%
Municipal securities		478,711			455,722			438,490		5.04	%	9.17	%
Trust preferred and other corporate securities		143,291			91,525			115,126		56.56	%	24.46	%
Mortgage-backed securities issued by GSEs and GNMA		1,599,812			1,496,631			1,577,325		6.89	%	1.43	%
Allowance for credit losses		(1,350	)		(1,171	)		(1,520	)	15.29	%	(11.18)%
Total	$	2,668,599		$	2,363,176		$	2,553,975		12.92	%	4.49	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	10,741		$	6,703		$	6,048		60.24	%	77.60	%
Total gross unrealized losses		(98,606	)		(117,319	)		(119,186	)	(15.95)%		(17.27)%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(87,865	)	$	(110,616	)	$	(113,138	)	(20.57)%		(22.34)%
*Held-to-maturity securities, at amortized cost*
U.S. agency securities	$	68,140		$	102,428		$	92,973		(33.48)%		(26.71)%
U.S. Treasury notes		96,017			96,942			96,250		(0.95)%		(0.24)%
Municipal securities		5,439			5,342			5,414		1.82	%	0.46	%
Trust preferred corporate securities		2,081			2,133			2,094		(2.44)%		(0.62)%
Mortgage-backed securities issued by GSEs		5,166			5,577			5,201		(7.37)%		(0.67)%
Allowance for credit losses		(65	)		(77	)		(67	)	(15.58)%		(2.99)%
Total	$	176,778		$	212,345		$	201,865		(16.75)%		(12.43)%

Total gross unrealized gains	$	283		$	323		$	214		(12.38)%		32.24	%
Total gross unrealized losses		(3,746	)		(7,929	)		(5,148	)	(52.76)%		(27.23)%
Net unrealized gains (losses) in HTM securities	$	(3,463	)	$	(7,606	)	$	(4,934	)	(54.47)%		(29.81)%
Total unrealized gains (losses) on AFS and HTM securities	$	(91,328	)	$	(118,222	)	$	(118,072	)	(22.75)%		(22.65)%
										% Change
Loans Held For Investment	Q3			Q3			Q2			Q3 25 vs.		Q3 25 vs.
		2025			2024			2025		Q3 24		Q2 25
Real estate - construction and development	$	1,239,372		$	1,118,669		$	1,072,625		10.79	%	15.55	%
Commercial real estate - owner occupied		1,910,050			1,655,345			1,815,900		15.39	%	5.18	%
Commercial real estate - non-owner occupied		3,808,755			3,179,699			3,557,175		19.78	%	7.07	%
Real estate - multifamily		920,254			750,906			887,083		22.55	%	3.74	%
Residential 1-4 family		2,189,417			1,891,216			1,997,395		15.77	%	9.61	%
HELOC		556,386			408,565			480,610		36.18	%	15.77	%
Commercial and industrial business (C&I)		1,452,133			1,256,511			1,370,564		15.57	%	5.95	%
Government		504,543			521,681			510,902		(3.29)%		(1.24)%
Indirect		697,606			546,887			579,041		27.56	%	20.48	%
Consumer loans and other		100,517			83,039			88,378		21.05	%	13.74	%
Total	$	13,379,033		$	11,412,518		$	12,359,673		17.23	%	8.25	%

										% Change
Deposits	Q3			Q3			Q2			Q3 25 vs.		Q3 25 vs.
		2025			2024			2025		Q3 24		Q2 25
Noninterest-bearing demand	$	5,139,488		$	4,267,628		$	4,754,340		20.43	%	8.10	%
Interest-bearing:
Demand and money market accounts		8,273,987			6,990,103			7,654,317		18.37	%	8.10	%
Savings		331,168			319,970			332,108		3.50	%	(0.28)%
Certificates of deposits		2,786,292			2,785,469			2,587,951		0.03	%	7.66	%
Total		16,530,935			14,363,170			15,328,716		15.09	%	7.84	%

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

	Three Months Ended								Three Months Ended								Three Months Ended
	September 30, 2025								June 30, 2025								September 30, 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)	$	12,662,595		$	180,361		5.65	%	$	12,304,172		$	170,520		5.56	%	$	11,419,428		$	156,610		5.46	%
Taxable investment securities		2,627,476			23,203		3.53	%		2,598,093			23,361		3.60	%		2,376,102			20,940		3.53	%
Tax-exempt investment securities		176,193			1,913		4.34	%		172,083			1,802		4.19	%		168,768			1,686		4.00	%
Total securities		2,803,669			25,116		3.58	%		2,770,176			25,163		3.63	%		2,544,870			22,626		3.56	%
Interest-bearing deposits		1,096,909			10,597		3.83	%		1,045,727			10,241		3.93	%		1,226,445			15,249		4.95	%
Mortgage loans held for sale		204,949			3,351		6.54	%		172,102			2,770		6.44	%		208,513			3,247		6.23	%
Total earning assets		16,768,122			219,425		5.19	%		16,292,177			208,694		5.14	%		15,399,256			197,732		5.11	%
Less: allowance for loan losses		(139,408	)							(131,837	)							(125,331	)
Total nonearning assets		1,995,385								1,896,640								1,754,216
Total assets	$	18,624,099							$	18,056,980							$	17,028,141
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,791,983		$	43,015		2.19	%	$	7,590,290		$	42,054		2.22	%	$	6,917,622		$	48,896		2.81	%
Savings		332,403			684		0.82	%		337,807			704		0.84	%		315,338			842		1.06	%
Certificates of deposit		2,626,140			25,444		3.84	%		2,560,313			25,394		3.98	%		2,723,437			32,390		4.73	%
Total interest-bearing deposits		10,750,526			69,143		2.55	%		10,488,410			68,152		2.61	%		9,956,397			82,128		3.28	%
Borrowings		49,111			(212	)	(1.69)%			34,799			(341	)	(3.88)%			33,867			(25	)	(0.29)%
Subordinated debt, net		267,755			2,461		3.68	%		272,448			2,609		3.83	%		256,309			2,237		3.49	%
Total interest-bearing liabilities		11,067,392			71,392		2.56	%		10,795,657			70,420		2.62	%		10,246,573			84,340		3.27	%
Demand deposits		4,898,006								4,685,835								4,305,783
Other noninterest-bearing liabilities		378,717								387,166								370,736
Total liabilities		16,344,115								15,868,658								14,923,092
Shareholders' equity		2,279,984								2,188,322								2,105,049
Total liabilities and equity	$	18,624,099							$	18,056,980							$	17,028,141
Net interest income (tax-equivalent basis) (4)				$	148,033							$	138,274							$	113,392
Reconciliation of Non-GAAP Financial Measures

Tax-equivalent basis adjustment					(1,081	)							(1,061	)							(1,110	)
Net interest income (GAAP)				$	146,952							$	137,213							$	112,282

Interest rate spread (2)(4)							2.63	%							2.52	%							1.84	%
Interest expense as a percent of average earning assets							1.69	%							1.73	%							2.18	%
Net interest margin (tax-equivalent basis) (3)(4)							3.50	%							3.40	%							2.93	%
Total cost of deposits							1.75	%							1.80	%							2.29	%

_{⁽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)

Nine Months Ended

September 30, 2025

September 30, 2024

Interest

Average

Interest

Average

Income/

Yield/

Average

Income/

Yield/

Balance

Expense

Rate (1)

Balance

Expense

Rate (1)

Assets:

Loans (net of unearned income and deferred costs)

12,169,050

503,947

5.54

11,423,458

TowneBank Reports Third Quarter 2025 Earnings