TowneBank : PDF, TowneBank Reports Full Year and Fourth Quarter Financial Results for 2024, January 22, 2025,

Published: 2025-01-22 16:46:14 ET TOWN

News Release

FOR IMMEDIATE RELEASE

TOWNEBANK REPORTS FULL YEAR AND FOURTH QUARTER

FINANCIAL RESULTS FOR 2024

Suffolk, VA., January 22, 2025 - 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:

Highlights for Fourth Quarter 2024:

"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:

Quarterly Provision for Credit Losses:

to our weightings of the more adverse macroeconomic forecast scenarios utilized in our models.

Quarterly Noninterest Income:

Quarterly Noninterest Expense:

2023, completed a branch relocation in Greenville, NC, and relocated our regional headquarters in Greensboro, NC.

Consolidated Balance Sheet Highlights:

Investment Securities:

Loans and Asset Quality:

Deposits and Borrowings:

Capital:

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

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

0.46

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 %

1.10 %

1.12 %

Nonperforming loans to period end loans

0.06 %

Nonperforming assets to period end assets

0.05 %

0.04 %

0.05 %

Net charge-offs (recoveries) to average loans (annualized)

0.01 %

0.02 %

- %

0.02 %

- %

Net charge-offs (recoveries)

382

677

(19)

520

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 %

3.34 %

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 %

12.21 %

Efficiency ratio (non-GAAP)

70.28 %

70.93 %

68.98 %

73.25 %

76.17 %

(1) Current reporting period regulatory capital ratios are preliminary.

Disclaimer

TowneBank published this content on January 22, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 22, 2025 at 21:45:10.505.