TOWN TowneBank

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TowneBank Beat Consensus Estimates

Wednesday, July 22, 2026 · 9:18 PM ET

TowneBank (TOWN) reported earnings of $0.78 per share on revenue of $321.24 million for the second quarter ended June 2026. The consensus earnings estimate was $0.76 per share on revenue of $434.50 million. The company beat consensus estimates by 2.63% while revenue grew 15.61% on a year-over-year basis.

TowneBank operates banking offices serving Chesapeake, Chesterfield County, Glen Allen, Hampton, James City County, Mechanicsville, Newport News, Norfolk, Portsmouth, Richmond, Suffolk, Virginia Beach, Williamsburg, and York County in Virginia, along with Raleigh, Cary, Charlotte, Moyock, Grandy, Camden County, Southern Shores, Corolla and Nags Head in North Carolina. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations.

Earnings Whisper Grade —
Power Rating—
Reported Earnings
$0.78
Earnings Whisper®
—
Consensus Estimate
$0.76
Earnings Surprise
Earnings Growth-3.7 %
Reported Revenue
$321.24M
Revenue Estimate
$434.50M

Consensus estimates for banks and some financial institutions are for net interest income, which may not be comparable to reported revenue.

Revenue Surprise
Revenue Growth15.6 %

TowneBank Reports Second Quarter 2026 Earnings

Wednesday, July 22, 2026 · 9:18 PM ET GlobeNewswire

SUFFOLK, Va., July 22, 2026 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended June 30, 2026 of $193.19 million, or $2.09 per diluted share, compared to $40.89 million, or $0.54 per diluted share, for the quarter ended June 30, 2025. Excluding certain items affecting comparability, core earnings (non-GAAP) were $72.01 million, or $0.78 per diluted share, in the current quarter compared to $63.39 million, or $0.84 per diluted share, for the quarter ended June 30, 2025.

"Our second quarter results demonstrate the strength and resilience of our Main Street Banking model. We continued to expand margin, increase noninterest-bearing deposit balances, and uphold our disciplined approach to credit risk management. Additionally, the sale of Towne Vacations generated a gain of nearly $200 million, significantly enhancing our capital levels and tangible book value. We are pleased by the early results of our strategic growth initiatives in the Carolinas and remain focused on expanding our Insurance business through both organic growth and selective acquisition opportunities," said G. Robert Aston, Jr., Executive Chairman.

Highlights for Second Quarter 2026:

  • Total deposits were $18.71 billion, an increase of 1.26%, or $233.17 million, compared to March 31, 2026.   
  • Noninterest-bearing deposits increased $245.55 million, or 4.39%, compared to the linked quarter driven by growth in commercial deposits.
  • Loans held for investment were $15.17 billion, a decrease of $91.49 million, or 0.60%, compared to March 31, 2026.
  • Total revenues were $444.27 million, an increase of $234.17 million, or 111.46%, compared to second quarter 2025. Noninterest income increased $186.27 million, driven by a $198.55 million gain on the sale of our Resort Property Management segment. Net interest income increased $47.90 million, as higher loan volumes and loan yields drove an improvement in interest income while cost of deposits decreased by 25 basis points.
  • Annualized return on common shareholders' equity was 25.72% compared to 7.54% in second quarter 2025. Excluding certain items affecting comparability, annualized return on common shareholders' equity (non-GAAP) was 9.59% compared to 11.69% in second quarter 2025.
  • Annualized return on average tangible common shareholders' equity (non-GAAP) was 37.76% compared to 10.99% in second quarter 2025.   Excluding certain items affecting comparability, annualized return on average tangible common shareholders' equity (non-GAAP) was 14.63% compared to 16.61% in second quarter 2025.
  • Net interest margin was 3.68% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.70%, including purchase accounting accretion of 11 basis points, compared to the prior year quarter net interest margin of 3.38% and tax-equivalent net interest margin (non-GAAP) of 3.40%, including purchase accounting accretion of 6 basis points.
  • Certain events related to the sale of our Resort Property Management segment impacted earnings and earnings-related ratios in the quarter. These events consisted of a pre-tax gain on the sale for $198.55 million, a special charitable foundation contribution of $25.00 million, and merger and acquisition related expenses of $8.68 million. Additionally, TowneBank paid a special dividend of $0.70 per common share, representing approximately 32% of the gain on the sale of the Resort Property Management segment before taxes and deal costs.
  • We expect net interest income to be impacted by net purchase accounting accretion income of $6.56 million and $10.31 million in the remainder of 2026 and 2027, respectively.
  • The effective tax rate was 23.72% in the quarter compared to 22.25% in second quarter 2025 and 18.19% in the linked quarter. The change in the effective rate from second quarter 2026 compared to 2025 and the linked quarter was due to the increase in state tax expense related to the sale of the Resort Property Management business.

"I’m highly encouraged with the early success of our talent acquisition strategy across the Carolinas. Since the beginning of the year, we have added 24 experienced Towne Bankers, including four market executives, eight private and commercial bankers, and two treasury sales officers. These strategic hires are helping us build meaningful momentum and deepen our presence in some of the nation's most dynamic and attractive banking markets," stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

  • Net interest income was $185.12 million in second quarter 2026 compared to $137.21 million for the quarter ended June 30, 2025, driven by a combination of volume increases and improvement in rates.  
  • Average interest-earning assets totaled $20.19 billion at June 30, 2026, compared to $19.61 billion in the linked quarter, an increase of 2.94%.
  • On an average basis, loans held for investment, with a yield of 5.69%, represented 75.50% of earning assets at June 30, 2026 compared to 5.67% and 76.65% in the linked quarter. Average loans held for investment had a yield of 5.56% and represented 75.52% of earning assets at June 30, 2025.
  • The cost of interest-bearing deposits was 2.24% for the quarter ended June 30, 2026, compared to 2.33% in the linked quarter and 2.61% in second quarter 2025. Interest expense on deposits increased $3.33 million, or 4.88%, from the prior year quarter as higher volume outpaced decreases in rate.
  • Our total cost of deposits decreased to 1.55% from 1.63% for the linked quarter and 1.80% for the quarter ended June 30, 2025 due to lower interest-bearing deposit rates.
  • Average interest-bearing liabilities totaled $13.26 billion, an increase of $105.95 million, or 0.81%, from the linked quarter. Total borrowings decreased $62.24 million compared to the linked quarter, due to repayment of a portion of debt assumed in the Dogwood State Bank ("Dogwood") acquisition.

Quarterly Provision for Credit Losses:

  • The quarterly provision for credit losses was $625 thousand compared to $6.41 million in the prior year quarter and $344 thousand in the linked quarter.
  • The allowance for credit losses on loans increased $651 thousand in second quarter 2026, compared to the linked quarter.
  • Net loan charge-offs were $5.76 million in the quarter, $1.69 million in the linked quarter, and $19 thousand in the prior year quarter. The increase in charge-offs was driven primarily by acquired indirect and SBA loans.
  • The ratio of net charge-offs to average loans on an annualized basis was 0.15% in second quarter 2026, 0.05% in the linked quarter, and less than 0.01% in second quarter 2025.
  • The allowance for credit losses on loans represented 1.32% of total loans at June 30, 2026, compared to 1.31% at March 31, 2026, and 1.09% at June 30, 2025. Our June 30, 2026 allowance for credit losses is further broken down into community banking which represented 1.20% of total loans and government guaranteed lending which represented 0.12% of total loans.
  • The allowance for credit losses on loans was 6.16 times nonperforming loans compared to 16.81 times at June 30, 2025 and 6.08 times at March 31, 2026.

Quarterly Noninterest Income:

  • Total noninterest income was $259.15 million compared to $72.88 million in 2025, an increase of $186.27 million, or 255.58%.
  • The gain on sale of our Resort Property Management segment included in noninterest income was $198.55 million. As a result of the sale, there was no operating income to report from this segment in second quarter 2026 compared to second quarter 2025 income of $18.21 million.
  • Government guaranteed lending income, net was $1.99 million in second quarter 2026 and represented a new noninterest income source in 2026 related to the acquisition of Dogwood.
  • Residential mortgage banking income was $12.54 million compared to $13.56 million in second quarter 2025 driven by margin compression. Loan volume increased to $734.65 million in second quarter 2026 from $671.47 million in second quarter 2025. Residential purchase activity was 91.58% of production volume in second quarter 2026 compared to 92.37% in second quarter 2025.
  • Gross margins on residential mortgage sales were 2.97%, a decrease of 12 basis points from 3.09% in the linked quarter and 16 basis points from 3.13% in second quarter 2025.

Quarterly Noninterest Expense:

  • Total noninterest expense was $189.94 million compared to $150.67 million in 2025, an increase of $39.28 million, or 26.07%. This increase was primarily attributable to a special charitable foundation contribution and growth in salaries and employee benefits.
  • An increase in banking personnel related to the Dogwood and Old Point Financial Corporation acquisitions represented $8.62 million of the $10.37 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 mid-September 2025 and performance-based incentives.

Consolidated Balance Sheet Highlights:

  • Total assets were $22.62 billion for the quarter ended June 30, 2026, a $258.25 million increase compared to $22.36 billion at March 31, 2026.
  • Loans held for investment decreased $91.49 million, or 0.60%, compared to the linked quarter, but increased $218 million in our Carolina markets.
  • Mortgage loans held for sale increased $36.86 million, or 15.44%, compared to prior year and $103.87 million, or 60.48%, compared to the linked quarter, driven by higher production volume.
  • Government guaranteed loans held for sale increased $28.42 million over the linked quarter. This loan activity was included in the acquisition of Dogwood and is new to TowneBank in 2026.
  • Total deposits increased $233.17 million, or 1.26%, compared to the linked quarter, driven by demand deposit growth.
  • Noninterest-bearing deposits increased $245.55 million, or 4.39%, compared to the linked quarter.
  • The Company repaid a portion of acquired FHLB borrowings in the quarter, contributing to a $62.24 million, or 12.15%, decrease in borrowings compared to the linked quarter.

Investment Securities:

  • Total investment securities were $3.10 billion compared to $3.03 billion at March 31, 2026 and $2.78 billion at June 30, 2025. The weighted average duration of the portfolio at June 30, 2026 was 3.6 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $85.14 million at June 30, 2026, compared to $81.40 million at March 31, 2026 and $113.14 million at June 30, 2025, with the changes in fair value marks due to the change in interest rates.

Loans and Asset Quality:

  • Total loans held for investment were $15.17 billion at June 30, 2026 and $15.26 billion at March 31, 2026.
  • Nonperforming assets, which consists of nonperforming loans, foreclosed property, and former bank premises, were $48.31 million, or 0.21% of total assets, compared to $51.11 million, or 0.23%, at the linked quarter end, and $9.29 million, or 0.05%, at June 30, 2025. Former bank premises of $10.57 million have executed purchase agreements or purchase agreements under review that are expected to close by November 2026.
  • Nonperforming loans were 0.21% of period end loans at June 30, 2026, and in the linked quarter, compared to 0.06% at June 30, 2025. The increase over prior year was primarily driven by loans acquired in the Dogwood transaction.
  • Foreclosed property and former bank premises totaled $15.88 million at June 30, 2026, and consisted of $505 thousand in other real estate owned, $1.32 million in repossessed autos, and $14.06 million in acquisition-related former bank premises. Foreclosed property and former bank premises totaled $18.36 million at March 31, 2026, and consisted of $505 thousand in other real estate owned, $1.53 million in repossessed autos, and $16.32 million in acquisition-related former bank premises.

Deposits and Borrowings:

  • Total deposits were $18.71 billion compared to $18.48 billion at March 31, 2026, an increase of $233.17 million, or 5.06% on an annualized basis from the linked quarter.
  • The ratio of period end loans held for investment to deposits was 81.06% compared to 82.58% at March 31, 2026, and 80.63% at June 30, 2025.
  • Noninterest-bearing deposits were 31.22% of total deposits at June 30, 2026 compared to 30.29% at March 31, 2026 and 31.02% at June 30, 2025. Noninterest-bearing deposits increased $245.55 million, or 4.39%, compared to the linked quarter.
  • Total borrowings were $450.24 million compared to $512.48 million at March 31, 2026, a decrease of $62.24 million, or 12.15%.

Capital:

  • Book value per common share was $32.40 compared to $31.31 at March 31, 2026 and $29.41 at June 30, 2025.
  • Tangible book value per common share (non-GAAP) was $22.60 compared to $21.49 at March 31, 2026 and $21.80 at June 30, 2025.

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 70 banking offices throughout Hampton Roads and Central Virginia, Eastern and Central North Carolina, the Greenville and upstate region of South Carolina, and Charleston, South 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 Trust Company, N.A. With total assets of $22.62 billion as of June 30, 2026, 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 and changes impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies, that may adversely affect our business; our ability to successfully integrate the businesses from recently completed acquisitions, including our mergers with Old Point Financial Corporation and Dogwood State Bank, to the extent that that process may take longer or be more difficult, time-consuming, or costly to accomplish than expected; deposit attrition, operating costs, customer losses, and business disruption associated with 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 that we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with recently completed 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 and integration related matters; the introduction of new lines of business or new products and services; 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, 2025 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
  June 30, March 31, December 31, September 30, June 30,
 2026
 2026
 2025
 2025
 2025
Income and Performance Ratios:         
 Total revenue$444,266  $246,447  $219,943  $222,584  $210,093 
 Net income 193,618   41,101   40,850   44,612   41,319 
 Net income available to common shareholders 193,186   40,993   40,630   44,295   40,887 
 Net income per common share - diluted 2.09   0.45   0.51   0.58   0.54 
 Book value per common share 32.40   31.31   30.67   30.27   29.41 
 Book value per common share - tangible(non-GAAP) 22.60   21.49   21.93   21.49   21.80 
 Return on average assets 3.45%  0.76%  0.82%  0.94%  0.91%
 Return on average assets - tangible(non-GAAP) 3.68%  0.89%  0.94%  1.05%  1.01%
 Return on average equity 25.66%  5.84%  6.67%  7.72%  7.52%
 Return on average equity - tangible(non-GAAP) 37.63%  9.55%  10.32%  11.39%  10.94%
 Return on average common equity 25.72%  5.85%  6.69%  7.75%  7.54%
 Return on average common equity - tangible(non-GAAP) 37.76%  9.58%  10.36%  11.45%  10.99%
 Noninterest income as a percentage of total revenue 58.33%  29.83%  27.73%  33.98%  34.69%
Regulatory Capital Ratios (1):         
 Common equity tier 1 12.16%  11.43%  11.34%  11.18%  11.77%
 Tier 1 12.20%  11.47%  11.39%  11.23%  11.82%
 Total 14.58%  13.87%  14.14%  13.98%  14.49%
 Tier 1 leverage ratio 10.00%  9.75%  9.36%  9.84%  9.93%
Asset Quality:         
 Allowance for credit losses on loans to nonperforming loans 6.16x  6.08x  12.57x  19.38x  16.81x
 Allowance for credit losses on loans to period end loans 1.32%  1.31%  1.10%  1.11%  1.09%
 Nonperforming loans to period end loans 0.21%  0.21%  0.09%  0.06%  0.06%
 Nonperforming assets to period end assets 0.21%  0.23%  0.07%  0.05%  0.05%
 Net charge-offs (recoveries) to average loans (annualized) 0.15%  0.05%  0.06%  0.01%  —%
 Net charge-offs (recoveries)$5,756  $1,690  $1,948  $255  $19 
           
 Nonperforming loans$32,430  $32,751  $11,726  $7,698  $7,982 
 Former bank premises 14,061   16,323   879   885   — 
 Foreclosed property 1,823   2,037   1,754   1,798   1,306 
 Total nonperforming assets$48,314  $51,111  $14,359  $10,381  $9,288 
 Loans past due 90 days and still accruing interest$1,095  $2,487  $890  $1,863  $210 
 Allowance for credit losses on loans$199,918  $199,267  $147,343  $149,175  $134,187 
Mortgage Banking:         
 Loans originated, mortgage$597,622  $469,323  $504,732  $491,921  $494,108 
 Loans originated, joint venture 137,028   106,027   118,597   144,440   177,359 
 Total loans originated$734,651  $575,350  $623,329  $636,361  $671,467 
 Number of loans originated 1,827   1,423   1,551   1,679   1,750 
 Number of originators 168   162   161   169   166 
 Purchase % 91.58%  77.57%  82.23%  91.84%  92.37%
 Loans sold$597,947  $527,428  $652,853  $657,822  $596,009 
 Rate lock asset$1,831  $2,003  $1,145  $2,213  $2,186 
 Gross realized gain on sales and fees as a % of loans originated 2.97%  3.09%  3.19%  3.32%  3.13%
Other Ratios:         
 Net interest margin 3.68%  3.58%  3.56%  3.48%  3.38%
 Net interest margin-fully tax-equivalent(non-GAAP) 3.70%  3.60%  3.58%  3.50%  3.40%
 Average earning assets/total average assets 89.78%  89.60%  89.96%  90.03%  90.23%
 Average loans/average deposits 82.40%  83.22%  80.57%  80.92%  81.09%
 Average noninterest deposits/total average deposits 30.78%  30.24%  31.28%  31.30%  30.88%
 Period end equity/period end total assets 13.27%  12.96%  12.34%  12.18%  12.19%
 Efficiency ratio(non-GAAP) 74.91%  76.96%  73.37%  67.08%  69.82%
 (1)  Current reporting period regulatory capital ratios are preliminary.      
        


TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
 
Investment Securities      % Change
 Q2 Q2 Q1 Q2 26 vs. Q2 26 vs.
Available-for-sale securities, at fair value2026
 2025
 2026
 Q2 25 Q1 26
U.S. agency securities$402,738  $345,808  $386,157  16.46% 4.29%
U.S. Treasury notes 176,393   78,746   83,396  124.00% 111.51%
Municipal securities 540,924   438,490   535,652  23.36% 0.98%
Trust preferred and other corporate securities 164,040   115,126   161,453  42.49% 1.60%
Mortgage-backed securities issued by GSEs and GNMA 1,657,895   1,577,325   1,697,124  5.11% (2.31)%
Allowance for credit losses (1,028)  (1,520)  (1,355) (32.37)% (24.13)%
Total$2,940,962  $2,553,975  $2,862,427  15.15% 2.74%
Gross unrealized gains (losses) reflected in financial statements      
Total gross unrealized gains$9,072  $6,048  $9,894  50.00% (8.31)%
Total gross unrealized losses (94,212)  (119,186)  (91,293) (20.95)% 3.20%
Net unrealized gains (losses) and other adjustments on AFS securities$(85,140) $(113,138) $(81,399) (24.75)% 4.60%
Held-to-maturity securities, at amortized cost         
U.S. agency securities$18,403  $92,973  $18,339  (80.21)% 0.35%
U.S. Treasury notes 95,317   96,250   95,551  (0.97)% (0.24)%
Municipal securities 5,515   5,414   5,490  1.87% 0.46%
Trust preferred corporate securities 2,041   2,094   2,054  (2.53)% (0.63)%
Mortgage-backed securities issued by GSEs 5,057   5,201   5,093  (2.77)% (0.71)%
Allowance for credit losses (32)  (67)  (33) (52.24)% (3.03)%
Total$126,301  $201,865  $126,494  (37.43)% (0.15)%
          
Total gross unrealized gains$195  $214  $196  (8.88)% (0.51)%
Total gross unrealized losses (1,931)  (5,148)  (2,314) (62.49)% (16.55)%
Net unrealized gains (losses) in HTM securities$(1,736) $(4,934) $(2,118) (64.82)% (18.04)%
Total unrealized gains (losses) on AFS and HTM securities$(86,876) $(118,072) $(83,517) (26.42)% 4.02%
          
       % Change
Loans Held For InvestmentQ2 Q2 Q1 Q2 26 vs. Q2 26 vs.
Community Banking: 2026   2025   2026  Q2 25 Q1 26
CRE - construction and development$1,308,080  $1,072,625  $1,450,284  21.95% (9.81)%
CRE - owner occupied 2,401,402   1,815,900   2,359,542  32.24% 1.77%
CRE - non-owner occupied 4,317,091   3,557,175   4,284,890  21.36% 0.75%
CRE - multifamily 865,154   887,083   894,653  (2.47)% (3.30)%
Residential 1-4 family 2,326,019   1,997,395   2,334,199  16.45% (0.35)%
HELOC 682,941   480,610   674,293  42.10% 1.28%
Commercial and industrial business (C&I) 1,615,241   1,370,564   1,619,980  17.85% (0.29)%
Government 524,444   510,902   499,769  2.65% 4.94%
Indirect 690,321   579,041   693,811  19.22% (0.50)%
Consumer loans and other 222,970   88,378   219,057  152.29% 1.79%
Total Community Banking$14,953,663  $12,359,673  $15,030,478  20.99% (0.51)%
Government Guaranteed Lending:         
Real estate - construction and development 12,846   —   28,840  N/M (55.46)%
Commercial real estate - owner occupied 94,943   —   88,072  N/M 7.80%
Commercial and industrial business (C&I) 108,216   —   113,770  N/M (4.88)%
Consumer loans and other 7   —   —  N/M N/M
Total Government Guaranteed Lending$216,012  $—  $230,682  N/M (6.36)%
Total Loans Held for Investment$15,169,675  $12,359,673  $15,261,160  22.74% (0.60)%
                 


TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
 
          
       % Change
DepositsQ2 Q2 Q1 Q2 26 vs. Q2 26 vs.
 2026
 2025
 2026
 Q2 25 Q1 26
Noninterest-bearing demand deposits$5,842,944 $4,754,340 $5,597,395 22.90% 4.39%
Interest-bearing:         
Demand and money market accounts 9,468,690  7,654,317  9,293,443 23.70% 1.89%
Savings 436,751  332,108  457,028 31.51% (4.44)%
Certificates of deposits 2,965,060  2,587,951  3,132,406 14.57% (5.34)%
Total 18,713,445  15,328,716  18,480,272 22.08% 1.26%
               


 
Acquisition Summary - Day 1 Balances Total Acquired 2026
 2025
  2025-2026 Dogwood (1) Old Point (2) Village (3)
Total securities $478,408 $190,976 $211,877 $75,555
Loans held for sale  40,596  36,981  —  3,615
Loans held for investment  3,438,268  1,905,599  956,429  576,240
Core deposit intangibles  82,900  30,490  31,390  21,020
Total assets  4,492,136  2,343,049  1,403,159  745,928
Noninterest-bearing demand deposits  1,089,093  544,484  306,066  238,543
Interest-bearing deposits  2,690,894  1,387,029  904,915  398,950
Total deposits  3,779,987  1,931,513  1,210,981  637,493
Advances from the FHLB  205,000  155,000  40,000  10,000
Subordinated debt, net  39,693  —  25,274  14,419
Total liabilities  4,071,303  2,118,357  1,284,531  668,415
         
Goodwill $368,990 $233,269 $92,729 $42,992
Initial allowance for credit losses on loans held for investment  65,406  59,492  4,223  1,691
Initial provision for credit losses (4)  17,504  —  11,449  6,055
         
(1)  Dogwood State Bank was acquired January 12, 2026.
(2)  Old Point Financial Corporation was acquired September 1, 2025.
(3)  Village Bank and Trust Corp. was acquired April 1, 2025.
(4)  ASU 2025-08 Financial Instruments -Credit Losses Measurement of Credit Losses on Financial Instruments - Purchased Loans,was adopted January 1, 2026.
         
         


 
  Three Months Ended
  June 30, March 31, December 31, September 30, June 30,
Net charge-offs: 2026 (1)  2026  2025
  2025   2025 
Community bank $451 $(284) $1,159 $(116) $(418)
Indirect  4,002  414   789  371   437 
Government guaranteed lending  1,303  1,560   —  —   — 
Total $5,756 $1,690  $1,948 $255  $19 
           
Non-performing loans:          
Community bank $24,616 $22,380  $10,275 $6,629  $6,912 
Indirect  970  2,731   1,451  1,069   1,070 
Government guaranteed lending  6,844  7,640   —  —   — 
Total $32,430 $32,751  $11,726 $7,698  $7,982 
(1)  Non-performing loans related to the Dogwood acquisition totaled approximately $18.59 million at June 30, 2026.
 


TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
 
 Three Months Ended Three Months Ended Three Months Ended
 June 30, 2026 March 31, 2026 June 30, 2025
   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)		$15,241,959  $216,044  5.69% $15,032,919  $210,226  5.67% $12,304,172  $170,520  5.56%
Taxable investment securities 2,808,164   25,687  3.66%  2,805,229   25,181  3.59%  2,598,093   23,361  3.60%
Tax-exempt investment securities 275,487   3,083  4.48%  245,092   2,625  4.28%  172,083   1,802  4.19%
Total securities 3,083,651   28,770  3.73%  3,050,321   27,806  3.65%  2,770,176   25,163  3.63%
Interest-bearing deposits 1,659,332   14,023  3.39%  1,388,016   11,459  3.35%  1,045,727   10,241  3.93%
Loans held for sale 203,978   3,076  6.03%  140,438   2,077  5.92%  172,102   2,770  6.44%
Total earning assets 20,188,920   261,913  5.20%  19,611,694   251,568  5.20%  16,292,177   208,694  5.14%
Less: allowance for loan losses (202,001)      (179,029)      (131,837)    
Total nonearning assets 2,499,032       2,455,700       1,896,640     
Total assets$22,485,951      $21,888,365      $18,056,980     
Liabilities and Equity:                 
Interest-bearing deposits                 
Demand and money market$9,279,980  $44,758  1.93% $9,081,281  $44,822  2.00% $7,590,290  $42,054  2.22%
Savings 446,151   619  0.56%  421,240   613  0.59%  337,807   704  0.84%
Certificates of deposit 3,076,803   26,104  3.40%  3,097,422   27,073  3.54%  2,560,313   25,394  3.98%
Total interest-bearing deposits 12,802,934   71,481  2.24%  12,599,943   72,508  2.33%  10,488,410   68,152  2.61%
Borrowings 175,152   1,309  2.96%  272,569   2,199  3.23%  34,799   (341) (3.88)%
Subordinated debt, net 284,404   2,736  3.85%  284,025   2,750  3.87%  272,448   2,609  3.83%
Total interest-bearing liabilities 13,262,490   75,526  2.28%  13,156,537   77,457  2.39%  10,795,657   70,420  2.62%
Demand deposits 5,693,724       5,463,137       4,685,835     
Other noninterest-bearing liabilities 510,177       419,807       387,166     
Total liabilities 19,466,391       19,039,481       15,868,658     
Shareholders’ equity 3,019,560       2,848,884       2,188,322     
Total liabilities and equity$22,485,951      $21,888,365      $18,056,980     
Net interest income (tax-equivalent basis) (4)  $186,387      $174,111      $138,274   
Reconciliation of Non-GAAP Financial Measures                
                  
Tax-equivalent basis adjustment   (1,270)      (1,169)      (1,061)  
Net interest income (GAAP)  $185,117      $172,942      $137,213   
                  
Interest rate spread (2)(4)    2.92%     2.81%     2.52%
Interest expense as a percent of average earning assets   1.50%     1.60%     1.73%
Net interest margin (tax-equivalent basis) (3)(4)   3.70%     3.60%     3.40%
Total cost of deposits    1.55%     1.63%     1.80%
                  
(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)
 
 Six Months Ended Six Months Ended
 June 30, 2026 June 30, 2025
   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)$15,138,015  $426,269  5.68% $11,918,188  $323,586  5.48%
Taxable investment securities 2,806,705   50,869  3.62%  2,538,402   44,662  3.52%
Tax-exempt investment securities 260,373   5,708  4.38%  174,071   3,663  4.21%
Total securities 3,067,078   56,577  3.69%  2,712,473   48,325  3.56%
Interest-bearing deposits 1,524,424   25,483  3.37%  1,122,263   22,042  3.96%
Loans held for sale 172,384   5,153  5.98%  168,251   5,423  6.45%
Total earning assets 19,901,901   513,482  5.20%  15,921,175   399,376  5.06%
Less: allowance for loan losses (190,578)      (128,072)    
Total nonearning assets 2,477,485       1,843,652     
Total assets$22,188,808      $17,636,755     
Liabilities and Equity:           
Interest-bearing deposits           
Demand and money market$9,181,179  $89,578  1.97% $7,435,687  $82,659  2.24%
Savings 433,765   1,232  0.57%  325,033   1,419  0.88%
Certificates of deposit 3,087,055   53,178  3.47%  2,550,430   51,207  4.05%
Total interest-bearing deposits 12,701,999   143,988  2.29%  10,311,150   135,285  2.65%
Borrowings 223,592   3,508  3.12%  32,217   (642) (3.96)%
Subordinated debt, net 284,215   5,486  3.86%  266,293   4,913  3.69%
Total interest-bearing liabilities 13,209,806   152,982  2.34%  10,609,660   139,556  2.65%
Demand deposits 5,579,068       4,482,341     
Other noninterest-bearing liabilities 465,240       370,508     
Total liabilities 19,254,114       15,462,509     
Shareholders’ equity 2,934,694       2,174,246     
Total liabilities and equity$22,188,808      $17,636,755     
Net interest income (tax-equivalent basis)(4)  $360,500      $259,820   
Reconciliation of Non-GAAP Financial Measures          
Tax-equivalent basis adjustment   (2,440)      (2,129)  
Net interest income (GAAP)  $358,060      $257,691   
            
Interest rate spread (2)(4)    2.86%     2.41%
Interest expense as a percent of average earning assets   1.55%     1.77%
Net interest margin (tax-equivalent basis) (3)(4)   3.65%     3.29%
Total cost of deposits    1.59%     1.84%
            
(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 share data)
  
   
 June 30, December 31,
  2026   2025 
ASSETS(unaudited) (audited)
Cash and due from banks$158,770  $129,941 
Interest-bearing deposits at FRB 1,546,624   1,097,155 
Interest-bearing deposits in financial institutions 110,086   123,553 
Total Cash and Cash Equivalents 1,815,480   1,350,649 
Securities available for sale, at fair value (amortized cost of $3,027,130 and $2,784,462, and allowance for credit losses of $1,028 and $1,207 at June 30, 2026 and December 31, 2025, respectively) 2,940,962   2,710,189 
Securities held to maturity, at amortized cost (fair value of $124,597 and $154,269 at June 30, 2026 and December 31, 2025, respectively) 126,333   156,697 
Less: allowance for credit losses (32)  (65)
Securities held to maturity, net of allowance for credit losses 126,301   156,632 
Other equity securities 15,907   12,219 
FHLB stock 21,550   16,341 
Total Securities 3,104,720   2,895,381 
Mortgage loans held for sale 275,602   154,444 
Government guaranteed loans held for sale 33,915   — 
Loans, net of unearned income and deferred costs 15,169,675   13,335,804 
Less: allowance for credit losses on loans (199,918)  (147,343)
Net Loans 14,969,757   13,188,461 
Premises and equipment, net 444,807   430,987 
Goodwill 808,644   594,080 
Other intangible assets, net 96,765   96,528 
BOLI 387,841   337,425 
Other assets 679,428   639,386 
TOTAL ASSETS$22,616,959  $19,687,341 
    
LIABILITIES AND EQUITY   
Deposits:   
Noninterest-bearing demand$5,842,944  $5,073,157 
Interest-bearing:   
Demand and money market accounts 9,468,690   8,390,884 
Savings 436,751   332,752 
Certificates of deposit 2,965,060   2,712,324 
Total Deposits 18,713,445   16,509,117 
Advances from the FHLB 127,060   52,452 
Subordinated debt, net 284,207   283,870 
Repurchase agreements and other borrowings 38,971   34,817 
Total Borrowings 450,238   371,139 
Other liabilities 451,756   378,076 
TOTAL LIABILITIES 19,615,439   17,258,332 
Preferred stock, authorized and unissued shares - 2,000,000 —   — 
Common stock, $1.667 par value: 150,000,000 shares authorized;   
92,433,645 and 78,964,038 shares issued at   
June 30, 2026 and December 31, 2025, respectively 154,087   131,633 
Capital surplus 1,695,607   1,254,776 
Retained earnings 1,206,036   1,087,343 
Common stock issued to deferred compensation trust, at cost:   
1,137,994 and 1,086,290 shares at June 30, 2026 and December 31, 2025, respectively (24,986)  (23,293)
Deferred compensation trust 24,986   23,293 
Accumulated other comprehensive income (loss) (61,247)  (51,685)
TOTAL SHAREHOLDERS’ EQUITY 2,994,483   2,422,067 
Noncontrolling interest 7,037   6,942 
TOTAL EQUITY 3,001,520   2,429,009 
TOTAL LIABILITIES AND EQUITY$22,616,959  $19,687,341 
 


TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)
        
        
 Three Months Ended Six Months Ended
 June 30, June 30,
  2026   2025   2026   2025 
INTEREST INCOME:       
Loans, including fees$215,308  $169,772  $424,820  $322,093 
Investment securities 28,236   24,850   55,586   47,689 
Interest-bearing deposits in financial institutions and federal funds sold 14,023   10,241   25,483   22,042 
Mortgage loans held for sale 3,076   2,770   5,153   5,423 
Total interest income 260,643   207,633   511,042   397,247 
INTEREST EXPENSE:       
Deposits 71,481   68,152   143,988   135,285 
Advances from the FHLB 1,671   124   4,096   149 
Subordinated debt, net 2,736   2,609   5,486   4,913 
Repurchase agreements and other borrowings (362)  (465)  (588)  (791)
Total interest expense 75,526   70,420   152,982   139,556 
Net interest income 185,117   137,213   358,060   257,691 
PROVISION FOR CREDIT LOSSES 625   6,410   969   8,830 
Net interest income after provision for credit losses 184,492   130,803   357,091   248,861 
NONINTEREST INCOME:       
Residential mortgage banking income, net 12,537   13,561   24,271   23,922 
Insurance commissions and related income, net 25,294   25,677   51,328   52,102 
Property management income, net —   18,207   12,440   28,759 
Service charges on deposit accounts 4,747   3,642   9,389   6,969 
Credit card merchant fees, net 2,145   1,794   4,064   3,491 
Investment income, net 3,795   3,158   7,515   6,233 
BOLI 2,760   1,992   5,779   3,864 
Government guaranteed lending income, net 1,994   —   6,195   — 
Gain on sale of equity investment 198,550   —   198,550   2,000 
Other income 7,327   4,849   12,997   8,158 
Net gain on investment securities —   —   126   — 
Total noninterest income 259,149   72,880   332,654   135,498 
NONINTEREST EXPENSE:       
Salaries and employee benefits 88,730   78,362   181,909   153,440 
Occupancy 11,793   9,791   23,798   19,124 
Furniture and equipment 5,347   4,770   11,246   9,392 
Amortization - intangibles 5,866   3,979   12,187   7,005 
Software 7,475   6,835   15,873   13,128 
Data processing 3,492   4,510   8,423   8,344 
Professional fees 3,164   2,539   6,417   5,192 
Advertising and marketing 3,210   3,228   8,887   7,701 
FDIC and other insurance 4,285   3,032   7,179   5,893 
Acquisition related expenses 11,212   18,737   42,897   19,157 
Other expenses 45,369   14,882   67,013   32,825 
Total noninterest expense 189,943   150,665   385,829   281,201 
Income before income tax expense and noncontrolling interest 253,698   53,018   303,916   103,158 
Provision for income tax expense 60,080   11,699   69,197   17,831 
Net Income 193,618   41,319   234,719   85,327 
Net income attributable to noncontrolling interest (432)  (432)  (540)  (727)
Net income attributable to TowneBank$193,186  $40,887  $234,179  $84,600 
Per common share information       
Basic earnings$2.10  $0.54  $2.56  $1.13 
Diluted earnings$2.09  $0.54  $2.56  $1.12 
Cash dividends declared$0.98  $0.27  $1.25  $0.52 
                


TOWNEBANK
Consolidated Balance Sheets - Five Quarter Trend
(dollars in thousands, except share data)
 
          
 June 30, March 31, December 31, September 30, June 30,
  2026   2026   2025   2025   2025 
ASSETS(unaudited) (unaudited) (audited) (unaudited) (unaudited)
Cash and due from banks$158,770  $95,472  $129,941  $152,647  $149,462 
Interest-bearing deposits at FRB 1,546,624   1,346,573   1,097,155   974,514   838,315 
Interest-bearing deposits in financial institutions 110,086   119,922   123,553   122,819   123,911 
Total Cash and Cash Equivalents 1,815,480   1,561,967   1,350,649   1,249,980   1,111,688 
Securities available for sale 2,940,962   2,862,427   2,710,189   2,668,599   2,553,975 
Securities held to maturity 126,333   126,527   156,697   176,843   201,932 
Less: allowance for credit losses (32)  (33)  (65)  (65)  (67)
Securities held to maturity, net of allowance for credit losses 126,301   126,494   156,632   176,778   201,865 
Other equity securities 15,907   15,463   12,219   12,420   12,248 
FHLB stock 21,550   24,985   16,341   16,341   13,428 
Total Securities 3,104,720   3,029,369   2,895,381   2,874,138   2,781,516 
Mortgage loans held for sale 275,602   171,735   154,444   212,507   238,742 
Government guaranteed loans held for sale 33,915   5,498   —   —   — 
Loans, net of unearned income and deferred costs 15,169,675   15,261,160   13,335,804   13,379,033   12,359,673 
Less: allowance for credit losses (199,918)  (199,267)  (147,343)  (149,175)  (134,187)
Net Loans 14,969,757   15,061,893   13,188,461   13,229,858   12,225,486 
Premises and equipment, net 444,807   438,792   430,987   422,134   392,056 
Goodwill 808,644   804,143   594,080   591,691   499,709 
Other intangible assets, net 96,765   102,631   96,528   101,875   74,186 
BOLI 387,841   385,087   337,425   334,527   295,434 
Other assets 679,428   694,197   639,386   657,731   632,382 
Assets held for sale —   103,396   —   —   — 
TOTAL ASSETS$22,616,959  $22,358,708  $19,687,341  $19,674,441  $18,251,199 
LIABILITIES AND EQUITY         
Deposits:         
Noninterest-bearing demand$5,842,944  $5,597,395  $5,073,157  $5,139,488  $4,754,340 
Interest-bearing:         
Demand and money market accounts 9,468,690   9,293,443   8,390,884   8,273,987   7,654,317 
Savings 436,751   457,028   332,752   331,168   332,108 
Certificates of deposit 2,965,060   3,132,406   2,712,324   2,786,292   2,587,951 
Total Deposits 18,713,445   18,480,272   16,509,117   16,530,935   15,328,716 
Advances from the FHLB 127,060   197,257   52,452   52,646   12,838 
Subordinated debt, net 284,207   284,236   283,870   283,847   260,430 
Repurchase agreements and other borrowings 38,971   30,988   34,817   25,740   20,847 
Total Borrowings 450,238   512,481   371,139   362,233   294,115 
Other liabilities 451,756   414,979   378,076   384,321   402,823 
Liabilities held for sale —   52,460   —   —   — 
TOTAL LIABILITIES 19,615,439   19,460,192   17,258,332   17,277,489   16,025,654 
          
TOTAL SHAREHOLDERS’ EQUITY 2,994,483   2,891,688   2,422,067   2,389,448   2,217,948 
Noncontrolling interest 7,037   6,828   6,942   7,504   7,597 
TOTAL EQUITY 3,001,520   2,898,516   2,429,009   2,396,952   2,225,545 
TOTAL LIABILITIES AND EQUITY$22,616,959  $22,358,708  $19,687,341  $19,674,441  $18,251,199 
                    


TOWNEBANK
Consolidated Statements of Income - Five Quarter Trend (unaudited)
(dollars in thousands, except share data)
  
  
 Three Months Ended
 June 30, March 31, December 31, September 30, June 30,
  2026   2026   2025   2025   2025 
INTEREST INCOME:         
Loans, including fees$215,308  $209,512  $189,824  $179,612  $169,772 
Investment securities 28,236   27,351   26,226   24,784   24,850 
Interest-bearing deposits in financial institutions and federal funds sold 14,023   11,459   11,825   10,597   10,241 
Mortgage loans held for sale 3,076   2,077   2,794   3,351   2,770 
Total interest income 260,643   250,399   230,669   218,344   207,633 
INTEREST EXPENSE:         
Deposits 71,481   72,508   68,977   69,143   68,152 
Advances from the FHLB 1,671   2,425   532   258   124 
Subordinated debt, net 2,736   2,750   2,764   2,461   2,609 
Repurchase agreements and other borrowings (362)  (226)  (568)  (470)  (465)
Total interest expense 75,526   77,457   71,705   71,392   70,420 
Net interest income 185,117   172,942   158,964   146,952   137,213 
PROVISION FOR CREDIT LOSSES 625   344   (169)  15,276   6,410 
Net interest income after provision for credit losses 184,492   172,598   159,133   131,676   130,803 
NONINTEREST INCOME:         
Residential mortgage banking income, net 12,537   11,734   11,538   13,123   13,561 
Insurance commissions and related income, net 25,294   26,034   23,120   25,791   25,677 
Property management income, net —   12,440   8,412   20,449   18,207 
Service charges on deposit accounts 4,747   4,642   4,638   4,056   3,642 
Credit card merchant fees, net 2,145   1,919   1,808   1,909   1,794 
Investment income, net 3,795   3,720   3,386   3,699   3,158 
BOLI 2,760   3,019   2,898   2,157   1,992 
Government guaranteed lending income, net 1,994   4,201   —   —   — 
Gain on sale of equity investment 198,550   —   —   —   — 
Other income 7,327   5,670   5,166   4,456   4,849 
Net gain (loss) on investment securities —   126   13   (7)  — 
Total noninterest income 259,149   73,505   60,979   75,633   72,880 
NONINTEREST EXPENSE:         
Salaries and employee benefits 88,730   93,179   85,088   78,964   78,362 
Occupancy 11,793   12,005   11,367   9,988   9,791 
Furniture and equipment 5,347   5,899   5,315   5,044   4,770 
Amortization - intangibles 5,866   6,321   5,347   4,427   3,979 
Software 7,475   8,398   6,986   7,518   6,835 
Data processing 3,492   4,931   4,236   4,630   4,510 
Professional fees 3,164   3,253   2,931   2,999   2,539 
Advertising and marketing 3,210   5,677   3,668   3,759   3,228 
Other expenses 60,866   56,223   41,688   36,409   36,651 
Total noninterest expense 189,943   195,886   166,626   153,738   150,665 
Income before income tax expense and noncontrolling interest 253,698   50,217   53,486   53,571   53,018 
Provision for income tax expense 60,080   9,116   12,636   8,959   11,699 
Net Income 193,618   41,101   40,850   44,612   41,319 
Net income attributable to noncontrolling interest (432)  (108)  (220)  (317)  (432)
Net income attributable to TowneBank$193,186  $40,993  $40,630  $44,295  $40,887 
Per common share information         
Basic earnings$2.10  $0.45  $0.52  $0.58  $0.54 
Diluted earnings$2.09  $0.45  $0.51  $0.58  $0.54 
Basic weighted average shares outstanding 92,165,341   90,433,283   78,805,687   76,417,605   75,240,678 
Diluted weighted average shares outstanding 92,463,558   90,775,117   79,109,745   76,763,640   75,540,822 
Cash dividends declared$0.98  $0.27  $0.27  $0.27  $0.27 
                    


TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)
 
          
 Three Months Ended Six Months Ended Increase/(Decrease)
 June 30, March 31, June 30, YTD 2026 over 2025
  2026   2025   2026   2026   2025  Amount Percent
Revenue             
Net interest income$183,847  $136,325  $171,988  $355,837  $255,909  $99,928  39.05%
Service charges on deposit accounts 4,747   3,642   4,642   9,389   6,969   2,420  34.73%
Credit card merchant fees 2,145   1,794   1,919   4,064   3,491   573  16.41%
Investment income, net 3,795   3,158   3,720   7,515   6,233   1,282  20.57%
Government guaranteed lending income, net 1,994   —   4,201   6,195   —   6,195  N/M
Gain on sale of equity investment 198,550   —   —   198,550   2,000   196,550  N/M
Other income 8,334   5,750   7,393   15,727   10,244   5,483  53.52%
Subtotal 219,565   14,344   21,875   241,440   28,937   212,503  734.36%
Net gain/(loss) on investment securities —   —   126   126   —   126  N/M
Total noninterest income 219,565   14,344   22,001   241,566   28,937   212,629  734.80%
Total revenue 403,412   150,669   193,989   597,403   284,846   312,557  109.73%
              
Provision for credit losses 688   6,212   505   1,194   8,579   (7,385) (86.08)%
              
Expenses             
Salaries and employee benefits 67,192   52,850   66,135   133,327   102,534   30,793  30.03%
Occupancy 10,073   7,342   9,731   19,804   14,321   5,483  38.29%
Furniture and equipment 5,064   4,081   5,214   10,277   7,889   2,388  30.27%
Amortization of intangible assets 4,603   1,969   4,554   9,157   2,951   6,206  210.30%
Software 5,898   4,427   5,914   11,813   8,449   3,364  39.82%
Data processing 3,196   2,840   3,805   7,000   5,448   1,552  28.49%
Accounting and professional fees 2,727   1,934   2,764   5,491   3,944   1,547  39.22%
Advertising and marketing 2,636   1,883   4,236   6,872   4,780   2,092  43.77%
FDIC and other insurance 3,964   2,676   2,487   6,451   5,267   1,184  22.48%
Acquisition related 11,212   17,256   31,683   42,895   17,676   25,219  142.67%
Other expenses 41,916   11,276   18,150   60,066   23,246   36,820  158.39%
Total expenses 158,481   108,534   154,673   313,153   196,505   116,648  59.36%
Income before income tax, corporate allocation and noncontrolling interest 244,243   35,923   38,811   283,056   79,762   203,294  254.88%
Corporate allocation 1,136   1,535   1,431   2,567   2,931   (364) (12.42)%
Income before income tax provision and noncontrolling interest 245,379   37,458   40,242   285,623   82,693   202,930  245.40%
Provision for income tax expense 58,021   7,814   6,537   64,560   12,495   52,065  416.69%
Net income 187,358   29,644   33,705   221,063   70,198   150,865  214.91%
Noncontrolling interest (127)  (124)  11   (116)  (82)  (34) 41.46%
Net income attributable to TowneBank$187,231  $29,520  $33,716  $220,947  $70,116  $150,831  215.12%
              
Efficiency ratio(non-GAAP) 38.14%  70.73%  77.44%  50.90%  67.95% (17.05)% (25.09)%
Efficiency ratio excluding gain on equity investment(non-GAAP) 75.11%  70.73%  77.44%  76.24%  68.43%  7.81% 11.41%
                           


TOWNEBANK
Mortgage Segment Financial Information (unaudited)
(dollars in thousands)
 
    
 Three Months Ended Six Months Ended Increase/(Decrease)
 June 30, March 31, June 30, YTD 2026 over 2025
  2026   2025   2026   2026   2025  Amount Percent
Revenue             
Residential mortgage brokerage income, net$13,392  $14,083  $12,498  $25,890  $24,664  $1,226  4.97%
Income from unconsolidated subsidiary 119   83   34   152   125   27  21.60%
Net interest and other income 1,484   1,095   1,170   2,653   2,205   448  20.32%
Total revenue 14,995   15,261   13,702   28,695   26,994   1,701  6.30%
              
Provision for credit losses (63)  198   (161)  (225)  251   (476) (189.64)%
              
Expenses             
Salaries and employee benefits 8,011   7,315   7,945   15,956   14,346   1,610  11.22%
Occupancy 950   1,098   866   1,815   2,036   (221) (10.85)%
Furniture and equipment 140   151   176   316   346   (30) (8.67)%
Software 754   790   786   1,540   1,517   23  1.52%
Data processing 169   198   144   314   360   (46) (12.78)%
Accounting and professional fees 166   157   133   298   383   (85) (22.19)%
Advertising and marketing 352   420   418   769   809   (40) (4.94)%
FDIC and other insurance 163   117   149   312   213   99  46.48%
Acquisition related —   1,481   —   —   1,481   (1,481) 100.00%
Other expenses 2,700   2,728   2,330   5,031   5,191   (160) (3.08)%
Total expenses 13,405   14,455   12,947   26,351   26,682   (331) (1.24)%
              
Income before income tax, corporate allocation and noncontrolling interest 1,653   608   916   2,569   61   2,508  4,111.48%
Corporate allocation (531)  (519)  (416)  (947)  (869)  (78) 8.98%
Income before income tax provision and noncontrolling interest 1,122   89   500   1,622   (808)  2,430  (300.74)%
Provision for income tax expense 226   (41)  87   312   (281)  593  (211.03)%
Net income 896   130   413   1,310   (527)  1,837  (348.58)%
Noncontrolling interest (305)  (308)  (119)  (424)  (425)  1  0.24%
Net income attributable to TowneBank$591  $(178) $294  $886  $(952) $1,838  (193.07)%
              
Efficiency ratio excluding gain on equity investment(non-GAAP) 89.40%  94.72%  94.49%  91.83%  98.84% (7.01)% (7.09)%
                          


TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)
 
          
 Three Months Ended Six Months Ended Increase/(Decrease)
 June 30, March 31, June 30, YTD 2026 over 2025
  2026   2025   2026   2026   2025  Amount Percent
Commission and fee income             
Property and casualty$23,068  $23,306  $22,450  $45,519  $46,629  $(1,110) (2.38)%
Employee benefits 4,940   4,596   4,876   9,815   9,320   495  5.31%
Total commissions and fees 28,008   27,902   27,326   55,334   55,949   (615) (1.10)%
              
Contingency and bonus revenue 2,828   3,034   3,730   6,559   6,654   (95) (1.43)%
Other income 5   4   12   17   8   9  112.50%
Total revenue 30,841   30,940   31,068   61,910   62,611   (701) (1.12)%
              
Employee commission expense 4,982   5,008   4,753   9,735   10,058   (323) (3.21)%
Revenue, net of commission expense 25,859   25,932   26,315   52,175   52,553   (378) (0.72)%
              
Salaries and employee benefits 13,527   12,947   14,018   27,545   25,862   1,683  6.51%
Occupancy 770   777   781   1,552   1,578   (26) (1.65)%
Furniture and equipment 143   153   174   318   366   (48) (13.11)%
Amortization of intangible assets 1,263   1,373   1,342   2,605   2,781   (176) (6.33)%
Software 823   741   850   1,672   1,426   246  17.25%
Data processing 127   133   105   231   253   (22) (8.70)%
Accounting and professional fees 271   212   246   518   503   15  2.98%
Advertising and marketing 222   175   202   425   471   (46) (9.77)%
FDIC and other insurance 158   126   140   298   233   65  27.90%
Other expenses 753   451   675   1,427   1,348   79  5.86%
Total operating expenses 18,057   17,088   18,533   36,591   34,821   1,770  5.08%
Income before income tax, corporate allocation and noncontrolling interest 7,802   8,844   7,782   15,584   17,732   (2,148) (12.11)%
Corporate allocation (605)  (700)  (725)  (1,330)  (1,426)  96  6.73%
Income before income tax provision and noncontrolling interest 7,197   8,144   7,057   14,254   16,306   (2,052) (12.58)%
Provision for income tax expense 1,833   2,098   1,811   3,644   4,229   (585) (13.83)%
Net income 5,364   6,046   5,246   10,610   12,077   (1,467) (12.15)%
Noncontrolling interest —   —   —   —   —   —  —%
Net income attributable to TowneBank$5,364  $6,046  $5,246  $10,610  $12,077  $(1,467) (12.15)%
              
Provision for income taxes 1,833   2,098   1,811   3,644   4,229   (585) (13.83)%
Depreciation, amortization and interest expense 1,342   1,489   1,429   2,771   3,016   (245) (8.12)%
EBITDA(non-GAAP)$8,539  $9,633  $8,486  $17,025  $19,322  $(2,297) (11.89)%
              
Efficiency ratio(non-GAAP) 64.94%  60.60%  65.33%  65.14%  60.97%  4.17% 6.84%


TOWNEBANK
Resort Property Management Segment Financial Information (unaudited)
(dollars in thousands)
 
    
 Three Months Ended Six Months Ended Increase/(Decrease)
 June 30, March 31, June 30, YTD 2026 over 2025
 2026 (1)  2025   2026   2026   2025  Amount Percent
Revenue             
Property management fees, net$— $18,207  $12,440   12,440   28,759   (16,319) (56.74)%
Net interest and other income —  24   1   1   37   (36) (97.30)%
Total revenue —  18,231   12,441   12,441   28,796   (16,355) (56.80)%
              
Expenses             
Salaries and employee benefits —  5,250   5,081   5,081   10,698   (5,617) (52.51)%
Occupancy —  574   627   627   1,189   (562) (47.27)%
Furniture and equipment —  385   335   335   791   (456) (57.65)%
Amortization of intangible assets —  637   425   425   1,273   (848) (66.61)%
Software —  877   848   848   1,736   (888) (51.15)%
Data processing —  1,339   878   878   2,283   (1,405) (61.54)%
Accounting and professional fees —  236   110   110   362   (252) (69.61)%
Advertising and marketing —  750   821   821   1,641   (820) (49.97)%
FDIC and other insurance —  113   118   118   180   (62) (34.44)%
Acquisition related —  —   2   2   —   2  N/M
Other expenses —  427   489   489   3,040   (2,551) (83.91)%
Total expenses —  10,588   9,734   9,734   23,193   (13,459) (58.03)%
              
Income before income tax, corporate allocation and noncontrolling interest —  7,643   2,707   2,707   5,603   (2,896) (51.69)%
Corporate allocation —  (316)  (290)  (290)  (636)  346  54.40%
Income before income tax provision and noncontrolling interest —  7,327   2,417   2,417   4,967   (2,550) (51.34)%
Provision for income tax expense —  1,828   681   681   1,388   (707) (50.94)%
Net income —  5,499   1,736   1,736   3,579   (1,843) (51.49)%
Noncontrolling interest —  —   —   —   (220)  220  100.00%
Net income attributable to TowneBank$— $5,499  $1,736  $1,736  $3,359  $(1,623) (48.32)%
              
Efficiency ratio excluding gain on equity investment(non-GAAP)N/M  54.58%  74.83%  74.83%  76.12% (1.29)% (1.69)%
 
(1)  The Resort Property Management segment was sold on April 3, 2026. There is no operating income to report in the quarter ended June 30, 2026.
 


TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)
     
 Three Months Ended Six Months Ended
 June 30, June 30, March 31, June 30, June 30,
 2026
 2025
 2026
 2026
 2025
          
Return on average assets (GAAP) 3.45%  0.91%  0.76%  2.13%  0.97%
Impact of excluding average goodwill and other
intangibles and amortization		 0.23%  0.10%  0.13%  0.18%  0.09%
Return on average tangible assets (non-GAAP) 3.68%  1.01%  0.89%  2.31%  1.06%
          
Return on average equity (GAAP) 25.66%  7.52%  5.84%  16.09%  7.86%
Impact of excluding average goodwill and other
intangibles and amortization		 11.97%  3.42%  3.71%  8.12%  3.30%
Return on average tangible equity (non-GAAP) 37.63%  10.94%  9.55%  24.21%  11.16%
          
Return on average common equity (GAAP) 25.72%  7.54%  5.85%  16.13%  7.90%
Impact of excluding average goodwill and other
intangibles and amortization		 12.04%  3.45%  3.73%  8.16%  3.35%
Return on average tangible common equity
(non-GAAP)		 37.76%  10.99%  9.58%  24.29%  11.25%
          
Book value (GAAP)$32.40  $29.41  $31.31  $32.40  $29.41 
Impact of excluding average goodwill and other
intangibles and amortization		 (9.80)  (7.61)  (9.82)  (9.80)  (7.61)
Tangible book value (non-GAAP)$22.60  $21.80  $21.49  $22.60  $21.80 
          
Efficiency ratio (GAAP) 42.75%  71.71%  79.48%  55.86%  71.52%
Impact of exclusions 32.16% (1.89)% (2.52)%  20.08% (1.43)%
Efficiency ratio (non-GAAP) 74.91%  69.82%  76.96%  75.94%  70.09%
          
Average assets (GAAP)$22,485,951  $18,056,980  $21,888,365  $22,188,808  $17,636,755 
Less: average goodwill and intangible assets 911,261   567,250   896,106   903,725   542,095 
Average tangible assets (non-GAAP)$21,574,690  $17,489,730  $20,992,259  $21,285,083  $17,094,660 
          
Average equity (GAAP)$3,019,560  $2,188,322  $2,848,884  $2,934,694  $2,174,246 
Less: average goodwill and intangible assets 911,261   567,250   896,106   903,725   542,095 
Average tangible equity (non-GAAP)$2,108,299  $1,621,072  $1,952,778  $2,030,969  $1,632,151 
          
Average common equity (GAAP)$3,012,709  $2,180,687  $2,842,105  $2,927,879  $2,162,348 
Less: average goodwill and intangible assets 911,261   567,250   896,106   903,725   542,095 
Average tangible common equity (non-GAAP)$2,101,448  $1,613,437  $1,945,999  $2,024,154  $1,620,253 
          
Net income (GAAP)$193,186  $40,887  $40,993  $234,179  $84,600 
Amortization of intangibles, net of tax 4,634   3,143   4,994   9,628   5,534 
Tangible net income (non-GAAP)$197,820  $44,030  $45,987  $243,807  $90,134 
          
Total revenue (GAAP)$444,266  $210,093  $246,447  $690,714  $393,189 
Net (gain)/loss on investment securities/equity investments (198,550)  —   (126)  (198,676)  (2,000)
Total revenue for efficiency calculation (non-GAAP)$245,716  $210,093  $246,321  $492,038  $391,189 
          
Noninterest expense (GAAP)$189,943  $150,665  $195,886  $385,829  $281,201 
Less: amortization of intangibles 5,866   3,979   6,321   12,187   7,005 
Noninterest expense net of amortization (non-GAAP)$184,077  $146,686  $189,565  $373,642  $274,196 


TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
           
           
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Three Months Ended
  June 30, March 31, December 31, September 30, June 30,
   2026   2026   2025   2025   2025 
Net income available to common shareholders (GAAP) $193,186  $40,993  $40,630  $44,295  $40,887 
           
Adjustments          
Plus: Acquisition-related expenses, net of tax  8,983   25,736   14,659   14,996   15,291 
Plus: Special contribution, net of tax  19,750   —   —   —   — 
Plus: Initial provision for acquired loans, net of tax  —   —   —   9,478   4,926 
Plus: Resort Property Management deferred tax adjustment for repurchase of noncontrolling interests  —   —   —   —   2,286 
Less: Gain on sale of equity investments, net of noncontrolling interest and tax  (149,905)  —   —   —   — 
Total adjustments, net of taxes  (121,172)  25,736   14,659   24,474   22,503 
Core operating earnings, excluding certain items affecting comparability (non-GAAP) $72,014  $66,729  $55,289  $68,769  $63,390 
Annualized interest impact of Series IV Notes, net of tax  41   42   42   42   42 
Core net income for diluted EPS (non-GAAP) $72,055  $66,771  $55,331  $68,811  $63,432 
           
Weighted average diluted shares  92,463,558   90,775,117   79,109,745   76,763,640   75,540,822 
Diluted EPS (GAAP) $2.09  $0.45  $0.51  $0.58  $0.54 
Diluted EPS, excluding certain items affecting
comparability (non-GAAP)		 $0.78  $0.74  $0.70  $0.90  $0.84 
Average assets $22,485,951  $21,888,365  $19,707,366  $18,624,097  $18,056,980 
Average tangible equity $2,108,299  $1,952,778  $1,724,687  $1,668,148  $1,621,072 
Average tangible common equity $2,101,448  $1,945,999  $1,717,982  $1,660,673  $1,613,437 
Return on average assets, excluding certain items
affecting comparability (non-GAAP)		  1.28%  1.24%  1.11%  1.46%  1.41%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  14.58%  14.90%  13.69%  17.23%  16.53%
Return on average common equity, excluding certain items affecting comparability (non-GAAP)  9.59%  9.52%  9.10%  12.03%  11.69%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  14.63%  14.95%  13.74%  17.31%  16.61%
Efficiency ratio, excluding certain items affecting
comparability (non-GAAP)		  62.56%  66.66%  67.50%  61.06%  62.79%
                     


TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands, except per share data)
     
     
Reconciliation of GAAP Earnings to Operating Earnings Excluding Certain Items Affecting Comparability Six Months Ended
  June 30, June 30,
   2026   2025 
Net income available to common shareholders (GAAP) $234,179  $84,600 
     
Adjustments    
Plus: Acquisition-related expenses, net of tax  34,719   15,680 
Plus: Special contribution, net of tax  19,750   — 
Plus: Initial provision for acquired loans, net of tax  —   4,926 
Plus: Resort Property Management deferred tax adjustment for repurchase of noncontrolling interests  —   2,286 
Less: Gain on sale of equity investments, net of noncontrolling interest and tax  (149,905)  — 
Total adjustments, net of taxes  (95,436)  22,892 
Core operating earnings, excluding certain items affecting comparability (non-GAAP) $138,743  $107,492 
Annualized interest impact of Series IV Notes, net of tax  83   84 
Core net income for diluted EPS (non-GAAP) $138,826  $107,576 
Weighted average diluted shares  91,616,241   75,535,484 
Diluted EPS (GAAP) $2.56  $1.12 
Diluted EPS, excluding certain items affecting comparability (non-GAAP) $1.52  $1.42 
Average assets $22,188,808  $17,636,755 
Average tangible equity $2,030,969  $1,632,151 
Average tangible common equity $2,024,154  $1,620,253 
Return on average assets, excluding certain items affecting comparability (non-GAAP)  1.26%  1.23%
Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  14.73%  14.00%
Return on average common equity, excluding certain items affecting comparability (non-GAAP)  9.56%  10.04%
Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  14.78%  14.10%
Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  64.62%  66.99%



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Source: TowneBank