SUFFOLK, Va., April 29, 2021 (GLOBE NEWSWIRE) -- TowneBank (the "Company") (NASDAQ:TOWN) today reported earnings for the quarter ended March 31, 2021 of $69.0 million, or $0.95 per diluted share, compared to $26.38 million, or $0.36 per diluted share, for the quarter ended March 31, 2020.

"Towne continued the strong earnings momentum from the latter half of last year fueled by continued strength in our fee-based businesses and solid growth in deposits and loans. Our deposit balances climbed to new record levels and our teams continue to assist those companies and individuals most impacted by the pandemic by delivering $429 million in new Paycheck Protection Program funding during the first quarter. Overall, we are off to a great start to the year," said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2021 Compared to First Quarter 2020:

Total revenues were $182.51 million, an increase of $44.81 million, or 32.54%.
Pre-provision, pre-tax, net revenues (non-GAAP) were $81.55 million, an increase of $41.96 million, or 105.99%.
Loans held for investment were $9.73 billion, an increase of $0.95 billion, or 10.82%, from March 31, 2020, and $0.11 billion, or 1.10%, from December 31, 2020. In first quarter 2021, the Company originated approximately $429.41 million of loans in round two of the Small Business Administration's Paycheck Protection Program ("PPP"). The balance at March 31, 2021 and December 31, 2020 included $898.73 million and $855.89 million, respectively, of PPP loans.
Total deposits were $12.14 billion, an increase of $2.83 billion, or 30.42%, compared to prior year and $0.57 billion, or 4.89%, from December 31, 2020.
Noninterest bearing deposits increased by 58.17%, to $4.84 billion, representing 39.87% of total deposits. Compared to the linked quarter, noninterest bearing deposits increased 10.66%.
Annualized return on common shareholders' equity was 15.70% and annualized return on average tangible common shareholders' equity was 22.45% (non-GAAP).
Net interest margin for the quarter was 3.04% and taxable equivalent net interest margin (non-GAAP) was 3.06%.
Nonperforming assets were $17.27 million, or 0.11% of total assets, compared to $29.75 million, or 0.24%, at March 31, 2020.
Effective tax rate of 19.37% in the quarter compared to 19.00% in the first quarter of 2020.

"During the quarter we opened our newest banking office located in the Myers Park area of Charlotte, North Carolina, with a third Charlotte region banking office planned to open later this year. Looking ahead, we believe the investments in our newer markets will deliver significant growth opportunities as the economy improves," stated J. Morgan Davis, President and Chief Executive Officer.

Quarterly Net Interest Income Compared to First Quarter 2020:

Net interest income was $99.99 million compared to $89.50 million at March 31, 2020.
Taxable equivalent net interest margin (non-GAAP) was 3.06%, including purchase accounting accretion of 5 basis points and PPP interest and fees of 12 basis points, compared to 3.37%, including purchase accounting accretion of 13 basis points and no PPP interest and fees, for first quarter 2020.
Average loans held for investment, with an average yield of 4.29%, represented 72.30% of average earning assets at March 31, 2021 compared to an average yield of 4.73% and 79.60% of average earning assets in the first quarter of 2020. Excluding PPP loans, loan yields were 4.18% in first quarter 2021.
Interest and fee income on PPP loans was $11.63 million in first quarter 2021, compared to $11.29 million in the linked quarter, and zero in first quarter 2020.
Total cost of deposits decreased to 0.30% from 0.83% at March 31, 2020.
Average interest-earning assets totaled $13.34 billion at March 31, 2021 compared to $10.74 billion at March 31, 2020, an increase of 24.21%.
Average interest-bearing liabilities totaled $8.01 billion, an increase of $0.85 billion from prior year.
Interest expense on the Federal Reserve Bank ("FRB") PPP lending facility was $0.16 million in first quarter, compared to $0.04 million in the linked quarter, and zero in first quarter 2020.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses for on-balance-sheet loans was a benefit of $3.41 million compared to a provision expense of $5.76 million one year ago and an expense of $1.21 million in the linked quarter. The first quarter 2021 included a release in the allowance for credit losses of $3.41 million driven by a combination of minimal net charge-offs, improvements in the economic forecast, offset by modest core loan growth.
Net loan charge-offs were $0.67 million compared to charge-offs of $0.56 million one year prior. The ratio of net loan charge-offs to average loans on an annualized basis was 0.03% in first quarter 2021 and 2020.
The provision for credit losses on off-balance-sheet commitments was a benefit of $0.48 million compared to a provision expense of $1.10 million in the first quarter of 2020, and $0.06 million in the linked quarter.
The allowance for credit losses on loans represented 1.19% of total loans compared to 1.25% at December 31, 2020 and 0.73% at March 31, 2020. Excluding PPP loans, which are fully government guaranteed, the allowance for credit losses (non-GAAP) was 1.31%, compared to 1.37% at December 31, 2020. The allowance for credit losses on loans was 9.09 times nonperforming loans compared to 10.74 times at December 31, 2020 and 3.85 times at March 31, 2020.

Quarterly Noninterest Income Compared to First Quarter 2020:

Total noninterest income was $82.52 million compared to $48.20 million in 2020, an increase of $34.32 million, or 71.20%. Residential mortgage banking income increased $30.0 million and real estate brokerage and property management income increased $11.0 million. Also included in noninterest income are net gains on investment securities of $1.0 million as compared to net gains of $5.0 million in the prior year.
Residential mortgage banking recorded income of $37.41 million compared to $7.42 million in first quarter 2020. Loan volume in the current quarter was $1.60 billion, with purchase activity comprising 53.45% of that volume. Loan volume in first quarter 2020 was $0.92 billion, with purchase activity comprising 61.31%. In addition to increased income resulting from the impact of higher loan volume and strong margins in the current quarter compared to prior year, the Company recorded a net gain on derivative instruments of $2.86 million compared to a loss on derivative instruments of $10.89 million in first quarter 2020.
Total Insurance segment revenue decreased $0.17 million, or 0.83% to $20.07 million in first quarter 2021 compared to 2020. The Company acquired a property and casualty insurance agency in December 2020, which brought in $0.61 million in additional revenue in first quarter 2021 and partially offset the impact of the reduction in revenues due to the sale of its travel insurance joint venture in third quarter 2020, which contributed revenue of $1.27 million in first quarter 2020.
Property management fee revenue increased 205.20%, or $10.41 million, to $15.48 million compared to first quarter 2020. The continuation of international travel restrictions related to COVID-19 coupled with many businesses and schools continuing to operate remotely has positively impacted the demand for domestic travel destinations. This high demand is in sharp contrast to the virtual shut-downs created by quarantines in first quarter 2020 that resulted in only limited reservation activities.

Quarterly Noninterest Expense Compared to First Quarter 2020:

Total noninterest expense was $97.33 million compared to $96.89 million in 2020, an increase of $0.44 million, or 0.45%. Increases in salary and benefits expense of $2.57 million, occupancy expense of $0.57 million, data processing expense of $0.45 million, and software expense of $0.70 million, were partially offset by a $2.27 million reduction in the estimated fourth quarter 2020 incentive accrual and $2.34 million in deferred loan costs related to the origination of PPP loans during first quarter 2021.
The quarterly increase in salaries and benefits was primarily driven by higher variable production related costs. Strong first quarter mortgage production resulted in increased overtime and incentive expenses as well as related payroll taxes.
Increased mortgage volume and higher credit card fees on vacation property reservation activities drove the increase in data processing expense, while increased costs associated with our core banking platform resulted in higher software expenses.

Consolidated Balance Sheet Highlights:

Total assets were $15.08 billion for the quarter ended March 31, 2021, an increase of $0.45 billion, or 3.10%, compared to $14.63 billion at December 31, 2020. Total assets increased $2.46 billion, or 19.45%, from $12.62 billion at March 31, 2020. The year-over-year increase was driven primarily by higher liquidity levels and loans held for investment tied to PPP lending activities.
Loans held for investment increased $0.95 billion, or 10.82%, compared to prior year and $0.11 billion compared the linked quarter. Excluding PPP loans of $0.90 billion in the first quarter, and $0.86 billion in the fourth quarter of 2020, loans held for investment increased $52.06 million, or 0.59%, compared to prior year, and $63.08 million, or 0.72%, compared to the linked quarter, or 2.92% on an annualized basis.
Average loans held for investment, excluding PPP loans, were $8.78 billion in the first quarter of 2021, an increase of $213.39 million, or 2.49% compared to prior year. In the linked quarter comparison, average loans held for investment, excluding PPP loans, increased 0.61%, or $53.48 million, 2.49% on an annualized basis.
Mortgage loans held for sale increased $129.76 million, or 28.64%, compared to the prior year and $42.11 million, or 7.79%, compared to the linked quarter.
Total deposits increased $2.83 billion, or 30.42%, compared to the prior year and $0.57 billion, or 4.89%, compared to the linked quarter.
Total borrowings decreased $0.64 billion, or 45.63%, from prior year and $0.20 billion, or 20.82%, compared to the linked quarter.

Investment Securities:

Total investment securities were $1.46 billion compared to $1.42 billion at December 31, 2020 and $1.35 billion at March 31, 2020. The weighted average duration of the portfolio at March 31, 2021 was 4.33 years. The carrying value of the AFS debt securities portfolio included $28.12 million in net unrealized gains compared to $58.32 million in net unrealized gains at December 31, 2020. During the first quarter of 2021, we sold $15.18 million in AFS debt securities at a gain of $1.0 million to reposition the portfolio.

Loans and Asset Quality:

Total loans held for investment were $9.73 billion at March 31, 2021 compared to $9.63 billion at December 31, 2020 and $8.78 billion at March 31, 2020.
Nonperforming assets were $17.27 million, or 0.11% of total assets, compared to $29.75 million, or 0.24%, at March 31, 2020.
Nonperforming loans were 0.13% of period end loans compared to 0.19% at March 31, 2020.
Foreclosed property decreased to $3.75 million from $13.05 million at March 31, 2020.
Expected loss estimates are subject to change based on continuing review of models and assumptions, portfolio performance, changes in forecasted macroeconomic conditions and loan mix which could result in material changes to the reserve in future periods.
At March 31, 2021 we had $210.25 million in loan modifications made in accordance with section 4013 of the CARES Act.

Deposits and Borrowings:

Total deposits were $12.14 billion compared to $11.57 billion at December 31, 2020 and $9.31 billion at March 31, 2020.
Total loans to deposits were 80.19% compared to 83.20% at December 31, 2020 and 94.37% at March 31, 2020.
Non-interest bearing deposits were 39.87% of total deposits at March 31, 2021 compared to 37.80% at December 31, 2020 and 32.88% at March 31, 2020.
Total borrowings were $0.76 billion compared to $0.96 billion at December 31, 2020 and $1.39 billion at March 31, 2020.

Capital:

Common equity tier 1 capital ratio of 12.15%.
Tier 1 leverage capital ratio of 9.54%.
Tier 1 risk-based capital ratio of 12.30%.
Total risk-based capital ratio of 15.59%.
Book value was $24.78 compared to $24.31 at December 31, 2020 and $22.77 at March 31, 2020.
Tangible book value (non-GAAP) was $17.94 compared to $17.46 at December 31, 2020 and $15.91 at March 31, 2020.

About TowneBank:

Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a mission 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, the bank operates over 40 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. Towne has grown its capabilities beyond banking to provide expertise 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. With total assets of $15.08 billion as of March 31, 2021, TowneBank is one of the largest banks headquartered in Virginia.

Non-GAAP Financial Measures:

This press release contains financial information determined by methods other than in accordance with GAAP. The Company's management uses these non-GAAP financial measures in its analysis of the Company's performance. These measures typically adjust GAAP performance measures to exclude the effects of the amortization of intangibles and include the tax benefit associated with revenue items that are tax-exempt, as well as adjust income available to common shareholders for certain significant activities or transactions that are infrequent in nature. Management believes presentations of these non-GAAP financial measures provide useful supplemental information that is essential to a proper understanding of the operating results of the Company's core businesses. These non-GAAP disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of GAAP to non-GAAP disclosures are included as tables at the end of this release.

Forward-Looking Statements:

Certain statements contained in this release constitute forward-looking statements within the meaning of U.S. federal securities laws. These forward-looking statements speak only as of the date of this release, are based on current expectations, and involve a number of assumptions. These include statements regarding TowneBank's future economic performance, financial condition, prospects, growth, strategies and expectations, and objectives of management, and are generally identified by the use of words such as "believe," "expect," "intend," "anticipate," "estimate," or "project" or similar expressions. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. You should not place undue reliance on forward-looking statements, which are subject to assumptions that are subject to change. TowneBank's ability to predict results, or the actual effect of future plans or strategies, is inherently uncertain. These forward-looking statements are subject to a number of factors and uncertainties that could cause actual results to differ from those indicated or implied in the forward-looking statements and such differences may be material. Factors which could have a material effect on the operations and future prospects of TowneBank include but are not limited to: the impacts of the ongoing coronavirus (COVID-19) pandemic, changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of TowneBank's loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in TowneBank's market area; implementation of new technologies and the ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation. TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

Media contact:

G. Robert Aston, Jr., Executive Chairman, 757-638-6780

J. Morgan Davis, President and Chief Executive Officer, 757-673-1673

Investor contact:

William B. Littreal, Chief Financial Officer, 757-638-6813



TOWNEBANK
Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)

		Three Months Ended
		March 31,			December 31,			September 30,			June 30,			March 31,
		2021			2020			2020			2020			2020
Income and Performance Ratios:
	Total Revenue	$	182,509		$	171,848		$	192,135		$	162,656		$	137,696
	Net income	72,631			53,891			50,715			37,222			27,605
	Net income available to common shareholders	68,995			50,082			34,464			34,605			26,384
	Pre-provision, pre-tax, net revenues ^(non-GAAP)	81,547			62,107			73,903			69,014			39,587
	Net income per common share - diluted	0.95			0.69			0.48			0.48			0.36
	Book value per common share	24.78			24.31			23.83			23.50			22.77
	Book value per common share - tangible ^(non-GAAP)	17.94			17.46			17.06			16.68			15.91
	Return on average assets	1.92		%	1.35		%	0.89		%	0.97		%	0.88		%
	Return on average assets - tangible ^(non-GAAP)	2.05		%	1.46		%	0.97		%	1.07		%	1.00		%
	Return on average equity	15.56		%	11.26		%	7.85		%	8.18		%	6.37		%
	Return on average equity - tangible ^(non-GAAP)	22.19		%	16.28		%	11.66		%	12.32		%	9.91		%
	Return on average common equity	15.70		%	11.36		%	7.91		%	8.24		%	6.42		%
	Return on average common equity - tangible ^(non-GAAP)	22.45		%	16.48		%	11.79		%	12.44		%	10.01		%
	Noninterest income as a percentage of total revenue	45.21		%	41.45		%	49.64		%	42.66		%	35.00		%
Regulatory Capital Ratios (1):
	Common equity tier 1	12.15		%	11.87		%	11.75		%	11.54		%	11.23		%
	Tier 1	12.30		%	12.04		%	11.91		%	11.67		%	11.35		%
	Total	15.59		%	15.42		%	15.35		%	14.91		%	14.40		%
	Tier 1 leverage ratio	9.54		%	8.99		%	8.89		%	9.05		%	10.11		%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans	9.09x			10.74x			7.31x			5.34x			3.85x
	Allowance for credit losses on loans to period end loans	1.19		%	1.25		%	1.22		%	0.92		%	0.73		%
	Allowance for credit losses on loans to period end loans excluding PPP loans ^(non-GAAP)	1.31		%	1.37		%	1.37		%	1.04		%	0.73		%
	Nonperforming loans to period end loans	0.13		%	0.12		%	0.17		%	0.17		%	0.19		%
	Nonperforming assets to period end assets	0.11		%	0.11		%	0.19		%	0.19		%	0.24		%
	Net charge-offs (recoveries) to average loans (annualized)	0.03		%	—		%	(0.01		)%	—		%	0.03		%
	Net charge-offs (recoveries)	$	669		$	109		$	(328	)	$	(102	)	$	559

	Nonperforming loans	$	12,768		$	11,188		$	16,295		$	16,935		$	16,700
	Former bank premises	750			750			750			—			—
	Foreclosed property	3,748			4,276			11,695			12,315			13,053
	Total nonperforming assets	$	17,266		$	16,214		$	28,740		$	29,250		$	29,753
	Loans past due 90 days and still accruing interest	$	108		$	528		$	19		$	464		$	91
	Allowance for credit losses on loans	$	116,077		$	120,157		$	119,058		$	90,467		$	64,372
Mortgage Banking:
	Loans originated, mortgage	$	1,187,595		$	1,257,963		$	1,292,801		$	1,116,782		$	718,681
	Loans originated, joint venture	417,177			429,848			498,100			357,815			204,522
	Total loans originated	$	1,604,772		$	1,687,811		$	1,790,901		$	1,474,597		$	923,203
	Number of loans originated	5,165			5,481			5,817			4,818			3,025
	Number of originators	229			228			224			216			223
	Purchase %	53.45		%	59.76		%	61.21		%	51.26		%	61.31		%
	Loans sold	$	1,601,480		$	1,845,926		$	1,833,590		$	1,398,649		$	809,834
	Rate lock asset	$	12,522		$	11,781		$	10,480		$	7,202		$	3,691
	Gross realized gain on sales and fees as a % of loans originated	4.01		%	4.02		%	3.65		%	3.17		%	1.80		%
Other Ratios:
	Net interest margin	3.04		%	2.97		%	2.70		%	2.85		%	3.35		%
	Net interest margin-fully tax equivalent ^(non-GAAP)	3.06		%	2.98		%	2.72		%	2.87		%	3.37		%
	Average earning assets/total average assets	91.47		%	91.59		%	92.09		%	91.33		%	89.15		%
	Average loans/average deposits	82.71		%	83.42		%	86.29		%	91.81		%	92.99		%
	Average noninterest deposits/total average deposits	38.39		%	39.61		%	37.76		%	36.52		%	32.21		%
	Period end equity/period end total assets	12.04		%	12.20		%	11.82		%	11.05		%	13.19		%
	Efficiency ratio^(non-GAAP)	52.11		%	60.02		%	57.36		%	55.17		%	70.79		%
	(1) Current reporting period regulatory capital ratios are preliminary



TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q1			Q1			Q4			Q1 21 vs.		Q1 21 vs.
*Available-for-sale securities, at fair value*	2021			2020			2020			Q1 20		Q4 20
U.S. agency securities	$	201,787		$	121,857		$	184,657		65.59	%	9.28	%
U.S. Treasury notes	1,019			1,014			1,000			0.49	%	1.90	%
Municipal securities	334,751			266,489			353,651			25.62	%	(5.34	)%
Trust preferred and other corporate securities	31,241			59,606			31,499			(47.59	)%	(0.82	)%
Mortgage-backed securities issued by GSE and GNMA	849,418			799,713			797,765			6.22	%	6.47	%
Allowance for credit losses	(210		)	(259		)	(348		)	(18.92	)%	(39.66	)%
Total	$	1,418,006		$	1,248,420		$	1,368,224		13.58	%	3.64	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	38,751		$	30,545		$	60,025		26.87	%	(35.44	)%
Total gross unrealized losses	(10,632		)	(9,848		)	(1,703		)	7.96	%	524.31	%
Net unrealized gains (losses) and other adjustments on AFS securities	$	28,119		$	20,697		$	58,322		35.86	%	(51.79	)%
*Held-to-maturity securities, at amortized cost*
Municipal securities	$	5,032		$	28,852		$	5,012		(82.56	)%	0.40	%
Trust preferred corporate securities	2,309			2,357			2,321			(2.04	)%	(0.52	)%
Mortgage-backed securities issued by GSE and GNMA	8,639			11,222			9,179			(23.02	)%	(5.88	)%
Allowance for credit losses	(97		)	(133		)	(97		)	(27.07	)%	—	%
Total	$	15,883		$	42,298		$	16,415		(62.45	)%	(3.24	)%

*Gross unrealized gains (losses) not reflected in financial statements*
Total gross unrealized gains	$	1,598		$	964		$	1,957		65.77	%	(18.34	)%
Total gross unrealized losses	—			—			—			—	%	—	%
Net unrealized gains (losses) in HTM securities	$	1,598		$	964		$	1,957		65.77	%	(18.34	)%

Loans Held For Investment (1)										% Change
	Q1			Q1			Q4			Q1 21 vs.		Q1 21 vs.
	2021			2020			2020			Q1 20		Q4 20
Real estate - construction and development	$	1,031,267		$	1,060,834		$	1,199,772		(2.79	)%	(14.04	)%
Commercial real estate - owner occupied	1,439,412			1,398,216			1,380,516			2.95	%	4.27	%
Commercial real estate - non owner occupied	2,477,315			2,305,971			2,335,235			7.43	%	6.08	%
Real estate - multifamily	360,125			283,514			295,488			27.02	%	21.87	%
Residential 1-4 family	1,173,761			1,229,909			1,216,629			(4.57	)%	(3.52	)%
HELOC	400,314			463,653			412,476			(13.66	)%	(2.95	)%
Commercial and industrial business (C&I)	2,005,558			1,311,266			1,990,808			52.95	%	0.74	%
Government	398,579			324,978			379,243			22.65	%	5.10	%
Indirect	278,567			268,347			271,459			3.81	%	2.62	%
Consumer loans and other	169,685			137,507			147,442			23.40	%	15.09	%
Total	$	9,734,583		$	8,784,195		$	9,629,068		10.82	%	1.10	%
(1) Paycheck Protection Program loans totaling $0.90 billion and $0.86 billion, primarily in C&I, are included in Q1 2021 and Q4 2020, respectively.

Deposits										% Change
	Q1			Q1			Q4			Q1 21 vs.		Q1 21 vs.
	2021			2020			2020			Q1 20		Q4 20
Noninterest-bearing demand	$	4,840,678		$	3,060,515		$	4,374,566		58.17	%	10.66	%
Interest-bearing:
Demand and money market accounts	5,062,461			3,573,926			4,819,604			41.65	%	5.04	%
Savings	342,554			280,807			330,091			21.99	%	3.78	%
Certificates of deposits	1,893,951			2,392,744			2,048,905			(20.85	)%	(7.56	%
Total	$	12,139,644		$	9,307,992		$	11,573,166		30.42	%	4.89	%



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

	Three Months Ended								Three Months Ended								Three Months Ended
	March 31, 2021								December 31, 2020								March 31, 2020
				Interest			Average					Interest			Average					Interest			Average
	Average			Income/			Yield/		Average			Income/			Yield/		Average			Income/			Yield/
	Balance			Expense			Rate		Balance			Expense			Rate		Balance			Expense			Rate
Assets:
Loans (net of unearned income and deferred costs), excluding nonaccrual loans (1)	$	9,647,129		$	101,960		4.29	%	$	9,752,150		$	104,799		4.28	%	$	8,550,216		$	100,566		4.73	%
Taxable investment securities	1,303,535			6,604			2.03	%	1,250,375			6,878			2.20	%	1,356,411			9,211			2.72	%
Tax-exempt investment securities	139,859			542			1.55	%	139,572			520			1.49	%	128,204			861			2.69	%
Total securities	1,443,394			7,146			1.98	%	1,389,947			7,398			2.13	%	1,484,615			10,072			2.71	%
Interest-bearing deposits	1,715,110			416			0.10	%	1,754,365			435			0.10	%	373,984			1,102			1.19	%
Loans held for sale	536,997			3,361			2.50	%	587,517			3,867			2.63	%	333,070			2,988			3.59	%
Total earning assets	13,342,630			112,883			3.43	%	13,483,979			116,499			3.44	%	10,741,885			114,728			4.30	%
Less: allowance for credit losses	(120,934		)						(121,402		)						(55,331		)
Total nonearning assets	1,370,720								1,359,808								1,362,769
Total assets	$	14,592,416							$	14,722,385							$	12,049,323
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	4,904,885		$	2,075		0.17	%	$	4,582,588		$	2,633		0.23	%	$	3,521,707		$	5,319		0.61	%
Savings	332,006			522			0.64	%	317,561			552			0.69	%	276,947			593			0.86	%
Certificates of deposit	1,959,225			5,951			1.23	%	2,159,573			7,578			1.40	%	2,434,098			13,150			2.17	%
Total interest-bearing deposits	7,196,116			8,548			0.48	%	7,059,722			10,763			0.61	%	6,232,752			19,062			1.23	%
Borrowings	562,451			822			0.58	%	722,291			1,645			0.89	%	679,745			2,581			1.50	%
Subordinated debt, net	249,114			2,930			4.70	%	248,965			2,962			4.76	%	248,510			2,962			4.77	%
Total interest-bearing liabilities	8,007,681			12,300			0.62	%	8,030,978			15,370			0.76	%	7,161,007			24,605			1.38	%
Demand deposits	4,483,444								4,630,665								2,962,110
Other noninterest-bearing liabilities	303,524								291,836								260,500
Total liabilities	12,794,649								12,953,479								10,383,617
Shareholders' equity	1,797,767								1,768,906								1,665,706
Total liabilities and equity	$	14,592,416							$	14,722,385							$	12,049,323
Net interest income (tax-equivalent basis)				$	100,583							$	101,129							$	90,123
Reconciliation of Non-GAAP Financial Measures
Tax-equivalent basis adjustment				(593		)						(515		)						(627		)
Net interest income (GAAP)				$	99,990							$	100,614							$	89,496

Interest rate spread (2)(3)							2.81	%							2.68	%							2.92	%
Interest expense as a percent of average earning assets							0.37	%							0.45	%							0.92	%
Net interest margin (tax equivalent basis) (3)(4)							3.06	%							2.98	%							3.37	%
Total cost of deposits							0.30	%							0.37	%							0.83	%

(1) March 31, 2021 and December 31, 2020 includes average PPP balances of $0.88 billion and $1.04 billion, and related interest and fee income of $11.63 million and $11.29 million, respectively.

(2) Interest spread is the average yield earned on earning assets less the average rate paid on interest-bearing liabilities. Fully tax equivalent.

(3) Net interest margin is net interest income expressed as a percentage of average earning assets. Fully tax equivalent.

(4) Non-GAAP.



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


	March 31,			December 31,
	2021			2020
	(unaudited)			(audited)
ASSETS
Cash and due from banks	$	141,545		$	41,514
Interest-bearing deposits at FRB - Richmond	1,936,458			1,795,241
Interest-bearing deposits in financial institutions	30,031			27,532
Total Cash and Cash Equivalents	2,108,034			1,864,287
Securities available for sale, at fair value (amortized cost of $1,390,097 and $1,310,250, and allowance for credit losses of $210 and $348 at March 31, 2021 and December 31, 2020, respectively.)	1,418,006			1,368,224
Securities held to maturity, at amortized cost (fair value $17,578 and $18,469 at March 31, 2021 and December 31, 2020, respectively.)	15,980			16,512
Less: allowance for credit losses	(97		)	(97		)
Securities held to maturity, net of allowance for credit losses	15,883			16,415
Other equity securities	6,355			6,492
FHLB stock	16,909			30,135
Total Securities	1,457,153			1,421,266
Mortgage loans held for sale	582,905			540,798
Loans, net of unearned income and deferred costs	9,734,583			9,629,068
Less: allowance for credit losses	(116,077		)	(120,157		)
Net Loans	9,618,506			9,508,911
Premises and equipment, net	261,831			260,242
Goodwill	452,328			452,328
Other intangible assets, net	44,808			45,533
BOLI	247,655			246,109
Other assets	306,176			286,970
TOTAL ASSETS	$	15,079,396		$	14,626,444

LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,840,678		$	4,374,566
Interest-bearing:
Demand and money market accounts	5,062,461			4,819,604
Savings	342,554			330,091
Certificates of deposit	1,893,951			2,048,905
Total Deposits	12,139,644			11,573,166
Advances from the FHLB	255,872			456,038
Subordinated debt, net	249,204			249,055
FRB PPP lending facility	183,164			182,852
Repurchase agreements and other borrowings	68,509			67,786
Total Borrowings	756,749			955,731
Other liabilities	366,697			313,719
TOTAL LIABILITIES	13,263,090			12,842,616
Preferred stock, authorized and unissued shares - 2,000,000	—			—
Common stock, $1.667 par: 150,000,000 shares authorized 72,653,670 and 72,667,541 shares issued at March 31, 2021 and December 31, 2020, respectively	121,108			121,132
Capital surplus	1,047,312			1,046,642
Retained earnings	613,826			557,889
Common stock issued to deferred compensation trust, at cost 873,521 and 873,486 shares at March 31, 2021 and December 31, 2020, respectively	(17,063		)	(16,969		)
Deferred compensation trust	17,063			16,969
Accumulated other comprehensive income (loss)	17,969			41,184
TOTAL SHAREHOLDERS' EQUITY	1,800,215			1,766,847
Noncontrolling interest	16,091			16,981
TOTAL EQUITY	1,816,306			1,783,828
TOTAL LIABILITIES AND EQUITY	$	15,079,396		$	14,626,444


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


	Three Months Ended
	March 31,
	2021			2020
INTEREST INCOME:
Loans, including fees	$	101,396		$	100,062
Investment securities	7,117			9,949
Interest-bearing deposits in financial institutions and federal funds sold	416			1,102
Mortgage loans held for sale	3,361			2,988
Total interest income	112,290			114,101
INTEREST EXPENSE:
Deposits	8,548			19,062
Advances from the FHLB	497			2,492
Subordinated debt, net	2,930			2,962
Repurchase agreements and other borrowings	325			89
Total interest expense	12,300			24,605
Net interest income	99,990			89,496

PROVISION FOR CREDIT LOSSES	(4,027		)	7,016
Net interest income after provision for credit losses	104,017			82,480
NONINTEREST INCOME:
Residential mortgage banking income, net	37,412			7,416
Insurance commissions and other title fees and income, net	16,325			16,893
Real estate brokerage and property management income, net	17,934			6,938
Service charges on deposit accounts	2,190			2,440
Credit card merchant fees, net	1,302			1,179
BOLI	1,519			3,105
Other income	4,837			5,227
Net gain/(loss) on investment securities	1,000			5,002
Total noninterest income	82,519			48,200
NONINTEREST EXPENSE:
Salaries and employee benefits	58,435			55,867
Occupancy expense	8,072			7,502
Furniture and equipment	3,512			3,640
Amortization - intangibles	2,723			2,950
Software expense	4,194			3,492
Data processing	3,239			2,791
Professional fees	2,339			3,067
Advertising and marketing	2,968			3,584
Other expenses	11,844			13,995
Total noninterest expense	97,326			96,888
Income before income tax expense and noncontrolling interest	89,210			33,792
Provision for income tax expense	16,579			6,187
Net income	$	72,631		$	27,605
Net income attributable to noncontrolling interest	(3,636		)	(1,221		)
Net income attributable to TowneBank	$	68,995		$	26,384
Per common share information
Basic earnings	$	0.95		$	0.37
Diluted earnings	$	0.95		$	0.36
Cash dividends declared	$	0.18		$	0.18



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


	March 31,			December 31,			September 30,			June 30,			March 31,
	2021			2020			2020			2020			2020
	(unaudited)			(audited)			(unaudited)			(unaudited)			(unaudited)
ASSETS
Cash and due from banks	$	141,545		$	41,514		$	114,604		$	115,724		$	108,929
Interest-bearing deposits at FRB - Richmond	1,936,458			1,795,241			1,670,186			2,511,152			753,643
Interest-bearing deposits in financial institutions	30,031			27,532			24,890			24,374			23,564
Total Cash and Cash Equivalents	2,108,034			1,864,287			1,809,680			2,651,250			886,136
Securities available for sale	1,418,006			1,368,224			1,310,683			1,266,624			1,248,420
Securities held to maturity	15,980			16,512			17,131			41,595			42,431
Less: allowance for credit losses	(97		)	(97		)	(90		)	(121		)	(133		)
Securities held to maturity, net of allowance for credit losses	15,883			16,415			17,041			41,474			42,298
Other equity securities	6,355			6,492			6,497			6,497			6,462
FHLB stock	16,909			30,135			41,829			49,277			52,042
Total Securities	1,457,153			1,421,266			1,376,050			1,363,872			1,349,222
Mortgage loans held for sale	582,905			540,798			669,020			610,369			453,143
Loans, net of unearned income and deferred costs	9,734,583			9,629,068			9,770,570			9,801,889			8,784,195
Less: allowance for credit losses	(116,077		)	(120,157		)	(119,058		)	(90,467		)	(64,372		)
Net Loans	9,618,506			9,508,911			9,651,512			9,711,422			8,719,823
Premises and equipment, net	261,831			260,242			256,909			257,533			236,735
Goodwill	452,328			452,328			446,725			446,725			446,725
Other intangible assets, net	44,808			45,533			45,781			48,632			51,448
BOLI	247,655			246,109			244,103			242,493			240,924
Other assets	306,176			286,970			295,637			247,962			239,670
TOTAL ASSETS	$	15,079,396		$	14,626,444		$	14,795,417		$	15,580,258		$	12,623,826
LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	4,840,678		$	4,374,566		$	4,464,178		$	4,226,208		$	3,060,515
Interest-bearing:
Demand and money market accounts	5,062,461			4,819,604			4,642,482			4,223,391			3,573,926
Savings	342,554			330,091			312,444			298,673			280,807
Certificates of deposit	1,893,951			2,048,905			2,285,859			2,516,666			2,392,744
Total Deposits	12,139,644			11,573,166			11,704,963			11,264,938			9,307,992
Advances from the FHLB	255,872			456,038			731,202			906,365			971,527
Subordinated debt, net	249,204			249,055			248,906			248,756			248,607
FRB PPP lending facility	183,164			182,852			—			1,111,429			—
Repurchase agreements and other borrowings	68,509			67,786			58,061			60,913			171,762
Total Borrowings	756,749			955,731			1,038,169			2,327,463			1,391,896
Other liabilities	366,697			313,719			303,582			266,314			258,306
TOTAL LIABILITIES	13,263,090			12,842,616			13,046,714			13,858,715			10,958,194
Preferred stock
Authorized shares - 2,000,000	—			—			—			—			—
Common stock, $1.667 par value	121,108			121,132			121,115			121,101			121,057
Capital surplus	1,047,312			1,046,642			1,045,170			1,043,774			1,041,870
Retained earnings	613,826			557,889			520,888			499,502			477,972
Common stock issued to deferred compensation trust, at cost	(17,063		)	(16,969		)	(16,951		)	(16,776		)	(15,562		)
Deferred compensation trust	17,063			16,969			16,951			16,776			15,562
Accumulated other comprehensive income (loss)	17,969			41,184			44,569			43,218			12,301
TOTAL SHAREHOLDERS' EQUITY	1,800,215			1,766,847			1,731,742			1,707,595			1,653,200
Noncontrolling interest	16,091			16,981			16,961			13,948			12,432
TOTAL EQUITY	1,816,306			1,783,828			1,748,703			1,721,543			1,665,632
TOTAL LIABILITIES AND EQUITY	$	15,079,396		$	14,626,444		$	14,795,417		$	15,580,258		$	12,623,826



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


	Three Months Ended
	March 31,			December 31,			September 30,			June 30,			March 31,
	2021			2020			2020			2020			2020
INTEREST INCOME:
Loans, including fees	$	101,396		$	104,182		$	102,869		$	102,139		$	100,062
Investment securities	7,117			7,499			7,440			8,163			9,949
Interest-bearing deposits in financial institutions and federal funds sold	416			435			632			433			1,102
Mortgage loans held for sale	3,361			3,867			4,587			3,811			2,988
Total interest income	112,290			115,983			115,528			114,546			114,101
INTEREST EXPENSE:
Deposits	8,548			10,762			12,966			15,072			19,062
Advances from the FHLB	497			1,404			1,901			2,595			2,492
Subordinated debt	2,930			2,962			2,962			2,962			2,962
Repurchase agreements and other borrowings	325			241			940			643			89
Total interest expense	12,300			15,369			18,769			21,272			24,605
Net interest income	99,990			100,614			96,759			93,274			89,496

PROVISION FOR CREDIT LOSSES	(4,027		)	1,617			31,598			26,945			7,016
Net interest income after provision for credit losses	104,017			98,997			65,161			66,329			82,480
NONINTEREST INCOME:
Residential mortgage banking income, net	37,412			37,504			37,531			29,715			7,416
Insurance commissions and other title fees and income, net	16,325			13,868			17,468			17,612			16,893
Real estate brokerage and property management income, net	17,934			9,229			11,301			10,781			6,938
Service charges on deposit accounts	2,190			1,707			1,986			1,888			2,440
Credit card merchant fees, net	1,302			1,377			1,506			1,109			1,179
BOLI	1,519			1,990			1,605			1,584			3,105
Other income	4,837			5,559			22,278			3,763			5,227
Net gain/(loss) on investment securities	1,000			—			1,701			2,930			5,002
Total noninterest income	82,519			71,234			95,376			69,382			48,200
NONINTEREST EXPENSE:
Salaries and employee benefits	58,435			61,475			61,408			56,926			55,867
Occupancy expense	8,072			8,193			8,396			7,227			7,502
Furniture and equipment	3,512			3,462			3,247			3,564			3,640
Amortization - intangibles	2,723			2,797			2,851			2,901			2,950
Software expense	4,194			4,066			3,572			3,492			3,492
Data processing	3,239			2,363			3,113			2,718			2,791
Professional fees	2,339			2,591			2,637			2,972			3,067
Advertising and marketing	2,968			2,204			1,870			1,986			3,584
Other expenses	11,844			18,781			14,887			9,239			13,995
Total noninterest expense	97,326			105,932			101,981			91,025			96,888
Income before income tax expense and noncontrolling interest	89,210			64,299			58,556			44,686			33,792
Provision for income tax expense	16,579			10,408			7,841			7,464			6,187
Net income	72,631			53,891			50,715			37,222			27,605
Net income attributable to noncontrolling interest	(3,636		)	(3,809		)	(16,251		)	(2,617		)	(1,221		)
Net income attributable to TowneBank	$	68,995		$	50,082		$	34,464		$	34,605		$	26,384
Per common share information
Basic earnings	$	0.95		$	0.69		$	0.48		$	0.48		$	0.37
Diluted earnings	$	0.95		$	0.69		$	0.48		$	0.48		$	0.36
Basic weighted average shares outstanding	72,414,953			72,357,177			72,339,413			72,280,555			72,206,228
Diluted weighted average shares outstanding	72,517,008			72,455,096			72,375,736			72,317,988			72,299,721
Cash dividends declared	$	0.18		$	0.18		$	0.18		$	0.18		$	0.18

TOWNEBANK
Banking Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			2021 over 2020
	2021			2020			2020			Amount			Percent
Revenue
Net interest income	$	97,604		$	87,406		$	97,412		$	10,198		11.67	%
Service charges on deposit accounts	2,190			2,440			1,707			(250		)	(10.25	)%
Credit card merchant fees	1,302			1,179			1,377			123			10.43	%
Other income	4,970			7,061			5,983			(2,091		)	(29.61	)%
Subtotal	8,462			10,680			9,067			(2,218		)	(20.77	)%
Net gain/(loss) on investment securities	1,000			5,002			—			(4,002		)	(80.01	)%
Total noninterest income	9,462			15,682			9,067			(6,220		)	(39.66	)%
Total revenue	107,066			103,088			106,479			3,978			3.86	%

Provision for credit losses	(3,401		)	7,041			1,628			(10,442		)	(148.30	)%

Expenses
Salaries and employee benefits	31,861			33,225			37,358			(1,364		)	(4.11	)%
Occupancy expense	5,546			4,916			5,681			630			12.82	%
Furniture and equipment	2,668			2,660			2,625			8			0.30	%
Amortization of intangibles	962			1,164			1,013			(202		)	(17.35	)%
Other expenses	14,050			18,705			19,892			(4,655		)	(24.89	)%
Total expenses	55,087			60,670			66,569			(5,583		)	(9.20	)%
Income before income tax, corporate allocation and noncontrolling interest	55,380			35,377			38,282			20,003			56.54	%
Corporate allocation	1,292			670			643			622			92.84	%
Income before income tax provision and noncontrolling interest	56,672			36,047			38,925			20,625			57.22	%
Provision for income tax expense	9,701			6,663			5,163			3,038			45.60	%
Net income	46,971			29,384			33,762			17,587			59.85	%
Noncontrolling interest	(5		)	(1		)	4			(4		)	400.00	%
Net income attributable to TowneBank	$	46,966		$	29,383		$	33,766		$	17,583		59.84	%

Efficiency ratio^(non-GA^AP⁾	51.03		%	60.67		%	61.57		%	(9.64		)%	(15.89	)%



TOWNEBANK
Realty Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			2021 over 2020
	2021			2020			2020			Amount			Percent
Revenue
Residential mortgage brokerage income, net	$	37,877		$	8,007		$	38,040		$	29,870		373.05	%
Real estate brokerage income, net	2,451			1,865			3,564			586			31.42	%
Title insurance and settlement fees	525			436			669			89			20.41	%
Property management fees, net	15,483			5,073			5,665			10,410			205.20	%
Income from unconsolidated subsidiary	406			186			398			220			118.28	%
Net interest and other income	2,736			2,396			3,627			340			14.19	%
Total revenue	59,478			17,963			51,963			41,515			231.11	%

Provision for credit losses	(626		)	(25		)	(11		)	(601		)	2,404.00	%

Expenses
Salaries and employee benefits	16,847			13,293			16,168			3,554			26.74	%
Occupancy expense	1,871			1,927			1,869			(56		)	(2.91	)%
Furniture and equipment	649			762			614			(113		)	(14.83	)%
Amortization of intangible assets	590			657			658			(67		)	(10.20	)%
Other expenses	9,229			6,867			8,779			2,362			34.40	%
Total expenses	29,186			23,506			28,088			5,680			24.16	%

Income (loss) before income tax, corporate allocation and noncontrolling interest	30,918			(5,518		)	23,886			36,436			(660.31	)%
Corporate allocation	(1,000		)	(393		)	(403		)	(607		)	154.45	%
(Loss) income before income tax provision and noncontrolling interest	29,918			(5,911		)	23,483			35,829			(606.14	)%
Provision for income tax (benefit) expense	6,216			(1,292		)	4,421			7,508			(581.11	)%
Net (loss) income	23,702			(4,619		)	19,062			28,321			(613.14	)%
Noncontrolling interest	(3,631		)	(791		)	(3,813		)	(2,840		)	359.04	%
Net (loss) income attributable to TowneBank	$	20,071		$	(5,410	)	$	15,249		$	25,481		(471.00	)%

Efficiency ratio ^(non-GAAP)	48.08		%	127.20		%	52.79		%	(79.12		)%	(62.20	)%

TOWNEBANK
Insurance Segment Financial Information (unaudited)
(dollars in thousands)


	Three Months Ended									Increase/(Decrease)
	March 31,						December 31,			2021 over 2020
	2021			2020			2020			Amount			Percent
Commission and fee income
Property and casualty	$	14,189		$	12,786		$	11,942		$	1,403		10.97	%
Employee benefits	3,884			3,918			3,725			(34		)	(0.87	)%
Travel insurance	—			1,266			—			(1,266		)	(100.00	)%
Specialized benefit services	167			168			175			(1		)	(0.60	)%
Total commissions and fees	18,240			18,138			15,842			102			0.56	%

Contingency and bonus revenue	1,759			2,022			1,087			(263		)	(13.01	)%
Other income	73			81			69			(8		)	(9.88	)%
Total revenue	20,072			20,241			16,998			(169		)	(0.83	)%

Employee commission expense	4,107			3,596			3,592			511			14.21	%
Revenue, net of commission expense	15,965			16,645			13,406			(680		)	(4.09	)%

Salaries and employee benefits	9,727			9,349			7,949			378			4.04	%
Occupancy expense	655			659			643			(4		)	(0.61	)%
Furniture and equipment	195			218			223			(23		)	(10.55	)%
Amortization of intangible assets	1,171			1,129			1,126			42			3.72	%
Other expenses	1,305			1,357			1,334			(52		)	(3.83	)%
Total operating expenses	13,053			12,712			11,275			341			2.68	%
Income before income tax, corporate allocation and noncontrolling interest	2,912			3,933			2,131			(1,021		)	(25.96	)%
Corporate allocation	(292		)	(277		)	(240		)	(15		)	5.42	%
Income before income tax provision and noncontrolling interest	2,620			3,656			1,891			(1,036		)	(28.34	)%
Provision for income tax expense	662			816			824			(154		)	(18.87	)%
Net income	1,958			2,840			1,067			(882		)	(31.06	)%
Noncontrolling interest	—			(429		)	—			429			(100.00	)%
Net income attributable to TowneBank	$	1,958		$	2,411		$	1,067		(453		)	(18.79	)%

Provision for income taxes	662			816			824			(154		)	(18.87	)%
Depreciation, amortization and interest expense	1,308			1,300			1,274			8			0.62	%
EBITDA^(non-GAAP)	$	3,928		$	4,527		$	3,165		$	(599	)	(13.23	)%

Efficiency ratio^(non^-GAAP)	74.43		%	69.59		%	75.70		%	4.84		%	6.96	%



TOWNEBANK
Reconciliation of Non-GAAP Financial Measures
(dollars in thousands)

	Three Months Ended
	March 31,			March 31,			December 31,
	2021			2020			2020

Return on average assets (GAAP)	1.92		%	0.88		%	1.35		%
Impact of excluding average goodwill and other intangibles and amortization	0.13		%	0.12		%	0.11		%
Return on average tangible assets (non-GAAP)	2.05		%	1.00		%	1.46		%

Return on average equity (GAAP)	15.56		%	6.37		%	11.26		%
Impact of excluding average goodwill and other intangibles and amortization	6.63		%	3.54		%	5.02		%
Return on average tangible equity (non-GAAP)	22.19		%	9.91		%	16.28		%

Return on average common equity (GAAP)	15.70		%	6.42		%	11.36		%
Impact of excluding average goodwill and other intangibles and amortization	6.75		%	3.59		%	5.12		%
Return on average tangible common equity (non-GAAP)	22.45		%	10.01		%	16.48		%

Book value (GAAP)	$	24.78		$	22.77		$	24.31
Impact of excluding average goodwill and other intangibles and amortization	(6.84		)	(6.86		)	(6.85		)
Tangible book value (non-GAAP)	$	17.94		$	15.91		$	17.46

Efficiency ratio (GAAP)	53.33		%	70.36		%	61.64		%
Impact of exclusions	(1.22		)%	0.43		%	(1.62		)%
Efficiency ratio (non-GAAP)	52.11		%	70.79		%	60.02		%

Average assets (GAAP)	$	14,592,416		$	12,049,323		$	14,722,385
Less: average goodwill and intangible assets	497,446			500,123			491,453
Average tangible assets (non-GAAP)	$	14,094,970		$	11,549,200		$	14,230,932

Average equity (GAAP)	$	1,797,767		$	1,665,706		$	1,768,906
Less: average goodwill and intangible assets	497,446			500,123			491,453
Average tangible equity (non-GAAP)	$	1,300,321		$	1,165,583		$	1,277,453

Average common equity (GAAP)	$	1,782,795		$	1,653,676		$	1,753,596
Less: average goodwill and intangible assets	497,446			500,123			491,453
Average tangible common equity (non-GAAP)	$	1,285,349		$	1,153,553		$	1,262,143

Net Income (GAAP)	$	68,995		$	26,384		50,082
Amortization of Intangibles, net of tax	2,151			2,331			2,210
Tangible net income (non-GAAP)	$	71,146		$	28,715		$	52,292

Net Income (GAAP)	$	68,995		$	26,384		$	50,082
Provision for credit losses	(4,027		)	7,016			1,617
Provision for income tax	16,579			6,187			10,408
Pre-provision, pre-tax net revenues (non-GAAP)	$	81,547		$	39,587		$	62,107

Total Revenue (GAAP)	$	182,509		$	137,696		$	171,848
Net (gain)/loss on investment securities	(1,000		)	(5,002		)	—
Other nonrecurring (income) loss	30			—			—
Total Revenue for efficiency calculation (non-GAAP)	$	181,539		$	132,694		$	171,848

Noninterest expense (GAAP)	$	97,326		$	96,888		$	105,932
Less: Amortization of intangibles	2,723			2,950			2,797
Noninterest expense net of amortization (non-GAAP)	$	94,603		$	93,938		$	103,135

TowneBank Reports Record First Quarter 2021 Earnings