Suffolk, Va., July 23, 2025 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ:TOWN) today reported earnings for the quarter ended June 30, 2025 of $38.84 million, or $0.51 per diluted share, compared to $42.86 million, or $0.57 per diluted share, for the quarter ended June 30, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $61.34 million, or $0.81 per diluted share, in the current quarter compared to $42.56 million, or $0.57 per diluted share, for the quarter ended June 30, 2024.

"Our Company delivered a record revenue quarter highlighting the strength of our Main Street banking strategy. Organic loan growth during the second quarter climbed nearly 5% on an annualized basis while credit trends continue to demonstrate best in class metrics. Our margin expanded 24 basis points during the quarter fueled by our partnership with Village Bank in our Richmond market. As we look ahead, we believe this quarter demonstrates the strength of our diversified revenue model and disciplined approach to strategic partnerships with focused execution. I wish to thank our more than 2,800 family members who work each day to Serve Others and Enrich Lives," said G. Robert Aston, Jr., Executive Chairman.

Highlights for Second Quarter 2025:

Total revenues were a record $207.44 million, an increase of $32.47 million, or 18.56%, compared to second quarter 2024. Net interest income increased $28.17 million, driven by a combination of increased interest income and lower deposit costs. Additionally, noninterest income increased $4.31 million.
Towne successfully completed the acquisition of Village Bank and Trust Financial Corp. and its wholly-owned bank subsidiary, Village Bank ("Village"), in April 2025. Included in that acquisition were $576.57 million in loans, $74.31 million in securities, and $637.49 million in deposits.
Total deposits were $15.33 billion, an increase of $1.06 billion, or 7.40%, compared to second quarter 2024. Total deposits increased 4.93%, or $0.72 billion, in comparison to March 31, 2025. Excluding $637.49 million in acquired deposits, total deposits would have increased $418.64 million, or 2.93% compared to the prior year and $82.68 million, or 2.27% on an annualized basis, compared to the linked quarter.
Noninterest-bearing deposits increased 10.47%, to $4.75 billion, compared to second quarter 2024 and represented 31.02% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 10.22%. The increase includes noninterest-bearing deposits of $238.54 million acquired in the Village transaction.
Loans held for investment were $12.36 billion, an increase of $0.91 billion, or 7.93%, compared to June 30, 2024, and $0.71 billion, or 6.07% compared to March 31, 2025. Excluding loans acquired in the quarter, total loans would have increased $331.35 million, or 2.89%, compared to the prior year and $130.35 million, or 4.49% on an annualized basis, compared to the linked quarter.
Annualized return on common shareholders' equity was 7.14% compared to 8.49% in second quarter 2024. Annualized return on average tangible common shareholders' equity (non-GAAP) was 10.44% compared to 12.16% in second quarter 2024.
Net interest margin was 3.38% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.40%, including purchase accounting accretion of 6 basis points, compared to the prior year quarter net interest margin of 2.86% and tax-equivalent net interest margin (non-GAAP) of 2.89%, including purchase accounting accretion of 5 basis points.
Compared to the linked quarter, both net interest margin and spread increased 24 basis points.
The effective tax rate was 22.23% in the quarter compared to 15.93% in second quarter 2024 and 13.95% in the linked quarter. The higher tax rate in the current quarter was due to an increase in state tax expense, an adjustment to deferred income tax related to the repurchase of noncontrolling interests in Resort Property Management, and nondeductible expenses related to the Village acquisition. Management expects the tax rate to normalize in the second half of 2025.

"We were pleased to close our Village Bank partnership and successfully complete the systems integration during the second quarter. Internally, our focus will shift during the second half of the year to closing our recently announced partnership with Old Point. Both of these strategic transactions will provide meaningful earnings momentum as we manage through an uncertain economic environment," stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

Net interest income was $137.21 million compared to $109.05 million for the quarter ended June 30, 2024.
On an average basis, loans held for investment, with a yield of 5.56%, represented 75.52% of earning assets at June 30, 2025 compared to a yield of 5.45% and 74.76% of earning assets at June 30, 2024.
The cost of interest-bearing deposits was 2.61% for the quarter ended June 30, 2025, compared to 3.32% in second quarter 2024. Interest expense on deposits decreased $13.87 million, or 16.91%, from the prior year quarter driven by decreases in rate.
Our total cost of deposits decreased to 1.80% from 2.32% for the quarter ended June 30, 2024 due to lower interest-bearing deposit rates. The Federal Reserve Open Market Committee lowered the overnight funds rate a total of 100 basis points in the last four months of 2024.
Average interest-earning assets totaled $16.29 billion at June 30, 2025 compared to $15.34 billion at June 30, 2024, an increase of 6.17%. The Company anticipates approximately $885 million in cash flows from its securities portfolio to be available for reinvestment in the next 24 months.
Average interest-bearing liabilities totaled $10.80 billion, an increase of $509.83 million, or 4.96%, from prior year, driven by demand and money market deposit growth. Borrowings increased over the linked quarter, driven by debt assumed in the Village acquisition, but were nearly level with prior year.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $6.41 million compared to a benefit of $177 thousand in the prior year quarter and an expense of $2.42 million in the linked quarter. The provision includes an initial provision for credit losses of $6.24 million related to loans and commitments acquired in the Village transaction.
The allowance for credit losses on loans increased $8.06 million in second quarter 2025, compared to the linked quarter, $7.75 million of which resulted from the April 2025 acquisition of Village. In addition to the $6.06 million initial acquisition related provision for the purchased loan portfolio we increased our allowance $1.69 million for purchased credit deteriorated loan marks. Additional allowance increases were primarily driven by loan portfolio growth.
Net loan charge-offs were $19 thousand in the quarter, and $626 thousand in the linked quarter, compared to net recoveries of $19 thousand in the prior year quarter.
The ratio of net charge-offs to average loans on an annualized basis was 0.00% in both second quarter 2025 and 2024, compared to 0.02% in the linked quarter.
The allowance for credit losses on loans represented 1.09% of total loans at June 30, 2025, compared to 1.10% at June 30, 2024, and 1.08% at March 31, 2025. The allowance for credit losses on loans was 16.81 times nonperforming loans compared to 19.08 times at June 30, 2024 and 19.15 times at March 31, 2025.

Quarterly Noninterest Income:

Total noninterest income was $70.23 million compared to $65.92 million in 2024, an increase of $4.31 million, or 6.53%.
Total net insurance commissions increased $1.65 million, or 6.85%, to $25.68 million in second quarter 2025 compared to 2024. This increase was primarily attributable to organic growth-related property and casualty commissions.
Property management fee revenue was $15.56 million in second quarter 2025, an increase of 8.69%, or $1.24 million, compared to second quarter 2024. The increase was driven by an acquisition in 2024 and changes to our fee structure.
Residential mortgage banking income was $13.56 million compared to $13.42 million in second quarter 2024. Loan volume increased to $671.47 million in second quarter 2025 from $626.98 million in second quarter 2024. Residential purchase activity was 92.37% of production volume in the second quarter of 2025 compared to 94.85% in second quarter 2024.
At 3.13%, gross margins on residential mortgage sales decreased 5 basis points from the linked quarter and 15 basis points from 3.28% in second quarter 2024.

Quarterly Noninterest Expense:

Total noninterest expense was $150.67 million compared to $123.98 million in 2024, an increase of $26.68 million, or 21.52%. This increase was primarily attributable to acquisition-related expenses and growth in salaries and employee benefits.
The April 2025 acquisition of Village and the acquisition of Old Point Financial Corporation expected to be completed third quarter 2025, resulted in $18.74 million in acquisition-related expenses in the quarter.
Salaries and benefits expense increased $7.01 million, driven by annual base salary adjustments that went into effect October 2024, higher production incentives, and an increase in banking personnel, primarily related to the Village acquisition.

Consolidated Balance Sheet Highlights:

Total assets were $18.26 billion for the quarter ended June 30, 2025, a $0.75 billion increase compared to $17.51 billion at March 31, 2025. Total assets increased $1.20 billion, or 7.01%, from $17.07 billion at June 30, 2024.
Loans held for investment increased $0.91 billion, or 7.93%, compared to prior year and $0.71 billion, or 6.07%, compared to the linked quarter. The Company continues to maintain a strong credit discipline.
Mortgage loans held for sale increased $37.98 million, or 18.92%, compared to prior year and $70.23 million, or 41.68%, compared to the linked quarter, driven by production levels.
Total deposits increased $1.06 billion, or 7.40%, driven by interest-bearing demand deposits, compared to prior year. In the linked quarter comparison, total deposits increased $0.72 billion, or 4.93%.
Noninterest-bearing deposits increased $450.57 million, or 10.47%, compared to prior year and $440.79 million, or 10.22%, compared to the linked quarter.
Total borrowings decreased $1.05 million, or 0.36%, compared to second quarter 2024 but increased $10.01 million, or 3.52%, compared to the linked quarter, due to acquired FHLB borrowings and subordinated debt.

Investment Securities:

Total investment securities were $2.78 billion compared to $2.70 billion at March 31, 2025 and $2.49 billion at June 30, 2024. The weighted average duration of the portfolio at June 30, 2025 was 3.2 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $113.14 million at June 30, 2025, compared to $119.25 million at March 31, 2025 and $172.93 million at June 30, 2024, with the changes in fair value due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $12.36 billion at June 30, 2025, $11.65 billion at March 31, 2025, and $11.45 billion at June 30, 2024. Excluding loans acquired in the quarter, total loans would have increased $331.35 million, or 2.89%, compared to the prior year and $130.35 million, or 4.49% on an annualized basis, compared to the linked quarter. Real estate construction and development loans declined compared to the prior year, but were offset by increases in non-owner and owner occupied real estate and multifamily commercial real estate.
Nonperforming assets were $9.29 million, or 0.05% of total assets, compared to $7.16 million, or 0.04%, at June 30, 2024, and $7.37 million, or 0.04%, at the linked quarter end.
Nonperforming loans were 0.06% of period end loans at June 30, 2025, June 30, 2024, and the linked quarter end.
Foreclosed property consisted of $966 thousand in other real estate owned and $340 thousand in repossessed autos, for a total of $1.31 million in foreclosed property at June 30, 2025, compared to $581 thousand in repossessed autos, for a total of $581 thousand in foreclosed property at June 30, 2024.

Deposits and Borrowings:

Total deposits were $15.33 billion compared to $14.61 billion at March 31, 2025 and $14.27 billion at June 30, 2024. Excluding $0.64 billion in acquired deposits, total deposits would have increased $418.64 million, or 2.93%, compared to the prior year and $82.68 million, or 2.27% on an annualized basis, compared to the linked quarter.
The ratio of period end loans held for investment to deposits was 80.63% compared to 79.77% at March 31, 2025 and 80.24% at June 30, 2024.
Noninterest-bearing deposits were 31.02% of total deposits at June 30, 2025 compared to 29.53% at March 31, 2025 and 30.15% at June 30, 2024. Noninterest-bearing deposits increased $450.57 million, or 10.47%, compared to June 30, 2024, and $440.79 million, or 10.22%, compared to the linked quarter.
Total borrowings were $294.12 million compared to $284.10 million at March 31, 2025 and $295.17 million at June 30, 2024.

Capital:

Common equity tier 1 capital ratio of 11.77%⁽¹⁾.
Tier 1 leverage capital ratio of 9.93%⁽¹⁾.
Tier 1 risk-based capital ratio of 11.82%⁽¹⁾.
Total risk-based capital ratio of 14.49%⁽¹⁾.
Book value per common share was $29.58 compared to $29.19 at March 31, 2025 and $27.62 at June 30, 2024.
Tangible book value per common share (non-GAAP) was $21.98 compared to $22.36 at March 31, 2025 and $20.65 at June 30, 2024.

⁽¹⁾ Preliminary.

About TowneBank:

Founded in 1999, TowneBank is a company built on relationships, offering a full range of banking and other financial services, with a focus of serving others and enriching lives. Dedicated to a culture of caring, Towne values all employees and members by embracing their diverse talents, perspectives, and experiences.

Today, TowneBank operates over 55 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its affiliated companies that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices RW Towne Realty, Towne 1031 Exchange, and Towne Vacations. With total assets of $18.26 billion as of June 30, 2025, TowneBank is one of the largest banks headquartered in Virginia.

Non-GAAP Financial Measures:

This press release contains certain financial measures determined by methods other than in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Such non-GAAP financial measures include the following: fully tax-equivalent net interest margin, core operating earnings, core net income, tangible book value per common share, total risk-based capital ratio, tier one leverage ratio, tier one capital ratio, and the tangible common equity to tangible assets ratio. Management uses these non-GAAP financial measures to assess the performance of TowneBank's core business and the strength of its capital position. Management believes that these non-GAAP financial measures provide meaningful additional information about TowneBank to assist investors in evaluating operating results, financial strength, and capitalization. The non-GAAP financial measures should be considered as additional views of the way our financial measures are affected by significant charges for credit costs and other factors. These non-GAAP financial measures should not be considered as a substitute for operating results determined in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. The computations of the non-GAAP financial measures used in this presentation are referenced in a footnote or in the appendix to this presentation.

Forward-Looking Statements:

This press release contains certain forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the beliefs, expectations, or opinions of TowneBank and its management regarding future events, many of which, by their nature, are inherently uncertain. Forward-looking statements may be identified by the use of such words as: "believe," "expect," "anticipate," "intend," "plan," "estimate," or words of similar meaning, or future or conditional terms, such as "will," "would," "should," "could," "may," "likely," "probably," or "possibly." These statements may address issues that involve significant risks, uncertainties, estimates, and assumptions made by management. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment that may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; an unforeseen outflow of cash or deposits or an inability to access the capital markets, which could jeopardize our overall liquidity or capitalization; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; insufficiency of our allowance for credit losses due to market conditions, inflation, changing interest rates or other factors; adverse developments in the financial industry generally, such as the 2023 bank failures, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; general economic conditions, either nationally or regionally, that may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit or other services; geopolitical instability, including wars, conflicts, trade restrictions and tariffs, civil unrest, and terrorist attacks and the potential impact, directly or indirectly, on our business; the effects of weather-related or natural disasters, which may negatively affect our operations and/or our loan portfolio and increase our cost of conducting business; public health events (such as the COVID-19 pandemic) and governmental and societal responses to them; changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; our ability to successfully integrate the businesses from recently completed and pending acquisitions, including our pending merger with Old Point Financial Corporation ("Old Point"), to the extent that it may take longer or be more difficult, time-consuming, or costly to accomplish than expected; our ability to close the transaction with Old Point when expected or at all because required approvals and other conditions to closing are not received or satisfied on the proposed terms or on the anticipated schedule; deposit attrition, operating costs, customer losses, and business disruption associated with recently completed or pending acquisitions, including reputational risk and adverse effects on relationships with employees, customers or other business partners, that may be greater than expected; costs or difficulties related to the integration of the businesses we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with recently completed or pending acquisitions may not be fully realized or realized within the expected time frame; the diversion of management's attention and time from ongoing business operations and opportunities on merger related matters; cybersecurity threats or attacks, whether directed at us or at vendors or other third parties with which we interact, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions; changes in the securities market; and changes in our local economy with regard to our market area, including any adverse impact of actual and proposed cuts to federal spending, including defense, security and military spending, on the Greater Hampton Roads economy. Any forward-looking statements made by us or on our behalf speak only as of the date they are made or as of the date indicated, and we do not undertake any obligation to update forward-looking statements as a result of new information, future events, or otherwise. For additional information on factors that could materially influence forward-looking statements included in this report, see the "Risk Factors" in TowneBank's Annual Report on Form 10-K for the year ended December 31, 2024 and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

Media contact:

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

William I. Foster III, President and Chief Executive Officer, 757-417-6482

Investor contact:

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

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

		Three Months Ended
		June 30,			March 31,			December 31,			September 30,			June 30,
			2025			2025			2024			2024			2024
Income and Performance Ratios:
	Total revenue	$	207,442		$	192,044		$	177,160		$	174,518		$	174,970
	Net income		39,269			50,887			41,441			43,126			43,039
	Net income available to common shareholders		38,837			50,592			41,265			42,949			42,856
	Net income per common share - diluted		0.51			0.67			0.55			0.57			0.57
	Book value per common share		29.58			29.19			28.43			28.59			27.62
	Book value per common share - tangible ^(non-GAAP)		21.98			22.36			21.55			21.65			20.65
	Return on average assets		0.86	%		1.19	%		0.95	%		1.00	%		1.01	%
	Return on average assets - tangible ^(non-GAAP)		0.96	%		1.29	%		1.03	%		1.09	%		1.11	%
	Return on average equity		7.12	%		9.50	%		7.64	%		8.12	%		8.43	%
	Return on average equity - tangible ^(non-GAAP)		10.39	%		13.08	%		10.68	%		11.42	%		12.03	%
	Return on average common equity		7.14	%		9.57	%		7.70	%		8.18	%		8.49	%
	Return on average common equity - tangible ^(non-GAAP)		10.44	%		13.21	%		10.79	%		11.54	%		12.16	%
	Noninterest income as a percentage of total revenue		33.85	%		37.27	%		33.36	%		35.66	%		37.68	%
Regulatory Capital Ratios (1):
	Common equity tier 1		11.77	%		12.75	%		12.77	%		12.63	%		12.43	%
	Tier 1		11.82	%		12.87	%		12.89	%		12.76	%		12.55	%
	Total		14.49	%		15.65	%		15.68	%		15.54	%		15.34	%
	Tier 1 leverage ratio		9.93	%		10.61	%		10.36	%		10.38	%		10.25	%
Asset Quality:
	Allowance for credit losses on loans to nonperforming loans	16.81x			19.15x			16.69x			18.70x			19.08x
	Allowance for credit losses on loans to period end loans		1.09	%		1.08	%		1.08	%		1.08	%		1.10	%
	Nonperforming loans to period end loans		0.06	%		0.06	%		0.06	%		0.06	%		0.06	%
	Nonperforming assets to period end assets		0.05	%		0.04	%		0.05	%		0.04	%		0.04	%
	Net charge-offs (recoveries) to average loans (annualized)		—	%		0.02	%		0.01	%		0.02	%		—	%
	Net charge-offs (recoveries)	$	19		$	626		$	382		$	677		$	(19	)

	Nonperforming loans	$	7,982		$	6,586		$	7,424		$	6,588		$	6,582
	Foreclosed property		1,306			786			443			884			581
	Total nonperforming assets	$	9,288		$	7,372		$	7,867		$	7,472		$	7,163
	Loans past due 90 days and still accruing interest	$	210		$	15		$	1,264		$	510		$	368
	Allowance for credit losses on loans	$	134,187		$	126,131		$	123,923		$	123,191		$	125,552
Mortgage Banking:
	Loans originated, mortgage	$	494,108		$	300,699		$	385,238		$	421,571		$	430,398
	Loans originated, joint venture		177,359			144,495			180,188			176,612			196,583
	Total loans originated	$	671,467		$	445,194		$	565,426		$	598,183		$	626,981
	Number of loans originated		1,750			1,181			1,489			1,637			1,700
	Number of originators		166			161			160			159			169
	Purchase %		92.37	%		89.94	%		89.46	%		91.49	%		94.85	%
	Loans sold	$	596,009		$	475,518		$	629,120		$	526,998		$	605,134
	Rate lock asset	$	2,186		$	1,880		$	1,150		$	1,548		$	1,930
	Gross realized gain on sales and fees as a % of loans originated		3.13	%		3.18	%		3.25	%		3.28	%		3.28	%
Other Ratios:
	Net interest margin		3.38	%		3.14	%		2.99	%		2.90	%		2.86	%
	Net interest margin-fully tax-equivalent ^(non-GAAP)		3.40	%		3.17	%		3.02	%		2.93	%		2.89	%
	Average earning assets/total average assets		90.23	%		90.32	%		90.57	%		90.43	%		90.36	%
	Average loans/average deposits		81.09	%		80.01	%		78.71	%		80.07	%		80.80	%
	Average noninterest deposits/total average deposits		30.88	%		29.68	%		30.14	%		30.19	%		30.06	%
	Period end equity/period end total assets		12.26	%		12.66	%		12.50	%		12.58	%		12.24	%
	Efficiency ratio^(non-GAAP)		70.71	%		67.10	%		70.28	%		70.93	%		68.98	%
	(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q2			Q2			Q1			Q2 25 vs.		Q2 25 vs.
*Available-for-sale securities, at fair value*		2025			2024			2025		Q2 24		Q1 25
U.S. agency securities	$	345,808		$	281,934		$	320,190		22.66	%	8.00	%
U.S. Treasury notes		78,746			27,701			78,184		184.27	%	0.72	%
Municipal securities		438,490			442,474			439,379		(0.90	)%	(0.20	)%
Trust preferred and other corporate securities		115,126			88,228			98,463		30.49	%	16.92	%
Mortgage-backed securities issued by GSEs and GNMA		1,577,325			1,411,883			1,535,217		11.72	%	2.74	%
Allowance for credit losses		(1,520	)		(1,541	)		(1,262	)	(1.36	)%	20.44	%
Total	$	2,553,975		$	2,250,679		$	2,470,171		13.48	%	3.39	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	6,048		$	1,983		$	5,909		204.99	%	2.35	%
Total gross unrealized losses		(119,186	)		(174,911	)		(125,156	)	(31.86	)%	(4.77	)%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(113,138	)	$	(172,928	)	$	(119,247	)	(34.58	)%	(5.12	)%
*Held-to-maturity securities, at amortized cost*
U.S. agency securities	$	92,973		$	102,234		$	92,805		(9.06	)%	0.18	%
U.S. Treasury notes		96,250			97,171			96,481		(0.95	)%	(0.24	)%
Municipal securities		5,414			5,318			5,390		1.81	%	0.45	%
Trust preferred corporate securities		2,094			2,147			2,107		(2.47	)%	(0.62	)%
Mortgage-backed securities issued by GSEs		5,201			5,618			5,235		(7.42	)%	(0.65	)%
Allowance for credit losses		(67	)		(79	)		(68	)	(15.19	)%	(1.47	)%
Total	$	201,865		$	212,409		$	201,950		(4.96	)%	(0.04	)%

Total gross unrealized gains	$	214		$	175		$	176		22.29	%	21.59	%
Total gross unrealized losses		(5,148	)		(12,880	)		(6,563	)	(60.03	)%	(21.56	)%
Net unrealized gains (losses) in HTM securities	$	(4,934	)	$	(12,705	)	$	(6,387	)	(61.16	)%	(22.75	)%
Total unrealized gains (losses) on AFS and HTM securities	$	(118,072	)	$	(185,633	)	$	(125,634	)	(36.39	)%	(6.02	)%
										% Change
Loans Held For Investment	Q2			Q2			Q1			Q2 25 vs.		Q2 25 vs.
		2025			2024			2025		Q2 24		Q1 25
Real estate - construction and development	$	1,072,625		$	1,190,768		$	1,006,086		(9.92	)%	6.61	%
Commercial real estate - owner occupied		1,815,900			1,673,582			1,654,401		8.50	%	9.76	%
Commercial real estate - non-owner occupied		3,557,175			3,155,958			3,329,728		12.71	%	6.83	%
Real estate - multifamily		887,083			682,537			841,330		29.97	%	5.44	%
Residential 1-4 family		1,997,395			1,887,420			1,886,107		5.83	%	5.90	%
HELOC		480,610			408,273			429,152		17.72	%	11.99	%
Commercial and industrial business (C&I)		1,370,564			1,297,538			1,337,254		5.63	%	2.49	%
Government		510,902			517,954			511,676		(1.36	)%	(0.15	)%
Indirect		579,041			558,216			570,795		3.73	%	1.44	%
Consumer loans and other		88,378			79,501			86,217		11.17	%	2.51	%
Total	$	12,359,673		$	11,451,747		$	11,652,746		7.93	%	6.07	%

										% Change
Deposits	Q2			Q2			Q1			Q2 25 vs.		Q2 25 vs.
		2025			2024			2025		Q2 24		Q1 25
Noninterest-bearing demand	$	4,754,340		$	4,303,773		$	4,313,553		10.47	%	10.22	%
Interest-bearing:
Demand and money market accounts		7,654,317			6,940,086			7,463,355		10.29	%	2.56	%
Savings		332,108			312,881			312,151		6.15	%	6.39	%
Certificates of deposits		2,587,951			2,715,848			2,519,489		(4.71	)%	2.72	%
Total		15,328,716			14,272,588			14,608,548		7.40	%	4.93	%

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

	Three Months Ended								Three Months Ended								Three Months Ended
	June 30, 2025								March 31, 2025								June 30, 2024
				Interest			Average					Interest			Average					Interest			Average
	Average			Income/			Yield/		Average			Income/			Yield/		Average			Income/			Yield/
	Balance			Expense			Rate (1)		Balance			Expense			Rate (1)		Balance			Expense			Rate (1)
Assets:
Loans (net of unearned income and deferred costs)	$	12,304,172		$	170,520		5.56	%	$	11,527,915		$	153,068		5.38	%	$	11,471,669		$	155,374		5.45	%
Taxable investment securities		2,598,093			23,361		3.60	%		2,478,048			21,301		3.44	%		2,368,476			21,671		3.66	%
Tax-exempt investment securities		172,083			1,802		4.19	%		176,081			1,860		4.23	%		156,503			1,521		3.89	%
Total securities		2,770,176			25,163		3.63	%		2,654,129			23,161		3.49	%		2,524,979			23,192		3.67	%
Interest-bearing deposits		1,045,727			10,241		3.93	%		1,199,650			11,801		3.99	%		1,182,816			14,512		4.93	%
Mortgage loans held for sale		172,102			2,770		6.44	%		164,358			2,653		6.46	%		165,392			2,945		7.12	%
Total earning assets		16,292,177			208,694		5.14	%		15,546,052			190,683		4.97	%		15,344,856			196,023		5.14	%
Less: allowance for loan losses		(131,837	)							(124,265	)							(126,792	)
Total nonearning assets		1,896,640								1,790,075								1,764,418
Total assets	$	18,056,980							$	17,211,862							$	16,982,482
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,590,290		$	42,054		2.22	%	$	7,279,365		$	40,606		2.26	%	$	6,896,176		$	48,161		2.81	%
Savings		337,807			704		0.84	%		312,118			714		0.93	%		317,774			845		1.07	%
Certificates of deposit		2,560,313			25,394		3.98	%		2,540,438			25,813		4.12	%		2,715,615			33,017		4.89	%
Total interest-bearing deposits		10,488,410			68,152		2.61	%		10,131,921			67,133		2.69	%		9,929,565			82,023		3.32	%
Borrowings		34,799			(341	)	(3.88	)%		29,606			(300	)	(4.05	)%		100,165			1,627		6.43	%
Subordinated debt, net		272,448			2,609		3.83	%		260,070			2,304		3.54	%		256,093			2,236		3.49	%
Total interest-bearing liabilities		10,795,657			70,420		2.62	%		10,421,597			69,137		2.69	%		10,285,823			85,886		3.36	%
Demand deposits		4,685,835								4,276,586								4,267,590
Other noninterest-bearing liabilities		387,166								353,665								383,447
Total liabilities		15,868,658								15,051,848								14,936,860
Shareholders' equity		2,188,322								2,160,014								2,045,622
Total liabilities and equity	$	18,056,980							$	17,211,862							$	16,982,482
Net interest income (tax-equivalent basis) (4)				$	138,274							$	121,546							$	110,137
Reconciliation of Non-GAAP Financial Measures

Tax-equivalent basis adjustment					(1,061	)							(1,068	)							(1,089	)
Net interest income (GAAP)				$	137,213							$	120,478							$	109,048

Interest rate spread (2)(4)							2.52	%							2.28	%							1.78	%
Interest expense as a percent of average earning assets							1.73	%							1.80	%							2.25	%
Net interest margin (tax-equivalent basis) (3)(4)							3.40	%							3.17	%							2.89	%
Total cost of deposits							1.80	%							1.89	%							2.32	%

(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, 2025							June 30, 2024
				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)	$	11,918,188		$	323,586	5.48	%	$	11,425,496		$	307,186	5.41	%
Taxable investment securities		2,538,402			44,662	3.52	%		2,404,564			40,385	3.36	%
Tax-exempt investment securities		174,071			3,663	4.21	%		159,021			3,071	3.86	%
Total securities		2,712,473			48,325	3.56	%		2,563,585			43,456	3.39	%
Interest-bearing deposits		1,122,263			22,042	3.96	%		1,175,069			28,746	4.92	%
Mortgage loans held for sale		168,251			5,423	6.45	%		141,130			4,661	6.61	%
Total earning assets		15,921,175			399,376	5.06	%		15,305,280			384,049	5.05	%
Less: allowance for loan losses		(128,072	)						(127,102	)
Total nonearning assets		1,843,652							1,745,180
Total assets	$	17,636,755						$	16,923,358
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	7,435,687		$	82,659

TowneBank Reports Second Quarter 2025 Earnings