TowneBank Reports Second Quarter 2026 Earnings

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		6.16	x			6.08	x			12.57	x			19.38	x			16.81	x
	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 value	2026				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 Investment	Q2				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
Deposits	Q2			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	%

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.