TowneBank Reports First Quarter 2025 Earnings

TowneBank

SUFFOLK, Va., April 23, 2025 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended March 31, 2025 of $50.59 million, or $0.67 per diluted share, compared to $34.69 million, or $0.46 per diluted share, for the quarter ended March 31, 2024. Excluding certain items affecting comparability, core earnings (non-GAAP) were $50.98 million, or $0.68 per diluted share, in the current quarter compared to $36.27 million, or $0.48 per diluted share, for the quarter ended March 31, 2024.

"Our Company had a very strong start to the year earning $0.67 per share and delivering nearly 7% annualized loan growth. Our continued focus on measured growth aligned with a deliberate strategy to maintain healthy liquidity and capital levels should position our Company well during periods of economic uncertainty. While growth could be challenged in the short run, we believe our conservative Main Street approach to relationship banking coupled with our diversified fee income businesses can serve as a pillar of strength for our members, shareholders and the communities we serve," said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2025:

Total revenues were $192.04 million, an increase of $24.94 million, or 14.93%, compared to first quarter 2024. Net interest income increased $17.26 million, driven primarily by lower deposit costs, while noninterest income increased $7.68 million. Total deposits were $14.61 billion, an increase of $482.47 million, or 3.42%, compared to first quarter 2024. Total deposits increased 1.19%, or $171.25 million, in comparison to December 31, 2024, 4.81% on an annualized basis. Noninterest-bearing deposits increased 2.85%, to $4.31 billion, compared to first quarter 2024 and represented 29.53% of total deposits. Compared to the linked quarter, noninterest-bearing deposits increased 1.42%. Loans held for investment were $11.65 billion, an increase of $200.40 million, or 1.75%, compared to March 31, 2024, and $193.69 million, 1.69%, or 6.86% on an annualized basis, compared to December 31, 2024. Annualized return on common shareholders' equity was 9.57% compared to 6.89% in first quarter 2024. Annualized return on average tangible common shareholders' equity (non-GAAP) was 13.21% compared to 9.98% in first quarter 2024. Net interest margin was 3.14% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.17%, including purchase accounting accretion of 3 basis points, compared to the prior year quarter net interest margin of 2.72% and tax-equivalent net interest margin (non-GAAP) of 2.75%, including purchase accounting accretion of 4 basis points. Compared to the linked quarter, net interest margin increased 15 basis points and spread increased 26 basis points. The effective tax rate was 13.95% in the quarter compared to 17.31% in first quarter 2024 and 13.92% in the linked quarter. The lower effective tax rate in the current quarter as compared to first quarter 2024 was primarily due to the impact on state and federal taxes from the increase in credits and losses related to tax advantaged investment properties placed in service over the past 12 months and purchase accounting adjustments for a prior partnership acquisition.

Story Continues

"We were pleased to close our partnership with Village Bank and Trust Financial Corp. on April 1, 2025 followed by our latest announcement of the signing of a definitive agreement with Old Point Financial Corporation. Both transactions are strategically important for our Company and follow our disciplined model of targeting partnerships that enhance shareholder returns with low execution risk," stated William I. Foster III, President and Chief Executive Officer.

Quarterly Net Interest Income:

Net interest income was $120.48 million compared to $103.22 million for the quarter ended March 31, 2024. On an average basis, loans held for investment, with a yield of 5.38%, represented 74.15% of earning assets at March 31, 2025 compared to a yield of 5.37% and 74.54% of earning assets at March 31, 2024. The cost of interest-bearing deposits was 2.69% for the quarter ended March 31, 2025, compared to 3.24% in first quarter 2024. Interest expense on deposits decreased $11.26 million, or 14.36%, from the prior year quarter driven by decreases in rate. Our total cost of deposits decreased to 1.89% from 2.26% for the quarter ended March 31, 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 $15.55 billion at March 31, 2025 compared to $15.27 billion at March 31, 2024, an increase of 1.84%. The Company anticipates approximately $760 million of cash flows from its securities portfolio to be available for reinvestment in the next 24 months. Average interest-bearing liabilities totaled $10.42 billion, an increase of $212.32 million, or 2.08%, from prior year, driven by demand and money market deposit growth. Borrowings have declined between periods. There were no short term FHLB borrowings in first quarter 2025, compared to an average of $174.73 million in the prior year quarter.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $2.42 million compared to a benefit of $0.88 million in the prior year quarter and an expense of $1.61 million in the linked quarter. The allowance for credit losses on loans increased $2.21 million in first quarter 2025, compared to the linked quarter. The increase in the allowance was driven by increases in the loan portfolio combined with a continuation of our use of higher weightings of more adverse macroeconomic forecast scenarios utilized in our model. Net loan charge-offs were $626 thousand in the quarter compared to $520 thousand in the prior year quarter and $382 thousand in the linked quarter. The ratio of net charge-offs to average loans on an annualized basis was 0.02% in first quarter 2025, compared to 0.02% in first quarter 2024 and 0.01% in the linked quarter. The allowance for credit losses on loans represented 1.08% of total loans at March 31, 2025, compared to 1.10% at March 31, 2024, and 1.08% at December 31, 2024. The allowance for credit losses on loans was 19.15 times nonperforming loans compared to 18.01 times at March 31, 2024 and 16.69 times at December 31, 2024.

Quarterly Noninterest Income:

Total noninterest income was $71.57 million compared to $63.88 million in 2024, an increase of $7.68 million, or 12.02%. Total net insurance commissions increased $0.89 million, or 3.47%, to $26.42 million in first quarter 2025 compared to 2024. This increase was primarily attributable to increases in property and casualty commissions, which were driven by organic growth. Property management fee revenue increased 16.26%, or $2.73 million, to $19.50 million in first quarter 2025 compared to 2024. Future reservations increased compared to the prior year, primarily driven by an acquisition in 2024. Residential mortgage banking income was $10.36 million compared to $10.48 million in first quarter 2024. Loan volume increased to $445.19 million in first quarter 2025 from $424.39 million in first quarter 2024. Residential purchase activity was 89.94% of production volume in the first quarter of 2025 compared to 95.66% in first quarter 2024. At 3.18% gross margins on residential mortgage sales decreased 7 basis points from the linked quarter and 16 basis points from 3.34% in first quarter 2024.

Quarterly Noninterest Expense:

Total noninterest expense was $130.54 million compared to $125.59 million in 2024, an increase of $4.95 million, or 3.94%.   This increase was primarily attributable to growth in salaries and employee benefits of $3.70 million. Salaries and benefits expense increases were driven by annual base salary adjustments that went into effect October 2024, an increase in banking personnel, and production incentives.

Consolidated Balance Sheet Highlights:

Total assets were $17.51 billion for the quarter ended March 31, 2025, a $264.99 million increase compared to $17.25 billion at December 31, 2024. Total assets increased $627.64 million, or 3.72%, from $16.88 billion at March 31, 2024. Loans held for investment increased $193.69 million, or 1.69%, compared to the linked quarter and $200.40 million, or 1.75%, compared to prior year. Real estate construction and development loans declined, but were offset by growth in non owner occupied and multifamily commercial real estate. The Company continues to maintain a strong credit discipline. Mortgage loans held for sale increased $17.78 million, or 11.80%, compared to prior year but decreased $31.95 million, or 15.94%, compared to the linked quarter, driven by production levels. Total deposits increased $482.47 million, or 3.42%, driven by interest-bearing demand deposits, compared to prior year. In the linked quarter comparison, total deposits increased $171.25 million, or 4.81% on an annualized basis. Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to prior year and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter. Total borrowings decreased $6.88 million, or 2.37%, compared to first quarter 2024 and $12.80 million, or 4.31%, compared to the linked quarter, due to declines in repurchase agreements and other borrowings.

Investment Securities:

Total investment securities were $2.70 billion compared to $2.59 billion at December 31, 2024 and $2.54 billion at March 31, 2024. The weighted average duration of the portfolio at March 31, 2025 was 3.3 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $119.25 million at March 31, 2025, compared to $155.28 million at December 31, 2024 and $170.84 million at March 31, 2024, with the changes in fair value due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $11.65 billion at March 31, 2025, $11.46 billion at December 31, 2024, and $11.45 billion at March 31, 2024. Nonperforming assets were $7.37 million, or 0.04% of total assets, compared to $7.77 million, or 0.05%, at March 31, 2024, and $7.87 million, or 0.05%, in the linked quarter end. Nonperforming loans were 0.06% of period end loans at March 31, 2025, March 31, 2024, and the linked quarter end. Foreclosed property consisted of $235 thousand in other real estate owned and $551 thousand in repossessed autos, for a total of $786 thousand in foreclosed property at March 31, 2025, compared to $175 thousand in other real estate owned and $605 thousand in repossessed autos, for a total of $780 thousand in foreclosed property at March 31, 2024.

Deposits and Borrowings:

Total deposits were $14.61 billion compared to $14.44 billion at December 31, 2024 and $14.13 billion at March 31, 2024. The ratio of period end loans held for investment to deposits was 79.77% compared to 79.37% at December 31, 2024 and 81.07% at March 31, 2024. Noninterest-bearing deposits were 29.53% of total deposits at March 31, 2025 compared to 29.46% at December 31, 2024 and 29.69% at March 31, 2024. Noninterest-bearing deposits increased $119.42 million, or 2.85%, compared to March 31, 2024, and $60.50 million, or 1.42%, or 5.77% on an annualized basis, compared to the linked quarter. Total borrowings were $284.10 million compared to $296.90 million at December 31, 2024 and $290.98 million at March 31, 2024.

Capital:

Common equity tier 1 capital ratio of 12.75%(1). Tier 1 leverage capital ratio of 10.61%(1). Tier 1 risk-based capital ratio of 12.87%(1). Total risk-based capital ratio of 15.65% (1) . Book value per common share was $29.19 compared to $28.43 at December 31, 2024 and $27.33 at March 31, 2024. Tangible book value per common share (non-GAAP) was $22.36 compared to $21.55 at December 31, 2024 and $20.31 at March 31, 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, LLC, and Towne Vacations. With total assets of $17.51 billion as of March 31, 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 of Old Point Financial Corporation ("Old Point"), a pending merger, and Village Bank and Trust Financial Corp. ("Village"), a recently completed merger, 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 pending or 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 we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; 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 March 31,  December 31,  September 30,  June 30,  March 31, 2025    2024    2024    2024    2024  Income and Performance Ratios:  Total revenue $ 192,044   $ 177,160   $ 174,518   $ 174,970   $ 167,102  Net income  50,887    41,441    43,126    43,039    35,127  Net income available to common shareholders  50,592    41,265    42,949    42,856    34,687  Net income per common share - diluted  0.67    0.55    0.57    0.57    0.46  Book value per common share  29.19    28.43    28.59    27.62    27.33  Book value per common share - tangible (non-GAAP)  22.36    21.55    21.65    20.65    20.31  Return on average assets  1.19 %   0.95 %   1.00 %   1.01 %   0.83 % Return on average assets - tangible (non-GAAP)  1.29 %   1.03 %   1.09 %   1.11 %   0.92 % Return on average equity  9.50 %   7.64 %   8.12 %   8.43 %   6.84 % Return on average equity - tangible (non-GAAP)  13.08 %   10.68 %   11.42 %   12.03 %   9.87 % Return on average common equity  9.57 %   7.70 %   8.18 %   8.49 %   6.89 % Return on average common equity - tangible (non-GAAP)  13.21 %   10.79 %   11.54 %   12.16 %   9.98 % Noninterest income as a percentage of total revenue  37.27 %   33.36 %   35.66 %   37.68 %   38.23 % Regulatory Capital Ratios (1):  Common equity tier 1  12.75 %   12.77 %   12.63 %   12.43 %   12.20 % Tier 1  12.87 %   12.89 %   12.76 %   12.55 %   12.32 % Total  15.65 %   15.68 %   15.54 %   15.34 %   15.10 % Tier 1 leverage ratio  10.61 %   10.36 %   10.38 %   10.25 %   10.15 % Asset Quality:  Allowance for credit losses on loans to nonperforming loans 19.15x  16.69x  18.70x  19.08x  18.01x Allowance for credit losses on loans to period end loans  1.08 %   1.08 %   1.08 %   1.10 %   1.10 % Nonperforming loans to period end loans  0.06 %   0.06 %   0.06 %   0.06 %   0.06 % Nonperforming assets to period end assets  0.04 %   0.05 %   0.04 %   0.04 %   0.05 % Net charge-offs (recoveries) to average loans (annualized)  0.02 %   0.01 %   0.02 %   — %   0.02 % Net charge-offs (recoveries) $ 626   $ 382   $ 677   $ (19 )  $ 520   Nonperforming loans $ 6,586   $ 7,424   $ 6,588   $ 6,582   $ 6,987  Foreclosed property  786    443    884    581    780  Total nonperforming assets $ 7,372   $ 7,867   $ 7,472   $ 7,163   $ 7,767  Loans past due 90 days and still accruing interest $ 15   $ 1,264   $ 510   $ 368   $ 323  Allowance for credit losses on loans $ 126,131   $ 123,923   $ 123,191   $ 125,552   $ 125,835  Mortgage Banking:  Loans originated, mortgage $ 300,699   $ 385,238   $ 421,571   $ 430,398   $ 289,191  Loans originated, joint venture  144,495    180,188    176,612    196,583    135,197  Total loans originated $ 445,194   $ 565,426   $ 598,183   $ 626,981   $ 424,388  Number of loans originated  1,181    1,489    1,637    1,700    1,247  Number of originators  161    160    159    169    176  Purchase %  89.94 %   89.46 %   91.49 %   94.85 %   95.66 % Loans sold $ 475,518   $ 629,120   $ 526,998   $ 605,134   $ 410,895  Rate lock asset $ 1,880   $ 1,150   $ 1,548   $ 1,930   $ 1,681  Gross realized gain on sales and fees as a % of loans originated  3.18 %   3.25 %   3.28 %   3.28 %   3.34 % Other Ratios:  Net interest margin  3.14 %   2.99 %   2.90 %   2.86 %   2.72 % Net interest margin-fully tax-equivalent (non-GAAP)  3.17 %   3.02 %   2.93 %   2.89 %   2.75 % Average earning assets/total average assets  90.32 %   90.57 %   90.43 %   90.36 %   90.52 % Average loans/average deposits  80.01 %   78.71 %   80.07 %   80.80 %   81.48 % Average noninterest deposits/total average deposits  29.68 %   30.14 %   30.19 %   30.06 %   30.25 % Period end equity/period end total assets  12.66 %   12.50 %   12.58 %   12.24 %   12.24 % Efficiency ratio (non-GAAP)  67.10 %   70.28 %   70.93 %   68.98 %   73.25 % (1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK Selected Data (unaudited) (dollars in thousands)  Investment Securities       % Change Q1  Q1  Q4  Q1 25 vs.  Q1 25 vs. Available-for-sale securities, at fair value  2025    2024    2024   Q1 24  Q4 24 U.S. agency securities $ 320,190   $ 294,723   $ 293,917   8.64 %  8.94 % U.S. Treasury notes  78,184    27,534    28,429   183.95 %  175.01 % Municipal securities  439,379    447,323    439,115   (1.78 )%  0.06 % Trust preferred and other corporate securities  98,463    87,983    95,279   11.91 %  3.34 % Mortgage-backed securities issued by GSEs and GNMA  1,535,217    1,347,920    1,497,951   13.90 %  2.49 % Allowance for credit losses  (1,262 )   (1,382 )   (1,326 )  (8.68 )%  (4.83 )% Total $ 2,470,171   $ 2,204,101   $ 2,353,365   12.07 %  4.96 % Gross unrealized gains (losses) reflected in financial statements  Total gross unrealized gains $ 5,909   $ 1,868   $ 2,572   216.33 %  129.74 % Total gross unrealized losses  (125,156 )   (172,708 )   (157,851 )  (27.53 )%  (20.71 )% Net unrealized gains (losses) and other adjustments on AFS securities $ (119,247 )  $ (170,840 )  $ (155,279 )  (30.20 )%  (23.20 )% Held-to-maturity securities, at amortized cost  U.S. agency securities $ 92,805   $ 102,042   $ 102,622   (9.05 )%  (9.57 )% U.S. Treasury notes  96,481    197,356    96,710   (51.11 )%  (0.24 )% Municipal securities  5,390    5,294    5,366   1.81 %  0.45 % Trust preferred corporate securities  2,107    2,159    2,121   (2.41 )%  (0.66 )% Mortgage-backed securities issued by GSEs  5,235    5,659    5,533   (7.49 )%  (5.39 )% Allowance for credit losses  (68 )   (82 )   (77 )  (17.07 )%  (11.69 )% Total $ 201,950   $ 312,428   $ 212,275   (35.36 )%  (4.86 )%  Total gross unrealized gains $ 176   $ 265   $ 178   (33.58 )%  (1.12 )% Total gross unrealized losses  (6,563 )   (14,262 )   (8,647 )  (53.98 )%  (24.10 )% Net unrealized gains (losses) in HTM securities $ (6,387 )  $ (13,997 )  $ (8,469 )  (54.37 )%  (24.58 )% Total unrealized gains (losses) on AFS and HTM securities $ (125,634 )  $ (184,837 )  $ (163,748 )  (32.03 )%  (23.28 )% % Change Loans Held For Investment Q1  Q1  Q4  Q1 25 vs.  Q1 25 vs. 2025    2024    2024   Q1 24  Q4 24 Real estate - construction and development $ 1,006,086   $ 1,255,741   $ 1,082,161   (19.88 )%  (7.03 )% Commercial real estate - owner occupied  1,654,401    1,700,753    1,628,731   (2.73 )%  1.58 % Commercial real estate - non owner occupied  3,329,728    3,178,947    3,196,665   4.74 %  4.16 % Real estate - multifamily  841,330    595,075    801,079   41.38 %  5.02 % Residential 1-4 family  1,886,107    1,882,296    1,891,470   0.20 %  (0.28 )% HELOC  429,152    386,361    410,594   11.08 %  4.52 % Commercial and industrial business (C&I)  1,337,254    1,288,550    1,280,394   3.78 %  4.44 % Government  511,676    528,341    513,039   (3.15 )%  (0.27 )% Indirect  570,795    555,482    567,245   2.76 %  0.63 % Consumer loans and other  86,217    80,797    87,677   6.71 %  (1.67 )% Total $ 11,652,746   $ 11,452,343   $ 11,459,055   1.75 %  1.69 %  % Change Deposits Q1  Q1  Q4  Q1 25 vs.  Q1 25 vs. 2025    2024    2024   Q1 24  Q4 24 Noninterest-bearing demand $ 4,313,553   $ 4,194,132   $ 4,253,053   2.85 %  1.42 % Interest-bearing:  Demand and money market accounts  7,463,355    6,916,701    7,329,669   7.90 %  1.82 % Savings  312,151    326,179    311,841   (4.30 )%  0.10 % Certificates of deposits  2,519,489    2,689,062    2,542,735   (6.31 )%  (0.91 )% Total  14,608,548    14,126,074    14,437,298   3.42 %  1.19 %

TOWNEBANK Average Balances, Yields and Rate Paid (unaudited) (dollars in thousands)  Three Months Ended  Three Months Ended  Three Months Ended March 31, 2025  December 31, 2024  March 31, 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) $ 11,527,915   $ 153,068   5.38 %  $ 11,455,253   $ 155,710   5.41 %  $ 11,379,323   $ 151,811   5.37 % Taxable investment securities  2,478,048    21,301   3.44 %   2,421,253    20,722   3.42 %   2,440,652    18,716   3.07 % Tax-exempt investment securities  176,081    1,860   4.23 %   176,266    1,832   4.16 %   161,538    1,549   3.84 % Total securities  2,654,129    23,161   3.49 %   2,597,519    22,554   3.47 %   2,602,190    20,265   3.12 % Interest-bearing deposits  1,199,650    11,801   3.99 %   1,451,121    15,796   4.33 %   1,167,322    14,234   4.90 % Mortgage loans held for sale  164,358    2,653   6.46 %   209,315    3,088   5.90 %   116,868    1,716   5.87 % Total earning assets  15,546,052    190,683   4.97 %   15,713,208    197,148   4.99 %   15,265,703    188,026   4.95 % Less: allowance for loan losses  (124,265 )       (123,068 )       (127,413 )  Total nonearning assets  1,790,075        1,758,988        1,725,945  Total assets $ 17,211,862       $ 17,349,128       $ 16,864,235  Liabilities and Equity:  Interest-bearing deposits  Demand and money market $ 7,279,365   $ 40,606   2.26 %  $ 7,157,076   $ 43,894   2.44 %  $ 6,828,053   $ 47,985   2.83 % Savings  312,118    714   0.93 %   315,414    777   0.98 %   329,036    881   1.08 % Certificates of deposit  2,540,438    25,813   4.12 %   2,694,236    31,214   4.61 %   2,583,938    29,522   4.60 % Total interest-bearing deposits  10,131,921    67,133   2.69 %   10,166,726    75,885   2.97 %   9,741,027    78,388   3.24 % Borrowings  29,606    (300 )  (4.05 )%   36,708    (151 )  (1.61 )%   212,375    3,078   5.73 % Subordinated debt, net  260,070    2,304   3.54 %   257,667    2,261   3.51 %   255,878    2,236   3.50 % Total interest-bearing liabilities  10,421,597    69,137   2.69 %   10,461,101    77,995   2.97 %   10,209,280    83,702   3.30 % Demand deposits  4,276,586        4,386,911        4,224,104  Other noninterest-bearing liabilities  353,665        353,005        390,576  Total liabilities  15,051,848        15,201,017        14,823,960  Shareholders’ equity  2,160,014        2,148,111        2,040,275  Total liabilities and equity $ 17,211,862       $ 17,349,128       $ 16,864,235  Net interest income (tax-equivalent basis) (4)   $ 121,546       $ 119,153       $ 104,324  Reconciliation of Non-GAAP Financial Measures  Tax-equivalent basis adjustment    (1,068 )       (1,096 )       (1,106 )  Net interest income (GAAP)   $ 120,478       $ 118,057       $ 103,218   Interest rate spread (2)(4)     2.28 %      2.02 %      1.65 % Interest expense as a percent of average earning assets    1.80 %      1.97 %      2.21 % Net interest margin (tax-equivalent basis) (3)(4)    3.17 %      3.02 %      2.75 % Total cost of deposits     1.89 %      2.07 %      2.26 %

(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 Consolidated Balance Sheets (dollars in thousands, except share data)   March 31,  December 31,  2025    2024  (unaudited)  (audited) ASSETS  Cash and due from banks $ 126,526   $ 108,750  Interest-bearing deposits at FRB  1,090,555    1,127,878  Interest-bearing deposits in financial institutions  100,249    102,847  Total Cash and Cash Equivalents  1,317,330    1,339,475  Securities available for sale, at fair value (amortized cost of $2,590,680 and $2,509,970, and allowance for credit losses of $1,262 and $1,326 at March 31, 2025 and December 31, 2024, respectively)  2,470,171    2,353,365  Securities held to maturity, at amortized cost (fair value of $195,631 and $203,883 at March 31, 2025 and December 31, 2024, respectively)  202,018    212,352  Less: allowance for credit losses  (68 )   (77 ) Securities held to maturity, net of allowance for credit losses  201,950    212,275  Other equity securities  12,223    12,100  FHLB stock  12,425    12,136  Total Securities  2,696,769    2,589,876  Mortgage loans held for sale  168,510    200,460  Loans, net of unearned income and deferred costs  11,652,746    11,459,055  Less: allowance for credit losses  (126,131 )   (123,923 ) Net Loans  11,526,615    11,335,132  Premises and equipment, net  373,111    368,876  Goodwill  457,619    457,619  Other intangible assets, net  57,145    60,171  BOLI  280,344    279,802  Other assets  634,437    615,479  TOTAL ASSETS $ 17,511,880   $ 17,246,890   LIABILITIES AND EQUITY  Deposits:  Noninterest-bearing demand $ 4,313,553   $ 4,253,053  Interest-bearing:  Demand and money market accounts  7,463,355    7,329,669  Savings  312,151    311,841  Certificates of deposit  2,519,489    2,542,735  Total Deposits  14,608,548    14,437,298  Advances from the FHLB  3,029    3,218  Subordinated debt, net  260,198    260,001  Repurchase agreements and other borrowings  20,875    33,683  Total Borrowings  284,102    296,902  Other liabilities  402,252    357,063  TOTAL LIABILITIES  15,294,902    15,091,263  Preferred stock, authorized and unissued shares - 2,000,000  —    —  Common stock, $1.667 par value: 150,000,000 shares authorized;  75,392,225 and 75,255,205 shares issued at  March 31, 2025 and December 31, 2024, respectively  125,679    125,455  Capital surplus  1,123,330    1,122,147  Retained earnings  1,039,518    1,007,775  Common stock issued to deferred compensation trust, at cost:  1,049,002 and 1,046,121 shares at March 31, 2025 and December 31, 2024, respectively  (21,969 )   (21,868 ) Deferred compensation trust  21,969    21,868  Accumulated other comprehensive income (loss)  (87,869 )   (116,045 ) TOTAL SHAREHOLDERS’ EQUITY  2,200,658    2,139,332  Noncontrolling interest  16,320    16,295  TOTAL EQUITY  2,216,978    2,155,627  TOTAL LIABILITIES AND EQUITY $ 17,511,880   $ 17,246,890

TOWNEBANK Consolidated Statements of Income (unaudited) (dollars in thousands, except per share data)   Three Months Ended March 31, 2025    2024  INTEREST INCOME:  Loans, including fees $ 152,322   $ 150,974  Investment securities  22,839    19,996  Interest-bearing deposits in financial institutions and federal funds sold  11,801    14,234  Mortgage loans held for sale  2,653    1,716  Total interest income  189,615    186,920  INTEREST EXPENSE:  Deposits  67,133    78,388  Advances from the FHLB  25    2,438  Subordinated debt, net  2,304    2,236  Repurchase agreements and other borrowings  (325 )   640  Total interest expense  69,137    83,702  Net interest income  120,478    103,218  PROVISION FOR CREDIT LOSSES  2,420    (877 ) Net interest income after provision for credit losses  118,058    104,095  NONINTEREST INCOME:  Residential mortgage banking income, net  10,361    10,477  Insurance commissions and related income, net  26,424    25,539  Property management income, net  19,500    16,773  Service charges on deposit accounts  3,327    3,079  Credit card merchant fees, net  1,697    1,551  Investment commissions, net  3,075    2,343  BOLI  1,872    1,842  Gain on sale of equity investment  2,000    —  Other income  3,310    2,206  Net gain on investment securities  —    74  Total noninterest income  71,566    63,884  NONINTEREST EXPENSE:  Salaries and employee benefits  75,078    71,377  Occupancy  9,333    9,422  Furniture and equipment  4,621    4,478  Amortization - intangibles  3,026    3,246  Software  6,293    6,100  Data processing  3,835    3,916  Professional fees  2,653    3,180  Advertising and marketing  4,472    4,582  FDIC and other insurance  2,860    4,358  Acquisition related expenses  420    595  Other expenses  17,945    14,337  Total noninterest expense  130,536    125,591  Income before income tax expense and noncontrolling interest  59,088    42,388  Provision for income tax expense  8,201    7,261  Net income $ 50,887   $ 35,127  Net income attributable to noncontrolling interest  (295 )   (440 ) Net income attributable to TowneBank $ 50,592   $ 34,687  Per common share information  Basic earnings $ 0.67   $ 0.46  Diluted earnings $ 0.67   $ 0.46  Cash dividends declared $ 0.25   $ 0.25

TOWNEBANK Consolidated Balance Sheets - Five Quarter Trend (dollars in thousands, except share data)   March 31,  December 31,  September 30,  June 30,  March 31, 2025    2024    2024    2024    2024  (unaudited)  (audited)  (unaudited)  (unaudited)  (unaudited) ASSETS  Cash and due from banks $ 126,526   $ 108,750   $ 131,068   $ 140,028   $ 75,802  Interest-bearing deposits at FRB  1,090,555    1,127,878    1,061,596    1,062,115    926,635  Interest-bearing deposits in financial institutions  100,249    102,847    103,400    99,303    98,673  Total Cash and Cash Equivalents  1,317,330    1,339,475    1,296,064    1,301,446    1,101,110  Securities available for sale  2,470,171    2,353,365    2,363,176    2,250,679    2,204,101  Securities held to maturity  202,018    212,352    212,422    212,488    312,510  Less: allowance for credit losses  (68 )   (77 )   (77 )   (79 )   (82 ) Securities held to maturity, net of allowance for credit losses  201,950    212,275    212,345    212,409    312,428  Other equity securities  12,223    12,100    12,681    13,566    13,661  FHLB stock  12,425    12,136    12,134    12,134    12,139  Total Securities  2,696,769    2,589,876    2,600,336    2,488,788    2,542,329  Mortgage loans held for sale  168,510    200,460    264,320    200,762    150,727  Loans, net of unearned income and deferred costs  11,652,746    11,459,055    11,412,518    11,451,747    11,452,343  Less: allowance for credit losses  (126,131 )   (123,923 )   (123,191 )   (125,552 )   (125,835 ) Net Loans  11,526,615    11,335,132    11,289,327    11,326,195    11,326,508  Premises and equipment, net  373,111    368,876    365,764    340,348    342,569  Goodwill  457,619    457,619    457,619    457,619    457,619  Other intangible assets, net  57,145    60,171    63,265    65,460    68,758  BOLI  280,344    279,802    279,325    277,434    279,293  Other assets  634,437    615,479    572,000    610,791    615,324  TOTAL ASSETS $ 17,511,880   $ 17,246,890   $ 17,188,020   $ 17,068,843   $ 16,884,237  LIABILITIES AND EQUITY  Deposits:  Noninterest-bearing demand $ 4,313,553   $ 4,253,053   $ 4,267,628   $ 4,303,773   $ 4,194,132  Interest-bearing:  Demand and money market accounts  7,463,355    7,329,669    6,990,103    6,940,086    6,916,701  Savings  312,151    311,841    319,970    312,881    326,179  Certificates of deposit  2,519,489    2,542,735    2,785,469    2,715,848    2,689,062  Total Deposits  14,608,548    14,437,298    14,363,170    14,272,588    14,126,074  Advances from the FHLB  3,029    3,218    3,405    3,591    3,775  Subordinated debt, net  260,198    260,001    256,444    256,227    256,011  Repurchase agreements and other borrowings  20,875    33,683    30,970    35,351    31,198  Total Borrowings  284,102    296,902    290,819    295,169    290,984  Other liabilities  402,252    357,063    371,316    411,770    401,307  TOTAL LIABILITIES  15,294,902    15,091,263    15,025,305    14,979,527    14,818,365   Preferred stock  —    —    —    —    —  Common stock, $1.667 par value  125,679    125,455    125,139    125,090    125,009  Capital surplus  1,123,330    1,122,147    1,117,279    1,115,759    1,114,038  Retained earnings  1,039,518    1,007,775    985,343    961,162    937,065  Common stock issued to deferred compensation  trust, at cost  (21,969 )   (21,868 )   (22,224 )   (22,756 )   (20,915 ) Deferred compensation trust  21,969    21,868    22,224    22,756    20,915  Accumulated other comprehensive income (loss)  (87,869 )   (116,045 )   (81,482 )   (129,224 )   (126,586 ) TOTAL SHAREHOLDERS’ EQUITY  2,200,658    2,139,332    2,146,279    2,072,787    2,049,526  Noncontrolling interest  16,320    16,295    16,436    16,529    16,346  TOTAL EQUITY  2,216,978    2,155,627    2,162,715    2,089,316    2,065,872  TOTAL LIABILITIES AND EQUITY $ 17,511,880   $ 17,246,890   $ 17,188,020   $ 17,068,843   $ 16,884,237

TOWNEBANK Consolidated Statements of Income - Five Quarter Trend (unaudited) (dollars in thousands, except share data)   Three Months Ended March 31,  December 31,  September 30,  June 30,  March 31, 2025    2024    2024    2024    2024  INTEREST INCOME:  Loans, including fees $ 152,322   $ 154,933   $ 155,792   $ 154,549   $ 150,974  Investment securities  22,839    22,236    22,334    22,928    19,996  Interest-bearing deposits in financial institutions and federal funds sold  11,801    15,796    15,249    14,512    14,234  Mortgage loans held for sale  2,653    3,087    3,247    2,945    1,716  Total interest income  189,615    196,052    196,622    194,934    186,920  INTEREST EXPENSE:  Deposits  67,133    75,885    82,128    82,023    78,388  Advances from the FHLB  25    26    29    942    2,438  Subordinated debt, net  2,304    2,261    2,237    2,236    2,236  Repurchase agreements and other borrowings  (325 )   (177 )   (54 )   685    640  Total interest expense  69,137    77,995    84,340    85,886    83,702  Net interest income  120,478    118,057    112,282    109,048    103,218  PROVISION FOR CREDIT LOSSES  2,420    1,606    (1,100 )   (177 )   (877 ) Net interest income after provision for credit losses  118,058    116,451    113,382    109,225    104,095  NONINTEREST INCOME:  Residential mortgage banking income, net  10,361    11,272    11,786    13,422    10,477  Insurance commissions and related income, net  26,424    23,265    25,727    24,031    25,539  Property management income, net  19,500    8,186    11,221    14,312    16,773  Service charges on deposit accounts  3,327    3,289    3,117    3,353    3,079  Credit card merchant fees, net  1,697    1,486    1,830    1,662    1,551  Investment commissions, net  3,075    3,195    2,835    2,580    2,343  BOLI  1,872    4,478    1,886    3,238    1,842  Other income  5,310    3,932    3,834    3,324    2,206  Net gain on investment securities  —    —    —    —    74  Total noninterest income  71,566    59,103    62,236    65,922    63,884  NONINTEREST EXPENSE:  Salaries and employee benefits  75,078    74,399    72,123    71,349    71,377  Occupancy  9,333    9,819    9,351    9,717    9,422  Furniture and equipment  4,621    4,850    4,657    4,634    4,478  Amortization - intangibles  3,026    3,095    3,130    3,298    3,246  Software  6,293    6,870    6,790    7,056    6,100  Data processing  3,835    3,788    4,701    4,606    3,916  Professional fees  2,653    3,446    4,720    3,788    3,180  Advertising and marketing  4,472    3,359    4,162    3,524    4,582  Other expenses  21,225    17,815    17,266    16,012    19,290  Total noninterest expense  130,536    127,441    126,900    123,984    125,591  Income before income tax expense and noncontrolling interest  59,088    48,113    48,718    51,163    42,388  Provision for income tax expense  8,201    6,672    5,592    8,124    7,261  Net income  50,887    41,441    43,126    43,039    35,127  Net income attributable to noncontrolling interest  (295 )   (176 )   (177 )   (183 )   (440 ) Net income attributable to TowneBank $ 50,592   $ 41,265   $ 42,949   $ 42,856   $ 34,687  Per common share information  Basic earnings $ 0.67   $ 0.55   $ 0.57   $ 0.57   $ 0.46  Diluted earnings $ 0.67   $ 0.55   $ 0.57   $ 0.57   $ 0.46  Basic weighted average shares outstanding  75,149,668    75,034,688    74,940,827    74,925,877    74,816,420  Diluted weighted average shares outstanding  75,527,713    75,309,989    75,141,661    75,037,955    74,979,501  Cash dividends declared $ 0.25   $ 0.25   $ 0.25   $ 0.25   $ 0.25

TOWNEBANK Banking Segment Financial Information (unaudited) (dollars in thousands)   Three Months Ended  Increase/(Decrease) March 31,  December 31,  YTD 2025 over 2024 2025    2024    2024   Amount  Percent Revenue  Net interest income $ 119,584   $ 102,682   $ 117,137   $ 16,902   16.46 % Service charges on deposit accounts  3,327    3,079    3,289    248   8.05 % Credit card merchant fees  1,697    1,551    1,486    146   9.41 % Investment commissions, net  3,075    2,343    3,195    732   31.24 % Other income  6,495    3,429    6,456    3,066   89.41 % Subtotal  14,594    10,402    14,426    4,192   40.30 % Net gain/(loss) on investment securities  —    74    —    (74 )  N/M Total noninterest income  14,594    10,476    14,426    4,118   39.31 % Total revenue  134,178    113,158    131,563    21,020   18.58 %  Provision for credit losses  2,367    (976 )   1,525    3,343   (342.52 )%  Expenses  Salaries and employee benefits  49,684    46,474    50,130    3,210   6.91 % Occupancy  6,979    7,061    7,362    (82 )  (1.16 )% Furniture and equipment  3,808    3,648    4,087    160   4.39 % Amortization of intangible assets  981    1,162    1,027    (181 )  (15.58 )% Software  4,022    4,054    4,548    (32 )  (0.79 )% Data processing  2,609    2,548    2,581    61   2.39 % Accounting and professional fees  2,010    2,659    2,649    (649 )  (24.41 )% Advertising and marketing  2,897    3,008    1,985    (111 )  (3.69 )% FDIC and other insurance  2,590    4,122    2,244    (1,532 )  (37.17 )% Acquisition related  420    147    268    273   185.71 % Other expenses  11,971    10,415    11,315    1,556   14.94 % Total expenses  87,971    85,298    88,196    2,673   3.13 % Income before income tax, corporate allocation and noncontrolling interest  43,840    28,836    41,842    15,004   52.03 % Corporate allocation  1,396    1,069    1,172    327   30.59 % Income before income tax provision and noncontrolling interest  45,236    29,905    43,014    15,331   51.27 % Provision for income tax expense  4,681    4,105    5,275    576   14.03 % Net income  40,555    25,800    37,739    14,755   57.19 % Noncontrolling interest  42    120    (63 )   (78 )  (65.00 )% Net income attributable to TowneBank $ 40,597   $ 25,920   $ 37,676   $ 14,677   56.62 %  Efficiency ratio (non-GAAP)  64.83 %   74.40 %   66.26 %  (9.57 )%  (12.86 )%

TOWNEBANK Mortgage Segment Financial Information (unaudited) (dollars in thousands)   Three Months Ended  Increase/(Decrease) March 31,  December 31,  YTD 2025 over 2024 2025    2024    2024   Amount  Percent Revenue  Residential mortgage brokerage income, net $ 10,580   $ 10,798   $ 11,580   $ (218 )  (2.02 )% Income (loss) from unconsolidated subsidiary  42    30    68    12   40.00 % Net interest and other income  1,110    768    1,661    342   44.53 % Total revenue  11,732    11,596    13,309    136   1.17 %  Provision for credit losses  53    99    81    (46 )  (46.46 )%  Expenses  Salaries and employee benefits  7,031    6,656    6,712    375   5.63 % Occupancy  939    1,061    981    (122 )  (11.50 )% Furniture and equipment  195    178    158    17   9.55 % Amortization of intangible assets  —    144    —    (144 )  (100.00 )% Software  727    787    719    (60 )  (7.62 )% Data processing  163    148    194    15   10.14 % Accounting and professional fees  226    234    252    (8 )  (3.42 )% Advertising and marketing  389    382    406    7   1.83 % FDIC and other insurance  96    102    112    (6 )  (5.88 )% Acquisition related  —    —    —    —   N/M Other expenses  2,461    2,222    2,652    239   10.76 % Total expenses  12,227    11,914    12,186    313   2.63 %  Income before income tax, corporate allocation and noncontrolling interest  (548 )   (417 )   1,042    (131 )  31.41 % Corporate allocation  (350 )   (348 )   (437 )   (2 )  0.57 % Income before income tax provision and noncontrolling interest  (898 )   (765 )   605    (133 )  17.39 % Provision for income tax expense  (240 )   (202 )   121    (38 )  18.81 % Net income  (658 )   (563 )   484    (95 )  16.87 % Noncontrolling interest  (117 )   (115 )   (156 )   (2 )  1.74 % Net income attributable to TowneBank $ (775 )  $ (678 )  $ 328   $ (97 )  14.31 %  Efficiency ratio excluding gain on equity investment (non-GAAP)  104.22 %   101.50 %   91.56 %   2.72 %  2.68 %

TOWNEBANK Resort Property Management Segment Financial Information (unaudited) (dollars in thousands)   Three Months Ended  Increase/(Decrease) March 31,  December 31,  YTD 2025 over 2024 2025    2024    2024   Amount  Percent Revenue  Property management fees, net $ 19,500   $ 16,773   $ 8,186   $ 2,727   16.26 % Net interest and other income  13    16    3    (3 )  (18.75 )% Total revenue  19,513    16,789    8,189    2,724   16.22 %  Expenses  Salaries and employee benefits  5,448    5,532    4,796    (84 )  (1.52 )% Occupancy  614    508    640    106   20.87 % Furniture and equipment  405    416    435    (11 )  (2.64 )% Amortization of intangible assets  637    533    637    104   19.51 % Software  859    608    939    251   41.28 % Data processing  944    1,102    896    (158 )  (14.34 )% Accounting and professional fees  126    152    304    (26 )  (17.11 )% Advertising and marketing  892    1,038    807    (146 )  (14.07 )% FDIC and other insurance  67    35    70    32   91.43 % Acquisition related  —    447    —    (447 )  (100.00 )% Other expenses  2,613    942    466    1,671   177.39 % Total expenses  12,605    11,313    9,990    1,292   11.42 %  Income before income tax, corporate allocation and noncontrolling interest  6,908    5,476    (1,801 )   1,432   26.15 % Corporate allocation  (320 )   —    —    (320 )  N/M Income before income tax provision and noncontrolling interest  6,588    5,476    (1,801 )   1,112   20.31 % Provision for income tax expense  1,629    1,358    (337 )   271   19.96 % Net income  4,959    4,118    (1,464 )   841   20.42 % Noncontrolling interest  (220 )   (445 )   43    225   (50.56 )% Net income attributable to TowneBank $ 4,739   $ 3,673   $ (1,421 )  $ 1,066   29.02 %  Efficiency ratio excluding gain on equity investment (non-GAAP)  61.33 %   64.21 %   114.21 %  (2.88 )%  (4.49 )%

TOWNEBANK Insurance Segment Financial Information (unaudited) (dollars in thousands)   Three Months Ended  Increase/(Decrease) March 31,  December 31,  YTD 2025 over 2024 2025    2024    2024   Amount  Percent Commission and fee income  Property and casualty $ 23,322   $ 20,722   $ 20,576   $ 2,600   12.55 % Employee benefits  4,725    4,826    4,335    (101 )  (2.09 )% Specialized benefit services  —    9    1    (9 )  (100.00 )% Total commissions and fees  28,047    25,557    24,912    2,490   9.74 %  Contingency and bonus revenue  3,620    4,503    2,924    (883 )  (19.61 )% Other income  4    11    221    (7 )  (63.64 )% Total revenue  31,671    30,071    28,057    1,600   5.32 %  Employee commission expense  5,050    4,512    3,958    538   11.92 % Revenue, net of commission expense  26,621    25,559    24,099    1,062   4.16 %  Salaries and employee benefits  12,915    12,715    12,761    200   1.57 % Occupancy  801    792    836    9   1.14 % Furniture and equipment  213    236    170    (23 )  (9.75 )% Amortization of intangible assets  1,408    1,407    1,431    1   0.07 % Software  685    651    664    34   5.22 % Data processing  119    118    117    1   0.85 % Accounting and professional fees  291    135    241    156   115.56 % Advertising and marketing  294    154    161    140   90.91 % FDIC and other insurance  107    99    108    8   8.08 % Acquisition related  —    1    —    (1 )  (100.00 )% Other expenses  900    758    580    142   18.73 % Total operating expenses  17,733    17,066    17,069    667   3.91 % Income before income tax, corporate allocation and noncontrolling interest  8,888    8,493    7,030    395   4.65 % Corporate allocation  (726 )   (721 )   (735 )   (5 )  0.69 % Income before income tax provision and noncontrolling interest  8,162    7,772    6,295    390   5.02 % Provision for income tax expense  2,131    2,000    1,613    131   6.55 % Net income  6,031    5,772    4,682    259   4.49 % Noncontrolling interest  —    —    —    —   N/M Net income attributable to TowneBank $ 6,031   $ 5,772   $ 4,682   $ 259   4.49 %  Provision for income taxes  2,131    2,000    1,613    131   6.55 % Depreciation, amortization and interest expense  1,527    1,553    1,550    (26 )  (1.67 )% EBITDA (non-GAAP) $ 9,689   $ 9,325   $ 7,845   $ 364   3.90 %  Efficiency ratio (non-GAAP)  61.32 %   61.27 %   65.48 %   0.05 %  0.08 %

TOWNEBANK Reconciliation of Non-GAAP Financial Measures (dollars in thousands)  Three Months Ended March 31,  March 31,  December 31, 2025    2024    2024   Return on average assets (GAAP)  1.19 %   0.83 %   0.95 % Impact of excluding average goodwill and other
 intangibles and amortization  0.10 %   0.09 %   0.08 % Return on average tangible assets (non-GAAP)  1.29 %   0.92 %   1.03 %  Return on average equity (GAAP)  9.50 %   6.84 %   7.64 % Impact of excluding average goodwill and other
 intangibles and amortization  3.58 %   3.03 %   3.04 % Return on average tangible equity (non-GAAP)  13.08 %   9.87 %   10.68 %  Return on average common equity (GAAP)  9.57 %   6.89 %   7.70 % Impact of excluding average goodwill and other
 intangibles and amortization  3.64 %   3.09 %   3.09 % Return on average tangible common equity
(non-GAAP)  13.21 %   9.98 %   10.79 %  Book value (GAAP) $ 29.19   $ 27.33   $ 28.43  Impact of excluding average goodwill and other
 intangibles and amortization  (6.83 )   (7.02 )   (6.88 ) Tangible book value (non-GAAP) $ 22.36   $ 20.31   $ 21.55   Efficiency ratio (GAAP)  67.97 %   75.16 %   71.94 % Impact of exclusions (0.87 )%  (1.91 )%  (1.66 )% Efficiency ratio (non-GAAP)  67.10 %   73.25 %   70.28 %  Average assets (GAAP) $ 17,211,862   $ 16,864,235   $ 17,349,128  Less: average goodwill and intangible assets  516,661    522,675    519,691  Average tangible assets (non-GAAP) $ 16,695,201   $ 16,341,560   $ 16,829,437   Average equity (GAAP) $ 2,160,014   $ 2,040,275   $ 2,148,111  Less: average goodwill and intangible assets  516,661    522,675    519,691  Average tangible equity (non-GAAP) $ 1,643,353   $ 1,517,600   $ 1,628,420   Average common equity (GAAP) $ 2,143,806   $ 2,024,169   $ 2,131,778  Less: average goodwill and intangible assets  516,661    522,675    519,691  Average tangible common equity (non-GAAP) $ 1,627,145   $ 1,501,494   $ 1,612,087   Net income (GAAP) $ 50,592   $ 34,687   $ 41,265  Amortization of intangibles, net of tax  2,391    2,564    2,445  Tangible net income (non-GAAP) $ 52,983   $ 37,251   $ 43,710   Total revenue (GAAP) $ 192,044   $ 167,102   $ 177,160  Net (gain)/loss on investment securities/equity investments  (2,000 )   (74 )   (218 ) Total revenue for efficiency calculation (non-GAAP) $ 190,044   $ 167,028   $ 176,942   Noninterest expense (GAAP) $ 130,536   $ 125,591   $ 127,441  Less: amortization of intangibles  3,026    3,246    3,095  Noninterest expense net of amortization (non-GAAP) $ 127,510   $ 122,345   $ 124,346

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 March 31,  December 31,  September 30,  June 30,  March 31, 2025    2024    2024    2024    2024  Net income available to common shareholders (GAAP) $ 50,592   $ 41,265   $ 42,949   $ 42,856   $ 34,687   Adjustments  Plus: Acquisition-related expenses, net of tax  389    250    460    18    564  Plus: Initial provision for acquired loans, net of tax  —    —    —    —    —  Plus: FDIC special assessment, net of tax  —    —    —    (310 )   1,021  Less: Gain on sale of equity investments, net of noncontrolling interest  —    (99 )   (16 )   —    —  Core operating earnings, excluding certain items affecting comparability (non-GAAP) $ 50,981   $ 41,416   $ 43,393   $ 42,564   $ 36,272  Annualized interest impact of Series IV Notes, net of tax  42    —    —    —    —  Core net income for diluted earnings (non-GAAP) $ 51,023   $ 41,416   $ 43,393   $ 42,564   $ 36,272   Weighted average diluted shares  75,527,713    75,309,989    75,141,661    75,037,955    74,979,501  Diluted EPS (GAAP) $ 0.67   $ 0.55   $ 0.57   $ 0.57   $ 0.46  Diluted EPS, excluding certain items affecting
 comparability (non-GAAP) $ 0.68   $ 0.55   $ 0.58   $ 0.57   $ 0.48  Average assets $ 17,211,862   $ 17,349,128   $ 17,028,141   $ 16,982,482   $ 16,864,235  Average tangible equity $ 1,643,353   $ 1,628,420   $ 1,582,830   $ 1,520,500   $ 1,517,600  Average common tangible equity $ 1,627,145   $ 1,612,087   $ 1,566,455   $ 1,504,028   $ 1,501,494  Return on average assets, excluding certain items affecting comparability (non-GAAP)  1.20 %   0.95 %   1.01 %   1.01 %   0.87 % Return on average tangible equity, excluding certain items affecting comparability (non-GAAP)  13.17 %   10.72 %   11.53 %   11.95 %   10.29 % Return on average common tangible equity, excluding certain items affecting comparability (non-GAAP)  13.30 %   10.82 %   11.65 %   12.08 %   10.40 % Efficiency ratio, excluding certain items affecting comparability (non-GAAP)  66.87 %   70.12 %   70.67 %   68.96 %   72.89 %

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