TowneBank Reports Third Quarter 2022 Earnings

TowneBank

SUFFOLK, Va., Oct. 27, 2022 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ: TOWN) today reported earnings for the quarter ended September 30, 2022 of $50.17 million, or $0.69 per diluted share, compared to $50.40 million, or $0.69 per diluted share, for the quarter ended September 30, 2021. Excluding acquisition-related expenses, earnings (non-GAAP) for the quarter ended September 30, 2022 were $50.78 million, or $0.70 per diluted share, compared to $51.08 million, or $0.70 per diluted share for the quarter ended September 30, 2021.

"TowneBank's solid third quarter results demonstrate the strength and durability of our business model. Continued loan growth and positive impacts from higher interest rates led to significant margin expansion during the quarter. While credit quality continues to perform well, we remain diligent in maintaining a healthy balance sheet and strong capital levels given the uncertain economic environment. Notwithstanding some of the current headwinds facing our Realty segment, we believe our diverse business mix, disciplined expense management and long-term view of managing our company position TowneBank to enjoy continued success," said G. Robert Aston, Jr., Executive Chairman.

Highlights for Third Quarter 2022 Compared to Third Quarter 2021:

• Total revenues were $179.24 million, an increase of $9.16 million, or 5.39%. This year-over-year increase was driven primarily by a $23.60 million increase in net interest income partially offset by a $13.45 million decline in residential mortgage banking income.

• Pre-provision, pre-tax, net revenues (non-GAAP), were $66.70 million, an increase of $3.05 million, or 4.80%.

• Loans held for investment were $10.56 billion, an increase of $1.26 billion, or 13.57%, compared to September 30, 2021, and $0.13 billion, or 5.09% on an annualized basis, compared to June 30, 2022. Excluding the decline in loans from the Paycheck Protection Program ("PPP"), loans held for investment increased $1.50 billion, or 16.59%, compared to September 30, 2021, and $0.16 billion, or 6.01% on an annualized basis, from the linked quarter. Total loans on September 30, 2022, September 30, 2021, and June 30, 2022 included $12.65 million, $251.45 million, and $36.19 million, respectively, of PPP loans.

• Total deposits were $13.41 billion, an increase of $0.40 billion, or 3.06%, compared to prior year but a decrease of $0.58 billion, or 4.17%, from June 30, 2022.

• Noninterest bearing deposits increased by 3.33%, to $5.57 billion, representing 41.56% of total deposits. Compared to the linked quarter, noninterest bearing deposits decreased 2.60%.

• Annualized return on common shareholders' equity was 10.69% compared to 10.68% in third quarter 2021. Annualized return on average tangible common shareholders' equity (non-GAAP) was 15.27% compared to 15.27% in third quarter 2021.

• Net interest margin was 3.28% for the quarter and 2.76% for third quarter 2021 and taxable equivalent net interest margin (non-GAAP) was 3.30% and 2.77%.

• Effective tax rate of 20.08% in the quarter compared to 22.73% in third quarter 2021 and 19.32% in the linked quarter.

"We remain excited about our Farmers Bank partnership. Our teams have begun working on the integration planned for early 2023. We believe our complimentary approach to serving the needs of our members and communities will lead to a successful partnership and post integration opportunities for continued growth," stated J. Morgan Davis, Chief Executive Officer.

Quarterly Net Interest Income Compared to Third Quarter 2021:

• Net interest income was $124.04 million compared to $100.44 million as of September 30, 2021. The increase was driven by higher interest rates and increased loan and investment securities balances partially offset by increased deposit costs.

• Tax-equivalent net interest margin (non-GAAP) was 3.30%, including purchase accounting accretion of 1 basis point and PPP interest and fees of 1 basis point, compared to 2.77%, including purchase accounting accretion of 3 basis points and PPP interest and fees of 15 basis points for third quarter 2021.

• On an average basis, loans held for investment, with a yield of 4.25%, represented 69.83% of earning assets at September 30, 2022 compared to a yield of 4.24% and 64.04% of earning assets in the third quarter of 2021. Excluding PPP loans, loan yields were 4.24% in third quarter 2022 compared to 4.06% in third quarter 2021.

• Interest and fee income on PPP loans was $0.62 million in third quarter 2022, compared to $7.77 million in third quarter 2021 and $1.52 million in the linked quarter.

• Total cost of deposits increased to 0.30% from 0.19% at September 30, 2021. Management expects continued pressure on the cost of deposits.

• On August 1, 2022, the Company redeemed its 4.50% fixed to floating rate subordinated notes due 2027 that had a total principal amount of $250 million. The Company recognized interest expense related to the notes of $0.99 million in third quarter 2022 and $2.96 million in third quarter 2021.

• Average interest-earning assets totaled $14.99 billion at September 30, 2022 compared to $14.44 billion at September 30, 2021, an increase of 3.77%.

• Average interest-bearing liabilities totaled $8.35 billion, an increase of $0.11 billion from prior year.

Quarterly Provision for Credit Losses:

• The quarterly provision for credit losses for on-balance-sheet loans was an expense of $3.29 million compared to a provision benefit of $1.60 million one year ago and an expense of $0.11 million in the linked quarter.

• In the linked quarter comparison, third quarter 2022 included an increase in the allowance for credit losses on loans of $3.48 million that was driven by loan growth and weakening in the macroeconomic forecast scenarios.

• Net loan recoveries were $0.19 million compared to net recoveries of $0.64 million one year prior and $0.08 million in the linked quarter. The ratio of net charge-offs to average loans on an annualized basis was (0.01)% in third quarter 2022, (0.03)% in third quarter 2021, and zero percent in the linked quarter.

• The allowance for credit losses on loans represented 1.02% of total loans at September 30, 2022, 1.15% at September 30, 2021, and 1.00% on June 30, 2022. The allowance for credit losses on loans was 20.48 times nonperforming loans compared to 12.68 times at September 30, 2021 and 18.94 times at June 30, 2022.

Quarterly Noninterest Income Compared to Third Quarter 2021:

• Total noninterest income was $55.20 million compared to $69.63 million in 2021, a decrease of $14.44 million, or 20.73%. The decrease was driven by declines in residential mortgage banking income of $13.45 million and real estate brokerage income of $0.85 million, partially offset by increased insurance commissions of $2.04 million.

• Residential mortgage banking income was $11.97 million compared to $25.42 million in third quarter 2021. Loan volume decreased to $0.69 billion in third quarter 2022 compared to $1.31 billion in 2021. Increases in mortgage rates have resulted in refinance activities dropping below 10% of our total mortgage production volume, the lowest level since second quarter 2018. Residential purchase activity comprised 93.20% of production volume in the third quarter of 2022 compared to 77.45% in the prior year quarter.

• Gross margins on residential mortgages declined 59 basis points from 3.61% in third quarter 2021 to 3.02% in the current quarter.

• Total net insurance commissions increased $2.04 million, or 11.71%, to $19.44 million in third quarter 2022 compared to 2021. This resulted from increases in property and casualty commissions, which were driven by organic growth and higher rates.

• Property management fee revenue decreased 5.82%, or $0.61 million, to $9.89 million compared to third quarter 2021 but increased $0.44 million, or 4.64%, compared to the linked quarter. Reservation income is down compared to the prior year quarter due to decreased bookings at some of our property management locations. Compared to the linked quarter, reservation income increased at one location while others held level with prior quarter.
  

Quarterly Noninterest Expense Compared to Third Quarter 2021:

• Total noninterest expense was $112.03 million compared to $104.09 million in 2021, an increase of $7.95 million, or 7.64%. Growth in salaries and employee benefits of $4.23 million, occupancy expense of $1.09 million, charitable contributions of $1.02 million, and advertising and marketing expense of $0.43 million was the primary sources of the increase.

• Salary and benefits expense increases were driven by annual base salary adjustments that went into effect July 2022 and increases in health insurance costs.

• The increase in occupancy expense was driven by lower tenant income in 2022.

• Advertising and marketing expense increases were primarily related to internet advertising in our realty segment and post-COVID increases in client business development.

Consolidated Balance Sheet Highlights:

• Total assets were $15.95 billion for the quarter ended September 30, 2022, a $0.91 billion decrease compared to $16.86 billion at June 30, 2022. Total assets increased $0.14 billion, or 0.89%, from $15.81 billion at September 30, 2021. Our asset mix has changed in the year-over-year comparison, with growth in investment securities and loans offset by declines in mortgage loans held for sale and total cash and cash equivalents.

• Loans held for investment increased $1.26 billion, or 13.57%, compared to prior year, and $0.13 billion, or 1.28%, compared to the linked quarter. Excluding PPP loans of $12.65 million in third quarter 2022, $251.45 million in third quarter 2021, and $36.19 million in the linked quarter, loans held for investment increased $1.50 billion, or 16.59%, compared to prior year, and $0.16 billion, or 1.51%, compared to June 30, 2022, or 6.01% on an annualized basis.

• Average loans held for investment, excluding PPP loans, were $10.45 billion in the third quarter of 2022, an increase of $1.56 billion, or 17.49%, compared to prior year. In the linked quarter comparison, average loans held for investment, excluding PPP loans, increased 3.04%, or $0.31 billion, and 12.08% on an annualized basis.

• Mortgage loans held for sale decreased $266.82 million, or 61.79%, compared to the prior year and $46.69 million, or 22.05%, compared to the linked quarter.

• Total deposits increased $0.40 billion, or 3.06%, compared to the prior year and decreased $0.58 billion, or 4.17%, compared to the linked quarter.

• Total borrowings decreased $167.17 million, or 34.30%, from prior year and $279.73 million, or 46.62%, compared to the linked quarter.

Investment Securities:

• Total investment securities were $2.45 billion compared to $2.48 billion at June 30, 2022 and $1.59 billion at September 30, 2021. The weighted average duration of the portfolio at September 30, 2022 was 3.6 years. The carrying value of the available for sale debt securities portfolio included $199.84 million and $120.41 million in net unrealized losses, related to rising rates, at September 30, 2022 and June 30, 2022, respectively, compared to net unrealized gains of $32.06 million at September 30, 2021.
  

Loans and Asset Quality:

• Total loans held for investment were $10.56 billion at September 30, 2022 compared to $10.43 billion at June 30, 2022 and $9.30 billion at September 30, 2021.

• Nonperforming assets were $5.44 million, or 0.03% of total assets, compared to $13.86 million, or 0.09%, at September 30, 2021.

• Nonperforming loans were 0.05% of period end loans compared to 0.09% at September 30, 2021.

• Foreclosed property decreased to $0.19 million from $5.41 million at September 30, 2021. The Company had no OREO properties at September 30, 2022.

Deposits and Borrowings:

• Total deposits were $13.41 billion compared to $14.00 billion at June 30, 2022 and $13.01 billion at September 30, 2021.

• Total loans held for investment to deposits were 78.73% compared to 74.49% at June 30, 2022 and 71.44% at September 30, 2021.

• Non-interest bearing deposits were 41.56% of total deposits at September 30, 2022 compared to 40.89% at June 30, 2022 and 41.45% at September 30, 2021.

• Total borrowings were $0.32 billion compared to $0.60 billion at June 30, 2022 and $0.49 billion at September 30, 2021.

Capital:

• Common equity tier 1 capital ratio of 11.92%.

• Tier 1 leverage capital ratio of 9.52%.

• Tier 1 risk-based capital ratio of 12.05%.

• Total risk-based capital ratio of 14.80%.

• Book value per common share was $25.08 compared to $25.48 at June 30, 2022 and $25.91 at September 30, 2021.

• Tangible book value per common share (non-GAAP) was $18.17 compared to $18.58 at June 30, 2022 and $18.92 at September 30, 2021.

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 40 banking offices throughout Hampton Roads and Central Virginia, as well as Northeastern and Central North Carolina – serving as a local leader in promoting the social, cultural, and economic growth in each community. Towne offers a competitive array of business and personal banking solutions, delivered with only the highest ethical standards. Experienced local bankers providing a higher level of expertise and personal attention with local decision-making are key to the TowneBank strategy. TowneBank has grown its capabilities beyond banking to provide expertise through its controlled divisions and subsidiaries that include Towne Wealth Management, Towne Insurance Agency, Towne Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Berkshire Hathaway HomeServices Towne Realty, Towne 1031 Exchange, LLC, and Towne Vacations. With total assets of $15.95 billion as of September 30, 2022, 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, pre-provision, pre-tax net revenues, 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 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; changes in the credit worthiness of customers and the possible impairment of the collectability of loans; 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; unusual and infrequently occurring events, such as weather-related disasters, terrorist acts or public health events (such as the COVID-19 pandemic); changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, 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. 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, 2021 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
J. Morgan Davis, Chief Executive Officer, 757-673-1673

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

TOWNEBANK
Selected Financial Highlights (unaudited)
(dollars in thousands, except per share data)
	Three Months Ended
	September 30,				June 30,				March 31,				December 31,				September 30,
		2022				2022				2022				2021				2021
Income and Performance Ratios:
Total revenue	$	179,236			$	166,980			$	165,412			$	160,424			$	170,076
Net income		50,671				47,054				46,250				41,657				52,743
Net income available to common shareholders		50,169				46,547				45,586				40,183				50,400
Pre-provision, pre-tax, net revenues (non-GAAP)		66,700				57,748				55,369				48,483				63,647
Net income per common share - diluted		0.69				0.64				0.63				0.55				0.69
Book value per common share		25.08				25.48				25.61				26.13				25.91
Book value per common share - tangible (non-GAAP)		18.17				18.58				18.67				19.15				18.92
Return on average assets		1.22	%			1.13	%			1.13	%			0.99	%			1.27	%
Return on average assets - tangible (non-GAAP)		1.31	%			1.22	%			1.23	%			1.08	%			1.37	%
Return on average equity		10.60	%			9.94	%			9.73	%			8.38	%			10.59	%
Return on average equity - tangible (non-GAAP)		15.08	%			14.20	%			13.91	%			12.08	%			15.09	%
Return on average common equity		10.69	%			10.03	%			9.81	%			8.45	%			10.68	%
Return on average common equity - tangible (non-GAAP)		15.27	%			14.37	%			14.08	%			12.22	%			15.27	%
Noninterest income as a percentage of total revenue		30.80	%			34.52	%			40.03	%			37.17	%			40.94	%
Regulatory Capital Ratios (1):
Common equity tier 1		11.92	%			11.83	%			12.16	%			12.36	%			12.53	%
Tier 1		12.05	%			11.97	%			12.31	%			12.51	%			12.69	%
Total		14.80	%			16.76	%			17.34	%			15.56	%			15.85	%
Tier 1 leverage ratio		9.52	%			9.19	%			9.16	%			9.11	%			9.18	%
Asset Quality:
Allowance for credit losses on loans to nonperforming loans		20.48x				18.94x				21.52x				17.75x				12.68x
Allowance for credit losses on loans to period end loans		1.02	%			1.00	%			1.05	%			1.12	%			1.15	%
Allowance for credit losses on loans to period end loans excluding PPP loans (non-GAAP)		1.02	%			1.00	%			1.06	%			1.13	%			1.18	%
Nonperforming loans to period end loans		0.05	%			0.05	%			0.05	%			0.06	%			0.09	%
Nonperforming assets to period end assets		0.03	%			0.04	%			0.03	%			0.06	%			0.09	%
Net charge-offs (recoveries) to average loans (annualized)		(0.01)	%			—	%			0.01	%			—	%			(0.03)	%
Net charge-offs (recoveries)	$	(187	)		$	(80	)		$	126			$	(60	)		$	(644	)
Nonperforming loans	$	5,250			$	5,493			$	4,825			$	5,973			$	8,451
Foreclosed property		186				563				560				4,583				5,409
Total nonperforming assets	$	5,436			$	6,056			$	5,385			$	10,556			$	13,860
Loans past due 90 days and still accruing interest	$	725			$	232			$	40			$	372			$	143
Allowance for credit losses on loans	$	107,497			$	104,019			$	103,833			$	106,059			$	107,177
Mortgage Banking:
Loans originated, mortgage	$	458,254			$	588,529			$	583,008			$	851,021			$	939,272
Loans originated, joint venture		234,443				249,279				236,980				303,362				370,865
Total loans originated	$	692,697			$	837,808			$	819,988			$	1,154,383			$	1,310,137
Number of loans originated		1,983				2,282				2,237				3,408				3,917
Number of originators		194				201				207				213				219
Purchase %		93.20	%			92.27	%			77.93	%			79.36	%			77.45	%
Loans sold	$	701,908			$	759,073			$	853,808			$	1,150,996			$	1,394,166
Rate lock asset	$	859			$	1,935			$	3,009			$	3,455			$	6,087
Gross realized gain on sales and fees as a % of loans originated		3.02	%			2.92	%			3.01	%			3.42	%			3.61	%
Other Ratios:
Net interest margin		3.28	%			2.88	%			2.67	%			2.70	%			2.76	%
Net interest margin-fully tax equivalent (non-GAAP)		3.30	%			2.89	%			2.69	%			2.72	%			2.77	%
Average earning assets/total average assets		91.92	%			92.22	%			92.24	%			92.13	%			91.95	%
Average loans/average deposits		76.82	%			74.57	%			71.61	%			70.68	%			71.69	%
Average noninterest deposits/total average deposits		41.77	%			40.56	%			40.49	%			41.42	%			40.40	%
Period end equity/period end total assets		11.56	%			11.09	%			11.28	%			11.71	%			12.02	%
Efficiency ratio (non-GAAP)		61.03	%			63.51	%			64.42	%			67.03	%			59.58	%
(1) Current reporting period regulatory capital ratios are preliminary.

TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)
Investment Securities													% Change
	Q3				Q3				Q2				Q3 22 vs.			Q3 22 vs.
Available-for-sale securities, at fair value		2022				2021				2022			Q3 21			Q2 22
U.S. agency securities	$	331,297			$	207,949			$	342,702			59.32	%		(3.33)	%
U.S. Treasury notes		26,399				1,007				27,496			2,521.55	%		(3.99)	%
Municipal securities		426,720				350,980				447,927			21.58	%		(4.73)	%
Trust preferred and other corporate securities		79,501				31,591				84,307			151.66	%		(5.70)	%
Mortgage-backed securities issued by GSE and GNMA		1,027,331				969,017				1,012,690			6.02	%		1.45	%
Allowance for credit losses		(1,112	)			(142	)			(1,111	)		683.10	%		0.09	%
Total	$	1,890,136			$	1,560,402			$	1,914,011			21.13	%		(1.25)	%
Gross unrealized gains (losses) reflected in financial statements
Total gross unrealized gains	$	1,292			$	40,906			$	1,840			(96.84)	%		(29.78)	%
Total gross unrealized losses		(201,127	)			(8,845	)			(122,253	)		2,173.91	%		64.52	%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(199,835	)		$	32,061			$	(120,413	)		(723.30)	%		65.96	%
Held-to-maturity securities, at amortized cost
U.S. agency securities	$	100,905			$	—			$	100,718			N/M			0.19	%
U.S. Treasury notes		434,148				—				434,432			N/M			(0.07)	%
Municipal securities		5,159				5,074				5,138			1.68	%		0.41	%
Trust preferred corporate securities		2,235				2,285				2,248			(2.19)	%		(0.58)	%
Mortgage-backed securities issued by GSE and GNMA		6,298				7,539				6,547			(16.46)	%		(3.80)	%
Allowance for credit losses		(83	)			(94	)			(85	)		(11.70)	%		(2.35)	%
Total	$	548,662			$	14,804			$	548,998			3,606.17	%		(0.06)	%
Total gross unrealized gains	$	153			$	1,591			$	448			(90.38)	%		(65.85)	%
Total gross unrealized losses		(31,116	)			—				(18,615	)		—	%		67.16	%
Net unrealized gains (losses) in HTM securities	$	(30,963	)		$	1,591			$	(18,167	)		(2,046.13)	%		70.44	%
Loans Held For Investment (1)													% Change
	Q3				Q3				Q2				Q3 22 vs.			Q3 22 vs.
		2022				2021				2022			Q3 21			Q2 22
Real estate - construction and development	$	1,324,831			$	1,005,592			$	1,383,791			31.75	%		(4.26)	%
Commercial real estate - owner occupied		1,590,371				1,463,000				1,579,464			8.71	%		0.69	%
Commercial real estate - non owner occupied		2,799,363				2,647,625				2,757,651			5.73	%		1.51	%
Real estate - multifamily		458,803				363,733				371,658			26.14	%		23.45	%
Residential 1-4 family		1,567,024				1,233,125				1,513,662			27.08	%		3.53	%
HELOC		388,305				389,974				386,067			(0.43)	%		0.58	%
Commercial and industrial business (C&I)		1,251,350				1,253,972				1,261,279			(0.21)	%		(0.79)	%
Government		520,198				471,037				527,230			10.44	%		(1.33)	%
Indirect		572,710				348,864				555,638			64.16	%		3.07	%
Consumer loans and other		86,656				120,643				89,320			(28.17)	%		(2.98)	%
Total	$	10,559,611			$	9,297,565			$	10,425,760			13.57	%		1.28	%
(1) Paycheck Protection Program loans totaling $0.01 billion, $0.25 billion, and $0.04 billion, primarily in C&I, are included in Q3 22, Q3 21, and Q2 22, respectively.
Deposits													% Change
	Q3				Q3				Q2				Q3 22 vs.			Q3 22 vs.
		2022				2021				2022			Q3 21			Q2 22
Noninterest-bearing demand	$	5,574,528			$	5,394,952			$	5,723,415			3.33	%		(2.60)	%
Interest-bearing:
Demand and money market accounts		6,042,417				5,681,181				6,384,818			6.36	%		(5.36)	%
Savings		387,622				366,165				388,364			5.86	%		(0.19)	%
Certificates of deposits		1,407,495				1,571,752				1,499,514			(10.45)	%		(6.14)	%
Total	$	13,412,062			$	13,014,050			$	13,996,111			3.06	%		(4.17)	%

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)
	Three Months Ended											Three Months Ended											Three Months Ended
	September 30, 2022											June 30, 2022											September 30, 2021
					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) (2)(3)	$	10,465,441			$	112,225			4.25	%		$	10,199,019			$	101,463			3.99	%		$	9,248,867			$	98,733			4.24	%
Taxable investment securities		2,385,218				12,943			2.17	%			2,331,410				11,388			1.95	%			1,421,347				6,560			1.85	%
Tax-exempt investment securities		147,184				1,054			2.86	%			132,304				879			2.66	%			125,523				487			1.55	%
Total securities		2,532,402				13,997			2.21	%			2,463,714				12,267			1.99	%			1,546,870				7,047			1.82	%
Interest-bearing deposits		1,800,798				9,509			2.09	%			2,368,147				4,616			0.78	%			3,179,010				1,182			0.15	%
Loans held for sale		188,737				2,446			5.18	%			213,109				2,217			4.16	%			468,323				3,405			2.91	%
Total earning assets		14,987,378				138,177			3.66	%			15,243,989				120,563			3.17	%			14,443,070				110,367			3.03	%
Less: allowance for credit losses		(104,178	)										(103,871	)										(108,478	)
Total nonearning assets		1,421,094											1,389,692											1,372,406
Total assets	$	16,304,294										$	16,529,810										$	15,706,998
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	6,084,753			$	6,542			0.43	%		$	6,349,725			$	3,094			0.20	%		$	5,486,788			$	2,095			0.15	%
Savings		391,437				628			0.64	%			387,498				526			0.54	%			358,739				533			0.59	%
Certificates of deposit		1,456,746				3,060			0.83	%			1,392,474				1,953			0.56	%			1,842,948				3,400			0.73	%
Total interest-bearing deposits		7,932,936				10,230			0.51	%			8,129,697				5,573			0.27	%			7,688,475				6,028			0.31	%
Borrowings		94,411				139			0.58	%			128,276				135			0.42	%			300,505				412			0.54	%
Subordinated debt, net		320,518				3,117			3.89	%			496,862				5,091			4.10	%			249,405				2,962			4.75	%
Total interest-bearing liabilities		8,347,865				13,486			0.64	%			8,754,835				10,799			0.49	%			8,238,385				9,402			0.45	%
Demand deposits		5,690,020											5,547,936											5,212,271
Other noninterest-bearing liabilities		387,835											348,678											367,891
Total liabilities		14,425,720											14,651,449											13,818,547
Shareholders’ equity		1,878,574											1,878,361											1,888,451
Total liabilities and equity	$	16,304,294