Group 1 - TowneBank is a Virginia-based bank and insurance company focusing on Virginia and North Carolina [1] - TowneBank has recently completed an acquisition and announced a new acquisition [1] - The investment group European Small Cap Ideas provides exclusive access to actionable research on Europe-focused investment opportunities [1] Group 2 - The focus of European Small Cap Ideas is on high-quality small-cap investment opportunities, emphasizing capital gains and dividend income [1] - The group offers two model portfolios: the European Small Cap Ideas portfolio and the European REIT Portfolio [1] - Additional features include weekly updates, educational content, and an active chat room for discussions on portfolio developments [1]

Core Viewpoint - TowneBank and Old Point Financial Corporation have received all necessary regulatory approvals to complete their merger, expected to close around September 1, 2025, pending customary closing conditions [1]. Group 1: Merger Details - The merger involves Old Point and its subsidiary, Old Point National Bank, merging with TowneBank [1]. - The deadline for Old Point common stockholders to elect their preferred form of consideration is set for 5:00 p.m. Eastern Time on August 26, 2025 [2]. - Stockholders can choose to receive either $41.00 in cash, 1.14 shares of TowneBank common stock, or a combination of both for each share of Old Point common stock [3]. Group 2: Election Process - To make a valid election, stockholders must submit a completed election form and any required documents to Computershare Trust Company, N.A. before the election deadline [4]. - Stockholders who do not make a proper election by the deadline will have no control over the type of consideration they receive, which may include cash, shares of TowneBank common stock, or a combination thereof [5]. Group 3: Company Background - TowneBank, founded in 1999, offers a full range of banking and financial services, with total assets of $18.26 billion as of June 30, 2025, making it one of the largest banks headquartered in Virginia [10]. - Old Point Financial Corporation operates through The Old Point National Bank of Phoebus and offers a variety of retail and commercial financial services, including mortgage and insurance products [11].

Core Viewpoint - TowneBank (TOWN) is positioned as a strong investment opportunity due to significant upward revisions in earnings estimates, indicating a positive earnings outlook that may continue to drive stock performance [1][2]. Earnings Estimate Revisions - The upward trend in earnings estimate revisions reflects analysts' growing optimism regarding TowneBank's earnings prospects, which is expected to positively influence its stock price [2]. - For the current quarter, the earnings estimate is $0.82 per share, representing a year-over-year increase of +41.4%. The Zacks Consensus Estimate has risen by 12.33% over the last 30 days, with one estimate moving higher and no negative revisions [6]. - For the full year, TowneBank is projected to earn $2.74 per share, marking a year-over-year change of +25.7%. Similar to the current quarter, there has been one upward revision with no negative changes in estimates [7]. Zacks Rank and Performance - TowneBank has achieved a Zacks Rank 2 (Buy), indicating favorable conditions for investment based on the positive estimate revisions. The Zacks Rank system has a proven track record of identifying stocks that outperform the market [8]. - Stocks rated Zacks Rank 1 (Strong Buy) and 2 (Buy) have historically outperformed the S&P 500, suggesting that TowneBank may continue to see strong performance [8]. Market Reaction - Investors have shown confidence in TowneBank, as evidenced by a 5.4% increase in its stock price over the past four weeks, driven by solid earnings growth prospects [9].

Core Viewpoint - TowneBank (TOWN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that upward revisions can lead to higher stock valuations [4][6]. - TowneBank's earnings per share (EPS) estimate for the fiscal year ending December 2025 is projected at $2.74, with a 5.8% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - The upgrade of TowneBank to a Zacks Rank 2 places it among the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - TowneBank reported quarterly earnings of $0.81 per share, exceeding the Zacks Consensus Estimate of $0.69 per share, and showing an increase from $0.57 per share a year ago, indicating a strong performance in the banking sector [1][2]. Financial Performance - The company achieved revenues of $208.5 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.98%, and up from $176.06 million year-over-year [2]. - Over the last four quarters, TowneBank has exceeded consensus EPS estimates three times and has topped consensus revenue estimates three times as well [2]. Stock Performance and Outlook - TowneBank shares have increased approximately 4.8% since the beginning of the year, while the S&P 500 has gained 7.3%, indicating underperformance relative to the broader market [3]. - The current consensus EPS estimate for the upcoming quarter is $0.73 on revenues of $205.73 million, and for the current fiscal year, it is $2.59 on revenues of $820.55 million [7]. Industry Context - The Zacks Industry Rank for Banks - Southeast places it in the top 14% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact TowneBank's stock performance [5].

Core Viewpoint - TowneBank reported a record revenue quarter with total revenues of $207.44 million, an increase of 18.56% compared to the same quarter in 2024, driven by organic loan growth and strategic partnerships [2][6][26]. Financial Performance - Net income for the quarter ended June 30, 2025, was $38.84 million, or $0.51 per diluted share, down from $42.86 million, or $0.57 per diluted share, in the same quarter of 2024 [1][26]. - Core earnings (non-GAAP) were $61.34 million, or $0.81 per diluted share, compared to $42.56 million, or $0.57 per diluted share, for the same quarter in 2024 [1][26]. - Net interest income increased by $28.17 million, driven by higher interest income and lower deposit costs [6][7]. Loan and Deposit Growth - Total loans held for investment reached $12.36 billion, an increase of $0.91 billion, or 7.93%, compared to June 30, 2024 [19][26]. - Total deposits increased by $1.06 billion, or 7.40%, compared to the same quarter in 2024, totaling $15.33 billion [6][19][26]. - Noninterest-bearing deposits increased by 10.47% year-over-year, representing 31.02% of total deposits [6][19]. Strategic Partnerships and Acquisitions - The acquisition of Village Bank was completed in April 2025, contributing significantly to earnings momentum [4][6]. - The company is focused on integrating its recent partnership with Old Point Financial Corporation, expected to close in the third quarter of 2025 [4][6]. Asset Quality and Credit Losses - The quarterly provision for credit losses was $6.41 million, compared to a benefit of $177 thousand in the prior year quarter [12][19]. - Nonperforming assets were $9.29 million, or 0.05% of total assets, an increase from $7.16 million, or 0.04%, at June 30, 2024 [19][27]. Capital and Regulatory Ratios - Common equity tier 1 capital ratio was 11.77%, and total risk-based capital ratio was 14.49% [19][26]. - Book value per common share increased to $29.58 from $27.62 a year ago [26]. Noninterest Income - Total noninterest income rose to $70.23 million, an increase of 6.53% compared to the same quarter in 2024 [12][19]. - Net insurance commissions increased by 6.85% to $25.68 million, driven by organic growth in property and casualty commissions [12][19]. Efficiency and Cost Management - Total noninterest expense increased by 21.52% to $150.67 million, primarily due to acquisition-related expenses and growth in salaries and employee benefits [12][19]. - The efficiency ratio was reported at 70.71%, indicating the proportion of expenses to revenue [26].

Company Overview - TowneBank (TOWN) is a community bank headquartered in Portsmouth, operating in the Finance sector with a year-to-date stock price change of 4.23% [3] - The company currently pays a dividend of $0.27 per share, resulting in a dividend yield of 3.04%, which is higher than the Banks - Southeast industry's yield of 2.34% and the S&P 500's yield of 1.54% [3] Dividend Performance - TowneBank's annualized dividend of $1.08 has increased by 8% from the previous year, with a historical average annual increase of 8.72% over the last five years [4] - The current payout ratio is 42%, indicating that the company distributes 42% of its trailing 12-month earnings per share as dividends [4] Earnings Growth and Future Outlook - The Zacks Consensus Estimate for TowneBank's earnings in 2025 is projected at $2.59 per share, reflecting a year-over-year earnings growth rate of 18.81% [5] - Future dividend growth will depend on earnings growth and the payout ratio [4] Investment Considerations - TowneBank is considered a compelling investment opportunity due to its strong dividend profile and current Zacks Rank of 3 (Hold) [6] - Income investors should note that high-yielding stocks may face challenges during periods of rising interest rates [6]

Financial Performance - TowneBank's total assets reached $17.1 billion as of Q2-FY24 [9], with total loans at $11.5 billion and total deposits at $14.3 billion [9] - The bank reported a Core Return on Average Assets (ROAA) of 1.01% and a Core Return on Average Tangible Common Equity (ROTCE) of 12.08% [9] - Net Interest Margin (NIM) on a fully tax-equivalent basis was 2.89%, while noninterest-bearing deposits accounted for 30.2% of total deposits [9] - For Q2-FY24, net income attributable to TowneBank was $42.9 million, a 2.7% increase year-over-year [47] - Earnings per share (diluted) for Q2-FY24 were $0.57, up 1.8% year-over-year [47] Business Segments - The bank's revenue mix is diversified, with net interest income accounting for 62% and noninterest income for 38% YTD Q2-FY24 [24] - Insurance segment contributes 39% to the total noninterest income YTD Q2-FY24 [26] - Towne Insurance is the largest bank-owned insurance company in the country [105], with insurance revenue of $29.6 million in Q2-24 [105] Balance Sheet and Asset Quality - Noninterest-bearing deposits accounted for 30.15% of total deposits in Q2-FY24 [47] - Nonperforming assets represent 0.04% of total assets [47] - The bank's loan-to-deposit ratio was 80.24% [47] Capital and Liquidity - The total risk-based capital ratio was 15.34% [47] - The tangible common equity to tangible assets ratio was 9.37% [47] - Total liquidity sources were $6.471 billion [171], covering 105% of adjusted uninsured deposits [172]

Financial Performance - TowneBank's total assets reached $17.25 billion, a 2.4% increase year-over-year[12] - Net income attributable to TowneBank was $41.26 million for the quarter, a 43.3% increase year-over-year[12] - Earnings per share-diluted increased to $0.55, a 41.0% increase year-over-year[12] - The net interest margin (TE) was 3.02%, a 16 bps increase year-over-year[12] Deposits and Loans - Total deposits amounted to $14.44 billion, a 3.9% increase year-over-year[12] - Total loans reached $11.46 billion, a 1.1% increase year-over-year[12] - Noninterest bearing deposits accounted for 29.46% of total deposits[12] Noninterest Income and Expense - Noninterest income totaled $59.10 million, a 23.6% increase year-over-year[14] - Noninterest expense was $127.44 million, a 4.6% increase year-over-year[14] Asset Quality and Capital - Nonperforming assets represented 0.05% of total assets[12] - The total risk-based capital ratio was 15.68%[12] Outlook - The company is targeting annualized loan growth in the mid-single digits[161] - Net interest income is expected to range between $510 million and $520 million for FY2025[161]

Financial Performance - TowneBank reported total assets of $1751 billion for Q1-FY25, a 37% increase year-over-year[9] - Net income attributable to TowneBank was $5059 million in Q1-FY25, up 459% from $3469 million in Q1-FY24[12, 14] - Core earnings per share-diluted reached $068 in Q1-FY25, compared to $048 in Q1-FY24, representing a 417% increase[14] - The return on average tangible common equity was 1330% for Q1-FY25[9] Balance Sheet & Lending - Total loans amounted to $1165 billion in Q1-FY25, reflecting a 17% increase year-over-year[9, 12] - Total deposits reached $1461 billion in Q1-FY25, a 34% increase compared to Q1-FY24[9, 12] - Noninterest-bearing deposits accounted for 30% of total deposits in Q1-FY25[9] - The loan-to-deposit ratio stood at 7977% in Q1-FY25[12] Non-Interest Income - Noninterest income totaled $7157 million in Q1-FY25, a 120% increase compared to $6388 million in Q1-FY24[14, 55] - Insurance commissions income net was $2642 million in Q1-FY25, up 35% year-over-year[55]