TowneBank Reports First Quarter 2025 Earnings

Core Viewpoint - TowneBank reported strong financial performance for the first quarter of 2025, with net income of $50.59 million, a significant increase from $34.69 million in the same quarter of 2024, reflecting a robust growth strategy and effective management of liquidity and capital levels [1][2]. Financial Performance - Earnings per diluted share for the quarter were $0.67, up from $0.46 in the first quarter of 2024 [1]. - Core earnings (non-GAAP) were $50.98 million, or $0.68 per diluted share, compared to $36.27 million, or $0.48 per diluted share, in the prior year [1]. - Total revenues increased by $24.94 million, or 14.93%, to $192.04 million compared to the first quarter of 2024 [7]. Loan and Deposit Growth - Annualized loan growth was nearly 7%, with loans held for investment reaching $11.65 billion, an increase of $200.40 million, or 1.75%, year-over-year [7][15]. - Total deposits rose to $14.61 billion, an increase of $482.47 million, or 3.42%, compared to the first quarter of 2024 [7][15]. - Noninterest-bearing deposits increased by 2.85% to $4.31 billion compared to the prior year [15]. Interest Income and Margin - Net interest income for the quarter was $120.48 million, up from $103.22 million in the first quarter of 2024, driven by lower deposit costs [7]. - The net interest margin was 3.14%, an increase from 2.72% in the same quarter of the previous year [7][24]. Credit Quality - 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 [7]. - Nonperforming assets were $7.37 million, or 0.04% of total assets, down from $7.77 million, or 0.05%, at March 31, 2024 [15]. Strategic Partnerships - The company completed a partnership with Village Bank and Trust Financial Corp. and signed a definitive agreement with Old Point Financial Corporation, which are expected to enhance shareholder returns with low execution risk [4]. Capital Ratios - The common equity tier 1 capital ratio was 12.75%, and the total risk-based capital ratio was 15.65% [21]. - Book value per common share increased to $29.19 from $27.33 a year ago [21]. Noninterest Income - Total noninterest income rose to $71.57 million, an increase of $7.68 million, or 12.02%, compared to the first quarter of 2024 [14]. - Property management fee revenue increased by 16.26% to $19.50 million, driven by organic growth [14]. Asset Quality - The allowance for credit losses on loans represented 1.08% of total loans, consistent with the previous year [15]. - The ratio of net charge-offs to average loans was 0.02%, unchanged from the first quarter of 2024 [15]. Investment Securities - Total investment securities were $2.70 billion, an increase from $2.54 billion at March 31, 2024 [10]. - The carrying value of available-for-sale debt securities included net unrealized losses of $119.25 million, down from $170.84 million a year ago [10]. Overall Growth Strategy - The company emphasizes a conservative approach to relationship banking and diversified fee income businesses to strengthen its position during economic uncertainty [2]. - The focus on measured growth and maintaining healthy liquidity and capital levels is expected to support the company in the face of potential short-term challenges [2].