TowneBank Reports Second Quarter 2025 Earnings

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].