SUFFOLK, Va., April 22, 2026 (GLOBE NEWSWIRE) -- TowneBank (the "Company" or "Towne") (NASDAQ:TOWN) today reported earnings for the quarter ended March 31, 2026 of $40.99 million, or $0.45 per diluted share, compared to $43.71 million, or $0.58 per diluted share, for the quarter ended March 31, 2025. Excluding certain items affecting comparability, core earnings (non-GAAP) were $66.73 million, or $0.74 per diluted share, in the current quarter compared to $44.10 million, or $0.58 per diluted share, for the quarter ended March 31, 2025.

"TowneBank posted a strong first quarter achieving record total revenues of $246 million. We continue to invest in top talent across our Carolina footprint while maintaining a disciplined focus on credit quality, liquidity and robust capital levels to support future growth. Our Main Street Banking model remains well positioned to perform across a broad range of economic conditions," said G. Robert Aston, Jr., Executive Chairman.

Highlights for First Quarter 2026:

Towne successfully completed the acquisition of Dogwood State Bank ("Dogwood"), in January 2026. Included in that acquisition were $1.95 billion in loans, $190.08 million in securities, and $1.93 billion in deposits.
Total revenues were a record $246.45 million, an increase of $63.35 million, or 34.60%, compared to first quarter 2025. Net interest income increased $52.46 million, driven by an increase in interest income. Noninterest income increased $10.89 million.
Total deposits were $18.48 billion, an increase of 11.94%, or $1.97 billion, in comparison to December 31, 2025. Excluding $1.93 billion in Dogwood acquired deposits, total deposits would have increased $39.64 million, compared to the linked quarter.
Noninterest-bearing deposits increased $524.24 million, or 10.33%, compared to the linked quarter driven by acquired deposits of $544.48 million.
Loans held for investment were $15.26 billion, an increase of $1.93 billion, or 14.44%, compared to December 31, 2025. Excluding loans acquired in the quarter, total loans would have decreased $26.20 million, or 0.20%, compared to the linked quarter.
Annualized return on common shareholders' equity was 5.85% compared to 8.27% in first quarter 2025. Annualized return on average tangible common shareholders' equity (non-GAAP) was 9.58% compared to 11.50% in first quarter 2025.
Net interest margin was 3.58% for the quarter and tax-equivalent net interest margin (non-GAAP) was 3.60%, including purchase accounting accretion of 11 basis points, compared to the prior year quarter net interest margin of 3.14% and tax-equivalent net interest margin (non-GAAP) of 3.17%, including purchase accounting accretion of 3 basis points.
Net interest margin increased 2 basis points and spread increased 4 basis points, compared to the linked quarter, which included purchase accounting accretion of 15 basis points. Accretion related to the Dogwood transaction was compressed compared to previous transactions due to the Company's adoption of the new accounting standard expanding the use of the gross-up approach for purchased loans effective January 1, 2026.
We expect net interest income to be impacted by net purchase accounting accretion income of $8.34 million and $9.12 million in the remainder of 2026 and 2027, respectively.
The effective tax rate was 18.19% in the quarter compared to 12.30% in first quarter 2025 and 23.72% in the linked quarter. The change in the effective rate from first quarter 2026 to 2025 was due to increases in state tax expense and nondeductible merger and acquisition expenses. The lower effective tax rate in the current quarter compared to the linked quarter was primarily due to the increase in credits and losses related to LIHTC investment properties.

Quarterly Net Interest Income:

Net interest income was $172.94 million in first quarter 2026 compared to $120.48 million for the quarter ended March 31, 2025.
On an average basis, loans held for investment, with a yield of 5.67%, represented 76.65% of earning assets at March 31, 2026 compared to a yield of 5.38% and 74.15% of earning assets at March 31, 2025.
The cost of interest-bearing deposits was 2.33% for the quarter ended March 31, 2026, compared to 2.69% in first quarter 2025. Interest expense on deposits increased $5.38 million, or 8.01%, from the prior year quarter as higher volume outpaced decreases in rate.
Our total cost of deposits decreased to 1.63% from 1.89% for the quarter ended March 31, 2025 due to lower interest-bearing deposit rates.
Average interest-earning assets totaled $19.61 billion at March 31, 2026, compared to $17.73 billion in the linked quarter, an increase of 10.62%.
Average interest-bearing liabilities totaled $13.16 billion, an increase of $1.40 billion, or 11.95%, from the linked quarter. Total borrowings increased by $141.34 million over the linked quarter, due to debt assumed in the Dogwood acquisition.

Quarterly Provision for Credit Losses:

The quarterly provision for credit losses was an expense of $344 thousand compared to $2.42 million in the prior year quarter and a benefit of $169 thousand in the linked quarter.
The allowance for credit losses on loans increased $51.92 million in first quarter 2026, compared to the linked quarter. The initial allowance related to the January 2026 acquisition of Dogwood was $54.21 million, $31.26 million of which was attributable to its community banking portfolio and $22.95 million attributable to its government lending portfolio, which consists primarily of SBA loans.
Net loan charge-offs were $1.69 million in the quarter, $1.95 million in the linked quarter, and $626 thousand in the prior year quarter.
The ratio of net charge-offs to average loans on an annualized basis was 0.05% in first quarter 2026, 0.06% in the linked quarter, and 0.02% in first quarter 2025.
The allowance for credit losses on loans represented 1.31% of total loans at March 31, 2026, compared to 1.10% at December 31, 2025, and 1.08% at March 31, 2025. Our March 31, 2026 allowance for credit losses is further broken down into community banking which represented 1.15% of total loans and government lending which represented 0.16% of total loans.
The allowance for credit losses on loans was 6.08 times nonperforming loans compared to 19.15 times at March 31, 2025 and 12.57 times at December 31, 2025.

Quarterly Noninterest Income:

Total noninterest income was $73.51 million compared to $62.62 million in 2025, an increase of $10.89 million, or 17.38%.
Government lending income, net was $4.20 million in first quarter 2026 and represented a new noninterest income source related to the acquisition of Dogwood.
Residential mortgage banking income was $11.73 million compared to $10.36 million in first quarter 2025. Loan volume increased to $575.35 million in first quarter 2026 from $445.19 million in first quarter 2025. Residential purchase activity was 77.57% of production volume in first quarter 2026 compared to 89.94% in first quarter 2025.
Gross margins on residential mortgage sales were 3.09%, a decrease of 10 basis points from 3.19% in the linked quarter and 9 basis points from 3.18% in first quarter 2025.
Service charges on deposit accounts increased $1.32 million over prior year due to the acquisition of three banks in the past 12 months.
Property management fee revenue increased $1.89 million, or 17.88%, to $12.44 million in first quarter 2026, compared to first quarter 2025. The increase was driven by changes to our fee structure resulting in revenue growth.

Quarterly Noninterest Expense:

Total noninterest expense was $195.89 million compared to $130.54 million in 2025, an increase of $65.35 million, or 50.06%. This increase was primarily attributable to acquisition-related expenses and growth in salaries and employee benefits.
The acquisitions of Dogwood, Old Point Financial Corporation ("Old Point"), and Village Bank and Trust Financial Corp. ("Village"), as well as the sale of Resort Property Management, resulted in $31.69 million in acquisition-related expenses in the quarter.
An increase in banking personnel related to the Dogwood, Old Point, and Village acquisitions represented $10.39 million of the $18.10 million increase in salaries and benefits expenses, compared to the prior year quarter. Additional contributing factors were annual base salary adjustments that went into effect mid-September 2025 and performance-based incentives.

Consolidated Balance Sheet Highlights:

Total assets were $22.36 billion for the quarter ended March 31, 2026, a $2.67 billion increase compared to $19.69 billion at December 31, 2025.
Loans held for investment increased $1.93 billion, or 14.44%, compared to the linked quarter, driven by the acquisition of Dogwood.
Mortgage loans held for sale increased $3.23 million, or 1.91%, compared to prior year and $17.29 million, or 11.20%, compared to the linked quarter, driven by decreases in rates early in first quarter 2026, which contributed to increases in refinance as well as purchase activities.
Total deposits increased $1.97 billion, or 11.94%, compared to the linked quarter, driven by acquisition-related increases in both noninterest-bearing and interest-bearing demand deposits.
Noninterest-bearing deposits increased $0.52 billion, or 10.33%, compared to the linked quarter.
Total borrowings increased $141.34 million, or 38.08%, compared to the linked quarter, due to acquired FHLB borrowings.

Investment Securities:

Total investment securities were $3.03 billion compared to $2.90 billion at December 31, 2025 and $2.70 billion at March 31, 2025. The weighted average duration of the portfolio at March 31, 2026 was 3.4 years. The carrying value of the available-for-sale debt securities portfolio included net unrealized losses of $81.40 million at March 31, 2026, compared to $73.07 million at December 31, 2025 and $119.25 million at March 31, 2025, with the changes in fair value marks due to the change in interest rates.

Loans and Asset Quality:

Total loans held for investment were $15.26 billion at March 31, 2026 and $13.34 billion at December 31, 2025. Excluding loans acquired in the quarter, total loans declined $26.20 million compared to the linked quarter.
Nonperforming assets, which consists of nonperforming loans, foreclosed property, and former bank premises, were $51.11 million, or 0.23% of total assets, compared to $14.36 million, or 0.07%, at the linked quarter end, and $7.37 million, or 0.04%, at March 31, 2025. Former bank premises of $14.02 million have executed purchase agreements or purchase agreements under review that are expected to close by November 2026.
Nonperforming loans were 0.21% of period end loans at March 31, 2026, compared to 0.09% in the linked quarter, and 0.06% at March 31, 2025. The increase in the current quarter was primarily driven by loans acquired in the Dogwood transaction.
Foreclosed property and former bank premises totaled $18.36 million at March 31, 2026, and consisted of $505 thousand in other real estate owned, $1.53 million in repossessed autos, and $16.32 million in acquisition-related former bank premises. Foreclosed property and former bank premises totaled totaled $2.63 million at December 31, 2025, and consisted of $401 thousand in other real estate owned, $1.35 million in repossessed autos, and $879 thousand in acquisition-related former bank premises.

Deposits and Borrowings:

Total deposits were $18.48 billion compared to $16.51 billion at December 31, 2025. Excluding $1.93 billion in acquired deposits, total deposits would have increased $39.64 million, or 0.97% on an annualized basis from the linked quarter.
The ratio of period end loans held for investment to deposits was 82.58% compared to 80.78% at December 31, 2025 and 79.77% at March 31, 2025.
Noninterest-bearing deposits were 30.29% of total deposits at March 31, 2026 compared to 30.73% at December 31, 2025 and 29.53% at March 31, 2025. Noninterest-bearing deposits increased $524.24 million, or 10.33%, compared to the linked quarter, but would have declined $20.25 million excluding acquired noninterest-bearing deposits.
Total borrowings were $512.48 million compared to $371.14 million at December 31, 2025, an increase of $141.34 million, or 38.08%. FHLB borrowings acquired with Dogwood totaled $155.00 million.

Capital:

Book value per common share was $31.31 compared to $30.67 at December 31, 2025 and $29.00 at March 31, 2025.
Tangible book value per common share (non-GAAP) was $21.49 compared to $21.93 at December 31, 2025 and $22.17 at March 31, 2025.

Resort Property Management Sale:

On April 3, 2026, the Company completed the sale of its Resort Property Management segment for $250 million.
- Anticipated gain on the transaction of approximately $195 million after estimated deal costs of 5% of purchase price.
- Transferred cash of approximately $42 million to the parent company prior to closing.
- Retained land and buildings of approximately $10 million to be converted to Bank use or sold separately.
- In anticipation of the transaction, classified the segment as held for sale in first quarter 2026 and presented as held for sale assets and held for sale liabilities on the Consolidated Balance Sheets.

"Our decision to divest Towne Vacations underscores our proven ability to unlock off balance sheet value for our shareholders. Looking ahead, we will identify opportunities to grow and strengthen our Towne Financial Services fee based platform," stated William I. Foster III, President and Chief Executive Officer.

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 70 banking offices throughout Hampton Roads and Central Virginia, Eastern and Central North Carolina, the Greenville and upstate region of South Carolina, and Charleston, South 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, and Towne Trust Company, N.A. With total assets of $22.36 billion as of March 31, 2026, 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 and changes impacting the rulemaking, supervision, examination and enforcement priorities of the federal banking agencies, that may adversely affect our business; our ability to successfully integrate the businesses from recently completed acquisitions, including our mergers with Old Point Financial Corporation and Dogwood State Bank, to the extent that that process may take longer or be more difficult, time-consuming, or costly to accomplish than expected; deposit attrition, operating costs, customer losses, and business disruption associated with 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 that we have acquired that may be greater than expected; expected growth opportunities or cost savings associated with recently completed acquisitions that 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 and integration related matters; the introduction of new lines of business or new products and services; 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; competitors that 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 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, 2025 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,
		2026			2025			2025			2025			2025
Income and Performance Ratios:
Total revenue	$	246,447		$	219,943		$	222,584		$	210,093		$	183,097
Net income		41,101			40,850			44,612			41,319			44,009
Net income available to common shareholders		40,993			40,630			44,295			40,887			43,714
Net income per common share - diluted		0.45			0.51			0.58			0.54			0.58
Book value per common share		31.31			30.67			30.27			29.41			29.00
Book value per common share - tangible ^(non-GAAP)		21.49			21.93			21.49			21.80			22.17
Return on average assets		0.76	%		0.82	%		0.94	%		0.91	%		1.03	%
Return on average assets - tangible ^(non-GAAP)		0.89	%		0.94	%		1.05	%		1.01	%		1.12	%
Return on average equity		5.84	%		6.67	%		7.72	%		7.52	%		8.21	%
Return on average equity - tangible ^(non-GAAP)		9.55	%		10.32	%		11.39	%		10.94	%		11.39	%
Return on average common equity		5.85	%		6.69	%		7.75	%		7.54	%		8.27	%
Return on average common equity - tangible ^(non-GAAP)		9.58	%		10.36	%		11.45	%		10.99	%		11.50	%
Noninterest income as a percentage of total revenue		29.83	%		27.73	%		33.98	%		34.69	%		34.20	%
Regulatory Capital Ratios (1):
Common equity tier 1		11.43	%		11.34	%		11.18	%		11.77	%		12.75	%
Tier 1		11.47	%		11.39	%		11.23	%		11.82	%		12.87	%
Total		13.87	%		14.14	%		13.98	%		14.49	%		15.65	%
Tier 1 leverage ratio		9.75	%		9.36	%		9.84	%		9.93	%		10.61	%
Asset Quality:
Allowance for credit losses on loans to nonperforming loans		6.08	x		12.57	x		19.38	x		16.81	x		19.15	x
Allowance for credit losses on loans to period end loans		1.31	%		1.10	%		1.11	%		1.09	%		1.08	%
Nonperforming loans to period end loans		0.21	%		0.09	%		0.06	%		0.06	%		0.06	%
Nonperforming assets to period end assets		0.23	%		0.07	%		0.05	%		0.05	%		0.04	%
Net charge-offs (recoveries) to average loans (annualized)		0.05	%		0.06	%		0.01	%		—	%		0.02	%
Net charge-offs (recoveries)	$	1,690		$	1,948		$	255		$	19		$	626

Nonperforming loans	$	32,751		$	11,726		$	7,698		$	7,982		$	6,586
Former bank premises		16,323			879			885			—			—
Foreclosed property		2,037			1,754			1,798			1,306			786
Total nonperforming assets	$	51,111		$	14,359		$	10,381		$	9,288		$	7,372
Loans past due 90 days and still accruing interest	$	2,487		$	890		$	1,863		$	210		$	15
Allowance for credit losses on loans	$	199,267		$	147,343		$	149,175		$	134,187		$	126,131
Mortgage Banking:
Loans originated, mortgage	$	469,323		$	504,732		$	491,921		$	494,108		$	300,699
Loans originated, joint venture		106,027			118,597			144,440			177,359			144,495
Total loans originated	$	575,350		$	623,329		$	636,361		$	671,467		$	445,194
Number of loans originated		1,423			1,551			1,679			1,750			1,181
Number of originators		162			161			169			166			161
Purchase %		77.57	%		82.23	%		91.84	%		92.37	%		89.94	%
Loans sold	$	527,428		$	652,853		$	657,822		$	596,009		$	475,518
Rate lock asset	$	2,003		$	1,145		$	2,213		$	2,186		$	1,880
Gross realized gain on sales and fees as a % of loans originated		3.09	%		3.19	%		3.32	%		3.13	%		3.18	%
Other Ratios:
Net interest margin		3.58	%		3.56	%		3.48	%		3.38	%		3.14	%
Net interest margin-fully tax-equivalent ^(non-GAAP)		3.60	%		3.58	%		3.50	%		3.40	%		3.17	%
Average earning assets/total average assets		89.60	%		89.96	%		90.03	%		90.23	%		90.32	%
Average loans/average deposits		83.22	%		80.57	%		80.92	%		81.09	%		80.01	%
Average noninterest deposits/total average deposits		30.24	%		31.28	%		31.30	%		30.88	%		29.68	%
Period end equity/period end total assets		12.96	%		12.34	%		12.18	%		12.19	%		12.58	%
Efficiency ratio^(non-GAAP)		76.96	%		73.37	%		67.08	%		69.82	%		70.41	%
(1) Current reporting period regulatory capital ratios are preliminary.


TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)

Investment Securities										% Change
	Q1			Q1			Q4			Q1 26 vs.		Q1 26 vs.
*Available-for-sale securities, at fair value*		2026			2025			2025		Q1 25		Q4 25
U.S. agency securities	$	386,157		$	320,190		$	365,644		20.60	%	5.61	%
U.S. Treasury notes		83,396			78,184			83,631		6.67	%	(0.28	)%
Municipal securities		535,652			439,379			494,380		21.91	%	8.35	%
Trust preferred and other corporate securities		161,453			98,463			142,994		63.97	%	12.91	%
Mortgage-backed securities issued by GSEs and GNMA		1,697,124			1,535,217			1,624,747		10.55	%	4.45	%
Allowance for credit losses		(1,355	)		(1,262	)		(1,207	)	7.37	%	12.26	%
Total	$	2,862,427		$	2,470,171		$	2,710,189		15.88	%	5.62	%
*Gross unrealized gains (losses) reflected in financial statements*
Total gross unrealized gains	$	9,894		$	5,909		$	13,566		67.44	%	(27.07	)%
Total gross unrealized losses		(91,293	)		(125,156	)		(86,632	)	(27.06	)%	5.38	%
Net unrealized gains (losses) and other adjustments on AFS securities	$	(81,399	)	$	(119,247	)	$	(73,066	)	(31.74	)%	11.40	%
*Held-to-maturity securities, at amortized cost*
U.S. agency securities	$	18,339		$	92,805		$	48,252		(80.24	)%	(61.99	)%
U.S. Treasury notes		95,551			96,481			95,783		(0.96	)%	(0.24	)%
Municipal securities		5,490			5,390			5,464		1.86	%	0.48	%
Trust preferred corporate securities		2,054			2,107			2,068		(2.52	)%	(0.68	)%
Mortgage-backed securities issued by GSEs		5,093			5,235			5,130		(2.71	)%	(0.72	)%
Allowance for credit losses		(33	)		(68	)		(65	)	(51.47	)%	(49.23	)%
Total	$	126,494		$	201,950		$	156,632		(37.36	)%	(19.24	)%

Total gross unrealized gains	$	196		$	176		$	253		11.36	%	(22.53	)%
Total gross unrealized losses		(2,314	)		(6,563	)		(2,681	)	(64.74	)%	(13.69	)%
Net unrealized gains (losses) in HTM securities	$	(2,118	)	$	(6,387	)	$	(2,428	)	(66.84	)%	(12.77	)%
Total unrealized gains (losses) on AFS and HTM securities	$	(83,517	)	$	(125,634	)	$	(75,494	)	(33.52	)%	10.63	%

										% Change
Loans Held For Investment	Q1			Q1			Q4			Q1 26 vs.		Q1 26 vs.
Community Banking:		2026			2025			2025		Q1 25		Q4 25
CRE - construction and development	$	1,450,284		$	1,006,086		$	1,266,242		44.15	%	14.53	%
CRE - owner occupied		2,359,542			1,654,401			1,932,015		42.62	%	22.13	%
CRE - non-owner occupied		4,284,890			3,329,728			3,777,350		28.69	%	13.44	%
CRE - multifamily		894,653			841,330			858,212		6.34	%	4.25	%
Residential 1-4 family		2,334,199			1,886,107			2,181,949		23.76	%	6.98	%
HELOC		674,293			429,152			583,725		57.12	%	15.52	%
Commercial and industrial business (C&I)		1,619,980			1,337,254			1,455,455		21.14	%	11.30	%
Government		499,769			511,676			507,586		(2.33	)%	(1.54	)%
Indirect		693,811			570,795			672,401		21.55	%	3.18	%
Consumer loans and other		219,057			86,217			100,869		154.08	%	117.17	%
Total Community Banking	$	15,030,478		$	11,652,746		$	13,335,804		28.99	%	12.71	%
Government Guaranteed Lending:
Real estate - construction and development		28,840			—			—		N/M		N/M
Commercial real estate - owner occupied		88,072			—			—		N/M		N/M
Commercial and industrial business (C&I)		113,770			—			—		N/M		N/M
Total Government Guaranteed Lending	$	230,682		$	—		$	—		N/M		N/M
Total Loans Held for Investment	$	15,261,160		$	11,652,746		$	13,335,804		30.97	%	14.44	%


TOWNEBANK
Selected Data (unaudited)
(dollars in thousands)


							% Change
Deposits	Q1		Q1		Q4		Q1 26 vs.		Q1 26 vs.
	2026		2025		2025		Q1 25		Q4 25
Noninterest-bearing demand deposits	$	5,597,395	$	4,313,553	$	5,073,157	29.76	%	10.33	%
Interest-bearing:
Demand and money market accounts		9,293,443		7,463,355		8,390,884	24.52	%	10.76	%
Savings		457,028		312,151		332,752	46.41	%	37.35	%
Certificates of deposits		3,132,406		2,519,489		2,712,324	24.33	%	15.49	%
Total		18,480,272		14,608,548		16,509,117	26.50	%	11.94	%


Acquisition Summary - Day 1 Balances	Total Acquired			2026	2025
	2025-2026		Dogwood (1)		Old Point (2)		Village (3)
Total securities	$	477,508	$	190,076	$	211,877	$	75,555
Total loans		3,486,512		1,951,553		958,719		576,240
Core deposit intangibles		82,900		30,490		31,390		21,020
Total assets		4,497,823		2,350,130		1,401,765		745,928
Noninterest-bearing demand deposits		1,089,093		544,484		306,066		238,543
Interest-bearing deposits		2,690,836		1,387,029		904,857		398,950
Total deposits		3,779,929		1,931,513		1,210,923		637,493
Advances from the FHLB		205,000		155,000		40,000		10,000
Subordinated debt, net		39,693		—		25,274		14,419
Total liabilities		4,072,488		2,119,639		1,284,434		668,415

Goodwill	$	364,487	$	227,470	$	94,025	$	42,992
Initial allowance for credit losses on loans		57,946		54,207		2,048		1,691
Initial provision for credit losses (4)		17,504		—		11,449		6,055

(1) Dogwood State Bank was acquired January 12, 2026
(2) Old Point Financial Corporation was acquired September 1, 2025.
(3) Village Bank and Trust Corp. was acquired April 1, 2025.
(4) ASU 2025-08 Financial Instruments - Credit Losses Measurement of Credit Losses on Financial Instruments - Purchased Loans, was adopted January 1, 2026


	Three Months Ended
Net Charge-offs	March 31,			December 31,		September 30,			June 30,			March 31,
		2026			2025		2025			2025			2025
Community bank		(284	)		1,159		(116	)		(418	)		142
Indirect		414			789		371			437			484
Government guaranteed lending		1,560			—		—			—			—
Total	$	1,690		$	1,948	$	255		$	19		$	626

TOWNEBANK
Average Balances, Yields and Rate Paid (unaudited)
(dollars in thousands)

	Three Months Ended								Three Months Ended								Three Months Ended
	March 31, 2026								December 31, 2025								March 31, 2025
				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)	$	15,032,919		$	210,226		5.67	%	$	13,352,669		$	190,556		5.66	%	$	11,527,915		$	153,068		5.38	%
Taxable investment securities		2,805,229			25,181		3.59	%		2,687,834			24,255		3.61	%		2,478,048			21,301		3.44	%
Tax-exempt investment securities		245,092			2,625		4.28	%		199,472			2,385		4.78	%		176,081			1,860		4.23	%
Total securities		3,050,321			27,806		3.65	%		2,887,306			26,640		3.69	%		2,654,129			23,161		3.49	%
Interest-bearing deposits		1,388,016			11,459		3.35	%		1,301,770			11,825		3.60	%		1,199,650			11,801		3.99	%
Loans held for sale		140,438			2,077		5.92	%		187,911			2,794		5.95	%		164,358			2,653		6.46	%
Total earning assets		19,611,694			251,568		5.20	%		17,729,656			231,815		5.19	%		15,546,052			190,683		4.97	%
Less: allowance for loan losses		(179,029	)							(149,047	)							(124,265	)
Total nonearning assets		2,455,700								2,126,757								1,790,075
Total assets	$	21,888,365							$	19,707,366							$	17,211,862
Liabilities and Equity:
Interest-bearing deposits
Demand and money market	$	9,081,281		$	44,822		2.00	%	$	8,266,287		$	42,226		2.03	%	$	7,279,365		$	40,606		2.26	%
Savings		421,240			613		0.59	%		331,959			626		0.75	%		312,118			714		0.93	%
Certificates of deposit		3,097,422			27,073		3.54	%		2,789,603			26,125		3.72	%		2,540,438			25,813		4.12	%
Total interest-bearing deposits		12,599,943			72,508		2.33	%		11,387,849			68,977		2.40	%		10,131,921			67,133		2.69	%
Borrowings		272,569			2,199		3.23	%		81,148			(36	)	(0.17	)%		29,606			(300	)	(4.05	)%
Subordinated debt, net		284,025			2,750		3.87	%		283,601			2,764		3.90	%		260,070			2,304		3.54	%
Total interest-bearing liabilities		13,156,537			77,457		2.39	%		11,752,598			71,705		2.42	%		10,421,597			69,137		2.69	%
Demand deposits		5,463,137								5,184,356								4,276,586
Other noninterest-bearing liabilities		419,807								352,753								353,665
Total liabilities		19,039,481								17,289,707								15,051,848
Shareholders' equity		2,848,884								2,417,659								2,160,014
Total liabilities and equity	$	21,888,365							$	19,707,366							$	17,211,862
Net interest income (tax-equivalent basis) (4)				$	174,111							$	160,110							$	121,546
Reconciliation of Non-GAAP Financial Measures

Tax-equivalent basis adjustment					(1,169	)							(1,146	)							(1,068	)
Net interest income (GAAP)				$	172,942							$	158,964							$	120,478

Interest rate spread (2)(4)							2.81	%							2.77	%							2.28	%
Interest expense as a percent of average earning assets							1.60	%							1.60	%							1.80	%
Net interest margin (tax-equivalent basis) (3)(4)							3.60	%							3.58	%							3.17	%
Total cost of deposits							1.63	%							1.65	%							1.89	%

(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,
		2026			2025
ASSETS	(unaudited)			(audited)
Cash and due from banks	$	95,472		$	129,941
Interest-bearing deposits at FRB		1,346,573			1,097,155
Interest-bearing deposits in financial institutions		119,922			123,553
Total Cash and Cash Equivalents		1,561,967			1,350,649
Securities available for sale, at fair value (amortized cost of $2,945,181 and $2,784,462, and allowance for credit losses of $1,355 and $1,207 at March 31, 2026 and December 31, 2025, respectively)		2,862,427			2,710,189
Securities held to maturity, at amortized cost (fair value of $124,409 and $154,269 at March 31, 2026 and December 31, 2025, respectively)		126,527			156,697
Less: allowance for credit losses		(33	)		(65	)
Securities held to maturity, net of allowance for credit losses		126,494			156,632
Other equity securities		15,463			12,219
FHLB stock		24,985			16,341
Total Securities		3,029,369			2,895,381
Mortgage loans held for sale		171,735			154,444
Government guaranteed loans held for sale		5,498			—
Loans, net of unearned income and deferred costs		15,261,160			13,335,804
Less: allowance for credit losses on loans		(199,267	)		(147,343	)
Net Loans		15,061,893			13,188,461
Premises and equipment, net		438,792			430,987
Goodwill		804,143			594,080
Other intangible assets, net		102,631			96,528
BOLI		385,087			337,425
Other assets		694,197			639,386
Assets held for sale		103,396			—
TOTAL ASSETS	$	22,358,708		$	19,687,341

LIABILITIES AND EQUITY
Deposits:
Noninterest-bearing demand	$	5,597,395		$	5,073,157
Interest-bearing:
Demand and money market accounts		9,293,443			8,390,884
Savings		457,028			332,752
Certificates of deposit		3,132,406			2,712,324
Total Deposits		18,480,272			16,509,117
Advances from the FHLB		197,257			52,452
Subordinated debt, net		284,236			283,870
Repurchase agreements and other borrowings		30,988			34,817
Total Borrowings		512,481			371,139
Other liabilities		414,979			378,076
Liabilities held for sale		52,460			—
TOTAL LIABILITIES		19,460,192			17,258,332
Preferred stock, authorized and unissued shares - 2,000,000		—			—
Common stock, $1.667 par value: 150,000,000 shares authorized;
92,366,411 and 78,964,038 shares issued at
March 31, 2026 and December 31, 2025, respectively		153,975			131,633
Capital surplus		1,692,582			1,254,776
Retained earnings		1,103,397			1,087,343
Common stock issued to deferred compensation trust, at cost:
1,080,732 and 1,086,290 shares at March 31, 2026 and December 31, 2025, respectively		(23,095	)		(23,293	)
Deferred compensation trust		23,095			23,293
Accumulated other comprehensive income (loss)		(58,266	)		(51,685	)
TOTAL SHAREHOLDERS' EQUITY		2,891,688			2,422,067
Noncontrolling interest		6,828			6,942
TOTAL EQUITY		2,898,516			2,429,009
TOTAL LIABILITIES AND EQUITY	$	22,358,708		$	19,687,341

TOWNEBANK
Consolidated Statements of Income (unaudited)
(dollars in thousands, except per share data)


	Three Months Ended
	March 31,
		2026			2025
INTEREST INCOME:
Loans, including fees	$	209,512		$	152,322
Investment securities		27,351			22,839
Interest-bearing deposits in financial institutions and federal funds sold		11,459			11,801
Mortgage loans held for sale		2,077			2,653
Total interest income		250,399			189,615
INTEREST EXPENSE:
Deposits		72,508			67,133
Advances from the FHLB		2,425			25
Subordinated debt, net		2,750			2,304
Repurchase agreements and other borrowings		(226	)		(325	)
Total interest expense		77,457			69,137
Net interest income		172,942			120,478
PROVISION FOR CREDIT LOSSES		344			2,420
Net interest income after provision for credit losses		172,598			118,058
NONINTEREST INCOME:
Residential mortgage banking income, net		11,734			10,361
Insurance commissions and related income, net		26,034			26,424
Property management income, net		12,440			10,553
Service charges on deposit accounts		4,642			3,327
Credit card merchant fees, net		1,919			1,697
Investment income, net		3,720			3,075
BOLI		3,019			1,872
Government lending income, net		4,201			—
Gain on sale of equity investment		—			2,000
Other income		5,670			3,310
Net gain on investment securities		126			—
Total noninterest income		73,505			62,619
NONINTEREST EXPENSE:
Salaries and employee benefits		93,179			75,078
Occupancy		12,005			9,333
Furniture and equipment		5,899			4,621
Amortization - intangibles		6,321			3,026
Software		8,398			6,293
Data processing		4,931			3,835
Professional fees		3,253			2,653
Advertising and marketing		5,677			4,472
FDIC and other insurance		2,894			2,860
Acquisition related expenses		31,685			420
Other expenses		21,644			17,945
Total noninterest expense		195,886			130,536
Income before income tax expense and noncontrolling interest		50,217			50,141
Provision for income tax expense		9,116			6,132
Net Income		41,101			44,009
Net income attributable to noncontrolling interest		(108	)		(295	)
Net income attributable to TowneBank	$	40,993		$	43,714
Per common share information
Basic earnings	$	0.45		$	0.58
Diluted earnings	$	0.45		$	0.58
Cash dividends declared	$	0.27		$	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,
		2026			2025			2025			2025			2025
ASSETS	(unaudited)			(audited)			(unaudited)			(unaudited)			(unaudited)
Cash and due from banks	$	95,472		$	129,941		$	152,647		$	149,462		$	126,526
Interest-bearing deposits at FRB		1,346,573			1,097,155			974,514			838,315			1,090,555
Interest-bearing deposits in financial institutions		119,922			123,553			122,819			123,911			100,249
Total Cash and Cash Equivalents		1,561,967			1,350,649			1,249,980			1,111,688			1,317,330
Securities available for sale		2,862,427			2,710,189			2,668,599			2,553,975			2,470,171
Securities held to maturity		126,527			156,697			176,843			201,932			202,018
Less: allowance for credit losses		(33	)		(65	)		(65	)		(67	)		(68	)
Securities held to maturity, net of allowance for credit losses		126,494			156,632			176,778			201,865			201,950
Other equity securities		15,463			12,219			12,420			12,248			12,223
FHLB stock		24,985			16,341			16,341

TowneBank Reports First Quarter 2026 Earnings