TowneBank (TOWN) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was $50.59M ($0.67/diluted share), up 45.9% year-over-year, with core earnings (non-GAAP) at $50.98M ($0.68/share).

• Total revenue rose 14.9% year-over-year to $192.04M, driven by growth in investment securities and loans.

• Total assets reached $17.51B, up 1.5% sequentially and 3.7% year-over-year.

• Completed Village Bank acquisition and announced pending Old Point Financial Corporation merger.

• Maintained #1 deposit market share in Hampton Roads and ranked on Forbes Best Banks list for 7 consecutive years.

Financial highlights

• Net interest income was $120.48M, up 16.7% year-over-year; net interest margin (TE) improved to 3.17% from 2.75%.

• Noninterest income grew 12.0% year-over-year to $71.57M, with gains in insurance, property management, and investment commissions.

• Provision for credit losses increased to $2.42M, up from a net benefit last year; allowance for credit losses on loans at 1.08%.

• Book value per share rose to $29.19; tangible book value per share up year-over-year.

• Efficiency ratio (non-GAAP) improved to 67.10% from 73.25% year-over-year.

Outlook and guidance

• Targeting mid-single digit annualized core loan growth and stable credit quality.

• Net interest income expected at $520-530M and noninterest income at $265-275M for FY2025.

• Noninterest expense projected at $530-540M for FY2025, excluding one-time M&A expenses.

• Management expects continued softness in mortgage banking due to interest rates and low inventory.

• Assumes two rate cuts totaling 50 bps in the second half of FY2025.