TowneBank (TOWN) Q2 2025 earnings summary

Executive summary

• Achieved record Q2 2025 revenue of $207.44 million, up 18.6% year-over-year, driven by organic loan growth and the Village Bank acquisition.

• Net income declined 9.4% year-over-year to $38.84 million ($0.51 per share), impacted by $18.74 million in acquisition-related expenses.

• Core net income rose 20.3% year-over-year, with core EPS up 19.1%.

• Completed Village Bank acquisition, adding $576.6 million in loans and $637.5 million in deposits; announced pending merger with Old Point Financial Corporation.

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

Financial highlights

• Net interest income increased 25.8% year-over-year to $137.21 million, with net interest margin expanding 51 bps to 3.40%.

• Total assets grew to $18.26 billion, loans to $12.36 billion, and deposits to $15.33 billion, all up over 7% year-over-year.

• Noninterest income rose 6.5% year-over-year, led by insurance, property management, and mortgage banking.

• Book value per share rose 7.1% to $29.58; tangible book value per share up 6.4% to $21.98.

• Allowance for credit losses at 1.09% of loans; nonperforming assets at 0.05% of total assets.

Outlook and guidance

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

• FY2025 net interest income expected at $545–555 million, noninterest income at $265–270 million, and noninterest expense at $525–535 million, excluding one-time M&A costs.

• Management expects the effective tax rate to normalize in the second half of 2025 after a temporary increase due to acquisition-related items.

• Mortgage banking expected to remain soft due to rate environment and low inventory.

• Anticipates continued strong capital and liquidity to support growth and further M&A activity.