About TowneBank

TowneBank offers retail and commercial banking services to numerous markets in Virginia and North Carolina. The company places special emphasis on serving the financial needs of individuals, commercial enterprises, and professionals. The company provides its members with complete residential real estate services, mortgage, personal and commercial insurance services, title-related services for both residential and commercial transactions, employee benefit services, and investment services. The company offers a diversified range of financial services through its banking and non-banking subsidiaries. Additionally, through two controlled divisions, the company provides investment and asset management services; and originates mortgage loans, the majority of which are sold to investors on the national secondary market. As of December 31, 2021, the company occupied an additional 143 properties, of which it owns 47, in the cities and counties in which the company operates. The company opened a full service banking office in Charlotte, North Carolina in 2021. The new 12,000-square-foot Myers Park financial center provides a full array of financial services to individuals, businesses, and community organizations. Segments The company operates through three segments: Banking, Realty, and Insurance. Banking The Banking segment provides loan and deposit services to retail and commercial customers. The company also provides commercial mortgage brokerage services and a variety of investment and asset management services. Realty The Realty segment provides residential real estate services and originations of a variety of mortgage loans. The company also provides resort property management and residential and commercial title insurance. Insurance The Insurance segment provides solutions for businesses, individuals, and community organizations. As an independent agency, Towne Insurance works with a variety of carriers to provide a wide array of insurance products, including property, casualty, life, and health insurance. Services The company provides its members with high-quality and responsive technology services. Members have easy access to its decision-makers and enjoy continuity in service relationships, allowing a fast response to meet their needs. The company plans to continue to pursue economically advantageous acquisitions and other strategic opportunities to grow its businesses. Banking and Other Financial Services The company’s capitalization provides a lending capacity to meet the credit needs of its targeted market segment. Further, the company has various loan participation agreements with other financial institutions should the need arise to meet the additional credit needs of its members. The company, through its Banking segment, offers a full range of deposit products, including checking accounts, savings accounts, and various types of time deposit services, which range from daily money market accounts to long-term certificates of deposit. The transaction accounts and certificates of deposit are tailored by market area at rates competitive to those offered in the area. In addition, the company offers retirement account services, such as Individual Retirement Accounts. All deposit accounts are insured by the Deposit Insurance Fund of the Federal Deposit Insurance Corporation (FDIC) up to the maximum amount allowed by law; and are solicited from individuals, businesses, associations and organizations, and governmental authorities. Other services offered include safe deposit boxes, treasury management services, direct deposit of payroll and Social Security checks, and automatic drafts for various accounts. In addition, services to facilitate access to banking information and transactions, such as online banking, mobile banking, and on-call banking, are offered. The company also offers a full range of short- to medium-term personal and commercial loans. Personal loans include secured and unsecured loans for financing automobiles, home improvements, education, and personal investments. Commercial loans include secured and unsecured loans for working capital (including inventory and receivables), business expansion (including the acquisition of real estate and improvements), and equipment and machinery purchases. Additionally, the company originates fixed- and floating-rate mortgage loans, as well as real estate acquisition, development, and construction loans. Through TowneBank Commercial Mortgage, LLC, the company brokers larger commercial loans that are not intended to remain in its portfolio. The company, through Towne 1031 Exchange, LLC, offers the ability to serve as a qualified intermediary assisting investors with tax-deferred exchanges under Section 1031 of the Internal Revenue Code. The company provides all necessary documentation to accomplish tax deferral while the investors' proceeds are safely held in accounts established at the company awaiting reinvestment as required by Internal Revenue Service regulations. The company, through Towne Investment Group and Towne Wealth Management, offers other financial services, such as financial, retirement, and estate planning. The company also offers assistance on a variety of investment options, including alternative investments, annuities, margin accounts, convertible bonds, and pension and profit-sharing plans. Towne Investment Group and Towne Wealth Management employ full-service financial advisors supported by an affiliation with Raymond James Financial, Inc., a full-service broker-dealer. Realty Services The full spectrum of services offered in the company’s Realty segment allows it to realize certain operational synergies in providing quality residential real estate services, originations of a variety of residential mortgages, and title services for residential and commercial title transactions. The company assists customers with the process of buying or selling a home. Additionally, the company provides other realty related services, including relocation services for individuals and families, including those in the military; and property management services for single-family homes, condominiums, townhomes, apartments, offices, vacation rentals, and retail establishments. The company’s vacation rentals business specializes in resort property management, offering vacation rentals with many of the most distinctive resort properties in Hilton Head, South Carolina; McHenry, Maryland; and Oak Island, North Carolina. In July 2021, the company acquired Venture Resorts, Inc. (Venture Resorts), one of the largest cabin rental companies in the Smoky Mountains. With close to 400 rental properties near the Tennessee destinations of Gatlinburg, Pigeon Forge, Wears Valley, and Sevierville, Venture Resorts provides accommodations for groups of all sizes visiting the Great Smoky Mountains National Park, the most visited national park in the United States. TowneBank Mortgage processes residential mortgage loans, from application acceptance to loan closing and funds disbursement. Once finalized, they are packaged and sold principally in the secondary market through purchase commitments from investors. In addition to relocation and property management services, the company offers title and settlement services, performs real estate closings for residential properties, and issues title insurance policies for both residential and commercial transactions. Insurance Services The Insurance segment provides individual and business members with a wide array of insurance products, including life, property, casualty, and health insurance. Through Towne Insurance, the company offers a full line of commercial and consumer insurance products and financial services. Through The Frieden Agency LLC (trading as Towne Benefits), the company offers individual and group life and health insurance. The company sold Red Sky Travel Insurance (Red Sky), a travel insurance joint venture, in 2020. Investment Portfolio As of December 31, 2021, the company’s investment portfolio included U.S. agency securities; U.S. Treasury notes; municipal securities; trust preferred corporate securities; and mortgage-backed securities. Strategy The company’s business strategy focuses on building strong relationships with its members, employees, and communities. Supervision and Regulation The company is organized as a Virginia chartered banking corporation and is regulated and supervised by the Bureau of Financial Institutions of the Virginia State Corporation Commission (Bureau of Financial Institutions). In addition, the company is regulated and supervised by the FDIC, which serves as its primary federal regulator. The company is also subject to the enforcement and rule-making authority of the Consumer Financial Protection Bureau (CFPB) regarding consumer financial products. Because the company’s assets exceed $10 billion, the company is subject to the Durbin Amendment promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018, which was signed into law on May 24, 2018, among other things, exempted banks with less than $250 billion in total consolidated assets, such as the company, from the enhanced prudential standards and the company-run and supervisory stress tests previously required under the Dodd-Frank Act. Substantially all of the company’s members' deposit accounts are insured up to applicable limits by the Deposit Insurance Fund (the ‘DIF’) of the FDIC. As such, the company is subject to insurance assessments on member deposits to maintain the DIF. Banks are subject to the provisions of the Community Reinvestment Act of 1977 (CRA) that requires the appropriate federal bank regulatory agency, the FDIC in the company’s case, to assess its record in meeting the credit needs of the communities the company serves. The company is subject to several federal laws that are designed to combat money laundering, terrorist financing, and transactions with certain persons, companies, or foreign governments designated by the U.S. authorities (AML laws). This category of laws includes the Bank Secrecy Act of 1970, the Money Laundering Control Act of 1986, the USA PATRIOT Act of 2001, and the Anti-Money Laundering Act of 2020. The company is responsible for, among other things, blocking accounts of, and transactions with, prohibited parties identified by the U.S. Treasury Department's Office of Foreign Assets Control, avoiding unlicensed trade and financial transactions with such parties and reporting blocked transactions after their occurrence. The company is subject to a number of federal and state consumer protection laws that extensively govern its relationship with its customers. These laws include the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Truth in Lending Act, the Truth in Savings Act, the Electronic Fund Transfer Act, the Expedited Funds Availability Act, the Home Mortgage Disclosure Act, the Fair Housing Act, the Real Estate Settlement Procedures Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, laws governing flood insurance, federal and state laws prohibiting unfair and deceptive business practices, foreclosure laws, and various regulations that implement some or all of the foregoing. The company’s mortgage origination activities are subject to the Board of Governors of the Federal Reserve System’s (Federal Reserve's) Regulation Z, which implements the Truth in Lending Act. The company is subject to the periodic reporting requirements of the Securities Exchange Act of 1934 (Exchange Act) as adopted by the FDIC, including the filing of annual, quarterly, and other reports with the FDIC. As an Exchange Act reporting bank with over $500 million in assets, the company is directly affected by the Sarbanes-Oxley Act of 2002 and regulations promulgated thereunder, which are aimed at improving corporate governance and reporting procedures. The company is also subject to the rules and listing standards adopted by The Nasdaq Stock Market, LLC. The company is complying with the rules and regulations implemented pursuant to the Sarbanes-Oxley Act and by The Nasdaq Stock Market, LLC. History TowneBank was founded in 1998. The company was incorporated under the laws of the Commonwealth of Virginia in 1998. The company commenced its operations in 1999.