TowneBank : Investor Presentation - Third Quarter 2023

Investor Presentation

3rd Quarter 2023

Cautionary Statements

Forward Looking:

This presentation 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 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; changes in the creditworthiness of customers and the possible impairment of the collectability of loans; 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; unusual and infrequently occurring events such as weather-related or natural disasters, acts of war or terrorism, or public health events (such as the COVID-19 pandemic); changes in the legislative or regulatory environment, including changes in accounting standards and tax laws, that may adversely affect our business; costs or difficulties related to the integration of the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; cybersecurity threats or attacks, the implementation of new technologies, and the ability to develop and maintain reliable electronic systems; our competitors 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. 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 presentation, see the "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, our Quarterly Report on Form 10-Q for the period ended June 30, 2023, and related disclosures in other filings that have been, or will be, filed by TowneBank with the Federal Deposit Insurance Corporation.

Non-GAAP Financial Measures:

This presentation 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.

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TowneBank at a Glance

Over
20 Years	Deposit Market Share
Consistent Earnings	#1 in Hampton Roads1
and Growth
Total Assets	Total Loans	Total Deposits
$16.7B	$11.2B	$13.9B

Ranked on

Top 50

Best Banks List2

Earnings Growth

25.9%

CAGR FY00 - FY22

Core ROAA	Core ROTCE	NIM (FTE)
1.06%	13.12%	2.98%

1. Source: FDIC Summary of Deposits for the VA Beach-Norfolk-Newport News, VA MSA, data as of June 30,2023
2. © 2022, Forbes Media LLC. Used with permission.
3. Total Return as of 9/29/2023; Source: S&P Global, data collected 10/13/2023.
4. Financial results for the quarter ending September 30, 2023.

NIB Deposits / Total Deposits

32.02%

10 Year Total Shareholder

Return3

109%

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Introduction

4

About TowneBank

Commitment

We value all employees and members by embracing their diverse talents, perspectives, and experiences, and by fostering inclusion that inspires innovation, encourages respect, and promotes success.

Mission

We will be a relationship and friendship driven local bank focused on basic human values that will serve to create a warm sense of belonging and financial well-being among our family members.

Strategy

We will offer a competitive array of business and personal financial services, delivered with only the highest ethical standards. Our commitment to exquisite service for our members will lead to our ability to create a reasonable rate of return for our shareholders, a bright future for our dedicated bankers, and a leadership role for our bank in promoting the social, cultural, and economic well-being of our community.

Community Commitment

We will strive to be a source of community pride by being a leader in community support activities through involvement of Towne family members, and the funding and fundraising activities of the TowneBank Foundation.

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Unique Value Proposition

• BANKING
• WEALTH MANAGEMENT
• INSURANCE
• MORTGAGE
• PROPERTY MANAGEMENT

(1) Source: S&P Global, Ownership Summary data as of 10/18/2023

Superior

Shareholder

Value

Extraordinary

Member

Experiences

Commitment to

Community Service

& Engagement

Super Community

Bank Model

Culture

of Caring

Local

Decision

Making

Invested

Insider

Ownership

(8.2%)1

Embracing Diverse

Talents, Perspectives

& Experiences

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Disciplined Acquirer and Experienced Integrator

Total Assets [Dollars in billions]

TOTAL ASSETS	$16.7 B

$16.4 $16.7

$15.8

$14.6

Organic	$11.6 B
Acquired	$5.1 B	$11.9

$0.9 $1.4 $1.8 $2.2 $2.5

	$11.2
$8.0	$8.5

$6.3

$3.1 $3.6 $3.9 $4.1 $4.4 $4.7 $5.0

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022 Q3-FY23

Harbor		Bank of
		Franklin
Bank		Currituck		Financial Corp.
$272 million in		$173 million in		$1.1 billion in
Total Assets		Total Assets		Total Assets
Newport News-		NE N. Carolina		Richmond,
Hampton, VA		(Outer Banks)		VA MSA

	Monarch			Paragon		Farmers
	Financial			Commercial		Bank
Holdings, Inc.			Corp.		$603 million in
$1.2 billion in			$1.8 billion in		Total Assets
			Hampton Roads,
Total Assets			Total Assets
			VA MSA
Hampton Roads,			Charlotte & Raleigh,
	VA MSA			NC MSA

7

Diversified Business Model

Total Revenue

Noninterest Income1

YTD Q3-	65%	35%
FY23
FY2022	67%	33%
FY2021	59%	41%
FY2020	57%	43%
FY2019	64%	36%
			Net Interest Income		Noninterest Income

1. Normalized noninterest income excludes gain (loss) on investment securities, gain of $544 thousand on sale of Beneflex (2023), gain of $8.83 million on sale of BHHS Towne Realty (2023) and the gain of $17.6 million on the sale of Red Sky Travel Insurance (2020)

YTD Q3-	18%	43%	39%
FY23
FY2022	18%	49%	33%
FY2021	13%	63%	24%
FY2020	14%	61%	25%
FY2019	17%	52%	31%
		Banking Segment		Realty Segment		Insurance Segment

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Balance Sheet: Consistency & Stability

Total Assets [Dollars in billions]			Total Loans [Dollars in billions]			Total Deposits [Dollars in billions]
$16.4		$16.7
$15.8								$13.9
					$13.6
$14.6						$13.3
					$11.2
					$10.8
		$9.6		$11.6
$11.9		$9.5

$8.4	$9.3

FY2019 FY2020 FY2021 FY2022 Q3-FY23

FY2019 FY2020 FY2021 FY2022 Q3-FY23

FY2019 FY2020 FY2021 FY2022 Q3-FY23

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Our Bank Reach

Richmond	Hampton Roads
#5 Market Share	#1 Market Share
27 Competing Banks	22 Competing Banks

Hampton Roads		Triangle/Greenville
Loans	$5.4 billion		Loans	$2.1 billion
Deposits	$8.6 billion		Deposits	$1.6 billion	Greensboro
Branches	27		Branches	3	#16 Market Share
Avg Branch	$319 million		Avg Branch	$539 million	24 Competing Banks

Richmond			Charlotte
Loans	$1.2 billion		Loans	$1.2 billion
Deposits	$1.5 billion		Deposits	$917 million
Branches	9		Branches	3
Avg Branch	$164 million		Avg Branch	$306 million

NE North Carolina	Greensboro
Loans	$320 million	Loans	$241 million	Charlotte
Deposits	$692 million	Deposits	$124 million	#11 Market Share	Triangle		NE North Carolina
49 Competing Banks
Branches	6	Branches	1	#6 Market Share		#1 Market Share
			36 Competing Banks		9 Competing Banks
Avg Branch	$115 million	Avg Branch	$124 million

(1) Deposit data from FDIC Market Share Report as of June 30, 2023; Competing Banks' count excludes institutions with no deposits in stated market regardless of physical or other presence

Greenville

#8 Market Share

13 Competing Banks

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