TowneBank (NasdaqGS:TOWN) - Share price, News & Analysis

Q: What is the Fair Price of TOWN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TOWN ($28.09) is trading below our estimate of [[fair value]] ($53.46)

TOWN fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	2/6
Financial Health	6/6
Dividends	4/6

TOWN Stock Overview

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals.

Rewards

Trading at 47.5% below our estimate of its fair value

Earnings are forecast to grow 4.14% per year

Earnings have grown 19.1% per year over the past 5 years

Pays a reliable dividend of 3.28%

Risk Analysis

No risks detected for TOWN from our risk checks.

TowneBank Competitors

Seacoast Banking Corporation of Florida

NasdaqGS:SBCF

US$2.1b

Park National

NYSEAM:PRK

US$2.0b

WesBanco

NasdaqGS:WSBC

US$1.9b

Hilltop Holdings

NYSE:HTH

US$2.2b

Price History & Performance

Summary of all time highs, changes and price drops for TowneBank
Historical stock prices
Current Share Price	US$28.09
52 Week High	US$34.79
52 Week Low	US$27.01
Beta	0.99
1 Month Change	-4.91%
3 Month Change	-9.77%
1 Year Change	-8.35%
3 Year Change	2.78%
5 Year Change	-10.40%
Change since IPO	325.72%

Recent News & Updates

Jun 21

TowneBank's (NASDAQ:TOWN) Dividend Will Be Increased To US$0.23

The board of TowneBank ( NASDAQ:TOWN ) has announced that it will be increasing its dividend on the 12th of July to...

Shareholder Returns

	TOWN	US Banks	US Market
7D	2.2%	3.2%	6.3%
1Y	-8.4%	-17.3%	-18.8%

Return vs Industry: TOWN exceeded the US Banks industry which returned -17.7% over the past year.

Return vs Market: TOWN exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is TOWN's price volatile compared to industry and market?
TOWN volatility
TOWN Average Weekly Movement	3.5%
Banks Industry Average Movement	3.8%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	3.2%

Stable Share Price: TOWN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: TOWN's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1998	2,795	J. Davis	https://www.townebank.com

TowneBank provides retail and commercial banking services for individuals, commercial enterprises, and professionals. The company operates through three segments: Banking, Realty, and Insurance. It accepts various deposits, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts.

TowneBank Fundamentals Summary

How do TowneBank's earnings and revenue compare to its market cap?
TOWN fundamental statistics
Market Cap	US$1.99b
Earnings (TTM)	US$191.97m
Revenue (TTM)	US$677.43m

10.4x

P/E Ratio

1.1x

P/B Ratio

Is TOWN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TOWN income statement (TTM)
Revenue	US$677.43m
Cost of Revenue	US$0
Gross Profit	US$677.43m
Other Expenses	US$485.46m
Earnings	US$191.97m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.71
Gross Margin	100.00%
Net Profit Margin	28.34%
Debt/Equity Ratio	33.4%

How did TOWN perform over the long term?

See historical performance and comparison

Dividends

3.3%

Current Dividend Yield

30%

Payout Ratio

Does TOWN pay a reliable dividends?

See TOWN dividend history and benchmarks

When do you need to buy TOWN by to receive an upcoming dividend?
TowneBank dividend dates
Ex Dividend Date	Jun 29 2022
Dividend Pay Date	Jul 12 2022
Days until Ex dividend	0 days
Days until Dividend pay date	13 days

Does TOWN pay a reliable dividends?

See TOWN dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is TOWN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TOWN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TOWN. This is calculated by dividing TOWN's market cap by their current preferred multiple.
What is TOWN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.99b

TOWN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	2.5x

Price to Earnings Ratio vs Peers

How does TOWN's PE Ratio compare to its peers?

TOWN PE Ratio vs Peers

The above table shows the PE ratio for TOWN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	12.3x
SBCF Seacoast Banking Corporation of Florida	18.5x	43.1%	US$2.1b
PRK Park National	13.2x	-2.6%	US$2.0b
WSBC WesBanco	9.5x	-3.5%	US$1.9b
HTH Hilltop Holdings	7.9x	-16.9%	US$2.2b
TOWN TowneBank	10.4x	4.1%	US$2.0b

Forward PE

Price-To-Earnings vs Peers: TOWN is good value based on its Price-To-Earnings Ratio (10.4x) compared to the peer average (12.3x).

Price to Earnings Ratio vs Industry

How does TOWN's PE Ratio compare vs other companies in the US Banks Industry?

Price-To-Earnings vs Industry: TOWN is expensive based on its Price-To-Earnings Ratio (10.4x) compared to the US Banks industry average (9.6x)

Price to Earnings Ratio vs Fair Ratio

What is TOWN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TOWN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.4x
Fair PE Ratio	12.3x

Price-To-Earnings vs Fair Ratio: TOWN is good value based on its Price-To-Earnings Ratio (10.4x) compared to the estimated Fair Price-To-Earnings Ratio (12.3x).

Share Price vs Fair Value

What is the Fair Price of TOWN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TOWN ($28.09) is trading below our estimate of fair value ($53.46)

Significantly Below Fair Value: TOWN is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: TOWN is poor value based on its PEG Ratio (2.5x)

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Future Growth

How is TowneBank forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

4.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TOWN's forecast earnings growth (4.1% per year) is above the savings rate (1.9%).

Earnings vs Market: TOWN's earnings (4.1% per year) are forecast to grow slower than the US market (13.9% per year).

High Growth Earnings: TOWN's earnings are forecast to grow, but not significantly.

Revenue vs Market: TOWN's revenue (4.4% per year) is forecast to grow slower than the US market (8.4% per year).

High Growth Revenue: TOWN's revenue (4.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if TOWN's Return on Equity is forecast to be high in 3 years time

Discover growth companies

Past Performance

How has TowneBank performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

19.1%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TOWN has high quality earnings.

Growing Profit Margin: TOWN's current net profit margins (28.3%) are lower than last year (28.8%).

Past Earnings Growth Analysis

Earnings Trend: TOWN's earnings have grown by 19.1% per year over the past 5 years.

Accelerating Growth: TOWN's earnings growth over the past year (2%) is below its 5-year average (19.1% per year).

Earnings vs Industry: TOWN earnings growth over the past year (2%) underperformed the Banks industry 20.7%.

Return on Equity

High ROE: TOWN's Return on Equity (10.6%) is considered low.

Discover strong past performing companies

Financial Health

How is TowneBank's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

Asset Level
Allowance for Bad Loans
Low Risk Liabilities
Loan Level
Low Risk Deposits
Level of Bad Loans

Financial Position Analysis

Debt to Equity History and Analysis

Balance Sheet

Financial Institutions Analysis

Asset Level: TOWN's Assets to Equity ratio (8.9x) is low.

Allowance for Bad Loans: TOWN has a sufficient allowance for bad loans (2152%).

Low Risk Liabilities: 93% of TOWN's liabilities are made up of primarily low risk sources of funding.

Loan Level: TOWN has an appropriate level of Loans to Assets ratio (59%).

Low Risk Deposits: TOWN's Loans to Deposits ratio (71%) is appropriate.

Level of Bad Loans: TOWN has an appropriate level of bad loans (0%).

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Dividend

What is TowneBank current dividend yield, its reliability and sustainability?

Dividend Score

4/6

Dividend Score 4/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.28%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: TOWN's dividend (3.28%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: TOWN's dividend (3.28%) is low compared to the top 25% of dividend payers in the US market (4.23%).

Stability and Growth of Payments

Stable Dividend: TOWN's dividends per share have been stable in the past 10 years.

Growing Dividend: TOWN's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (30.2%), TOWN's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years or that it will be covered by earnings.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.0yrs

Average management tenure

CEO

J. Davis (70 yo)

4.25yrs

Tenure

US$1,726,871

Compensation

Mr. J. Morgan Davis has been Chief Executive Officer TowneBank since March 2018 and served as its President since 2011 until July 2021. Mr. Davis served as the President and Chief Banking Officer of TowneB...

CEO Compensation Analysis

Compensation vs Market: J.'s total compensation ($USD1.73M) is below average for companies of similar size in the US market ($USD5.46M).

Compensation vs Earnings: J.'s compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: TOWN's management team is considered experienced (5 years average tenure).

Board Members

Experienced Board: TOWN's board of directors are seasoned and experienced ( 18.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: TOWN insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31