NasdaqGS:TOWN

Stock Analysis Report

Executive Summary

TowneBank provides retail and commercial banking services for small- and medium-size businesses, professionals, and individuals.

Rewards

Trading at 14.7% below its fair value

Earnings have grown 24.3% per year over the past 5 years

Pays a high and reliable dividend of 2.62%

Risk Analysis

No risks detected for TOWN from our risk checks.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has TowneBank's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TOWN has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.07%

TOWN

0.3%

US Banks

0.9%

US Market


1 Year Return

-0.9%

TOWN

12.0%

US Banks

20.0%

US Market

Return vs Industry: TOWN underperformed the US Banks industry which returned 12.1% over the past year.

Return vs Market: TOWN underperformed the US Market which returned 20.1% over the past year.


Shareholder returns

TOWNIndustryMarket
7 Day-0.07%0.3%0.9%
30 Day-1.9%-1.3%1.4%
90 Day-2.8%1.2%8.8%
1 Year1.7%-0.9%15.3%12.0%22.5%20.0%
3 Year-11.1%-16.8%25.1%16.2%49.9%40.3%
5 Year98.0%76.8%76.7%56.6%73.2%54.1%

Price Volatility Vs. Market

How volatile is TowneBank's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TowneBank undervalued compared to its fair value and its price relative to the market?

14.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TOWN ($27.51) is trading below our estimate of fair value ($32.26)

Significantly Below Fair Value: TOWN is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TOWN is poor value based on its PE Ratio (14.3x) compared to the Banks industry average (12.6x).

PE vs Market: TOWN is good value based on its PE Ratio (14.3x) compared to the US market (18.4x).


Price to Earnings Growth Ratio

PEG Ratio: TOWN is poor value based on its PEG Ratio (10x)


Price to Book Ratio

PB vs Industry: TOWN is overvalued based on its PB Ratio (1.2x) compared to the US Banks industry average (1.2x).


Next Steps

Future Growth

How is TowneBank forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

1.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TOWN's forecast earnings growth (1.4% per year) is below the savings rate (1.7%).

Earnings vs Market: TOWN's earnings (1.4% per year) are forecast to grow slower than the US market (14.6% per year).

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

Revenue vs Market: TOWN's revenue (3% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: TOWN's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TOWN's Return on Equity is forecast to be low in 3 years time (8%).


Next Steps

Past Performance

How has TowneBank performed over the past 5 years?

24.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TOWN has high quality earnings.

Growing Profit Margin: TOWN's current net profit margins (25%) are lower than last year (25.5%).


Past Earnings Growth Analysis

Earnings Trend: TOWN's earnings have grown significantly by 24.3% per year over the past 5 years.

Accelerating Growth: TOWN's earnings growth over the past year (3.7%) is below its 5-year average (24.3% per year).

Earnings vs Industry: TOWN earnings growth over the past year (3.7%) underperformed the Banks industry 12.2%.


Return on Equity

High ROE: TOWN's Return on Equity (8.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

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


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: TOWN has a low level of unsold assets or inventory.

Debt Coverage by Assets: TOWN's debt is covered by short term assets (assets are 1.2x debt).


Financial Institutions Analysis

Asset Level: TOWN's level of assets compared to its equity is low.

Allowance for Bad Loans: TOWN has a sufficient allowance for bad loans.

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

Loan Level: TOWN has an acceptable proportion of non-loan assets held.

Low Risk Deposits: TOWN's loans are broadly funded by customer deposits.

Level of Bad Loans: TOWN has an appropriate level of bad loans (0.21%)


Next Steps

Dividend

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

2.62%

Current Dividend Yield


Dividend Yield vs Market

company2.6%marketbottom25%1.4%markettop25%3.7%industryaverage2.8%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: TOWN's dividend (2.62%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: TOWN's dividend (2.62%) is low compared to the top 25% of dividend payers in the US market (3.69%).


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

Dividend Coverage: With its reasonably low payout ratio (36.3%), TOWN's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TOWN's dividends in 3 years are forecast to be well covered by earnings (39.3% payout ratio).


Next Steps

Management

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

1.9yrs

Average management tenure


CEO

J. Davis (68yo)

1.9yrs

Tenure

US$2,090,269

Compensation

Mr. J. Morgan Davis has been Chief Executive Officer, President TowneBank since March 2018.And he was Chief Banking Officer at TowneBank since March 2018. Mr. Davis served as the President and Chief Bankin ...


CEO Compensation Analysis

Compensation vs Market: J.'s total compensation ($USD2.09M) is below average for companies of similar size in the US market ($USD3.78M).

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


Leadership Team

NamePositionTenureCompensationOwnership
G. Aston
Executive Chairman22.1yrsUS$2.35m0.60% $11.9m
J. Davis
President1.9yrsUS$2.09m0.20% $4.0m
William Littreal
Senior EVP1.9yrsUS$1.19m0.089% $1.8m
Brad Schwartz
Senior EVP3.7yrsUS$1.19m0.14% $2.8m
Kevin Fly
Senior EVP & Chief Accounting Officer1.8yrsno data0.011% $218.6k
George Whitley
Chief Legal Officer & Senior EVP of Virginia Business3.3yrsno data0.029% $570.7k
Scott Williams
Executive VP and Director of Marketing & Member Experience1.1yrsno datano data
R. Clark
Senior EVP & Chief Human Resources Officer1.1yrsno datano data
Thomas Hasty
Senior Executive Vice President of Risk Management21.1yrsno datano data
Shirley Sasser
Senior VP & Director of Corporate Sales0yrsno datano data

1.9yrs

Average Tenure

63yo

Average Age

Experienced Management: TOWN's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
G. Aston
Executive Chairman22.1yrsUS$2.35m0.60% $11.9m
J. Davis
President1.9yrsUS$2.09m0.20% $4.0m
Brad Schwartz
Senior EVP3.7yrsUS$1.19m0.14% $2.8m
William Foster
President of Commercial and Real Estate Banking & Director14.8yrsno data0.026% $505.9k
Gordon Gentry
Chairman of TowneBank Peninsula0yrsUS$53.21k0.28% $5.6m
Jeffrey Benson
Vice Chairman of the Board3.7yrsUS$53.38k0.16% $3.1m
William Lewis
Independent Director21.1yrsUS$48.73k0.12% $2.3m
John Failes
Vice Chairman of the Board0yrsUS$54.58k0.078% $1.5m
Jacqueline Amato
Director0yrsUS$3.62m0.18% $3.6m
Richard Bray
Lead Director3yrsUS$62.68k0.10% $2.0m

14.8yrs

Average Tenure

71yo

Average Age

Experienced Board: TOWN's board of directors are seasoned and experienced ( 14.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: TOWN insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

TowneBank's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TowneBank
  • Ticker: TOWN
  • Exchange: NasdaqGS
  • Founded: 1998
  • Industry: Regional Banks
  • Sector: Banks
  • Market Cap: US$1.976b
  • Shares outstanding: 71.83m
  • Website: https://www.townebank.com

Number of Employees


Location

  • TowneBank
  • 5716 High Street West
  • Portsmouth
  • Virginia
  • 23703
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TOWNNasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDMay 1999
3T8DB (Deutsche Boerse AG)YesCommon StockDEEURMay 1999

Biography

TowneBank provides retail and commercial banking services for small- and medium-size businesses, professionals, and individuals. The company operates in three segments: Banking, Realty, and Insurance. It accepts various deposits products, including demand deposits, savings accounts, money rate savings, certificates of deposit, and individual retirement accounts, and negotiable order of withdrawal accounts. The company also offers secured and unsecured personal loans for financing automobiles, home improvements, education, and personal investments; commercial loans for working capital, business expansion, and equipment and machinery purchases; and mortgage loans, as well as real estate acquisition, development, and construction loans. In addition, it provides other services, such as safe deposit boxes, cash management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as Internet, mobile, and on-call banking services. Further, the company offers documentation services to accomplish tax deferral to investors; investment and asset management services; commercial mortgage brokerage services; and other financial services, such as financial, retirement, and estate planning services, as well as assistance on various investment options, such as alternative investments, annuities, margin accounts, convertible bonds, and pension and profit sharing plans. Additionally, it provides residential real estate, relocation, property management, vacations rental, and title and settlement services; and originates residential mortgage loans. The company offers life, property, casualty, travel, and vehicle insurance services; medical, and baggage protection insurance for travelers; and employee benefit programs, such as medical, dental, vision, and disability insurance. As of February 27, 2019, it operated 41 banking offices in Virginia and North Carolina. TowneBank was founded in 1998 and is based in Portsmouth, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 23:46
End of Day Share Price2020/02/14 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.