TowneBank (TOWN) AI Stock Analysis

• Market Cap: $3.23B
• Dividend Yield: 3.04%
• Average Volume (3M): 311.39K
• Price to Earnings (P/E): 15.8
• Beta (1Y): 0.85
• Revenue Growth: 9.48%
• EPS Growth: 12.83%
• Country: US
• Employees: 2,704
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.70
• Shares Outstanding: 92,247,390
• 10 Day Avg. Volume: 360,092
• 30 Day Avg. Volume: 311,389
• PEG Ratio: 5.44
• Price to Book (P/B): 1.06
• Price to Sales (P/S): 3.15
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 0.85
• Enterprise Value/Revenue: 2.63
• Enterprise Value/Gross Profit: 3.40
• Enterprise Value/Ebitda: 10.74
• 1Y Price Target: $40.00
• Price Target Upside: 14.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $41.00 ▲(17.14% Upside)

TowneBank's overall stock score is driven by its solid financial performance and stable valuation metrics. The technical analysis presents mixed signals, with short-term bullish momentum but potential resistance in the medium to long term. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Strong free cash flow growth

Nearly doubling free cash flow on a TTM basis indicates durable cash generation capacity. This strengthens the bank's ability to fund organic growth, support dividends, pursue targeted M&A, and build loss-absorbing reserves without relying on volatile market funding.

Conservative balance sheet with low leverage

A very low debt-to-equity ratio reflects conservative financial policy and a strong capital base. Over the medium term this enhances resilience to credit cycles, supports regulatory capital requirements, and provides flexibility to expand lending or absorb localized loan losses.

Strategic regional expansion via Dogwood merger

The Dogwood acquisition materially expands TowneBank's franchise along the fast-growing I-85 corridor and coastal NC/SC markets, adds local leadership, and broadens deposit and loan sourcing. This structural footprint expansion can drive sustained revenue growth and diversification.

Negative Factors

Modest return on equity

An ROE near 7.5% suggests limited profitability relative to equity capital and may constrain long-term shareholder returns. Persistently modest ROE reduces capacity to organically boost book value per share and may force reliance on expense cuts or higher-risk growth to lift returns.

Declining net profit margin

A shrinking net margin signals pressure on core profitability, which can erode earnings power over time. Unless margins stabilize, the bank may face muted earnings growth even with revenue gains, limiting reinvestment capacity and reducing resilience to rate or credit shocks.

Low operating cash flow to net income conversion

Weak conversion of accounting earnings into operating cash flow raises concerns about the quality and sustainability of reported profits. Over months, this can constrain liquidity available for lending, dividends, or capital needs, and heighten sensitivity to credit or deposit stress.

TowneBank Business Overview & Revenue Model

Company Description

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. 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, treasury management services, direct deposit of payroll and social security checks, and automatic drafts for various accounts, as well as online, 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 comprising 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 also offers life, property, casualty, and vehicle insurance services; and employee benefit programs, such as health, dental, vision, and disability insurance. It operates in Richmond, Virginia, the Greater Hampton Roads region in southeastern Virginia, northeastern North Carolina, Raleigh, Charlotte, Greensboro, and Greenville, North Carolina. TowneBank was incorporated in 1998 and is headquartered in Portsmouth, Virginia.

How the Company Makes Money

TowneBank generates revenue primarily through interest income from loans and investments, as well as non-interest income from service fees and commissions. The key revenue streams include interest from commercial and residential loans, which are a significant portion of the bank's portfolio, and fees associated with deposit accounts and other banking services. Additionally, TowneBank earns income from its wealth management services, which involve investment advisory and trust services for clients. The bank may also benefit from strategic partnerships with local businesses and organizations that enhance its service offerings and customer base, contributing to overall earnings.

TowneBank Financial Statement Overview

Summary

TowneBank exhibits solid financial performance with consistent revenue growth and strong cash flow generation. The company maintains a stable balance sheet with low leverage, although profitability metrics show some room for improvement. Efficient operations and effective cash management position the bank well for future growth.

Income Statement

TowneBank's income statement shows a consistent revenue growth trend with a TTM growth rate of 2.68%. The gross profit margin is strong at 70.87%, indicating efficient cost management. However, the net profit margin has slightly decreased to 15.71% from previous periods, suggesting some pressure on profitability. The EBIT and EBITDA margins remain healthy, reflecting good operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.15, indicating conservative leverage. The return on equity is modest at 7.51%, showing moderate profitability relative to equity. The equity ratio is strong, suggesting a solid capital structure with a good proportion of equity financing.

Cash Flow

Cash flow analysis reveals a significant improvement in free cash flow growth at 96.59% TTM, highlighting strong cash generation capabilities. The operating cash flow to net income ratio is low, indicating potential challenges in converting income into cash. However, the free cash flow to net income ratio is robust at 81.95%, demonstrating effective cash management.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	811.78M	1.02B	942.55M	742.95M	720.08M
Gross Profit	811.78M	692.51M	676.41M	677.77M	695.77M
EBITDA	265.44M	225.55M	220.44M	265.75M	308.63M
Net Income	169.53M	161.76M	153.72M	188.99M	215.38M
Balance Sheet
Total Assets	19.69B	17.25B	16.84B	15.85B	16.36B
Cash, Cash Equivalents and Short-Term Investments	0.00	1.40B	3.26B	2.99B	5.10B
Total Debt	336.32M	296.90M	492.58M	318.01M	481.82M
Total Liabilities	17.26B	15.09B	14.78B	13.96B	14.45B
Stockholders Equity	2.42B	2.14B	2.04B	1.87B	1.90B
Cash Flow
Free Cash Flow	0.00	81.09M	117.17M	363.22M	487.62M
Operating Cash Flow	0.00	138.36M	161.30M	415.50M	518.82M
Investing Cash Flow	0.00	-202.77M	-335.68M	-2.05B	-547.36M
Financing Cash Flow	0.00	275.53M	149.90M	-512.10M	1.46B

TowneBank Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TOWN, the sentiment is Positive. The current price of 35 is below the 20-day moving average (MA) of 35.11, above the 50-day MA of 34.37, and above the 200-day MA of 34.07, indicating a neutral trend. The MACD of 0.44 indicates Positive momentum. The RSI at 49.43 is Neutral, neither overbought nor oversold. The STOCH value of 38.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TOWN.

TowneBank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSBC	75 Outperform	$3.39B	15.86	6.54%	4.35%	41.49%	-5.53%
CVBF	73 Outperform	$2.67B	12.97	9.10%	4.00%	-8.43%	3.75%
FBK	72 Outperform	$3.08B	23.48	6.98%	1.34%	10.50%	-6.22%
TOWN	70 Outperform	$3.23B	15.84	7.37%	3.04%	9.48%	12.83%
BKU	70 Outperform	$3.57B	13.46	8.97%	2.71%	-5.44%	45.47%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
SFNC	62 Neutral	$2.94B	-7.30	-12.42%	4.41%	-55.53%	-387.04%