TowneBank (TOWN) AI Stock Analysis

• Market Cap: $2.65B
• Dividend Yield: 2.92%
• Average Volume (3M): 268.83K
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.93
• Revenue Growth: 8.35%
• EPS Growth: 14.42%
• Country: US
• Employees: 2,704
• Sector: Financial
• Sector Strength: 67
• Industry: Banks - Regional
• EPS (TTM): 0.81
• Shares Outstanding: 75,152,570
• 10 Day Avg. Volume: 269,558
• 30 Day Avg. Volume: 268,832
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 2.84
• Enterprise Value/Gross Profit: 3.83
• Enterprise Value/Ebitda: 11.30
• 1Y Price Target: $42.00
• Price Target Upside: 20.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 70 Outperform
• Price Target: $37.00 ▲(5.93% Upside)

TowneBank's strong financial performance, characterized by robust profit margins and effective cash management, is the most significant factor contributing to its score. The reasonable valuation and stable dividend yield also support its attractiveness, although technical indicators suggest a neutral market sentiment.

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 credit services, including mortgages, commercial loans, and personal loans. Additionally, the bank earns non-interest income through fees and service charges associated with deposit accounts, transaction processing, and other banking services. Its wealth management and insurance divisions also contribute to revenue through advisory fees, investment management, and premium income. TowneBank's strategic partnerships with local businesses and community organizations, along with its focus on personalized customer service, play a significant role in attracting and retaining clients, thereby supporting its earnings.

TowneBank Financial Statement Overview

Summary

TowneBank exhibits strong financial health characterized by solid profitability, a stable balance sheet, and effective cash flow management. Despite modest revenue growth, the bank maintains impressive profit margins and low leverage, indicating a robust financial position.

Income Statement

TowneBank shows strong profitability metrics with a consistent increase in total revenue over the years, indicating a positive growth trajectory. The TTM data reveals a gross profit margin of approximately 69.3%, and a net profit margin of 17.2%, both of which are commendable for a regional bank. The EBIT and EBITDA margins are also robust at 20.1% and 23.4% respectively, demonstrating operational efficiency. However, the revenue growth rate from the previous year is modest at 0.91%, which suggests a need for acceleration in revenue generation.

Balance Sheet

The balance sheet remains stable with a debt-to-equity ratio of 0.13, indicating low leverage and a strong capacity to manage debt. The equity ratio stands at 12.6%, highlighting a stable financial foundation. The return on equity (ROE) is 8.1%, which, while positive, suggests room for improvement to enhance shareholder returns. Overall, the balance sheet reflects a sound financial position with limited leverage risks.

Cash Flow

Cash flow analysis reveals strong cash management with a healthy free cash flow growth rate of 101.7% year-over-year. The operating cash flow to net income ratio is 1.25, indicating effective cash conversion. The free cash flow to net income ratio of 0.92 shows efficient capital expenditure management. The cash flow statement underscores TowneBank's ability to generate and manage cash effectively, supporting operational and strategic initiatives.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.02B	942.55M	742.95M	720.08M	742.25M
Gross Profit	692.51M	676.41M	677.14M	695.77M	595.06M
EBITDA	225.55M	220.44M	265.75M	310.96M	230.39M
Net Income	161.76M	153.72M	188.99M	215.38M	145.53M
Balance Sheet
Total Assets	17.25B	16.84B	15.85B	16.36B	14.63B
Cash, Cash Equivalents and Short-Term Investments	1.40B	3.26B	2.99B	5.10B	3.23B
Total Debt	296.90M	492.58M	318.01M	481.82M	772.88M
Total Liabilities	15.09B	14.78B	13.96B	14.45B	12.84B
Stockholders Equity	2.14B	2.04B	1.87B	1.90B	1.77B
Cash Flow
Free Cash Flow	81.09M	117.17M	363.22M	487.62M	82.10M
Operating Cash Flow	138.36M	161.30M	415.50M	518.82M	127.89M
Investing Cash Flow	-202.77M	-335.68M	-2.05B	-547.36M	-1.12B
Financing Cash Flow	275.53M	149.90M	-512.10M	1.46B	2.41B

TowneBank Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 34.93
• 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 Neutral. The current price of 34.93 is below the 20-day moving average (MA) of 35.45, above the 50-day MA of 34.66, and above the 200-day MA of 34.21, indicating a neutral trend. The MACD of 0.06 indicates Positive momentum. The RSI at 47.53 is Neutral, neither overbought nor oversold. The STOCH value of 42.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TOWN.

TowneBank Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CVBF	73 Outperform	$2.64B	13.17	21.98%	4.35%	-5.14%	-0.94%
INDB	72 Outperform	$3.21B	14.48	6.29%	3.74%	3.67%	-10.83%
PRK	72 Outperform	$2.58B	15.62	13.49%	2.97%	10.28%	22.73%
BKU	70 Outperform	$2.69B	10.51	8.98%	3.37%	-2.81%	51.85%
TOWN	70 Outperform	$2.65B	15.32	8.07%	2.92%	8.35%	14.42%
SFNC	66 Neutral	$2.75B	15.01	4.57%	4.44%	-0.30%	6.05%
Sector *	63 Neutral	€13.46B	9.53	5.49%	3.96%	13.93%	9.46%