Forward-Looking Statements Statements made in this presentation, - - PowerPoint PPT Presentation

2016 AND FOURTH QUARTER UPDATE

Forward-Looking Statements

Statements made in this presentation, other than those concerning reported historical financial information, may be considered forward-looking statements, which speak only as of the date of this presentation, are based on current expectations, and involve a number of assumptions. These include statements as to the anticipated benefits of TowneBank’s proposed merger with Paragon Commercial Corporation (“Paragon”), including future financial and operating results, cost savings and enhanced revenues that may be realized from the merger as well as other statements of expectations regarding the merger and any other statements regarding future results or expectations. TowneBank intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of these safe harbor provisions. TowneBank’s ability to predict results, or the actual effect

• f future plans or strategies, is inherently uncertain. Factors which could have a material effect on the operations and future

prospects of TowneBank, and the resulting company after the proposed merger, include but are not limited to: the businesses of TowneBank and Paragon may not be integrated successfully or such integration may be more difficult, time-consuming or costly than expected; expected revenue synergies and cost savings from the merger may not be fully realized or realized within the expected timeframe; revenues following the merger may be lower than expected; customer and employee relationships and business operations may be disrupted by the merger; the ability to obtain required regulatory and stockholder approvals, and the ability to complete the merger on the expected timeframe may be more difficult, time-consuming or costly than expected; changes in interest rates, general economic and business conditions; legislative/regulatory changes; the monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Board of Governors of the Federal Reserve System; the quality and composition of the loan and securities portfolios; demand for loan products; deposit flows; competition; demand for financial services in the companies’ respective market areas; the companies’ respective implementation of new technologies and their ability to develop and maintain secure and reliable electronic systems; changes in the securities markets; and changes in accounting principles, policies and guidelines; and other risk factors detailed from time to time in filings made by TowneBank with the Federal Deposit Insurance Corporation (“FDIC”) or Paragon with the Securities and Exchange Commission (“SEC”). TowneBank undertakes no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise.

6001 Harbour View Blvd Suffolk, VA 23435 757-638-6701 www.townebank.com

Additional Information

Please Contact: William B. Littreal 757-638-6813 William.Littreal@townebank.net

Corporate Headquarters

2

Non-GAAP Financial Measures

This presentation contains certain non-GAAP 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

• perating earning, core net income, tangible book value per common share, total risk-based capital ratio, tier
• ne 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

• r in the appendix to this presentation.

3

Sincerely,

• G. Robert Aston, Jr.

Chairman and Chief Executive Officer The Towne story began in my home garage in the summer of 1998 when a small group of long-time friends and banking associates came together to lay the foundation for what was to become

• TowneBank. With caring as a specific business strategy and a deep-rooted passion for service to others,
• ur defined culture for Towne set us on a course to begin building a great community asset for our

hometown community in the Hampton Roads Region of Virginia and expanded to Richmond, VA MSA. Our initial stock offering was substantially oversubscribed as over 4,000 community shareholders invested over $50 million in what was the largest capitalization of a new bank in Virginia history. In another first, we actually returned $13 million to our subscribers and limited any one shareholder to a maximum investment of $250,000. This extraordinary level of capital coupled with the reputation our bankers enjoyed with the banking regulators allowed the bank to open with 90 hometown bankers and three banking centers located in the cities of Virginia Beach, Chesapeake and Portsmouth. More than a bank, Towne has emerged as a family of companies providing wealth management, insurance, real estate brokerage, residential and vacation property management along with commercial and residential mortgage services. As a tribute to our early investors and community supporters, Towne now has assets over $8.6 billion, an enviable record of 18 consecutive years of increased earnings, and has returned over $178 million in common dividends since our opening on April 8, 1999. As you review the information contained in this Investor Presentation, please know that we welcome you to join our TowneBank family of investors and supporters as we embark on a new and continued journey as a growth company.

Welcome to TowneBank (TOWN)

4

Why TowneBank?

¹ Financial information as of or for the period ended September 30, 2017. ² Nonperforming assets excluding restructured loans (nonaccrual loans, real estate owned and repossessed assets) as a percent of total assets.

Dominant Deposit Market Share

Dominant deposit market share in legacy markets and a scalable deposit platform in Paragon Bank’s NC (PBNC) high-growth Raleigh and Charlotte markets

Efficient Branch Strategy

$176.9 million average branch size ¹

Disciplined Acquirer and Experienced Integrator

Successfully completed and integrated two acquisitions since 2014 and recently announced acquisition of Paragon Bank NC (PBNC)

Consistent Earnings Growth

17 consecutive years of earnings growth (inclusive of the financial crisis)

Diversified Business Model

42.5% of revenue base is comprised

• f non-interest income driven by

insurance and mortgage banking businesses ¹

Strong Asset Quality & Credit Focused Culture

NPAs ²/ Assets - 0.39% & NCOs / Average Loans HFI - 0.03% ¹

5

$0.2 $0.4 $0.6 $0.8 $0.9 $1.4 $1.8 $2.2 $2.5 $3.1 $3.6 $3.9 $4.1 $4.4 $4.7 $5.0 $6.3 $8.0 $8.6 $10.5 $- $2.0 $4.0 $6.0 $8.0 $10.0 $12.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 YTD Pro forma*

12% compounded annual growth rate during credit cycle (‘07 – ’12) 15% compounded annual growth rate for the last 5 years

Total Assets

(Dollars in billions) *Total assets estimated as of closing assuming the successful acquisition of Paragon Commercial Corporation ($1.74 billion in assets as of September 30, 2017) and continued organic growth.

6

$(10.0) $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016 YTD 2017 YTD

28% compounded annual growth rate for the past 17 years

Net Income

(Dollars in millions) 1) 2016 Core Earnings of $80.2 million, GAAP Earnings of $67.3 million excluding $12.9 of one-time charges, net of taxes

1

7

TowneBank Growth History

$203 $385 $560 $764 $932 $1,448 $1,803 $2,195 $2,501 $3,134 $3,606 $3,871 $4,082 $4,406 $4,673 $4,982 $6,297 $7,974

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Millions

Organic Acquired Harbor Bank $272 million in Total Assets

Newport News-Hampton, VA

Bank of Currituck $173 million in Total Assets

NE N. Carolina (Outer Banks)

Franklin Financial Corp. $1.1 billion in Total Assets

Richmond, VA MSA

Monarch Financial Holdings, Inc. $1.2 billion in Total Assets Hampton Roads, VA MSA

Acquired - $2.7 Billion Organic - $5.3 Billion

8

1 TowneBank (VA) 26 5,483 22.01 210.88 2 Wells Fargo & Co (CA) 51 4,733 19.00 92.80 3 SunTrust Banks Inc. (GA) 36 4,006 16.08 111.28 4 BB&T Corp. (NC) 47 3,297 13.23 70.15 5 Bank of America Corp. (NC) 33 3,041 12.21 92.15 6 Xenith Bank (VA) 22 995 3.99 45.23 7 Old Point Financial Corp. (VA) 21 780 3.13 37.14 8 Southern Bank and Trust (NC) 11 437 1.75 39.73 9 PNC Bank (DE) 11 379 1.52 34.45 10 Chesapeake Bank (VA) 8 379 1.52 47.38 Total For Institutions In Market 320 24,916

Dominant Market Position

1)Data as of 6/30/2017 FDIC Summary of Deposits for the Virginia Beach – Norfolk – Newport News, VA – NC MSA

Average Branch Size ($mm) Market Share (%) Deposits in Market ($mm) Number of Branches Institution (ST)

Virginia Beach-Norfolk-Newport News, VA-NC ¹

Rank

9

Bank of America Corp. (NC) 23 13,536 37.1 $ 588.52 Wells Fargo & Co. (CA) 61 7,134 19.5 $ 116.95 SunTrust Banks Inc. (GA) 40 4,392 12.0 $ 109.80 BB&T Corp. (NC) 40 3,203 8.8 $ 80.08 Big Four (2) 77.4 77.4 TowneBank Richmond 9 786 786 2.2 2.2 $ 87.33

Hampton Roads and Richmond Market Share Overview

1

1) Data as of 6/30/2017 FDIC Summary of Deposits 2) Excludes Capital One

Average Branch Size ($mm) Market Share (%)

(2)

Deposits in Market ($mm) Number of Branches Institution (ST)

Richmond Deposit Market Share 1

10 10 Bank 1999 2005 2010 2017 TowneBank 1.9 8.9 14.4 22.0 Wells Fargo 28.7 22.7 20.3 19.0 SunTrust 15.6 14.0 15.6 16.1 BB&T 22.1 14.5 12.2 13.2 Bank of America 15.6 15.2 10.2 12.2 Total 83.9 75.3 72.7 82.5 Bank 2017 1999 2010 2005

Hampton Roads Market Share 1

Rank Institution (ST) 1 TowneBank (VA) 2 613 32.76 306.50 2 Bank of America Corp. (NC) 3 290 15.51 96.67 3 Wells Fargo & Co (CA) 4 254 13.57 63.50 4 SunTrust Banks Inc. (GA) 4 211 11.28 52.75 5 BB&T Corp. (NC) 3 168 8.96 56.00 6 Old Point Financial Corp. (VA) 4 138 7.39 34.50 7 SONABANK (VA) 1 52 2.79 52.00 8 Union Bank & Trust (VA) 1 39 2.09 39.00 9 Fulton Bank (PA) 1 38 2.00 38.00 10 Citizens and Farmers Bank (VA) 1 35 1.86 35.00 Total For Institutions In Market 26 1,873 Rank Institution (ST) 1 TowneBank (VA) 2 333 28.00 166.50 2 PNC Bank (DE) 5 213 17.85 42.60 3 First National Bank of Pennsylvania (PA) 5 170 14.28 34.00 4 Wells Fargo & Co (CA) 3 162 13.62 54.00 5 BB&T Corp. (NC) 3 96 8.09 32.00 6 Southern Bank and Trust (NC) 3 91 7.64 30.33 7 Xenith Bank (VA) 1 57 4.82 57.00 8 First South Bank (NC) 2 46 3.90 23.00 9 First Bank (NC) 1 22 1.81 22.00 Total For Institutions In Market 25 1,191 Rank Institution (ST) 1 TowneBank (VA) 1 250 18.26 250.00 2 SunTrust Banks Inc. (GA) 3 229 16.69 76.33 3 Wells Fargo & Co (CA) 1 225 16.38 225.00 4 Bank of America Corp. (NC) 1 205 14.96 205.00 5 Citizens and Farmers Bank (VA) 2 115 8.39 57.50 6 BB&T Corp. (NC) 2 106 7.75 53.00 7 Union Bank & Trust (VA) 2 78 5.71 39.00 8 Chesapeake Bank (VA) 4 75 5.47 18.75 9 Old Point Financial Corp. (VA) 2 67 4.89 33.50 10 PNC Bank (DE) 1 21 1.52 21.00 Total For Institutions In Market 19 1,372 Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) Dare County, NC Newport News, VA Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) James City County, VA Number of Branches Rank Institution (ST) 1 TowneBank (VA) 6 1,592 24.61 265.33 2 Wells Fargo & Co (CA) 15 1,402 21.68 93.47 3 BB&T Corp. (NC) 14 1,022 15.81 73.00 4 Bank of America Corp. (NC) 9 932 14.40 103.56 5 SunTrust Banks Inc. (GA) 9 424 6.55 47.11 6 Xenith Bank (VA) 6 344 5.32 57.33 7 PNC Bank (DE) 6 251 3.88 41.83 8 Southern Bank and Trust (NC) 4 168 2.60 42.00 9 Fulton Bank (PA) 3 142 2.19 47.33 10 Dollar Bank FSB (PA) 2 62 0.95 31.00 Total For Institutions In Market 81 6,467 Rank Institution (ST) 1 TowneBank (VA) 2 837 30.15 418.50 2 Wells Fargo & Co (CA) 8 525 18.89 65.63 3 BB&T Corp. (NC) 5 484 17.43 96.80 4 Bank of America Corp. (NC) 4 317 11.43 79.25 5 Xenith Bank (VA) 7 234 8.44 33.43 6 SunTrust Banks Inc. (GA) 3 170 6.12 56.67 7 Southern Bank and Trust (NC) 3 58 2.10 19.33 8 Fulton Bank (PA) 2 54 1.93 27.00 9 PNC Bank (DE) 1 45 1.62 45.00 10 Old Point Financial Corp. (VA) 2 27 0.97 13.50 Total For Institutions In Market 42 2,777 Rank Institution (ST) 1 TowneBank (VA) 3 706 59.52 235.33 2 Wells Fargo & Co (CA) 5 229 19.31 45.80 3 BB&T Corp. (NC) 3 173 14.60 57.67 4 Bank of America Corp. (NC) 1 52 4.35 52.00 5 SunTrust Banks Inc. (GA) 1 25 2.11 25.00 6 Woodforest Financial Grp Inc. (TX) 1 1 0.11 1.00 Total For Institutions In Market 14 1,186 Rank Institution (ST) 1 TowneBank (VA) 3 176 87.99 58.67 2 Xenith Bank (VA) 1 24 12.01 24.00 Total For Institutions In Market 4 200 Currituck County, NC Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm) Virginia Beach, VA Chesapeake, VA Portsmouth, VA Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

#1 Market Share by City/County

1

1) Data as of 6/30/2017 FDIC Summary of Deposits

Rank Virginia Beach, VA

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

Chesapeake, VA

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

Portsmouth, VA

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

Currituck County, NC

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

Newport News, VA

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

Dare County, NC

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

James City County, VA

Rank Institution (ST) Number of Branches Deposits in Market ($mm) Market Share (%) Average Branch Size ($mm)

11 11

4 7 39 57

High Performing Bank Screen (1)(2) # of Banks #1 DMS Rank in a Top 50 MSA (Based on Population size) Estimated EPS Growth (2016A – 2018E) > 14% Fee Income / Operating Revenue > 30% Last Twelve Months ROAA (3) > 1.00% Publicly Traded U.S. Banks With Assets between $5 – 10 Billion Key Attributes

Notes

• 1. Financial data from SNL; LTM reflects last twelve months ending September 30, 2017 or the most recent quarter available; TOWN data as of September 30, 2017
• 2. Core EPS from SNL; 2018 EPS reflects S&P CapIQ consensus medians as of November 3, 2017
• 3. Core ROAA; excludes nonrecurring expenses and income

High Performing Community Bank

Highly Profitable Bank

1.16% LTM ROAA (3)

With Diversified Revenue Stream

LTM Fee Inc./Revenue: 42%

Top Deposit Market Share

#1 DMS Rank in VA Beach, MSA

Strong Forecasted EPS growth

14.9% CAGR 2016A-2018E 12 12

Key Takeaways

• #1 Market share in Virginia Beach-Norfolk-Newport News, VA-NC MSA¹
• Sustainability - Efficient branching strategy; $176.99 million Average Branch Size 2
• Consistency - 17 consecutive years of Increased Earnings
• 33.8% Noninterest DDAs 2
• 42.5% Noninterest Income 2
• Experienced and successful acquirer
• Culture of Caring
• Historically strong credit culture

1) Data as of 9/30/2017 FDIC Summary of Deposits for the Virginia Beach – Norfolk – Newport News, VA – NC MSA 2) As of 9/30/2017

13 13

10 year Anniversary of NASDAQ listing

14 14

$57,462 $49,005 $66,597 $57,513 United States Southeast Avg. Raleigh MSA Charlotte MSA 3.8% 3.9% 8.2% 7.2% United States Southeast Avg. Raleigh MSA Charlotte MSA

Compelling Growth Acquisition

Compelling Growth Demographics Business Model Positioned to Capture Continued Growth 2017 – 2021 Population Growth ¹

TOWN (38) PBNC (3)

2017 Median Household Income ¹

71% of Total Deposits 29% of Total Deposits

Strong Organic Loan Growth 2013 - 2016 Loan CAGR: 13% Differentiated Business Model High-touch private bank customer service model Retention of Key Personnel Execution of Employment Contracts with PBNC personnel

¹ Source: SNL Financial. Deposit market data as of 6/30/2016.

16 16

Dominant Deposit Market Share

PBNC (3) TOWN (38)

Pro Forma Branch Map

¹ Deposit market share rank amongst community banks or banks with total assets less than $15 billion. Deposit market share information as of June 30, 2016. Total deposit market share % illustrated for all banks within the respective MSA. ² Deposit market share pro forma for the announced acquisition of Paragon Commercial Corporation (PBNC). Deposit information as of June 30, 2016. Source: SNL Financial

Pro Forma Market Presence in Virginia & North Carolina

TOWN possesses a dominant deposit market share in legacy markets and a scalable deposit platform in PBNC’s high-growth Raleigh and Charlotte markets.

Virginia Beach-Norfolk-Newport News, VA- NC

1st

21.5 Kill Devil Hills, NC

1st

27.9 Richmond, VA

3rd

2.1 Elizabeth City, NC

3rd

5.4 PRO FORMA for PBNC Acquisition Raleigh, NC ²

2nd

2.8 Charlotte-Concord-Gastonia, NC-SC ²

6th

0.2 MSA Community Bank Deposit Market Share Ranking ¹ Total Deposit Market Share (%)

17 17

$700 $770 $884 $983 $1,172 $1,265 2012 2013 2014 2015 2016 Q1 2017 $722 $767 $868 $1,016 $1,191 $1,231 2012 2013 2014 2015 2016 Q1 2017

Paragon’s Business Model & Historical Organic Growth

$s in millions

• High-touch client service level of a private bank
• Expertise and sophistication of a big bank with community

bank responsiveness and service

• Focused on clients with significant banking needs who value

an extraordinary client experience

• Client mix includes mature businesses, professional firms,

non-profits and affluent customers

• Experienced bankers with deep local market ties
• Relationship focused bankers – 25 years of experience in

banking

• Internal referral culture enhances teamwork & benefits clients
• Founded in 1999 as North Carolina’s first business-only bank,

adding private banking in 2009

• Headquartered in Raleigh, NC with banking offices in

Raleigh, Charlotte and Cary, NC

• All in-market and organic loan and deposit growth

$s in millions

¹ PBNC total assets as of March 31, 2017. ² PBNC market capitalization as of April 26, 2017.

$s in millions

Total Assets1 1,550 $ Market Cap.2 279 $ PBNC PBNC at a Glance Private Bank Model Targeted Client Base Focused Sales Culture Total Gross Loans Total Deposits

18 18

Transaction Rationale

• Entrance into the high-growth and demographically attractive Raleigh and Charlotte, North Carolina

markets

• Significantly enhances TOWN’s existing North Carolina franchise
• Strong history of organic loan and deposit growth
• Provides geographic and portfolio diversification
• Retention of Paragon Management team, Commercial Lenders, Private Bankers and CDO’s
• Continued use of Paragon branding in Raleigh and Charlotte
• Thorough multi-week due diligence process covering all aspects of PBNC’s operations
• Comprehensive loan portfolio review, including reviewing ~48% of the portfolio
• Strong asset quality coupled with attractive core deposit funding
• Efficient branching model – Paragon average branch size of $368 million ¹
• Similar cultures with emphasis on attracting high quality clients with exceptional client service
• Long-standing relationship between TOWN and PBNC’s executive management
• Maintain Paragon brand and local credit decision process
• Immediately accretive to EPS, with low single-digit EPS accretion thereafter
• Offsets impact of crossing $10.0 billion in assets estimated at $4 million in lost annual revenue/costs
• Minimal Tangible book value dilution of less than ~1% and earned back in approximately 2.25 years
• Pro forma CRE concentration largely unchanged
• No revenue synergies modeled but complements in market Mortgage and Insurance operations

¹ Source: SNL Financial. Deposit market share information as of 6/30/2016.

Compelling Strategic Rationale Attractive Financial Metrics Low Risk Cultural Compatibility

19 19

Transaction:

• TowneBank (TOWN) to acquire Paragon Commercial Corporation (PBNC)

Fixed Exchange Ratio:

• 1.7250 shares of TOWN common stock for each share of PBNC common stock; 100%

stock Transaction Value:

• Implied Price per Share: $59.25 per share ¹
• Aggregate Transaction Value: $323.7 million ¹

Pricing Multiples:

• 22.3x of PBNC’s LTM EPS ²
• 231% of PBNC’s TBV ²

Pro Forma Ownership:

• ~87% TOWN / ~13% PBNC

Board Representation:

• 2 PBNC Directors to be appointed to TOWN’s Board of Directors

Management & Leadership Retention:

• Executed employment contracts with members of PBNC Executive Management,

Commercial Lenders, Private Bankers and Client Development Officers Required Approvals:

• Customary regulatory approvals and shareholder approval for PBNC

Expected Closing:

• Q1 2018

Transaction Terms

¹ Based on TOWN’s stock price of $34.35 as of April 26, 2017. ² As of March 31, 2017.

20 20

Transaction Assumptions & Pro Forma Financial Impact

• Gross credit mark of $26.8 million or 2.2%
• Comprehensive credit review performed by

TOWN

• Reviewed 375 loan files representing

approximately 48% of total loan exposure

• Reviewed 100% of classified grades
• Cost savings of ~19% of PBNC’s non-interest

expense base

• One-time merger related expenses of ~$22 million

(pre-tax)

• Includes estimated financial impact associated with

crossing $10 billion in total assets

• Redemption of PBNC outstanding TruPs post-

closing

• No revenue synergies assumed
• Projected close Q1 2018
• Low single-digit EPS accretion
• Nominal tangible book value dilution of less than

1.0%

• Estimated tangible book value earnback
• ~2.25 years using cross-over method ¹
• ~1.8 years using simple method ²
• TOWN’s capital ratios will continue to exceed

well-capitalized regulatory standards

• Pro forma Tangible Common Equity / Tangible

Assets ~9.7%

• Pro forma CRE levels largely unchanged

¹ Calculated as the time at which TOWN pro forma tangible book value per share equals TOWN’s estimated stand-alone tangible book value. ² Simple TBV Earn-back Calculation is computed as the tangible book value dilution at closing divided by first full year of PF (2019) estimated EPS accretion

Assumptions Pro Forma Capital Impact Pro Forma Financial Impact

21 21

Transaction Summary

Extension into high- growth NC markets Acquisition of a high- performing organic growth platform Differentiated high- touch approach to community banking Offsets impact of crossing $10 billion in total assets Solidifies TOWN as one

• f the top community

banks in Virginia and North Carolina 22 22

APPENDIX

23 23

The Towne Model



Caring as the Foundation for our Company Culture and as a Specific Marketing Strategy



Deep Commitment to Community Engagement



8 Banking Regions with Local Decision Making and the “Best Bankers”



“HomeTowne Banker” Approach to Delivering Exquisite Service



$100 Million Branch Strategy



Diversified Financial Services driving Noninterest Income

24 24

Towne Family of Companies

25 25

Noninterest Income¹ (in thousands) 144,645 $ 115,704 $ 91,301 $ Net Income (in thousands) 75,330 $ 48,254 $ 49,903 $ Diluted Earnings per Share 1.21 $ 0.87 $ 0.98 $ Dividends Declared per Share 0.41 $ 0.38 $ 0.35 $ Total Assets (in millions) 8,615 $ 7,830 $ 6,174 $ Total Loans (in millions) 5,910 $ 5,652 $ 4,367 $ Total Deposits (in millions) 6,548 $ 6,147 $ 4,788 $ Return on Average Assets 1.22% 0.93% 1.12% Return on Average Tangible Common Equity 13.28% 9.94% 11.30% Net Interest Margin ² 3.55% 3.41% 3.48% Nonperforming Assets/Total Assets 0.39% 0.44% 0.78% Allowance for Loan and Losses/Total Loans 0.75% 0.72% 0.86% Net Loan Charge-offs/Average loans 0.05% 0.03% 0.02% Common Equity Tier I 12.36% 11.74% 12.52%

• YTD Net Income of $75

million, up $27 million or 56.1% compared to 2016 YTD

• Total Revenues climbed 24.84%

from 2016 YTD to $340 million

• Loans outstanding grew $103

million or 1.77% from 4Q16

• Deposits up $513 million or

8.50%, Noninterest DDA up 13.61% or $265 million from 4Q16

2017 Performance Highlights

1) Excludes gain(loss) on investment securities 2) Non-GAAP financial measure. See appendix for reconciliation

Financial Highlights YTD 2017 YTD 2016 YTD 2015

Highlights:

26 26

Summary 2017 Earnings

1) Excludes gain(loss) on investment securities and properties 2) Non-GAAP financial measure. See Appendix for reconciliation June 30, Y/Y Linked Quarter Y/Y

Dollars in Thousands

2017 2016 2017 r r 2017 2016 r Net Interest Income $65,923 $62,605 $69,253 5% (5%) $195,456 $156,724 25% Provision for Loan Losses 696 1,686 1,320 (59%) (47%) 4,557 3,526 29% Total Noninterest Income1 49,562 47,016 50,365 5% (2%) 144,799 115,551 25% Gain/(Loss) on Securities and Properties (146) (195) (22) (25%) 564% (154) 153 (201%) Merger and Acquisition Expense 466 969 1,281 (52%) (64%) 1,743 19,817 (91%) Other Noninterest Expense 73,720 69,964 76,838 5% (4%) 220,810 175,175 26% Net Income before Taxes and NCI 40,457 36,807 40,157 10% 1% 112,991 73,910 53% Tax Provision 11,862 10,974 12,240 8% (3%) 33,488 21,538 55% Effective Tax Rate (%) 30.41% 31.22% 31.83% (3%) (4%) 30.77% 30.86% (0%) Net Income 28,595 25,833 27,917 11% 2% 79,503 52,372 52% Noncontrolling Interest 1,445 1,657 1,704 (13%) (15%) 4,173 4,118 1% Net Income attributable to TowneBank 27,150 $ 24,176 $ 26,213 $ 12% 4% 75,330 $ 48,254 $ 56% Acquisition-related expenses 466 969 1,281 (52%) (64%) 1,743 19,817 (91%) Purchase Accounting Adjustment (3,889) N/M (100%) (3,889) N/M Non-core charges 466 969 (2,608) (52%) (118%) (2,146) 19,817 (111%) Income tax expense (benefit) (117) (267) 1,167 (56%) (110%) 1,124 (6,476) (117%) Non-core charges, net of taxes 349 702 (1,441) N/M (124%) (1,022) 13,341 (108%) Core operating earnings (non-GAAP) 27,499 $ 24,878 $ 24,772 $ 11% 11% 74,308 $ 61,595 $ 21% Diluted EPS $0.44 $0.39 $0.42 13% 5% $1.21 $0.87 39% Common Dividend $0.14 $0.13 $0.14 8% 0% $0.41 $0.38 8% NIM - fully tax equivalent2 3.43% 3.55% 3.84% 12bps (41bps) 3.55% 3.41% 14bps Three Months Ended Nine Months Ended September 30, September 30,

27 27

Earnings Per Share Book Value

Financial Performance Trends

1) Non-GAAP financial measure. See appendix for reconciliation. See reconciliation of Non-GAAP measures in our annual reports on Form 10-K for prior periods

$13.08 Diluted EPS (GAAP)

0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00 16.00 18.00 20.00 3Q2017 2016Y 2015Y 2014Y 2013Y 2012Y 2011Y Tangible Book Value Per Share¹ Book Value Per Share

$18.04

0.71 0.76 1.03 1.14 1.18 1.22 1.18 0.44 1.24 1.41 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 2010 2011 2012 2013 2014 2015 2016 3Q2017

Diluted EPS (GAAP) Core Diluted EPS (non-GAAP)

28 28

Net Income

(Dollars in thousands)

$14,538 $17,812 $17,566 $12,466 $17,819 $6,259 $24,176 $18,996 $21,968 $26,213 $27,150 $(2,000) $3,000 $8,000 $13,000 $18,000 $23,000 $28,000 $33,000 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 2017Q3

2015 Total (GAAP) $62,382 Core (non-GAAP) $63,235 2016 Total (GAAP) $67,250 Core (non-GAAP) $80,148 2017 Total (GAAP) $75,330 Core (non-GAAP) $74,308 29 29

Net Interest Income (Fully Taxable Equivalent)

(Dollars in thousands)

$69,977 $66,634 553 3,889 61 848 202 1,463 872 781 2,368

• $58,000

$60,000 $62,000 $64,000 $66,000 $68,000 $70,000 $72,000 $74,000

30 30

Net Interest Margin

Net Interest Margin

1

NII Sensitivity

2

31 31

1) Non-GAAP financial measure. See appendix for reconciliation. See reconciliation of Non-GAAP measures in our annual reports on Form 10-K for prior periods 2) The interest sensitivity chart is a 1 year result on net interest income of an instantaneous and permanent rate shock. The results include assumptions about deposit rate changes that may or may not occur.

0.0% 5.9% 11.1% 16.1% 21.1% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Base +100 bp +200 bp +300 bp +400 bp IRR - Current Qtr

3.55% 3.52% 3.45% 3.84% 3.43% 3.43% 3.37% 3.37% 3.51% 3.30% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% 3.60% 3.70% 3.80% 3.90% 3Q 16 4Q 16 1Q 17 2Q 17 3Q 17 Margin Margin exPAA

$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 2012 2013 2014 2015 2016 2016 YTD 2017 YTD

Noninterest Income

• Total noninterest income up

25.01% year over year and represents 42.5% of Total Revenues

• Realty Segment driven by

Mortgage Banking and Property Management

• Insurance segment driven by

growth in property and casualty and employee benefit lines 2017

(Dollars in thousands)

32 32

Noninterest Income

June 30, Y/Y Linked Quarter Y/Y

Dollars in Thousands

2017 2016 2017 r r 2017 2016 r

Residential mortgage banking income, net 19,087 $ 21,430 $ 21,594 $ (10.93%) (11.61%) 58,314 $ 40,696 $ 43.29% Insurance commissions and other title fees and income, net 12,116 11,258 12,902 7.62% (6.09%) 39,818 36,918 7.86% Real estate brokerage and property management, net 10,042 6,647 7,629 51.08% 31.63% 22,664 17,591 28.84% Service charges on deposit accounts 2,670 2,552 2,644 4.62% 0.98% 7,785 7,012 11.02% Credit card merchant fees, net 1,388 1,365 1,298 1.68% 6.93% 3,804 3,373 12.78% BOLI 1,425 1,264 1,421 12.74% 0.28% 4,321 3,616 19.50% Other income 2,688 2,305 2,856 16.62% (5.88%) 7,940 6,498 22.19% Subtotal before gain on investments 49,416 46,821 50,344 5.54% (1.84%) 144,646 115,704 25.01% Net gain on investment securities

• (1)
• N/M

(1)

• Total noninterest income

49,416 $ 46,821 $ 50,343 $ 5.54% (1.84%) 144,645 $ 115,704 $ 25.01%

Three Months Ended September 30, Nine Months Ended September 30,

33 33

$27.6 $34.3 $42.3 $47.5 $54.5 $42.8 $46.0 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 2012 2013 2014 2015 2016 2016 YTD 2017 YTD

Towne Insurance

Insurance Highlights:

• Ranked 59th of Top 100 Business

Insurance Agencies

• Broad areas of specialty and products
• Successful Acquirer and Integrator - 20

acquisitions since 2001; highly competitive landscape

• Strong consistent cash flows
• Dominant market share in legacy

footprint

• Opportunities to diversify in

complementary markets

(Dollars in millions)

Gross Commissions

2015 Best Practices Agency

34 34

Towne Insurance

Commission and fee income Property and casualty 9,768 $ 9,052 $ 716 $ 7.91% Employee benefits 3,132 2,947 185 6.28% Travel insurance 970 926 44 4.75% Specialized benefit services 165 154 11 7.14% Total commissions and fees 14,035 13,079 956 7.31% Contingency and bonus revenue 180 61 119 195.08% Other income 67 82 (15) (18.29%) Total revenue 14,282 $ 13,222 $ 1,060 $ 8.02% Employee commission expense 2,557 2,482 75 3.02% Revenue, net of commission expense 11,725 $ 10,740 $ 985 $ 9.17% Total operating expenses 9,452 8,496 956 11.25% 2,273 2,244 29 1.29% Corporate allocation (133) (161) 28 (17.39%) Income before taxes and noncontrolling interest 2,140 $ 2,083 $ 57 $ 2.74% Net Income before tax, allocations, and noncontrolling interest Three Months Ended September 30, 2017 September 30, 2016

Variance $ %

• Year over year Growth in

Revenue driven by organic growth in P&C and Employee Benefits; rate improvement and continued high retention in Q3

• P&C Revenue up 7.91%
• ver 2016
• Continued growth in

Benefits

• Announced W.A. Moore

Acquisition in July 2017

Highlights:

(Dollars in thousands)

DR

35 35

Towne Investment Group

Assets Under Management (Includes Direct Held Assets)

Wealth Management Highlights:

• 2,500+ households
• Recurring revenue for 2017 was 81% of

total revenue

(Dollars in millions)

$997 $1,194 $1,376 $1,564 $2,106 $2,540 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 2012 2013 2014 2015 2016 2017 36 36

• A Top 19 Berkshire Hathaway HomeServices Affiliate
• 395 Real Estate Agents
• No. 2 in Market Share
• Generates Mortgage Activity
• Manages 1480 Housing Units
• Beach Properties Manages 345 Vacation Homes in

Hilton Head, South Carolina

• Oak Island Accommodations Manages 622 Vacation

Homes in Oak Island, North Carolina

• Railey Mountain Lake Vacations Manages 368

Vacation Homes in Deep Creek, Maryland

Realty Highlights :

Berkshire Hathaway HomeServices

Towne Realty

(Dollars in billions)

Sales Volume

$0.85 $0.99 $1.01 $1.08 $1.27 $0.96

$- $0.20 $0.40 $0.60 $0.80 $1.00 $1.20 $1.40 2012 2013 2014 2015 2016 2017 37 37

Towne Mortgage

Mortgage Highlights :

• Historically strong purchase

money volumes driven by Real Estate companies

• Disciplined underwriting; No

material losses through cycle

• Converted all loan officers to a

single origination system.

• Focusing on efficiencies and
• ptimization of our operational

platforms

(Dollars in millions) *includes Joint Venture volumes

Origination Volume*

Mortgage only markets Bank and Mortgage markets

$1,327 $1,434 $1,222 $1,573 $3,157 $2,152 $2,732 $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 2012 2013 2014 2015 2016 2016 YTD 2017 YTD

38 38

Noninterest Expense

• Noninterest expense, excluding

M&A, increased 26.1% compared to 2016 driven by the Monarch acquisition in Q2 2016

• Continued focus on driving

efficiency across all Segments

• Banking segment efficiency ratio

improved 2,127 bps year over year driven by Monarch integration

2017

(Dollars in thousands)

$- $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 2013 2014 2015 2016 2016 YTD 2017 YTD 39 39

Noninterest Expense

June 30, Y/Y Linked Quarter

Dollars in Thousands

2017 2016 2017 r r

Salaries and benefits 43,467 $ 40,497 $ 44,834 $ 7.33% (3.05%) Occupancy expense 6,635 6,656 6,658 (0.32%) (0.35%) Furniture and equipment 3,710 3,199 3,563 15.97% 4.13% Acquisition-related expenses 466 969 1,281 (51.91%) (63.62%) Other expenses 19,908 19,612 21,783 1.51% (8.61%) Total noninterest expense 74,186 $ 70,933 $ 78,119 $ 4.59% (5.03%)

Three Months Ended September 30,

40 40

Efficiency Ratio

Efficiency Ratio (excluding securities, gains, OREO cost, M&A cost, purchase loan accounting adjustment(2017 Q2), and Intangible Amortizations)

50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

2016 Q3 2016 Q4 2017 Q1 2017 Q2 2017 Q3

56% 61% 58% 58% 53% 70% 89% 88% 77% 77% 73% 82% 57% 66% 74% 62% 70% 65% 65% 62%

Efficiency Ratio

Bank Segment Realty Segment Insurance Segment Consolidated

41 41

Total Cash & Securities 1,576,339 $ 1,267,403 $ 954,388 $ Gross Loans 5,910,479 5,949,061 5,651,642 Loan Loss Reserve (44,398) (44,131) (40,655) Total Net Loans 5,866,081 5,904,930 5,610,987 Other Assets 1,172,374 1,254,709 1,264,767 Total Assets 8,614,794 $ 8,427,042 $ 7,830,142 $ Total Deposits 6,548,462 $ 6,595,769 $ 6,146,947 $ FHLB Borrowings 527,072 527,219 427,655 Other Debt 270,323 28,571 31,927 Total Debt 797,395 555,790 459,582 Total Other Liabilities 128,086 152,485 144,735 Total Liabilities 7,473,943 $ 7,304,044 $ 6,751,264 $ Equity ($000) Common Equity 1,129,588 1,110,681 1,067,193 Equity Attributable to Parent Company 1,129,588 1,110,681 1,067,193 Noncontrolling Interests 11,263 12,317 11,685 Total Equity 1,140,851 $ 1,122,998 $ 1,078,878 $

Balance Sheet Summary

• Strong Capital ratios
• Strong Liquidity to support

growth

• Stable core funding;

34% noninterest DDA

• Conservative securities

portfolio with 1.7 year average duration

September 30, 2017 September 30, 2016 June 30, 2017 (Dollars in Thousands)

Highlights:

42 42

Deposit Growth by Region

Richmond 805 $ 786 $ 19 $ 2.42% Virginia Beach 1,626 1,610 16 0.99% Portsmouth 959 915 44 4.81% Chesapeake 845 845

• (1.95%)

Norfolk 879 860 19 2.21% Peninsula 758 802 (44) (5.49%) Currituck 445 551 (106) (19.24%) Williamsburg 335 336 (1) (0.30%) Hampton Roads 5,847 5,919 (72) (1.22%) Corporate/TFSG (104) (109) 5 (4.59%) Consolidated 6,548 $ 6,596 $ (48) $ (0.73%) Actual 9/30/2017 $ ∆ % ∆ Deposit Growth Region Actual 6/30/2017

(Dollars In millions)

43 43

Loan Growth by Region

Loan Growth Actual Actual Region 3/31/2017 3/31/2017 $ r % r Richmond 790 $ 767 $ 23 $ 3.00% Virginia Beach 1,537 1,545 (8) (0.52%) Peninsula 971 992 (21) (2.12%) Chesapeake 747 754 (7) (0.93%) Portsmouth 653 666 (13) (1.95%) Norfolk 659 677 (18) (2.66%) Currituck 281 271 10 3.69% Williamsburg 230 234 (4) (1.71%) Hampton Roads 5,078 5,139 (61) (1.19%) Corporate/TFSG 42 43 (1) (2.33%) Consolidated 5,910 $ 5,949 $ (39) $ (0.66%) Actual 9/30/2017 $ ∆ % ∆ Loan Growth Region Actual 6/30/2017

(Dollars In millions)

44 44

Loan Portfolio at September 30, 2017

High-Quality, Stable Portfolio

• Loans Held for Investment increased

$103 million or 1.77% from 12/31/2016

• NPAs / Assets of .39%; Outstanding

asset quality metrics

• Allowance to NPLs of 5.06x
• Top 10 loan relationships represent

10.59% of the held for investment portfolio $5.9 billion Yield on Loans: 4.69% QTD Highlights:

1-4 Family 21% Construction 15% CRE-Owner Occupied 16% CRE- Investment related properties 23% Multifamily 3% C&I 18% Consumer and

• ther

4%

45 45

12.36% 12.40% 16.71% 10.14% 13.00% 13.10% 14.50% 9.70% 13.70% 14.20% 16.20% 10.40% 4.50% 6.00% 8.00% 4.00%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% Tier 1 Common Equity (CET1) RB Ratio¹ Tier 1 Ratio¹ Total RBC Ratio¹ Tier 1 Leverage¹ TOWN US Commercial Banks VA Commercial Banks Regulatory Minimum

Strong Capital Position

1) Non-GAAP financial measure. See appendix for reconciliation

46 46

• Targeting mid-single digit Annualized Loan Growth
• Stable asset quality and charge-offs
• Continued reduction in NPAs
• Paragon Acquisition on target to close 1st Quarter 2018
• Completed integration of Mortgage operations
• Primary focus on organic growth to build out existing markets
• Strong capital and liquidity to support continued growth
• Opportunistic M&A

Loans and Asset Quality Strategic

• Slight NIM compression throughout remainder of 2017 as excess liquidity is

deployed into higher earning assets

• Focused noninterest expense control
• Drive Efficiency Ratio
• Near term Return on Average Assets range of 1.1% - 1.2%

Profitability

2017 Outlook Summary

47 47

Quarter Ended Quarter Ended March 31, 2017 March 31, 2017 Total assets

8,614,794 $ 8,427,042 $

Less: Goodwill

(270,901) (268,246)

Less: Intangible assets, net

(39,751) (40,066)

Tangible assets

8,304,142 $ 8,118,730 $

Total equity

1,140,851 $ 1,122,998 $

Less: Goodwill

(270,901) (268,246)

Less: Intangible assets, net

(39,751) (40,066)

Less: Noncontrolling interest

(11,263) (12,317)

Tangible common equity

818,936 $ 802,369 $

Risk-based capital: Common equity tier 1 capital

835,767 $ 819,456 $

Tier 1

838,829 $ 822,641 $

Total

1,130,355 $ 866,772 $

Risk weighted assets

6,762,783 $ 6,837,630 $

Total assets for leverage capital purposes

8,276,653 $ 7,890,484 $

Tier 1 capital ratio

12.40% 12.03%

Total

16.71% 12.68%

Common equity Tier 1

12.36% 11.98%

Tier 1 leverage ratio

10.14% 10.43%

Non-GAAP Reconciliations

(Dollars in thousands)

Quarter Ended September 30, 2017 Quarter Ended June 30, 2017 48 48

Quarter Ended Quarter Ended Quarter Ended June 30, 2017 March 31, 2017 December 31, 2016 Net interest margin - tax-equivalent (Non-GAAP) 3.43% 3.84% 3.45% Adjustments to net interest margin: Tax-equivalent basis adjustment (0.04) (0.04) (0.04) Net interest margin (GAAP) 3.39% 3.80% 3.41% June 30, 2017 Book value (GAAP) 18.04 $ Impact of excluding average goodwill and other intangibles and amortization (4.96) Tangible book value (Non-GAAP) 13.08 $

Non-GAAP Reconciliations

Quarter Ended September 30, 2017 Quarter Ended June 30, 2017 Quarter Ended March 31, 2017 September 30, 2017 49 49

Non-GAAP Reconciliations

Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16

Total revenue 115,340 $ 119,596 $ 105,166 $ 101,669 $ 109,426 $ Net gain (loss) on OREO Sales and investment securities (146) (22) 13 (48) (195) Purchase Loan Accounting Adjustment

• 3,889
• Adjusted non-int inc

115,486 115,729 105,153 101,717 109,621 Total noninterest expenses 74,186 78,119 70,248 72,834 70,933 Less: Excl Expenses - M&A, Intangible Amortization, & OREO expenses 2,626 3,425 1,978 1,797 3,042 Adj Non int exp 71,560 $ 74,694 $ 68,270 $ 71,037 $ 67,891 $ Efficiency Ratio 64.2% 67.5% 66.8% 71.6% 64.7% Core efficiency Ratio (non-GAAP) 62.0% 64.5% 64.9% 69.8% 61.9%

Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16

Total revenue 70,411 $ 73,737 $ 65,140 $ 67,283 $ 65,537 $ Net gain (loss) on OREO Sales and investment securities (179) (22) 13 (48) (195) Purchase Loan Accounting Adjustment

• 3,889
• Adjusted non-int inc

70,590 69,870 65,127 67,331 65,732 Total noninterest expenses 38,547 41,974 38,350 41,515 38,671 Less: Excl Expenses - M&A, Intangible Amortization, & OREO expenses 1,030 1,418 841 502 1,668 Adj Non int exp 37,517 $ 40,556 $ 37,509 $ 41,013 $ 37,003 $ Efficiency Ratio 54.6% 60.1% 58.9% 61.7% 58.8% Core efficiency Ratio (non-GAAP) 53.1% 58.0% 57.6% 60.9% 56.3%

Consolidated Banking Q3 '17 Q2 '17 Q1 '17 Q4 '16 Q3 '16

Total revenue 33,203 $ 33,420 $ 25,449 $ 24,933 $ 33,149 $ Net gain (loss) on OREO Sales and investment securities 33

• Purchase Loan Accounting Adjustment
• Adjusted non-int inc

33,170 33,420 25,449 24,933 33,149 Total noninterest expenses 26,187 26,701 23,078 22,834 23,766 Less: Excl Expenses - M&A, Intangible Amortization, & OREO expenses 767 808 627 587 668 Adj Non int exp 25,420 $ 25,893 $ 22,450 $ 22,247 $ 23,097 $ Efficiency Ratio 78.9% 79.9% 90.7% 91.6% 71.7% Core efficiency Ratio (non-GAAP) 76.6% 77.5% 88.2% 89.2% 69.7%

Q3'17 Q2 '17 Q1 '17 Q4 '16 Q3 '16

Total revenue 11,725 $ 12,438 $ 14,577 $ 9,453 $ 10,740 $ Net gain (loss) on OREO Sales and investment securities

• Purchase Loan Accounting Adjustment
• Adjusted non-int inc

11,725 12,438 14,577 9,453 10,740 Total noninterest expenses 9,452 9,445 8,821 8,484 8,496 Less: Excl Expenses - M&A, Intangible Amortization, & OREO expenses 829 1,200 510 708 706 Adj Non int exp 8,623 $ 8,245 $ 8,311 $ 7,776 $ 7,790 $ Efficiency Ratio 80.6% 75.9% 60.5% 89.7% 79.1% Core efficiency Ratio (non-GAAP) 73.5% 66.3% 57.0% 82.3% 72.5%

Insurance

Q3’17

Consolidated

Q2’17 Q1’17 Q4’16 Q3’16 Q3’17

Realty

Q2’17 Q1’17 Q4’16 Q3’16 Q3’17

Banking

Q2’17 Q1’17 Q4’16 Q3’16 Q3’17

Insurance

Q2’17 Q1’17 Q4’16 Q3’16

(Dollars in thousands)

50 50

Non-GAAP Reconciliations

Year Ended June 30, 2017 Consolidated Banking Realty Insurance Totals Net income available to common shareholders (GAAP) 62,083 $ 7,573 $ 5,674 $ 75,330 $ Purchase Accounting Adjustment (3,889) (3,889) Acquisition-related expenses 1,100 181 462 1,743 Non-core charges (2,789) 181 462 (2,146) Income tax (expense) benefit 1,283 (36) (122) 1,125 Non-core charges, net of taxes (1,506) 145 340 (1,021) Core net income (non-GAAP) 60,577 $ 7,718 $ 6,014 $ 74,309 $ Average tangible equity 807,891 $ Amortization expense on intangibles, net of taxes 3,785 $ Core return on average tangible assets (non-GAAP) 12.92% Year Ended June 30, 2016 Consolidated Banking Realty Insurance Totals Net income available to common shareholders (GAAP) 33,697 $ 9,614 $ 4,943 $ 48,254 $ Acquisition-related expenses 19,205 463 149 19,817 Non-core charges 19,205 463 149 19,817 Income tax (expense) benefit (6,262) (162) (52) (6,476) Non-core charges, net of taxes 12,943 301 97 13,341 Core net income (non-GAAP) 46,640 $ 9,915 $ 5,040 $ 61,595 $ Average tangible equity 694,316 $ Amortization expense on intangibles, net of taxes 2,673 $ Core return on average tangible assets (non-GAAP) 12.36%

Nine-Months Ended September 30, 2017 Banking Realty Insurance Consolidated Totals Nine-Months Ended September 30, 2016 Banking Realty Insurance Consolidated Totals

(Dollars in thousands)

51 51