TowneBank Preferred Stock Offering Tops $59 Million
August 27, 2008
SUFFOLK, Va., Aug. 27, 2008 (GLOBE NEWSWIRE) -- TowneBank (Nasdaq: TOWN) announced today that it has raised $59.8 million in additional capital through the sale of more than 598,000 shares of its 8% Non-Cumulative Convertible Preferred Stock, Series A, well above the original maximum offering amount of $30 million. The bank also announced that the Board of Directors approved a conversion price for the preferred stock of $18.56, the closing price of the common stock on Tuesday, August 26, 2008. This conversion price equals 5.388 shares of common stock for each share of preferred stock. Since the offering was over-subscribed by the bank's shareholders and members, it was not made available to the general public.
G. Robert Aston, Jr., Chairman and Chief Executive Officer of TowneBank, commented, "We deeply appreciate the tremendous support shown by our shareholders and members through their participation in this offering. Their loyalty and support continues to provide the foundation for our growth and success."
The preferred stock will pay a non-cumulative dividend of 8% per year. Dividends are payable quarterly in cash, when, as and if declared by the Board of Directors, on the first day of March, June, September and December, commencing on December 1, 2008. Dividends on the preferred stock will begin to accrue from August 15, 2008.
On or after September 1, 2011, if the closing price of Towne common stock exceeds 120% of the conversion price for 20 trading days during any consecutive 30 day trading period, including the last day of the period, Towne may, at its option, cause some or all of the outstanding shares of the preferred stock to be automatically converted into its common stock. On September 1, 2013, all of the then outstanding shares of preferred stock will automatically convert into common shares without regard to the then market price of the common stock.
As one of Virginia's top community banks, TowneBank now operates 17 banking offices in Chesapeake, Hampton, Portsmouth, Newport News, Virginia Beach, Norfolk, Williamsburg and York County. Towne also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, GSH Real Estate Corporation, Corolla Classic Vacations and Corolla Real Estate. Through its strategic partnership with William E. Wood and Associates and Prudential McCardle, the bank also offers mortgage services in all of the offices of both companies in Hampton Roads and Northeastern North Carolina. Local decision-making is a hallmark of its hometown banking strategy that is delivered through the leadership of each group's President and Board of Directors. With total assets of $2.72 billion as of June 30, 2008, TowneBank is the largest bank headquartered in Hampton Roads.
This release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. These statements may address issues that involve significant risks, uncertainties, estimates and assumptions made by management. Facts that may cause actual results to differ materially from those contemplated by such forward-looking statements include competitive pressures in the banking industry that may increase significantly; changes in the interest rate environment may reduce margins and/or the volumes and values of loans made or held as well as the value of other financial assets held; general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, deterioration in credit quality and/or a reduced demand for credit or other service; changes in the legislative or regulatory environment, including changes in accounting standards, may adversely affect our business; costs or difficulties related to the integration of the business and the businesses we have acquired may be greater than expected; expected cost savings associated with pending or recently completed acquisitions may not be fully realized or realized within the expected time frame; our competitors may have greater financial resources and develop products that enable them to compete more successfully; changes in business conditions, changes in the securities market and changes in our local economy with regard to our market area and its heavy concentration of U. S. military bases and related personnel. We assume no obligation to update information contained in this release.