SUFFOLK, Va., July 24, 2008 (PRIME NEWSWIRE) -- Hampton Roads based TowneBank (Nasdaq:TOWN) announced today the offering of up to 250,000 shares of its 8% Non-Cumulative Convertible Preferred Stock, Series A.
The stock will be issued at a price of $100 per share for a maximum aggregate offering amount, before expenses, of $25 million. The preferred stock will pay a non-cumulative dividend of 8% per year, payable quarterly. The preferred stock is convertible at the option of the holder into 6.667 common shares of Towne based upon a minimum share price of $15.00 per share. However, if the closing price of Towne common stock is more than $15.00 per share when the offering closes, the conversion price will be adjusted so as to equal such higher closing price. The number of common shares of Towne issued upon conversion will be determined by dividing the $100 purchase price per share by the applicable conversion price.
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 Series A Preferred Stock to be automatically converted into its common stock.
On September 1, 2013, all of the then outstanding Series A Preferred Stock will automatically convert into common shares without regard to the then market price.
The offering will be made available until August 15, 2008 on an exclusive basis to current Towne shareholders and depositors, after which shares may be offered to the general public. The offering will close upon the sale of all 250,000 shares or on August 29, 2008, whichever occurs first. Towne reserves the right to sell up to an additional 50,000 shares of preferred stock in this offering on the same terms and conditions. If all such additional shares are sold, the total proceeds, before expenses, to Towne will be $30 million.
"At the present time, we are experiencing an unprecedented level of new business opportunities being created in part by the current disruption in the financial markets," said G. Robert Aston, Jr. "While Towne has always been well capitalized by regulatory standards, this new capital will further strengthen our balance sheet and give us the capital necessary to capitalize on these opportunities."
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 press release is not an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such an offer, solicitation, or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Any offer, solicitation or sale will be made only by means of the final offering circular.
Forward-Looking Statement:
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 services, 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 regards to our market area and its heavy concentration of U. S. military based and related personnel. We assume no obligation to update information contained in this release.