SUFFOLK, Va., Oct. 20, 2009 (GLOBE NEWSWIRE) -- TowneBank (Nasdaq:TOWN) announced today that it has raised approximately $27 million in additional capital through the sale of more than 6,900 of its Series III Towne Investment Units purchased by over 1,000 local supporters. Each Investment Unit, priced at $4,000, consists of a TowneBank convertible note in the principal amount of $2,000 and 150 shares of TowneBank common stock, which have an aggregate value of $2,000 based on a per share price of $13.38, the average closing price of the common stock for the five consecutive trading days immediately preceding the October 19th closing date.
The convertible notes bear interest at 8% per annum, payable semi-annually, and mature in ten years. They are convertible, at the option of the holder, into shares of TowneBank common stock at an initial conversion price of $13.38 per share. On or after October 1, 2011, if the closing price of TowneBank common stock exceeds 100% of the conversion price for 20 trading days during any consecutive 30 day trading period, TowneBank may, at its option, cause some or all of the outstanding notes to be automatically converted into its common stock. On November 1, 2019, all of the then outstanding notes will automatically convert into common shares without regard to the prevailing market price of the common stock.
As one of Virginia's top community banks, TowneBank now operates 18 banking offices in Chesapeake, Hampton, Portsmouth, Newport News, Virginia Beach, Norfolk, Williamsburg and York County. TowneBank also offers a full range of financial services through its controlled divisions and subsidiaries that include Towne Investment Group, Towne Insurance Agency, Towne 1031 Exchange, LLC, TFA Benefits, TowneBank Mortgage, TowneBank Commercial Mortgage, Prudential Towne Realty, Corolla Classic Vacations and Corolla Real Estate. 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 $3.49 billion as of June 30, 2009, TowneBank is one of the largest banks headquartered in Virginia.
Forward-Looking Statements:
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.