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The Investment Units will be issued at a price of $4,000 per unit for a maximum aggregate offering amount, before expenses, of $60 million. Each Investment Unit will consist of: one 8% convertible subordinated capital note in the principal amount of $2,000 that matures on November 1, 2019; and shares of TowneBank common stock that have a total aggregate market value of $2,000 based on the greater of: (i) the average closing price of TowneBank common stock for the five trading days immediately preceding the closing date of the offering; or (ii) the closing price of TowneBank common stock on the trading day immediately preceding the closing date of the offering. In no event will the offering price be less than $13.00 per share.
The note is convertible into shares of TowneBank common stock at any time at an initial conversion price equal to the offering price of the common shares in the Investment Units. On and after October 1, 2011, TowneBank may, at its option, convert some or all of the notes into shares of its common stock at the then applicable conversion price. TowneBank may exercise this conversion right if, for 20 trading days within any period of 30 consecutive trading days, the closing price of the common stock exceeds 100% of the then applicable conversion price.
The offering will be made available until September 14, 2009 on an exclusive basis to current TowneBank shareholders and members, after which shares may be offered to the general public. The offering will close upon the sale of all 15,000 Investment Units or on September 30, 2009, whichever occurs first, unless TowneBank extends the offering. TowneBank reserves the right to sell up to an additional 5,500 Investment Units on the same terms and conditions. If all such additional shares are sold, the total proceeds, before expenses, to TowneBank will be a total of $82 million.
"During one of the most challenging economic periods in our nation's history, TowneBank has experienced extraordinary levels of opportunity and growth," says G. Robert Aston, Jr. "Since June of 2008, TowneBank's total assets have grown over $775 million, reaching a new record level of $3.49 billion as of June 30, 2009. At a time when many of our competitors were experiencing difficulties, Towne's strong capital and liquidity position enabled us to continue to be a source of financial strength in meeting the financial needs of our members and the community. Because of the loyal support of our dedicated shareholders, our strong capital position gave us a real competitive advantage along with maximum financial flexibility. We believe this offering will give us the opportunity to continue to add value to the TowneBank franchise and will enable us to maintain flexibility to ensure the most effective use and cost of capital."
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, Prudential Towne Realty, Corolla Classic Vacations, and Corolla Real Estate. Towne has expanded its financial services to provide its members with complete residential real estate services, mortgage, personal and commercial insurance services, title related services for both residential and commercial transactions, employee benefit services, investment services, and property management services. 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. 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.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: TowneBank
CONTACT: TowneBank G. Robert Aston, Chairman and CEO 757-638-6780 Clyde E. McFarland, Jr., Senior Executive Vice President and CFO 757-638-6801
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