TowneBank announces mandatory conversion of 8% preferred stock

By Tali David

Minneapolis, Sept. 3 - TowneBank announced the mandatory conversion of all of its 8% series A noncumulative convertible preferred stock, the company announced in a news release.

All outstanding shares were converted into shares of TowneBank common stock at a conversion rate of 5.55 shares of common stock per share of series A preferred, plus cash in lieu of any fractional shares at a price of $14.36 per whole share.

"We are pleased that our capital position and financial performance has enabled us to fully meet all 8% preferred stock dividends while also increasing our common dividends at a time when many banks were required to reduce or fully eliminate all dividend payments," chief financial officer Clyde E. McFarland, Jr. said in the release.

"This conversion will eliminate total annual preferred dividends of approximately $4.59 million and will have a positive effect on our common equity position."

TowneBank is a Portsmouth, Va.-based provider of retail and commercial banking products and services through its subsidiaries.

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