TowneBank Announces Mandatory Conversion of 8.0% Non-Cumulative Convertible Preferred Stock, Series A

TowneBank Announces Mandatory Conversion of 8.0% Non-Cumulative Convertible
Preferred Stock, Series A

SUFFOLK, Va., Sept. 3, 2013 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank
(Nasdaq:TOWN) announced today that all of the outstanding shares of its 8.0%
Non-Cumulative Convertible Preferred Stock, Series A (the "Series A
Preferred") were converted on September 1, 2013 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," said Clyde E. McFarland,
Jr., Chief Financial Officer."This conversion will eliminate total annual
preferred dividends of approximately $4.59million and will have a positive
effect on our common equity position."

All holders of Series A Preferred should submit their Series A Preferred stock
certificate and a completed Letter of Transmittal to any TowneBank branch
location or the conversion agent, Registrar and Transfer Company, at 10
Commerce Drive, Cranford, NJ 07016, Attention: Daniel Flynn.

Holders of Series A Preferred may contact Registrar and Transfer Company at
1-800-368-5948 or Debbie Todd, TowneBank's Investor Relations Officer, at
757-638-6794 for more information.

As one of the top community banks in Virginia and North Carolina, TowneBank
operates 26 banking offices serving Chesapeake, Hampton, Newport News,
Norfolk, Portsmouth, Suffolk, Virginia Beach, Williamsburg, James City County
and York County in Virginia along with Moyock, Grandy, Camden, Southern
Shores, Corolla and Kill Devil Hills in North Carolina. 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, Towne 1031 Exchange, LLC, and Corolla Classic Vacations. Through its
strategic partnership with William E. Wood and Associates, the bank also
offers mortgage services in all of their offices 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 $4.60 billion
as of June 30, 2013, TowneBank is one of the largest banks headquartered in
Virginia.

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.

CONTACT: G. Robert Aston, Jr., Chairman and CEO
         (757) 638-6780
         Clyde E. McFarland, Jr., Senior Executive Vice President and CFO
         (757) 638-6801
 
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