TowneBank Announces $60 Million Investment Offering

SUFFOLK, Va., Aug. 27, 2009 (GLOBE NEWSWIRE) -- Hampton Roads based TowneBank
(Nasdaq:TOWN) announced today the offering of up to 15,000 Series III Towne
Investment Units.

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.

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