Towne Bancorp Announces Addition to Loan Loss Reserves

  
    
  
  
    
      Towne Bancorp (OTCBB: TWNE), the holding company for Towne Bank of 
      Arizona, today announced it expects to take additional provision expense 
      of $2.4 million as of September 30, 2008. This will result in a $0.7 
      million increase in Allowance for Loan and Lease Losses (ALLL), for a 
      total ALLL of $4.9 million.
    
    
      As of September 30, 2008, the Bank will also reduce the book value of 
      its OREO by $1.2 million to reflect a continued softening in the real 
      estate market.
    
    
      “Given current economic events and the 
      reduction in real estate prices in Arizona, we believe that adding to 
      the ALLL and writing down certain foreclosed real estate (OREO) is 
      prudent,” commented Patrick F. Patrick, 
      President and Chief Executive Officer of Towne Bancorp. Patrick added, “In 
      addition, we will maintain our strong capital position, with total 
      risk-based capital of approximately 23% of risk weighted assets, well in 
      excess of well-capitalized regulatory guidelines.”