TowneBank (TOWN) in Portsmouth, Va., has converted all of its Series A preferred stock into common stock.

The $4.6 billion-asset company said that each share of preferred stock was converted to roughly 5.5 shares of common stock on Tuesday. Fractional shares were cashed out at a rate of $14.36 per whole share. The conversion will save TowneBank about $4.6 million in annual dividend payments.

"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," Clyde McFarland Jr., the company's chief financial officer, said in a press release. "This conversion will … have a positive effect on our common equity position."

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