A relationship bank that absorbed three acquisitions in 15 months, hired WesBanco's former CIO to run technology, and has Microsoft Copilot on bankers' desks that a regional president admits is 'not being widely used'.
TowneBank, the Hampton Roads bank with about $22 billion of assets after acquiring Village Bank, Old Point Financial ($203 million, 2025) and Dogwood State Bank ($476 million in stock, completed 12 January 2026), is candid about the gap between having AI tools and using them. Bankers have Microsoft Copilot installed, but Triad president Scott Baker acknowledged in June 2026 that 'we have this resource sitting right there, and we don't always go grab it', adding that using it well 'would allow us to be much more engaged, authentic and strategic with our customers, rather than just spending our time digesting information'; he asked an MBA capstone team to recommend governed uses, which centred on preparing for customer meetings and reviewing appraisals and credit memos without replacing bankers' judgement. Technology leadership changed in February 2026 when Varun Chandhok, formerly chief information officer of WesBanco Bank and a 22-year M&T Bank technology executive, became senior executive vice president and CIO, charged by chief operating officer Lee Clark with expanding 'our technology capabilities so we can continue providing exquisite service to our members'. The second quarter of 2026 was transformed by the sale of the Towne Vacations resort-management business for a gain of about $198.6 million, lifting reported earnings to $193.2 million, or $2.09 per share, against core earnings of $72.0 million, or $0.78, and funding a $25 million foundation gift and a $0.70 special dividend; deposits reached $18.71 billion and the Carolinas expansion added bankers and treasury officers. Executive chairman Robert Aston and president and CEO William Foster III run what they call the 'Main Street Banking model'. TowneBank is a Virginia state nonmember bank supervised by the FDIC; no AI vendor beyond Microsoft, model or budget has been disclosed.
Lead bank
TowneBank
Assets (lead bank, Mar 31, 2026)
$22 billion
Charter
Virginia state nonmember bank (FDIC)
Headquarters
Portsmouth, VA
Flagship platform
Technology organisation under CIO Varun Chandhok; Microsoft Copilot rollout
AI leadership
William I. Foster III · G. Robert Aston, Jr. · Varun Chandhok · Lee Clark
- Microsoft Copilot deployed to bankers but under-used by the bank's own account; an MBA capstone study recommended governed uses for meeting prep and document review.
- New CIO Varun Chandhok (February 2026), ex-WesBanco CIO and M&T Bank technology executive, tasked with expanding technology capabilities.
- Three acquisitions in 15 months (Village, Old Point, Dogwood State Bank) added $4.5 billion of assets and a Carolinas footprint.
- Q2 2026 reported earnings $193.2 million ($2.09) on a $198.6 million gain from selling Towne Vacations; core earnings $72.0 million ($0.78); deposits $18.71 billion.
- Customer AI content covers voice cloning and deepfake scams (May 2026).
- No AI leader, model or budget disclosed beyond Copilot licences.
What is Technology organisation under CIO Varun Chandhok; Microsoft Copilot rollout?
In February 2026 TowneBank appointed Varun Chandhok senior executive vice president and chief information officer, previously CIO of WesBanco Bank and chief information and operations officer of Premier Bank after a 22-year career in business-line CIO roles at M&T Bank, with a mandate to 'further advance our technology strategy' and 'expand our technology capabilities'. The bank has deployed Microsoft Copilot to banker workstations; in mid-2026 Triad president Scott Baker said 'we have this resource sitting right there, and we don't always go grab it' and commissioned an MBA capstone team to assess governed use, which recommended Copilot for meeting preparation and document review while preserving bankers' judgement and customer data security. Customer-facing AI content covers voice cloning and deepfake scams. No AI leader, model or budget beyond the Copilot licences has been disclosed.[3][4]
What has TowneBank done on AI, and when?
- Jul 22, 2026
Second-quarter 2026 results; Towne Vacations sold[5]
Reported EPS $2.09; core EPS $0.78; $198.6 million gain; special dividend $0.70.
- May 14, 2026
Guide to recognising AI scams[4]
Voice cloning and deepfake videos.
- Feb 17, 2026
Varun Chandhok named chief information officer[3]
Ex-WesBanco CIO; mandate to expand technology capabilities.
- Jan 12, 2026
- Aug 19, 2025
Dogwood State Bank acquisition announced[2]
$476 million in stock; 17 Carolinas branches; 8% EPS accretion projected for 2027.
- Apr 4, 2025
Old Point Financial acquisition announced[1]
$203 million in cash and stock; 13 Hampton Roads and Richmond branches.
Where does TowneBank use AI today?
| System | What it does | Status | Use case |
|---|---|---|---|
| Microsoft Copilot for bankers[3] | Meeting preparation, appraisal and credit-memo review; adoption still building. | Rolling out | Generative & agentic AI |
| Acquisition integration (Old Point, Dogwood)[2][5] | Systems and brand conversions across Virginia and the Carolinas. | In production | Third-party & vendor AI |
| Customer education on AI scams[4] | Voice cloning and deepfake awareness. | In production | Fraud detection |
Use-case links open the tracker's rules-by-use-case matrix: which documents govern each system type.
What has TowneBank disclosed in numbers?
“Varun is exceptionally well-equipped to further advance our technology strategy and champion our continued growth.”[3]
Lee Clark · Senior EVP and Chief Operating Officer · Feb 17, 2026
“The sale of Towne Vacations generated a gain of nearly $200 million, significantly enhancing our capital levels and tangible book value.”[5]
G. Robert Aston, Jr. · Executive Chairman · Jul 22, 2026
Who runs AI at TowneBank?
William I. Foster IIILinkedIn ↗
President and CEO[5]
G. Robert Aston, Jr.LinkedIn ↗
Varun ChandhokLinkedIn ↗
Senior EVP and Chief Information Officer[3]
Lee ClarkLinkedIn ↗
Senior EVP and Chief Operating Officer[3]
Which regulators govern TowneBank's AI?
| Authority | Why it matters here | Documents |
|---|---|---|
| FDIC | TowneBank is a state nonmember bank; FDIC third-party and model-risk guidance govern Copilot use and acquisition conversions. | FDIC FIL-29-2023 FDIC FIL-15-2026 |
| CFPB | Consumer and mortgage products bring adverse-action and UDAAP duties to any automated decisioning. | ECOA / Regulation B adverse action (15 U.S.C. 1691(d); 12 CFR 1002.9) |
| Federal Reserve | Interagency third-party guidance applies to the Microsoft relationship and acquired-bank vendors. | SR 23-4 |
What does the public record suggest about TowneBank's AI strategy?
Analysis by BankingNewsAI from the sources cited on this page. Observations, not advice.
01
Licences are not adoption
TowneBank's own admission that Copilot sits unused is the most honest data point in this group; usage metrics and training belong in the CIO's first-year plan.
02
Govern Copilot before scaling it
Customer data inside credit memos and appraisals means the governed-use recommendations should become policy before wider rollout.
03
The new CIO arrives with an AI-capable stack
Chandhok's WesBanco and M&T background is in enterprise platforms; expect consolidation of three acquired banks' systems before new AI.
04
Capital from Towne Vacations could fund technology
A near-$200 million gain is an unusual opportunity to invest in platforms without pressuring core earnings.
Does TowneBank use AI?
TowneBank has Microsoft Copilot deployed to bankers, though a regional president said in June 2026 it is not widely used and commissioned a study on governed uses such as meeting preparation and document review. The bank hired a new chief information officer in February 2026 and publishes customer guidance on AI scams. No AI leader, model or budget beyond Copilot has been disclosed.
What did TowneBank sell in 2026?
Its Towne Vacations resort property-management segment, generating a pre-tax gain of about $198.6 million in the second quarter of 2026. Reported earnings were $193.2 million, or $2.09 per share, against core earnings of $72.0 million, or $0.78, and the bank paid a $0.70 special dividend and made a $25 million foundation contribution.
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