About 15 min after takeoff, the aircraft was observed to enter a maneuver from low altitude over a beach area. During the maneuver, the plane pulled up, entered a steep climb and then banked or rolled left and entered a nose down attitude. Before recovering, it struck the sand at the water's edge, bounced and then came to rest in shallow water. Reportedly, the engine sounded normal, except when the plane descended and turned, one witness noted that the sound level rose in pitch. An examination of the aircraft and engine revealed no indication of a preimpact malfunction or failure. The pilot weighed 270 lbs and occupied the front seat while the 180 lb passenger was in the aft seat. Reportedly, the plane had 35 gal of fuel on board before takeoff, but was within its weight and balance limits. The pilot had recently received 25 hrs of dual instruction for banner towing and had been included in the operator's waiver for authorization to tow.