BALTIMORE, Aug. 5 /PRNewswire-FirstCall/ -- Bay National
Corporation (the "Company") (NASDAQ:BAYN), the bank holding company
for Bay National Bank, today reported a second quarter net loss of
$2,045,000 or $0.95 per diluted share, as compared to a net loss of
$776,000 or $0.36 per diluted share reported for the quarter ending
June 30, 2008. The results for the current quarter include a
provision for credit losses of $2,843,000 and net charge-offs
totaling $2,330,000 while the comparable quarter one year ago
reflected $558,000 in provision for credit losses and in net
charge-offs. Net charge-offs for the second quarter of 2009 were
largely in the commercial, commercial construction, commercial real
estate and consumer construction categories. Also included in the
results for the second quarter of 2009 is an expense of
approximately $33,600 for an FDIC special assessment that is
payable on September 30, 2009. Hugh W. Mohler, Chairman and CEO,
stated, "As we experienced in the first quarter of 2009, the second
quarter results for 2009 when compared to the same quarter results
of one year ago, reflect a significant reduction in non-interest
expenses that were more than offset by the decrease in interest
income due to the historically low interest rate environment in
which we are operating, as well as a decrease in the number of
loans outstanding as a result of charge-offs, making fewer new
loans in order to preserve capital and an increase in the number of
non-accrual loans. The quarter's operating results were most
negatively impacted, however, by the substantial increase in the
provision for credit losses when compared to the quarter ended June
30, 2008. As of June 30, 2009, total assets were $316.7 million, an
increase of 14.8 percent from June 30, 2008. Net loans decreased by
$30.7 million or 12.4% from the year-ago quarter while deposits
increased by $63.9 million or 28.1%. While we are currently
pursuing efforts to raise additional capital, management deems it
prudent to maintain current capital ratios by limiting loan growth
for the short-term and recognizes that the needs of our existing
customers must take priority over the establishment of new
relationships. Hugh W. Mohler continued, "We continue to feel the
pressure of the turmoil in the financial markets and the prolonged
downturn in economic conditions. As such, our priorities are
unequivocally internally focused on improving our capital ratios
and liquidity position. "However, our Board of Directors and
management team remain steadfast in their determination to preserve
capital, manage asset/portfolio risk and improve our operating
efficiencies. We are pleased that in spite of the credit issues
recognized this quarter and the continuing recessionary conditions,
the bank remains adequately capitalized with 8.45% in total
risk-based capital. Management continues to work diligently to
raise additional capital in order to meet the increased regulatory
requirements. Once achieved, we will have available capacity to
grow the loan portfolio and thereby increase the level of earning
assets that will further advance our return to profitability. We
remain hopeful that our efforts will be successful," Mr. Mohler
concluded. About Bay National Bank Bay National Bank was founded in
2000 in response to banking industry consolidation and the distinct
void these mergers created in servicing, in particular, small and
mid-size businesses and their owners, business professionals, and
high net worth individuals. We believe that Bay National Bank now
occupies a unique niche in the banking industry. We also believe
that Bay National Bank is well positioned between the much larger
banks, whose size and bureaucracy can preclude them from delivering
exceptional and responsive service, and the much smaller banks,
which may not be able to deliver the full range of products and
services sought by growing businesses and sophisticated customers.
Bay National Bank has two full-service banking offices, Baltimore
and Salisbury, Maryland, and residential mortgage lending
operations in both Baltimore and the Eastern Shore of Maryland. It
offers a complete range of commercial, private, cash management,
retail, and residential mortgage banking services delivered with a
high degree of respect and integrity. The statements in this press
release that our board and management "remain steadfast in their
determination to preserve capital, manage asset/portfolio risk and
improve our operating efficiencies," with respect to raising
additional capital, growing the loan portfolio and increasing
earnings assets after raising such capital, and with respect to our
future return to profitability are not historical facts and as such
constitute "forward-looking statements" as defined by Federal
Securities laws. Such statements are subject to risks and
uncertainties that could cause actual results to differ materially
from future results expressed or implied by such forward-looking
statements. Potential risks and uncertainties include, but are not
limited to, our ability to raise additional capital and the amount
of capital we are able to raise, further deterioration in real
estate values and economic conditions generally, and changes in
interest rates, deposit flows and loan demand, as well as changes
in competitive, governmental, regulatory, technological and other
factors which may affect Bay National Corporation specifically or
the banking industry generally. Forward-looking statements speak
only as of the date they are made. Bay National Corporation will
not update forward-looking statements to reflect factual
assumptions, circumstances or events that have changed after a
forward-looking statement was made. For further information, please
refer to the Bay National Corporation reports filed with the U.S.
Securities and Exchange Commission. SELECTED UNAUDITED FINANCIAL
DATA AS OF JUNE 30, 2009 and 2008 (dollars in thousands, except per
share data) June 30, June 30, 2009 2008 -------- -------- Total
assets $316,679 $275,826 Cash and due from banks 19,595 459 Federal
funds sold and other overnight investments 38,731 12,184 Investment
securities available for sale 21,442 - Other equity securities
1,151 1,503 Loans, net 217,029 247,721 Deposits 291,095 227,152
Short-term borrowings - 21,811 Subordinated debt 8,000 8,000
Stockholders' equity 12,067 17,801 Common shares outstanding
2,154,301 2,147,551 Book value per share $5.60 $8.29 Ratio of
interest earning assets to interest bearing liabilities 116.74%
123.53% Stockholders' equity as a percentage of assets 3.81% 6.45%
SELECTED UNAUDITED FINANCIAL RATIOS FOR THE SIX MONTHS ENDED JUNE
30, 2009 and 2008 Weighted average yield/rate on: YTD 2009 YTD 2008
-------- -------- Loans 5.09% 6.72% Investments and interest
bearing cash balances .79% 1.76% Interest bearing liabilities 3.00%
3.36% Net interest spread 1.78% 3.09% Net interest margin 2.25%
3.72% SELECTED UNAUDITED OPERATIONAL DATA FOR THE THREE AND SIX
MONTHS ENDED JUNE 30, 2009 and 2008 (dollars in thousands, except
per share data) Three Months Ended Six Months Ended
------------------ ---------------- June 30 June 30 ------- -------
2009 2008 2009 2008 ---- ---- ---- ---- Interest income $3,056
$3,853 $6,244 $8,218 Interest expense 1,626 1,597 3,305 3,480 Net
interest income 1,430 2,256 2,939 4,738 Provision for credit losses
2,843 558 3,894 3,025 Net interest income after provision for
credit losses (1,413) 1,698 (955) 1,713 Non-interest income 260 202
442 410 Non-interest expenses 2,245 2,997 4,353 5,675 Loss before
income taxes (3,398) (1,097) (4,866) (3,552) Income tax benefit
(1,353) (321) (1,938) (1,290) Net loss $(2,045) $(776) $(2,928)
$(2,262) PER COMMON SHARE Basic net loss per share $(.95) $(.36)
$(1.36) $(1.06) Diluted net loss per share $(.95) $(.36) $(1.36)
$(1.06) Average shares outstanding (Basic) 2,153,919 2,141,806
2,153,512 2,140,825 Average shares outstanding (Diluted) 2,153,919
2,141,806 2,153,512 2,140,825 STOCK PRICE High $1.65 $10.20 $2.63
$11.70 Low $1.21 $7.80 $.69 $7.80 Close $1.25 $7.80 $1.25 $7.80
SUPPLEMENTAL INFORMATION: (dollars in thousands) Reconciliation of
total deposits to June 30, June 30, core deposits: 2009 2008 ----
---- Total deposits $291,095 $227,152 Commercial paper sweep
balances - 13,661 National market certificates of deposit (159,788)
(44,395) Variable balance accounts (1 customer as of June 30, 2009
and 2008) (7,150) (7,804) Portion of variable balance accounts
considered to be core 3,000 3,000 ----- ----- Core deposits
$127,157 $191,614 ======== ======== DATASOURCE: Bay National
Corporation CONTACT: Hugh W. Mohler, Chairman & CEO,
+1-410-427-3707, or David E. Borowy, Senior Vice President &
CFO, +1-410-427-3788, both of Bay National Corporation
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