Bay National Corporation Reports First Quarter Results

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May 17, 2010, 05:52 ET

BALTIMORE, May 17 /PRNewswire-FirstCall/ -- Bay National Corporation (the "Company") (Nasdaq: BAYN), the bank holding company for Bay National Bank, today reported a first quarter net loss of $2.8 million or ($1.29) per diluted share, as compared to a net loss of $884 thousand or ($0.41) per diluted share reported for the quarter ending March 31, 2009. The current quarter results are attributable to prudent provisions for potential credit losses of $1.8 million and net charge-offs totaling $2.7 million, the majority of which were divided among commercial real estate, commercial construction and commercial and industrial loans.

Hugh W. Mohler, President and CEO, stated, "The Bank's performance in the first quarter 2010 reflects the volatile and uncertain economic challenges facing our customers and our nation. Non-performing loans are the most significant impediment to earnings compounded by the requisite loan loss provisions. A great deal of time this year will be spent continuing to confront the 'Great Recession' and its direct impact on our asset quality."

At March 31, 2010, the Company had total assets of $282.2 million, a decrease of 2.8% from March 31, 2009. In addition, the Company had total deposits of $275.9 million and net loans of $175.1 million, decreases of 2.0% and 5.3%, respectively, over the March 31, 2009 totals.

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, 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.

SELECTED UNAUDITED FINANCIAL DATA AS OF MARCH 31, 2010 and 2009 (dollars in thousands, except per share data)
		March 31, 2010			March 31, 2009
Total assets	$	282,197		$	297,235
Cash and due from banks		76,470			17,833
Federal funds sold and other overnight investments		1,036			19,962
Investment securities available for sale		16,783			-
Other equity securities		1,151			1,192
Loans, net		175,050			241,803
Deposits		275,921			274,000
Subordinated debt		8,000			8,000
Stockholders' (deficit) equity		(3,601)			14,130

Common shares outstanding		2,154,301			2,153,101
Book value per share	$	(1.67)		$	6.56
Ratio of interest earning assets to interest bearing liabilities		120.73	%		116.33	%
Stockholders' (deficit) equity as a percentage of assets		(1.28)	%		4.75	%

SELECTED UNAUDITED FINANCIAL RATIOS FOR THE THREE MONTHS ENDED MARCH 31, 2010 and 2009
Weighted average yield/rate on:	YTD 2010		YTD 2009
Loans	5.31	%	5.10	%
Investments and interest bearing cash balances	.77	%	.46	%
Interest bearing liabilities	2.08	%	3.10	%
Net interest spread	1.70	%	1.74	%
Net interest margin	2.05	%	2.29	%

SELECTED UNAUDITED OPERATIONAL DATA FOR THE THREE MONTHS ENDED MARCH 31, 2010 and 2009 (dollars in thousands, except per share data)
		Three Months Ended March 31
		2010		2009
Interest income	$	2,685	$	3,188
Interest expense		1,229		1,679
Net interest income		1,456		1,509
Provision for credit losses		1,843		1,050
Net interest (loss) income after provision for credit losses		(387)		459
Non-interest income		202		182
Non-interest expenses		2,588		2,109
Loss before income taxes		(2,773)		(1,468)
Income tax benefit		-		(584)
Net loss	$	(2,773)	$	(884)

PER COMMON SHARE
Basic net loss per share	$	(1.29)	$	(.41)
Diluted net loss per share	$	(1.29)	$	(.41)
Average shares outstanding (Basic)		2,154,301		2,153,101
Average shares outstanding (Diluted)		2,154,301		2,153,101

STOCK PRICE
High	$	2.24	$	2.63
Low	$	1.10	$	.52
Close	$	1.17	$	1.37

SUPPLEMENTAL INFORMATION: (dollars in thousands)
Reconciliation of total deposits to core deposits:		March 31, 2010		March 31, 2009
Total deposits	$	275,921	$	274,000
National market certificates of deposit		(165,785)		(132,855)
Variable balance accounts (1 customer as of March 31, 2010 and 2009)		(6,591)		(8,048)
Portion of variable balance accounts considered to be core		3,000		3,000
Core deposits	$	106,545	$	136,097