BALTIMORE, April 29 /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 $1.5 million or ($0.69)
per diluted share, as compared to net income of $619 thousand or $0.28 per
diluted share reported for the quarter ending March 31, 2007.
Hugh W. Mohler, Chairman and CEO, stated, "The first quarter numbers
reflect the Company's progress in addressing the real estate issues that
arose during the second half of 2007. We again strengthened our loan loss
provision by $1.7 million, as a result of an increase in non-performing
loans, and charged-off $767 thousand. The boost in the loan loss provision
was exacerbated by the deterioration of real estate values, which represent
a substantial portion of the collateral for non-performing loans.
Management is working vigorously to sell properties collateralizing
non-performing loans, moving collateral into real estate owned, and taking
appropriate charge-offs to reflect the present value of all real estate
owned.
Our net interest income was negatively impacted by the Federal
Reserve's initiative to stimulate our nation's economy with a reduction of
300 basis points in the Fed Funds rate over the past six months. Absent
these items, and our strategic decisions to open a commercial banking
office in the BWI Corridor and add experienced lenders to our Baltimore
office (as noted below), the Company would have been marginally profitable
this quarter."
Mr. Mohler continued, "The Company's total assets, net loans and
deposits increased by 6.72%, 6.26% and 5.90%, respectively from the
year-ago quarter ending March 31, 2007. Our strategic initiative to expand
into the Baltimore- Washington Corridor is gaining significant traction.
Leading this effort is a highly-experienced team of seven commercial
bankers, Brian Israel, Dave Gramil, Bruce Hollander, John Walker, Todd
Brown, Theresa Fodel, and Mary Ellen Marsalek.
We have also hired new leadership in our residential mortgage lending
operation in Baltimore -- Dan Murtaugh, a twelve-year mortgage veteran most
recently with Wells Fargo Private Banking. In spite of these difficult
times, we remain committed to providing this service to our customers and
are confident that Dan Murtaugh provides us with both a solid reputation
and strong knowledge base necessary to expand our residential mortgage
lending presence in the Baltimore region.
Other great additions to our professional banking team are lifelong
Mercantile veteran, Mark Wagner, and Bill Peters, an 18-year banking
professional, most recently with The Patapsco Bank. We are delighted to
welcome them to our growing cadre of exceptional commercial and private
banking professionals.
Our continued focus on conserving capital and managing interest rate
risk resulted in maintaining capital levels defined as 'well capitalized,'
the highest rating by regulatory capital measures. We will diligently
monitor and manage our capital in order to preserve and enhance long-term
shareholder value.
As noted in our fourth quarter 2007 earnings release, the Company has
had minimal charge-offs since its inception in 2000 prior to the real
estate conundrum; however, earnings are not at an acceptable level, and we
are maintaining a clear focus on restoring our profitability to a level
consistent with a high performing bank.
In conclusion, I commend our dedicated team of associates in both
Baltimore and the Eastern Shore of Maryland and our Board of Directors for
their unwavering support during this difficult cycle. They have
successfully worked through challenging economic environments in the past
and will, I am confident, succeed again in accelerating our performance
back to historic levels."
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. Bay National Bank believes
that it now occupies a unique niche in the banking industry. It also
believes that it has positioned itself between the much larger banks, whose
size and bureaucracy can preclude them from delivering exceptional and
responsive service, and between 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 Corporation has two full-service banking offices,
Baltimore and Salisbury, Maryland, residential mortgage lending operations
in both Baltimore and the Eastern Shore of Maryland, and a recently-opened
commercial banking office in the Baltimore-Washington Corridor. 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 are not historical facts
constitute "forward-looking statements" as defined by Federal Securities
laws. Forward-looking statements can generally be identified by the use of
forward- looking terminology such as "believes," "expects," "intends,"
"may," "will," "should," "anticipates" or similar terminology. Such
statements, specifically regarding Bay National Corporation's intentions
regarding shareholder value, expansion of our residential mortgage lending
presence and future performance, 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, changes in interest
rates, deposit flows, loan demand and real estate values, as well as
changes in economic, 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 MARCH 31, 2008 and 2007
(dollars in thousands, except per share data)
2008 2007
Total assets $267,024 $250,217
Cash and due from banks 485 2,159
Federal funds sold and other
overnight investments 14,374 18,005
Investment securities available for sale - 697
Other equity securities 1,157 1,156
Loans, net 237,935 223,924
Deposits 231,149 218,262
Short-term borrowings 8,312 2,681
Subordinated debt 8,000 8,000
Stockholders' equity 18,481 19,478
Common shares outstanding 2,140,933 2,128,876
Book value per share $8.63 $9.15
Ratio of interest earning assets
to interest bearing liabilities 126.77% 125.15%
Stockholders' equity as a
percentage of assets 6.92% 7.78%
SELECTED UNAUDITED FINANCIAL RATIOS
FOR THE THREE MONTHS ENDED MARCH 31, 2008 and 2007
Weighted average yield/rate on: 2008 2007
Loans 7.27% 9.28%
Investments and interest bearing
cash balances 1.75% 4.25%
Interest bearing liabilities 3.73% 4.54%
Net interest spread 3.25% 4.23%
Net interest margin 3.97% 5.16%
SELECTED UNAUDITED OPERATIONAL DATA
FOR THE THREE MONTHS ENDED MARCH 31, 2008 and 2007
(dollars in thousands, except per share data)
Three Months Ended
March 31
2008 2007
Interest income $4,369 $5,343
Interest expense 1,882 2,199
Net interest income 2,487 3,144
Provision for credit losses 2,468 -
Net interest income after
provision for credit losses 19 3,144
Non-interest income 208 192
Non-interest expenses 2,682 2,295
Income (loss) before income taxes (2,455) 1,041
Income tax (benefit) expense (969) 422
Net (loss) income $(1,486) $619
PER COMMON SHARE
Basic net (loss) income per share* $(.69) $.29
Diluted net (loss) income per share* $(.69) $.28
Average shares outstanding (Basic)* 2,139,845 2,128,876
Average shares outstanding (Diluted)* 2,139,845 2,211,076
STOCK PRICE
High* $11.70 $17.55
Low* $8.12 $15.50
Close* $8.55 $17.04
* All periods have been adjusted to reflect a 1.1 to 1 stock split in the
form of a 10% stock dividend recorded on June 29, 2007
SUPPLEMENTAL INFORMATION:
(dollars in thousands)
Reconciliation of total deposits March 31, March 31,
to core deposits: 2008 2007
Total deposits $231,149 $218,262
National market certificates of deposit (50,889) (26,518)
Variable balance accounts (1 customer
as of March 31, 2008 and 2007) (6,898) (10,222)
Portion of variable balance accounts
considered to be core 3,000 3,000
Core deposits $176,362 $184,522
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SOURCE Bay National Corporation
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Related links:
http://www.baynational.com
CONTACT:
Hugh W. Mohler, Chairman & CEO,
+1-410-427-3707, or Mark A. Semanie, Executive Vice President &
CFO, +1-410-427-3715, both of Bay National Corporation
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