Bay National Corp. Reports Q3 2009 Net Loss of $1.4M

BALTIMORE -- Bay National Corporation (the "Company") (NASDAQ:BAYN) , the bank holding company for Bay National Bank, today reported a third quarter net loss of $1,447,000 or $0.67 per diluted share, as compared to a net loss of $1,779,000 or $0.83 per diluted share reported for the quarter ending September 30, 2008.

The results for the current quarter include a provision for credit losses of $1,800,000 and net charge-offs totaling $2,329,000 while the comparable quarter one year ago reflected $2,492,000 in provision for credit losses and in net charge-offs. Net charge-offs for the third quarter of 2009 were largely in the commercial, commercial construction, commercial real estate and consumer construction categories.

As of September 30, 2009, total assets were $297.5 million, an increase of 8.5% from September 30, 2008. Net loans decreased by $40.8 million or 17.1% from the year-ago quarter end while deposits increased by $44.2 million or 18.9%. While we continue with our 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, Chairman and Chief Executive Officer, commented, "Though we are encouraged by occasional signs of stabilization in the financial markets, we continue to be adversely affected by the declines in real estate values, the dramatic decreases in interest rates, and a prolonged recovery to the worst economic downturn in 80 years. Amidst these crosscurrents, we have determined that our strategic priorities remain unequivocally focused on improving our capital ratios and liquidity position.

As such, our Board of Directors and management team continue their steadfast efforts and 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 uncertain economic conditions, the bank remains adequately capitalized with approximately 8.2% 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.