BALTIMORE, March 31 /PRNewswire-FirstCall/ -- Bay National Corporation (the "Company") (Nasdaq: BAYN), the bank holding company for Bay National Bank, today reported a fourth quarter net loss of $11,695,000 or ($5.43) per diluted share, as compared to a net loss of $1,023,000 or $0.48 per diluted share reported for the quarter ending December 31, 2008. The primary contributors to the net loss for the quarter were the provision for credit losses taken during the quarter and a write-down in the carrying value of a deferred tax asset.

"The 'elephant in the room' is concern over the extent of future loan losses," commented Hugh W. Mohler, President and Chief Executive Officer. "Therefore, we took an aggressive stance by increasing our loan loss reserve by $5,272,000 and charging off $1,444,000 (net of recoveries) in the fourth quarter of 2009. Net charge-offs for the fourth quarter of 2009 were principally in the real estate sector, including consumer residential construction, commercial real estate and other commercial categories."

Importantly, reflected in the results for the fourth quarter is a write-down in the carrying value of deferred income tax assets of $7,548,000 due to the uncertainty that these future tax benefits will be realized.

For the twelve-month period ended December 31, 2009, the net loss was $16,070,000 or ($7.46) per diluted share. As of December 31, 2009, total assets were $290.3 million, an increase of 7.3% from December 31, 2008. Deposits increased by $36.9 million or 15.1% while net loans decreased by $57.8 million or 23.8% from the year-ago quarter end. Loan growth during 2009 was deliberately limited so that we could maintain a sharp focus on the needs of our existing customers.

"Much of 2009 was spent addressing the economic consequences of a very difficult and challenging 2008. While the broader financial landscape stabilized, significant headwinds remained throughout 2009," added Mr. Mohler. "The effects persist in straining the financial system, in particular, banking institutions. In point of fact, in 2009, all but two of the large U.S. banking institutions cut shareholder dividends to address capital shortfalls."

"Every generation has its crisis and while many have referred to the first decade of the 21st century as the lost decade, we remain optimistic. Many decisions and changes were made in 2009 to adjust and adapt to economic realities. Not all were easy; however, each was intended to protect the interests of our stockholders," concluded Mr. Mohler.

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.

    BAY NATIONAL CORPORATION
    SELECTED UNAUDITED FINANCIAL DATA
    AS OF DECEMBER 31, 2009 and 2008
    (dollars in thousands, except per share data)


                                                  December   December
                                                  31, 2009   31, 2008
                                                  --------   --------
    Total assets                                  $290,343   $270,588
    Cash and due from banks                         71,153      7,263
    Federal funds sold and other overnight
     investments                                       943      2,023
    Investment securities available for sale        21,129          -
    Other equity securities                          1,151      1,240
    Loans, net                                     184,913    242,676
    Deposits                                       281,503    244,628
    Short-term borrowings                                -      1,864
    Subordinated debt                                8,000      8,000
    Stockholders' (deficit) equity                    (992)    15,022

    Common shares outstanding                    2,154,301  2,153,101
    Book value per share                             $(.46)     $6.98
    Ratio of interest earning assets to interest
     bearing liabilities                            121.18%    123.85%
    Stockholders' (deficit) equity as a
     percentage of assets                            (.34)%      5.55%




    SELECTED UNAUDITED FINANCIAL RATIOS
    FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008


    Weighted average yield/rate on:  YTD 2009  YTD 2008
                                     --------  --------
    Loans                                5.13%     6.15%
    Investments and interest bearing
     cash balances                        .88%     1.47%
    Interest bearing liabilities         2.74%     3.20%
    Net interest spread                  1.56%     2.71%
    Net interest margin                  2.06%     3.30%




    SELECTED UNAUDITED OPERATIONAL DATA
    FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2009 and 2008
    (dollars in thousands, except per share data)


                              Three Months              Twelve Months
                                 Ended                      Ended
                              ------------         -------------
                              December 31                December 31
                              -----------                -----------
                          2009          2008       2009          2008
                          ----          ----       ----          ----
    Interest income        $2,752        $3,521    $12,043        $15,325
    Interest expense        1,347         1,705      6,266          6,763
    Net interest income     1,405         1,816      5,777          8,562
    Provision for
     credit losses          5,272           961     10,966          6,478
    Net interest (loss)
     income after
     provision for
     credit losses         (3,867)          855     (5,189)         2,084
    Non-interest income       189           150        869            763
    Non-interest
     expenses               3,265         2,840      9,893         11,106
    Loss before income
     taxes                 (6,943)       (1,835)   (14,213)        (8,259)
    Income tax expense
     (benefit)              4,752          (812)     1,857         (3,194)
    Net loss             $(11,695)      $(1,023)  $(16,070)       $(5,065)

    PER COMMON SHARE
    Basic net loss per
     share                 $(5.43)        $(.48)    $(7.46)        $(2.37)
    Diluted net loss
     per share             $(5.43)        $(.48)    $(7.46)        $(2.37)
    Average shares
     outstanding
     (Basic)            2,154,301     2,129,698  2,153,910      2,140,793
    Average shares
     outstanding
     (Diluted)          2,154,301     2,129,698  2,153,910      2,140,793

    STOCK PRICE
        High                $2.45         $5.96      $3.70         $11.70
        Low                 $1.09         $1.50       $.52          $1.50
        Close               $1.20         $2.40      $1.20          $2.40

BAY NATIONAL CORPORATION

SELECTED UNAUDITED FINANCIAL DATA

AS OF DECEMBER 31, 2009 and 2008

(dollars in thousands, except per share data)

    SUPPLEMENTAL INFORMATION:
    (dollars in thousands)


                                          December 31,   December 31,
    Reconciliation of total deposits to
     core deposits:                                2009          2008
                                                   ----          ----
    Total deposits                             $281,503      $244,628
    National market certificates of
     deposit                                   (165,518)      (94,920)
    Variable balance accounts (1 customer
     as of December 31, 2009 and 2008)           (7,071)       (5,312)
    Portion of variable balance accounts
     considered to be core                        3,000         3,000
                                                  -----         -----
    Core deposits                              $111,914      $147,396
                                               ========      ========

SOURCE Bay National Corporation