BALTIMORE, April 29 /PRNewswire-FirstCall/ -- Bay National Corporation(the 'Company') (Nasdaq: BAYN), the bank holding company for Bay NationalBank, today reported a first quarter net loss of $1.5 million or ($0.69) perdiluted share, as compared to net income of $619 thousand or $0.28 per dilutedshare reported for the quarter ending March 31, 2007.
Hugh W. Mohler, Chairman and CEO, stated, 'The first quarter numbersreflect the Company's progress in addressing the real estate issues that aroseduring the second half of 2007. We again strengthened our loan loss provisionby $1.7 million, as a result of an increase in non-performing loans, andcharged-off $767 thousand. The boost in the loan loss provision wasexacerbated by the deterioration of real estate values, which represent asubstantial portion of the collateral for non-performing loans. Management isworking vigorously to sell properties collateralizing non-performing loans,moving collateral into real estate owned, and taking appropriate charge-offsto reflect the present value of all real estate owned.
Our net interest income was negatively impacted by the Federal Reserve'sinitiative to stimulate our nation's economy with a reduction of 300 basispoints in the Fed Funds rate over the past six months. Absent these items, andour strategic decisions to open a commercial banking office in the BWICorridor 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 depositsincreased by 6.72%, 6.26% and 5.90%, respectively from the year-ago quarterending March 31, 2007. Our strategic initiative to expand into the Baltimore-Washington Corridor is gaining significant traction. Leading this effort is ahighly-experienced team of seven commercial bankers, Brian Israel, DaveGramil, Bruce Hollander, John Walker, Todd Brown, Theresa Fodel, and MaryEllen Marsalek.
We have also hired new leadership in our residential mortgage lendingoperation in Baltimore -- Dan Murtaugh, a twelve-year mortgage veteran mostrecently with Wells Fargo Private Banking. In spite of these difficult times,we remain committed to providing this service to our customers and areconfident that Dan Murtaugh provides us with both a solid reputation andstrong knowledge base necessary to expand our residential mortgage lendingpresence in the Baltimore region.
Other great additions to our professional banking team are lifelongMercantile veteran, Mark Wagner, and Bill Peters, an 18-year bankingprofessional, most recently with The Patapsco Bank. We are delighted towelcome them to our growing cadre of exceptional commercial and privatebanking professionals.
Our continued focus on conserving capital and managing interest rate riskresulted in maintaining capital levels defined as 'well capitalized,' thehighest rating by regulatory capital measures.
