BALTIMORE, Feb. 11 /PRNewswire-FirstCall/ -- Bay National Corporation (Nasdaq: BAYN), the holding company for Bay National Bank, today reported a fourth quarter net loss per diluted share of $0.48 compared with a net loss per diluted share of $0.26 reported in the fourth quarter of 2007. The net loss was $1.024 million compared to a net loss of $564 thousand in the fourth quarter of last year. The current quarter results include a credit loss provision of $961 thousand and net charge-offs totaling $1.961 million, the majority of which were related to the residential real estate construction portfolio.
As of December 31, 2008, total assets were $270.6 million, an increase of 5.5% from December 31, 2007. Total deposits were $244.6 million and net loans were $242.7 million, increases of 21.1% and 2.8%, respectively, over the December 31, 2007 totals.
Hugh W. Mohler, Chairman and Chief Executive Officer, commented, 'What began as a 'subprime crisis' in 2007, quickly became a full-blown global recession in 2008, causing the U.S. stock market to lose more than a third of its value in a year, while sending unemployment to its highest level since the 1980s. U.S. home prices went into a free-fall wreaking havoc on the financial industry. In terms of the impact of these forces on Bay National Bank's financial performance and condition, the buck stops with me, and I accept the responsibility for not asking enough hard questions about the risks associated with the residential housing market.
In 2008, several critical strategic decisions were made by Management and the Board of Directors to lay a foundation for future growth. These initiatives included: the Board of Directors voluntarily declining all Board fees, executive management willingly taking a 20% pay cut and no bonus; senior executives, of their own accord, taking a 10% pay cut and not receiving any bonuses; a salary freeze for all personnel; and no bonuses paid for 2008 and none budgeted for 2009 in an effort to restore the Corporation to its historically strong earnings pattern.
During 2009, we will remain focused on credit quality, controlling growth in order to further strengthen our capital structure, and drastically reduce our operating expenses. Under regulatory capital definitions, we remain adequately-capitalized at 9.57% total risk-based capital (slightly below the 10% well-capitalized level), and strongly believe our ongoing commitment to expense management and conservative lending practices will enhance our ability to return to historic levels of profitability when the economic cycle begins to improve.
It is important that our investors, customers and associates understand that despite this quarter's performance, Bay National Corporation has tremendous opportunities. We have strategically positioned ourselves as the 'local' bank, which our customers have genuinely embraced. Often, challenging times offer great opportunities and I am confident that this will be true with Bay National Bank.'
On February 6, 2009, in cooperation with the Office of the Comptroller of the Currency (the 'OCC'), Bay National Bank voluntarily agreed to the issuance of a Consent Order. The Consent Order is a formal agreement that, among other things, requires the Bank to submit to the OCC for approval a strategic plan in which the Board of Directors will outline its plan to remain independent and which addresses the resolution of problem assets (including related costs), viable sources of liquidity (including related costs), achievement and maintenance of enumerated capital requirements, and ongoing viability of the Bank based on current financial and market conditions.
