BALTIMORE, Aug. 5 /PRNewswire-FirstCall/ -- Bay National Corporation (the "Company") (Nasdaq: BAYN), the bank holding company for Bay National Bank, today reported a second quarter net loss of $2,045,000 or $0.95 per diluted share, as compared to a net loss of $776,000 or $0.36 per diluted share reported for the quarter ending June 30, 2008.
The results for the current quarter include a provision for credit losses of $2,843,000 and net charge-offs totaling $2,330,000 while the comparable quarter one year ago reflected $558,000 in provision for credit losses and in net charge-offs. Net charge-offs for the second quarter of 2009 were largely in the commercial, commercial construction, commercial real estate and consumer construction categories. Also included in the results for the second quarter of 2009 is an expense of approximately $33,600 for an FDIC special assessment that is payable on September 30, 2009.
Hugh W. Mohler, Chairman and CEO, stated, "As we experienced in the first quarter of 2009, the second quarter results for 2009 when compared to the same quarter results of one year ago, reflect a significant reduction in non-interest expenses that were more than offset by the decrease in interest income due to the historically low interest rate environment in which we are operating, as well as a decrease in the number of loans outstanding as a result of charge-offs, making fewer new loans in order to preserve capital and an increase in the number of non-accrual loans. The quarter's operating results were most negatively impacted, however, by the substantial increase in the provision for credit losses when compared to the quarter ended June 30, 2008.
As of June 30, 2009, total assets were $316.7 million, an increase of 14.8 percent from June 30, 2008. Net loans decreased by $30.7 million or 12.4% from the year-ago quarter while deposits increased by $63.9 million or 28.1%. While we are currently pursuing 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 continued, "We continue to feel the pressure of the turmoil in the financial markets and the prolonged downturn in economic conditions. As such, our priorities are unequivocally internally focused on improving our capital ratios and liquidity position.
"However, our Board of Directors and management team remain steadfast in their 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 continuing recessionary conditions, the bank remains adequately capitalized with 8.45% 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.
