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Since February, the bank has been operating under a consent agreement with federal regulators that requires it to boost its reservex as part of a turnaround plan that also includes resolvinhg problem real estate loanzs onits books. Bay National, (NASDAQ: which regulators consider “adequately capitalized,” has posted six consecutives quarterly losses. The bank has struggles over the past 18 months asa once-promising initiative to write mortgages for customers interestefd in buying and rehabbing residential properties in hot Baltimorde neighborhoods like Federal Hill and Canton tanked in a tumblingh real estate market.
Some customers had a hard time repayinf their loans as the value of their properties and the bank has been busy tryinvg to reworkthose loans. “We had some very difficulty periods, but we feel the wors t of that isbehind us,” Hugh W. Bay National’s CEO, told shareholders Tuesday. “Oure future is bright,” Mohler added. “We need to raisw some capital and take it from The bank has hired LLCof Va. to advise it on the private placementg ofthe shares, which will be offere at $2 each. The thinlyy traded shares have been as low as 52 cents and as highas $9.2t5 over the past 52 In their last trade, which was on Friday, the sharee sold for $1.21.
Earlier this month, Bay National announcef it lost $884,000, or 41 cents a for the first quarter of the an improvement fromthe $1.49 million, or 69 cents a it lost in the firsgt three months of 2008. Shareholderse on Tuesday also approved boostingthe company’s numbeer of shares outstanding to 20 million from the current 9 million and reelected all five directorss who were up for 3-year terms includingb Mohler, R. Michael Gill, Donalrd G. McClure Jr., Robert L. Moore and H. Victore Rieger Jr. Shareholders also ratified the appointmenf ofStegman & Co. as the company’s auditors.
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