baynational8k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): February 5,
2009
Bay National
Corporation
(Exact Name of Registrant as
Specified in its Charter)
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Maryland
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000-51765
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52-2176710
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(State
of Incorporation)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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2328
West Joppa Road
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Lutherville, Maryland
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21093
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
Telephone Number, Including Area Code: 410-494-2580
N/A
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
[ ]
Written communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
Section
1 – Registrant’s Business and Operations
Item
1.01 Entry into a Material Definitive Agreement.
On
February 6, 2009, pursuant to a Stipulation and Consent to the Issuance of a
Consent Order, Bay National Bank (the “Bank”), a wholly owned subsidiary of Bay
National Corporation (the “Company”), consented to the issuance of a Consent
Order (the “Order”) by the Office of the Comptroller of Currency (the “OCC”),
the Bank’s primary banking regulator. The OCC will make a copy of the
Order available on its website at www.occ.gov. The
contents of the OCC website are not incorporated by reference into this
report. We will also file a copy of the Order at a later
date.
Among
other things, the Order requires the Bank and/or its board of directors (the
“Board”) to take certain actions, including developing and submitting certain
written plans to the OCC, and imposes certain restrictions on the Bank designed
to improve its financial strength, including the following: within 30 days
provide a written analysis of the Board’s decision whether to sell, merge or
liquidate the Bank or remain independent; if the Board decides the Bank should
remain independent and the OCC does not object to the written analysis, within
60 days of the Order implement a three-year strategic plan for the Bank with
respect to certain financial objectives; by April 30, 2009 maintain a 12% total
risk-based ratio, an 11% Tier 1 risk-based ratio and a 9% leverage ratio;
develop a three-year capital program that, among other things, assesses current
and expected funding needs and ensures that sufficient funds or access to funds
exists to meet those needs; ensure that the Bank has competent management in its
credit risk and asset liability risk management functions, conduct management
reviews and adopt a written education program for officers as necessary;
immediately take action to protect the Bank’s interest in assets criticized by
the OCC and adopt a written program designed to eliminate the basis of such
criticism; and develop written plans to address liquidity improvement, loan
portfolio management, asset diversification, the Bank’s allowance for loan and
lease losses, monitoring and review of problem loans and leases, charged-off
loans and related issues, and monitoring of portfolio trends.
The Board
must also appoint a compliance committee to monitor, coordinate and report to
the Board on the Bank’s compliance with the Order. In addition, under
the Order the Bank may not pay dividends unless it is in compliance with the
capital program required by the Order and applicable regulatory requirements and
receives the OCC’s written non-objection.
The
foregoing description is only a summary of the material terms of the Order and
is qualified in its entirety by reference to the Order.
The
Company’s press release discussing the Order is filed as Exhibit 99.1
hereto.
Section
2 – Financial Information
Item
2.02 Results of Operations and Financial Condition.
On
February 11, 2009, the Company issued a press release discussing the Order
outlined in Item 1.01 and announcing its earnings for the quarter and year ended
December 31, 2008.
Among
other figures, the press release reports that core deposits totaled $147.4
million at December 31, 2008. Management categorizes core deposits as
commercial sweep balances and all deposits other than national market
certificates of deposit, deposits purchased through the certificate of deposit
account registry service (CDARS) program and all but $3.0 million in deposits
from one account with highly variable balances. Although commercial
paper sweep balances are reflected as short-term borrowings on the Balance
Sheet, management considers them to be core deposits as they represent customer
relationships with commercial enterprises. Core deposits are closely
monitored by management because they consider them not only a relatively stable
source of funding but also reflective of the growth of commercial and consumer
depository relationships.
Section
5 – Corporate Governance and Management
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
(b) On
February 5, 2009, Kenneth H. Trout resigned from the Board of Directors of the
Company and the Bank, effective immediately. Mr. Trout did not resign
in connection with any disagreement with the Company, the Bank or its
management.
Section
9 – Financial Statements and Exhibits
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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BAY NATIONAL
CORPORATION |
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Date: February
11, 2009
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By:
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/s/
Hugh W. Mohler
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Hugh
W. Mohler
President
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