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Bay Bancorp, Inc. Announces Fourth Quarter and Full Year 2015 Results

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COLUMBIA, Md., Feb. 01, 2016 (GLOBE NEWSWIRE) -- Bay Bancorp, Inc. ("Bay") (NASDAQ: BYBK), the savings and loan holding company for Bay Bank, FSB ("Bank"), announced today net income of $1.93 million or basic and diluted net income per common share of $0.18 and $0.17, respectively, for the year ended December 31, 2015, compared to net income of $3.03 million or basic and diluted net income per common share of $0.29 for the year ended December 31, 2014.  For the fourth quarter of 2015, Bay reported net income of $0.51 million or basic and diluted net income per common share of $0.05, compared to net income of $0.53 million or basic and diluted net income per common share of $0.05 for the third quarter of 2015 and net income of $1.31 million or basic and diluted net income per common share of $0.12 for the fourth quarter of 2014.  Net income for the year ended December 31, 2014 included a bargain purchase gain from the acquisition of Slavie Federal Savings Bank from the FDIC (the "Slavie Acquisition") and income from the recognition of the remaining interest rate mark-to-market adjustment related to the Bank's exit from its IRA business, representing a combined $2.9 million of pre-tax income.

Commenting on the announcement, Joseph J. Thomas, President and CEO, said, "I am very pleased by our team's efforts to increase Bay's pre-tax profitability by 33% in 2015, when compared to 2014, which is also a $3.7 million increase in pre-tax earnings after adjusting for non-recurring items in 2014 (bargain purchase gain and exit of IRA).  We accomplished this increase by growing our originated loan portfolio by 33%, while reducing our noninterest expense by $4.9 million, or 18%, when compared to 2014.  While we did not grow total assets appreciably during 2015, our efforts to resolve acquired loans led to a reduction of our classified asset ratio to 26% from 47% at December 31, 2015, when compared to 2014.  With the announced second quarter 2016 merger with Hopkins Federal Savings Bank, we are poised to increase scale, profitability and leverage that will together lead to improved returns on our strong capital base," continued Thomas.

Highlights from 2015

The Bank's relationship management activities resulted in net new loan growth in the Bank's originated portfolio by a 32.5% annualized pace in 2015.  Deposit mix changes were favorable, with planned declines in certificate of deposit balances offset by core interest bearing and noninterest-bearing deposit growth, leading to an attractive 0.40% cost of funds for the fourth quarter of 2015.  Bay has a very strong capital position and capacity for future growth with total regulatory capital to risk weighted assets of 16.6% as of December 31, 2015.  The Bank has a proven record of success in acquisitions and acquired problem asset resolutions and, at December 31, 2015, had $9.4 million in remaining net purchase discounts on acquired loan portfolios.

Specific highlights are listed below:

  • The return on average assets for the three months and year ended December 31, 2015 was 0.43% and 0.40%, respectively, as compared to 1.08% and 0.66%, respectively, for the same periods of 2014.  The return on average equity for the three months and year ended December 31, 2015 was 3.10% and 2.94%, respectively, as compared to 7.87% and 4.93%, respectively, for the same periods of 2014.
     
  • Total assets were $491 million at December 31, 2015, an increase of $17 million when compared to $474 million at September 30, 2015 and an increase of $11 million when compared to $480 million at December 31, 2014.
     
  • Total loans were $393 million at December 31, 2015, an increase of 1.0% from $389 million at September 30, 2015 and unchanged from $393 million at December 31, 2014.
     
  • Total deposits were $367 million at December 31, 2015, a decrease of 4% from $382 million at September 30, 2015 and a decrease of 5% from $388 million at December 31, 2014.
     
  • Net interest income for the three and twelve months ended December 31, 2015 totaled $5.1 million and $21.4 million, respectively, compared to $6.4 million and $22.9 million, respectively, for the same periods of 2014.  Interest income associated with discount accretion on purchased loans, deferred costs and deferred fees will vary due to the timing and nature of loan principal payments.  For the three and twelve months ended December 31, 2015, accretion of purchased discounts included in interest income and deferred fee and cost amortization trailed the respective 2014 recognition by $1.05 million and $2.32 million, respectively.  Earning asset leverage was the primary offset to the decline in year-over-year results, as average earning assets increased to $455 million for the year ended December 31, 2015, compared to $431 million for 2014. 
     
  • Net interest margin for the three month and year ended December 31, 2015 was 4.49% and 4.70%, respectively, compared to 5.61% and 5.31%, respectively, for the same periods of 2014.  The fourth quarter margin reflects the variable pace of discount accretion recognition within interest income and the impact of fair value amortization on the interest expense of acquired deposits.  For the year ended December 31, 2015, the earning asset portfolio yield was influenced by a $2.32 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $1.07 million decrease in the fair value amortization on deposits when compared to 2014.  The margin declined by 61 basis points during the year ended December 31, 2015 when compared to 2014, with the reduction in loan and deposit accretion accounting for an 80 basis point fluctuation.
     
  • Nonperforming assets decreased to $10.3 million at December 31, 2015, down from $12.8 million at September 30, 2015 but an improvement from the $14.3 million recorded at December 31, 2014.  The fourth quarter decrease resulted from the Bank's continued resolution of acquired nonperforming loans.
     
  • The provision for loan losses in the three and twelve months ended December 31, 2015 was $264,000 and $1,143,000, respectively, compared to $221,000 and $802,000, respectively, for the same periods of 2014.  The increases for 2015 were primarily related to an acceleration in growth in the Bay Bank originated portfolio combined with modest increases in the some qualitative factors used for calculating the required reserve.  As a result, the allowance for loan losses was $1.77 million at December 31, 2015, representing 0.45% of total loans, compared to $1.29 million, or 0.33% of total loans, at December 31, 2014.  Management expects both the allowance for loan losses and the related provision for loan losses to increase in the future due to the gradual runoff of the discount on the acquired loan portfolios and an increase in new loan originations.
     
  • Total Capital increased to $67.7 million at December 31, 2015 from $66.9 million at September 30, 2015 and $66.6 million at December 31, 2014.  The book value of Bay's common stock was $6.13 per common share at December 31, 2015, compared to $6.05 per common share at September 30, 2015 and December 31, 2014.

Stock Repurchase Program

During 2015, Bay purchased 170,492 shares of its common stock, at an average price of $5.03 per share, pursuant to the stock purchase program that the Board of Directors approved on July 30, 2015.  The program authorizes Bay to purchase up to 250,000 shares of its common stock over a 12-month period in open market and/or through privately negotiated transactions, at Bay's discretion.  The Board may modify, suspend or discontinue the program at any time.

Recent Events

On December 18, 2015, Bay and Hopkins Bancorp, Inc. ("Hopkins"), the parent company of Hopkins Federal Savings Bank, jointly announced the execution of a definitive merger agreement (the "Merger Agreement") that provides for the merger of Hopkins, with assets of approximately $242 million at September 30, 2015, with and into Bay, with Bay as the surviving savings and loan holding company.  The transaction is valued at approximately $23.8 million.  Under the terms of the Merger Agreement, Bay will acquire the outstanding shares of Hopkins common stock for cash equal to 105% of Hopkins' tangible book value as of the closing, after giving effect to Hopkins' payment of all of its transaction-related expenses, up to $625,000 in cash bonuses that Hopkins may choose to pay to certain directors and employees at the closing (the "bonuses"), and a $16.0 million cash dividend that Hopkins proposes to pay to its stockholders prior to the closing (the "cash dividend").  The merger consideration is subject to adjustment based on Hopkins' tangible book value as of the closing, which will be calculated after deducting all of Hopkins' transaction-related expenses.  Immediately after the Merger, Hopkins Federal Savings Bank will merge with and into the Bank, with the Bank as the surviving federal savings bank.  Based on Hopkins' tangible book value at September 30, 2015 and 241,552 shares of Hopkins common stock outstanding, and after giving effect to Hopkins' payment of the bonuses, the cash dividend and its anticipated transaction-related expenses, the merger consideration would be approximately $23.8 million in cash, with the stockholders of Hopkins receiving cash of approximately $98.44 for each share of Hopkins common stock owned at the effective time of the Merger.  Bay will have the right to terminate the Merger Agreement if the merger consideration would exceed $25.7 million, and Hopkins will have the right to terminate the Merger Agreement if the merger consideration would be less than $21.4 million.  The Merger, which is subject to regulatory approval, is anticipated to close in the second quarter of 2016.  Additional information regarding the Merger may be found in Bay's Current Report on Form 8-K that was filed with the Securities and Exchange Commission on December 21, 2015.

Balance Sheet Review

Total assets were $491 million at December 31, 2015, an increase of $11 million, or 2%, when compared to December 31, 2014.  The increase was due mainly to an $18 million increase in liquid assets over the year.  Investment securities decreased by $1.7 million, or 5%, for the year, while loans held for sale decreased by $2.4 million, or 33%.

Total deposits were $367 million at December 31, 2015, a decrease of $20 million, or 5%, when compared to December 31, 2014.  The decrease was due to managed declines in certificates of deposits, offset by a $10 million, or 11.1% increase in noninterest bearing deposits.  This funding source has been temporarily replaced with short term FHLB advances, improving the cost of funds, while Bay prepares for the 2016 merger with the deposit funded balance sheet of Hopkins.  Short term borrowings were $52 million at December 31, 2015, an increase of $30 million, or 136%, when compared to December 31, 2014.

Stockholders' equity increased to $67.7 million at December 31, 2015 when compared to $66.9 million at September 30, 2015 and $66.6 million at December 31, 2014.  The fourth quarter 2015 increases related to corporate earnings, which were assisted by net market value adjustment and net increases on bank owned investment securities.  The book value of Bay's common stock was $6.13 at December 31, 2015 and $6.05 at September 30, 2015 and December 31, 2014.

Nonperforming assets, which consist of nonaccrual loans, troubled debt restructurings, accruing loans past due 90 days or more, and real estate acquired through foreclosure, decreased to $10.3 million at December 31, 2015, from $12.8 million at September 30, 2015 and from $14.3 million at December 31, 2014.  The improvements were driven by decreases in purchased credit impaired loans 90 days or more past due of $1.0 million and $3.0 million from September 30, 2015 and December 31, 2014, respectively.  Nonperforming assets represented 2.10% of total assets at December 31, 2015, compared to 2.71% of total assets at September 30, 2015, and 2.99% at December 31, 2014.

At December 31, 2015, the Bank remained above all "well-capitalized" regulatory requirement levels.  The Bank's tier 1 risk-based capital ratio was 16.14% at December 31, 2015 as compared to 16.10% at September 30, 2015 and 16.31% at December 31, 2014.  Liquidity remained strong due to managed cash and cash equivalents, borrowing lines with the FHLB of Atlanta, the Federal Reserve and correspondent banks, and the size and composition of the investment portfolio.

Review of Financial Results

Net income for the three months and year ended December 31, 2015 was $0.51 million and $1.93 million, respectively, compared to net income of $1.31 million and $3.03 million, respectively, for the same periods of 2014.  With the changes to net income primarily the result of the 2014 bargain purchase gain attributable to the Slavie Acquisition of $0.52 million and the 2014 recognition of the remaining interest rate mark-to-market adjustment of $2.38 million related to the exit of our IRA business, changes were less comparable to prior periods. 

Net interest income for the three months ended December 31, 2015 totaled $5.1 million compared to $6.4 million for the same period of 2014.  Interest income associated with discount accretion on purchased loans, deferred costs and deferred fees will vary due to the timing and nature of loan principal payments and the decline in accretion contributed $1.0 million to the change.

Net interest income decreased to $21.4 million for the year ended December 31, 2015 compared to $22.9 million for the same period of 2014.  The decrease was the result of a $24 million growth in average interest-earning assets partially due to the Slavie Acquisition, offset by a $2.3 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $1.1 million decrease in the fair value amortization on deposits.  Excluding the impact of the fair value accounting, net interest income increased by $1.90 million when compared to the year ended December 31, 2014.  The net interest margin for the fourth quarter of 2015 decreased to 4.49% from 4.68% for the third quarter of 2015.  The net interest margin for the year ended December 31, 2015 decreased to 4.70% compared to 5.31% for 2014 due to the decline in discount accretion on loans and deposits.  As of December 31, 2015, the remaining net loan discounts on the Bank's loan portfolio, including loans acquired in the Slavie Acquisition, totaled $9.4 million.

Noninterest income for the three months ended December 31, 2015 was $1.1 million compared to $1.5 million for the three months ended September 30, 2015 and $1.1 million for the three months ended December 31, 2014.  The change from the immediately prior quarter was primarily the result of $0.05 million decrease in electronic banking fees and a $0.32 million decrease in mortgage banking fees and gains.  The changes from the fourth quarter of 2014 were primarily the result of a $0.07 million decrease in electronic banking fees, offset by a $0.09 million gain from the sale of certain securities in 2015.

Noninterest income for the year ended December 31, 2015 was $5.4 million compared to $7.8 million for the same period of 2014.  This decrease was primarily the result of the $2.38 million remaining interest rate mark-to-market adjustment on IRA deposits recognized in 2014, the $0.52 million bargain purchase gain recognized in 2014 and a $0.23 million decrease in electronic banking fees, offset by a $0.76 million increase in mortgage banking fees and gains and a $0.29 million gain from the sale of certain securities in 2015.  Expectations are for mortgage fees and gains to increase during 2016 as the Bank moves to expand its mortgage banking operations.

Noninterest expense reduction was a key focus for 2015 net income improvement.  For the three months ended December 31, 2015, noninterest expense was $5.2 million compared to $5.8 million for the prior quarter and $6.9 million for the fourth quarter of 2014.  The primary contributors to the decrease when compared to the fourth quarter of 2014 were decreases of $0.87 million in salary and employee benefits, $0.08 million in occupancy expense, $0.12 million in furniture and equipment, $0.48 million in other expenses, and $0.13 million in merger related expenses.

For the year ended December 31, 2015, noninterest expense was $22.6 million compared to $27.5 million for 2014, a decrease of $4.9 million for the same period of 2014.  The primary contributors to the decrease when compared to 2014 were decreases of $1.68 million in salary and employee benefits, $0.33 million in occupancy expense, $0.22 million in furniture and equipment expense along with $1.01 million in one-time other expenses recorded in 2014.

In the fourth quarter of 2014, Bay Bancorp filed amended 2011 and 2012 Federal and Maryland tax returns for the former Carrollton Bancorp, resulting in the accrual of $0.6 million in tax refunds.  Combined with a reversal of a deferred tax valuation allowance, the Bank recognized $1.2 million in favorable tax benefits in the fourth quarter of 2014.

Bay Bancorp, Inc. Information 

Bay Bancorp, Inc. is a financial holding company and a savings and loan holding company headquartered in Columbia, Maryland.  Through Bay Bank, FSB, its federal savings bank subsidiary, Bay Bancorp, Inc. serves the community with a network of 11 branches strategically located throughout the Baltimore Metropolitan Statistical Area, particularly Baltimore City and the Maryland counties of Baltimore Washington corridor.  The Bank serves small and medium size businesses, professionals and other valued customers by offering a broad suite of financial products and services, including on-line and mobile banking, commercial banking, cash management, mortgage lending and retail banking.  The Bank funds a variety of loan types including commercial and residential real estate loans, commercial term loans and lines of credit, consumer loans and letters of credit.  Additional information is available at www.baybankmd.com.

Forward-Looking Statements 

The statements contained herein that are not historical facts are forward-looking statements (as defined by the Private Securities Litigation Reform Act of 1995) based on management's current expectations and beliefs concerning future developments and their potential effects on the Company. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company.  There can be no assurance that future developments affecting the Company will be the same as those anticipated by management.  These statements are evidenced by terms such as "anticipate," "estimate," "should," "expect," "believe," "intend," and similar expressions.  Although these statements reflect management's good faith beliefs and projections, they are not guarantees of future performance and they may not prove true.  These projections involve risk and uncertainties that could cause actual results to differ materially from those addressed in the forward-looking statements.  For a discussion of these risks and uncertainties, see the section of the periodic reports filed by Bay Bancorp, Inc. with the Securities and Exchange Commission entitled "Risk Factors".

BAY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
            
 December 31, September 30,    
  20152015 December 31, December 31,
  (unaudited) (unaudited) 2014 2013
            
ASSETS           
Cash and due from banks$ 8,059,888  $ 7,122,397  $ 7,062,943  $ 7,126,720 
Interest bearing deposits with banks and federal funds sold  26,353,334    8,057,450    9,829,231    16,146,340 
Total Cash and Cash Equivalents  34,413,222    15,179,847    16,892,174    23,273,060 
            
Investment securities available for sale, at fair value  33,352,233    33,470,737    35,349,889    36,586,669 
Investment securities held to maturity, at amortized cost  1,573,165    1,592,496    1,315,718    - 
Restricted equity securities, at cost  2,969,595    1,626,595    1,862,995    1,009,695 
Loans held for sale  4,864,344    10,496,323    7,233,306    12,836,234 
            
Loans, net of deferred fees and costs  393,240,567    389,360,703    393,051,192    320,680,332 
Less: Allowance for loan losses  (1,773,009)   (1,619,755)   (1,294,976)   (851,000)
Loans, net  391,467,558    387,740,948    391,756,216    319,829,332 
            
Real estate acquired through foreclosure  1,459,732    1,977,262    1,480,472    1,290,120 
Premises and equipment, net  5,060,802    5,187,841    5,553,957    5,998,532 
Bank owned life insurance  5,611,352    5,579,745    5,485,377    5,356,575 
Core deposit intangible  2,624,184    2,821,906    3,478,282    3,993,679 
Deferred tax assets, net  3,923,751    4,100,033    3,214,100    6,564,121 
Accrued interest receivable  1,271,871    1,308,152    1,306,111    1,186,748 
Accrued taxes receivable  1,575,043    1,809,750    3,122,885    - 
Defined benefit pension asset  -    -    680,668    - 
Prepaid expenses  691,372    809,447    925,288    - 
Other assets  303,614    460,086    285,547    1,164,538 
Total Assets$ 491,161,838   $ 474,161,168   $ 479,942,985   $ 419,089,303  
            
LIABILITIES            
Noninterest-bearing deposits$ 101,838,210  $ 91,825,133  $ 91,676,534  $ 90,077,139 
Interest-bearing deposits  265,577,728    289,745,003    296,153,598    270,916,332 
Total Deposits  367,415,938    381,570,136    387,830,132    360,993,471 
            
Short-term borrowings  52,300,000    20,900,000    22,150,000    - 
Defined benefit pension liability  829,237    1,661,891    -    42,492 
Accrued expenses and other liabilities  2,934,174    3,149,747    3,319,567    3,499,072 
Total Liabilities  423,479,349    407,281,774    413,299,699    364,535,035 
            
STOCKHOLDERS' EQUITY           
Common stock - par value $1.00, authorized 20,000,000 shares, issued and outstanding 11,046,676, 11,046,676, 11,014,517 and 9,379,753  shares as of December 31, 2015, September 30, 2015, December 31, 2014 and December 31, 2013, respectively.  11,046,676    11,046,676    11,014,517    9,379,753 
Additional paid-in capital  43,395,183    43,374,650    43,228,950    36,357,001 
Retained earnings  12,667,070    12,154,890    10,736,305    7,703,597 
Accumulated other comprehensive income  573,560    303,178    1,663,514    1,113,917 
Total Stockholders' Equity  67,682,489    66,879,394    66,643,286    54,554,268 
Total Liabilities and Stockholders' Equity$ 491,161,838   $ 474,161,168   $ 479,942,985   $ 419,089,303  
            

 

BAY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME 
(Unaudited)
                    
  Twelve Months Ended December 31,  Three Months Ended December 31,   Three Months Ended September 30, 
   2015   2014   2015   2014    2015   2014 
                    
Interest income:                   
Interest and fees on loans $21,907,865 $ 22,848,600  $5,341,325 $ 6,391,123   $5,473,097 $ 5,537,260 
Interest on loans held for sale  350,833   246,212   59,177   49,938    97,965   64,265 
Interest and dividends on securities  913,511   970,377   102,201   264,062    295,612   213,862 
Interest on deposits with banks and federal funds sold  37,297   49,811   9,174   10,566    11,743   7,217 
Total Interest Income  23,209,506   24,115,000   5,511,877   6,715,689    5,878,417   5,822,604 
                    
Interest expense:                   
Interest on deposits  1,761,899   1,231,643   379,979   335,047    433,349   286,368 
Interest on Fed Funds Purchased  604   -   -   -    -   - 
Interest on short-term borrowings  72,380   25,556   25,426   12,850    23,310   12,706 
Total Interest Expense  1,834,883   1,257,199   405,405   347,897    456,659   299,074 
Net Interest Income  21,374,623   22,857,801   5,106,472   6,367,792    5,421,758   5,523,530 
                    
Provision for loan losses  1,142,522   801,688   264,326   221,471    306,387   220,373 
Net interest income after provision for loan losses  20,232,101   22,056,113   4,842,146   6,146,321    5,115,371   5,303,157 
                    
Noninterest income:                   
Electronic banking fees  2,402,589   2,637,079   575,302   646,031    625,041   674,701 
Mortgage banking fees and gains  1,708,779   950,299   196,037   182,496    515,035   259,740 
Net gain on sale of real estate acquired through foreclosure  45,285   58,046   5,490   30,624    346   (1,503)
Service charges on deposit accounts  313,697   393,128   84,591   89,732    79,375   99,451 
Bargain purchase gain  -   524,432   -   -    -   - 
Gain on securities sold  289,912   -   92,945   -    119,477   - 
Other income  658,992   3,201,243   146,158   169,614    155,504   95,003 
Total Noninterest Income  5,419,254   7,764,227   1,100,523   1,118,497    1,494,778   1,127,392 
                    
Noninterest expenses:                   
Salary and employee benefits  11,666,515   13,347,292   2,709,041   3,578,278    2,894,539   3,244,553 
Occupancy expenses  2,601,966   2,935,880   594,528   679,197    631,180   722,573 
Furniture and equipment expenses  957,610   1,174,911   180,613   299,637    256,425   280,320 
Legal, accounting and other professional fees  1,361,907   1,416,505   231,693   328,054    393,035   356,226 
Data processing and item processing services  1,372,688   1,197,231   378,587   333,322    368,221   371,572 
FDIC insurance costs  403,502   383,031   101,744   95,463    98,375   84,882 
Advertising and marketing related expenses  377,906   382,465   97,692   91,954    184,910   105,546 
Foreclosed property expenses  509,234   690,989   213,011   186,694    66,760   113,903 
Loan collection costs  343,521   332,843   31,605   27,744    112,539   152,196 
Core deposit intangible amortization  854,098   992,961   197,723   254,545    197,722   245,674 
Merger and acquisition related expenses  22,097   1,028,239   22,097   150,679    -   637,272 
Other expenses  2,114,881   3,632,070   439,954   921,826    552,049   1,656,932 
Total Noninterest Expenses  22,585,925   27,514,417   5,198,288   6,947,393    5,755,755   7,971,649 
Income before income taxes  3,065,430   2,305,923   744,381   317,425    854,394   (1,541,100)
Income tax (benefit) expense  1,134,665   (726,785)  232,201   (922,107)   324,977   (599,585)
Net income $  1,930,765  $   3,032,708      512,180      1,239,532     529,417   (941,515)
                    
Basic net income per common share $0.18 $ 0.29  $0.05 $ 0.12   $0.05 $ (0.09)
                    
Diluted net income per common share $0.17 $ 0.29  $0.05 $ 0.12   $0.05 $ (0.09)


BAY BANCORP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the Twelve Months Ended December 31, 2015 and 2014
(Unaudited)
            
            
         Accumulated  
     Additional   Other  
   Common Paid-in Retained Comprehensive  
   Stock Capital Earnings Income (loss) Total
            
Balance December 31, 2013 $ 9,379,753 $ 36,357,001 $7,703,597$ 1,113,917 $ 54,554,268 
            
Net income   -   -  3,032,708  -   3,032,708 
Other comprehensive income      -  549,597   549,597 
Stock-based compensation   212,000   1,294,713  -  -   1,506,713 
Issuance of common stock   1,422,764   5,577,236  -  -   7,000,000 
Balance December 31, 2014 $ 11,014,517 $ 43,228,950 $10,736,305$ 1,663,514 $ 66,643,286 
            
            
         Accumulated  
     Additional   Other  
   Common Paid-in Retained Comprehensive  
   Stock Capital Earnings Income (loss) Total
            
Balance December 31, 2014 $ 11,014,517 $ 43,228,950 $10,736,305$ 1,663,514 $ 66,643,286 
            
Net income   -   -  1,930,765  -   1,930,765 
Other comprehensive income      -  (1,089,954)  (1,089,954)
Stock-based compensation   -   143,712  -  -   143,712 
Issuance of common stock under stock option plan   202,651   709,603       912,254 
Repurchase of common stock   (170,492)  (687,082) -  -   (857,574)
Balance December 31, 2015 $ 11,046,676 $ 43,395,183 $12,667,070$ 573,560 $ 67,682,489 


BAY BANK, FSB
CAPITAL RATIOS
(Unaudited)
         To Be Well  
         Capitalized Under  
      To Be Considered  Prompt Corrective  
   Actual   Adequately Capitalized  Action Provisions  
  Amount Ratio Amount Ratio Amount Ratio 
As of December 31, 2015:                   
                    
Total Risk-Based Capital Ratio $67,238 16.58% $32,443 8.00% $40,553 10.00% 
                    
Tier I Risk-Based Capital Ratio $65,465 16.14% $24,332 6.00% $32,443 8.00% 
                    
Common Equity Tier I Capital Ratio $65,465 16.14% $18,249 4.50% $26,360 6.50% 
                    
Leverage Ratio $65,465 13.75% $19,041 4.00% $23,801 5.00% 
                    
As of September 30, 2015:                   
                    
Total Risk-Based Capital Ratio $65,357 16.50% $31,681 8.00% $39,601 10.00% 
                    
Tier I Risk-Based Capital Ratio $63,737 16.10% $23,760 6.00% $31,680 8.00% 
                    
Common Equity Tier I Capital Ratio $63,737 16.10% $17,820 4.50% $25,740 6.50% 
                    
Leverage Ratio $63,737 13.19% $19,331 4.00% $24,164 5.00% 
                    
As of December 31, 2014:                   
                    
Total Risk-Based Capital Ratio $62,743 16.66% $30,132 8.00% $37,665 10.00% 
                    
Tier I Risk-Based Capital Ratio $61,448 16.31% $15,066 4.00% $22,599 6.00% 
                    
Leverage Ratio $61,448 12.94% $18,988 4.00% $23,735 5.00% 
                    
As of September 30, 2014:                   
                    
Total Risk-Based Capital Ratio $60,376 16.14% $29,922 8.00% $37,402 10.00% 
                    
Tier I Risk-Based Capital Ratio $59,247 15.84% $14,961 4.00% $22,441 6.00% 
                    
Leverage Ratio $59,247 12.51% $18,943 4.00% $23,679 5.00% 
                    
As of December 31, 2013:                   
                    
Total Risk-Based Capital Ratio $47,815 14.68% $26,049 8.00% $32,562 10.00% 
                    
Tier I Risk-Based Capital Ratio $46,964 14.42% $13,025 4.00% $19,537 6.00% 
                    
Leverage Ratio $46,964 11.41% $16,461 4.00% $20,577 5.00% 

 

BAY BANCORP, INC. AND SUBSIDIARY
SELECTED FINANCIAL DATA
Unaudited
                
                
 Three Months Ended Twelve Months Ended 
                
 December 31, September 30, December 31, December 31, December 31, 
 2015 2015 2014 2015 2014 
Financial Data:               
Assets$ 491,161,838  $ 474,161,168  $ 479,942,985  $ 491,161,838  $ 479,942,985  
Investment securities  34,925,398    35,063,233    36,665,607    34,925,398    36,665,607  
Loans (net of deferred fees and costs)  393,240,567    389,360,703    393,051,192    393,240,567    393,051,192  
Allowance for loan losses  (1,773,009)   (1,619,755)   (1,294,976)   (1,773,009)   (1,294,976) 
Deposits  367,415,938    381,570,136    387,830,132    367,415,938    387,830,132  
Borrowings  52,300,000    20,900,000    22,150,000    52,300,000    22,150,000  
Stockholders' equity  67,682,489    66,879,394    66,643,286    67,682,489    66,643,286  
                
Net income  512,180    529,418    1,239,532    1,930,765    3,032,708  
                
Average Balances:               
Assets  475,843,083    486,948,390    479,539,765    481,145,938    459,673,750  
Investment securities  35,141,189    40,709,454    37,744,736    36,649,655    37,773,016  
Loans (net of deferred fees and costs)  391,709,601    387,299,575    393,337,031    389,684,220    364,499,210  
Borrowings  30,558,696    32,341,304    18,500,000    23,188,219    9,269,231  
Deposits  375,606,120    383,155,659    391,419,769    388,245,406    385,700,292  
Stockholders' equity  65,565,103    67,356,613    66,079,174    65,747,418    61,530,969  
                
Performance Ratios:               
Return on average assets  0.43%   0.43%   1.08%   0.40%   0.66% 
Return on average equity  3.10%   3.12%   7.87%   2.94%   4.93% 
Yield on average interest-earning assets  4.85%   5.07%   5.90%   5.10%   5.59% 
Rate on average interest-bearing liabilities  0.52%   0.56%   0.43%   0.58%   0.42% 
Net interest spread  4.33%   4.51%   5.47%   4.51%   5.17% 
Net interest margin  4.49%   4.68%   5.59%   4.70%   5.30% 
                
Book value per share$ 6.13  $ 6.05  $ 6.05  $ 6.13  $ 6.05  
Basic net income per share$ 0.05  $ 0.05    0.12    0.18    0.29  
Diluted net income per share$ 0.05  $ 0.05    0.12    0.17    0.29  
                
                
  December 31, September 30,  June 30, December 31,    
  2015  2015   2015  2014     
Asset Quality Ratios:               
Allowance for loan losses to loans  0.45%   0.42%   0.37%   0.33%    
Nonperforming loans to total loans  2.26%   2.79%   2.98%   3.27%    
Nonperforming assets to total assets  2.10%   2.71%   2.68%   2.99%    
Net charge-offs annualized to avg. loans  0.03%   0.06%   0.06%   0.06%    
                
Capital Ratios (Bay Bank, FSB):                
Total risk-based capital ratio  16.58%   16.50%   17.39%   16.66%    
Common equity tier 1 capital ratio  16.14%   16.10%   17.00%  N/A    
Tier 1 risk-based capital ratio  16.14%   16.10%   17.00%   16.31%    
Leverage ratio  13.75%   13.19%   13.23%   12.94%    
                


For investor inquiries contact: Joseph J. Thomas, President and CEO 410-536-7336 jthomas@baybankmd.com 7151 Columbia Gateway Drive, Suite A Columbia, MD 21046 For further information contact: Larry D. Pickett, Chief Financial Officer lpickett@baybankmd.com 410-312-5415

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