Business Banking
Personal Online Banking
Personal Banking

Our commitment is to exceed expectations, one customer at a time.  And that's what makes Bay Bank unique - just like the customers we serve.  Read More >>

Business Banking

Our bank was built by entrepreneurs, for entrepreneurs. At Bay Bank, you will receive the responsive, personal service of a local bank combined with the strength and resources of a larger institution.  Read More >>

Mortgage Services

We believe in the simple and straightforward concept that the customer experience should be the number one priority.  Read More >>

The Bank Built by Entrepreneurs for Entrepreneurs. 

Whether we're working with a business owner or an individual managing their personal finances, we believe there is an entrepreneur in all of us. Our philosophy is to employ knowledgeable, experienced bankers who have a strong desire to partner with businesses and individuals to help them reach their financial goals. Outstanding customer experience is our hallmark. With decisions being made locally by individuals who understand the market, we can move quickly on behalf of our customers.

We are proud to be a local bank dedicated to providing the personal service of a community bank combined with a larger institution’s strength of resources. 

Proud Partnerships

Bay Bank is proud to support these organizations.  Use the arrows to scroll through all of our Proud Partnerships.

Recent News View All

Columbia, Maryland (April 28, 2016)- Bay Bancorp, Inc. ("Bay") (NASDAQ: BYBK), the savings and loan holding company for Bay Bank, FSB ("Bank"), announced today net income of $0.19 million or $0.02 per basic and diluted common share for the quarter ended March 31, 2016, compared to net income of $0.34 million or $0.03 per basic and diluted common share for the quarter ended March 31, 2015.  The pre-tax results for 2016 include $0.06 million of merger-related expenses related to the previously announced pending Hopkins Federal Savings Bank (“Hopkins Bank”) merger (the “Hopkins Merger”).

Commenting on the announcement, Joseph J. Thomas, President and CEO said, “We continued to invest in our franchise by hiring Todd Warren as Baltimore Market President and we achieved growth of new loans in the Bank’s originated portfolio at an 18.6% annualized pace in the first quarter of 2016.  However, our earnings were negatively impacted by a decline in net interest margin for the quarter ended March 31, 2016 to 4.20% from 4.73% for the same period of 2015 due to a decrease in net discount accretion recognized into income from acquired loans.  Our ongoing efficiency efforts continue in 2016 and for the three months ended March 31, 2016, noninterest expense was $5.3 million compared to $5.7 million for the same period of 2015.  The contributors to the decrease were broad based and would be even more substantial after considering the Hopkins Merger related expenses incurred in the first quarter 2016.  Core, pre-provision income, excluding accelerated accretion on acquired loans, provision for loan loss, intangible asset amortization and merger related expenses, was $0.84 million for the three months ended March 31, 2016 compared to $0.80 million for the same period of 2015.  We expect the approval and completion of the Hopkins Merger during the 2nd quarter of 2016 and are excited about the new client opportunities, additional scale, and enhanced earnings performance we will gain in the combination with Hopkins Bank.”

 

Highlights from the First Three Months of 2016


Bay focused on deposit costs and liquidity management over the quarter as Bay prepared for the Hopkins Merger balance sheet.  Partially related to the focus, deposits declined by $1.5 million for the three months ending March 31, 2016, when compared to December 31, 2015.  Bay’s capital position remains very strong with the capacity for both the Hopkins Merger and for future growth.  Total regulatory capital to risk weighted assets was 16.6% as of March 31, 2016.  The Bank has a proven record of success in acquisitions and acquired problem asset resolutions and, at March 31, 2016, had $9.0 million in remaining net purchase discounts on the acquired loan portfolios.


Specific highlights are listed below:

 

·   Total assets were $463 million at March 31, 2016 compared to $491 million at December 31, 2015 and decreased by $24 million from $487 million at March 31, 2015.

 

·   Total loans were $397 million at March 31, 2016, an increase of 0.9% from $393 million at December 31, 2015 and an increase of 1.4% from $392 million at March 31, 2015.

 

·   Total deposits were $366 million at March 31, 2016, a decrease of 0.4% from $367 million at December 31, 2015 and a decrease of 9.5% from $404 million at March 31, 2015.  Noninterest bearing deposits at March 31, 2016 were $98 million, a decrease of 3.7% from $101 million at December 31, 2015.

 

·   Net interest income for the three months ended March 31, 2016 totaled $4.7 million compared to $5.3 million for the same period of 2015.  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 nonperforming loan resolutions.  The decrease in net discount accretion income was the primary driver of year-over-year results, declining $0.6 million as Bay transitions interest income reliance to the core balance sheet and ongoing net earnings growth. 

 

·   Net interest margin for the three months ended March 31, 2016 was 4.20%, compared to 4.73% for the same period of 2015.  The margin for the first quarter of 2016 reflects the variable pace of net discount accretion recognized within interest income and the impact of fair value amortization on the interest expense of acquired deposits.  For the quarter ended March 31, 2016, the earning asset portfolio yield was influenced by a $0.60 million decline in net discount accretion of purchased loan discounts recognized in interest income.  The net interest margin declined 0.53% during the quarter compared to a year earlier, nearly all related to loan and deposit accretion fluctuations.

 

The return on average assets for the three months ended March 31, 2016 was 0.16%, as compared to 0.43% and 0.29% for the three months ended December 31, and March 31, 2015, respectively.  The return on average equity for the three months ended March 31, 2016 was 1.11% compared to 3.10% and 2.08% for the three months ended December 31, and March 31, 2015, respectively.

 

·   Nonperforming assets decreased to $9.7 million at March 31, 2016, from $10.3 million at December 31, 2015 and from $15.6 million at March 31, 2015.  The decrease resulted from the Bank’s consistent resolution of acquired nonperforming loans from previous acquisitions.

 

·   The provision for loan losses for the three months ended March 31, 2016 was $298,000, compared to $275,000 for the same period of 2015.  The increase for the 2016 period was primarily the result of an increase in loan originations and adjustments in certain qualitative factors.  As a result, the allowance for loan losses increased to $1.95 million at March 31, 2016, representing 0.49% of total loans, compared to $1.77 million, or 0.45% of total loans, at December 31, 2015.  Management expects both the allowance for loan losses and the related provision for loan losses to increase in the future periods due to the reduction in the accretion of the discount on the acquired loan portfolios and an increase in new loan originations.

 

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 authorized 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.  During the first quarter of 2016, Bay purchased 79,508 shares of its common stock pursuant to the stock purchase program at an average price of $4.91 per share.  Also during the first quarter of 2016, the Board of Directors authorized an additional stock purchase program, authorizing Bay to purchase an additional 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.  As of March 31, 2016, Bay has repurchased 95,492 shares under this authorization at an average price of $4.95 per share.  The Board may modify, suspend or discontinue the program at any time.

 

Balance Sheet Review

 

Total assets were $463.4 million at March 31, 2016, a decrease of $27.7 million, or 5.6%, when compared to December 31, 2015.  Cash and interest bearing deposits decreased by $19.7 million or 57.1%, when compared to December 31, 2015 as the bank reduced wholesale short-term borrowings, while investment securities available for sale decreased by $8.3 million or 25.0%, over the same period.  Loans held for sale decreased by $1.3, million or 26.8%, during the quarter ended March 31, 2016 and were offset by a $3.6 million, or 0.9%, increase in loans held for investment.

 

Total deposits were $365.9 million at March 31, 2016, a decrease of $1.5 million, or 0.4%, when compared to December 31, 2015.  The decrease was primarily the result of a $3.8 million, or 3.7%, decrease in non-interest bearing accounts.  The decrease in assets resulted in a $26.0 million decrease in short-term borrowings over the quarter.

 

Stockholders’ equity decreased to $66.9 million at March 31, 2016 from $67.7 million at December 31, 2015 and increased from $65.7 million at March 31, 2015.  The decrease since December 31, 2015 related to the ongoing stock repurchase program and a $0.1 million decrease in Accumulated Other Comprehensive Income offset by corporate earnings.  The book value of Bay’s common stock improved to $6.15 per share at March 31, 2016, compared to $6.12 per share at December 31, 2015.

 

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 $9.7 million at March 31, 2016 from $10.3 million at December 31, 2015.  The decrease related primarily to decreases in nonaccrual loans and troubled debt restructurings.  Nonperforming assets represented 2.1% of total assets at March 31, 2016, which, due to lower reported assets, was unchanged from December 31, 2015. 


At March 31, 2016, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was 16.20% at March 31, 2016 as compared to 16.14% at December 31, 2015 and 16.22% at March 31, 2015.  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 ended March 31, 2016 was $0.19 million compared to net income of $0.34 million for the same period of 2015.  Individual categories reflect variability between years. 

 

Net interest income decreased by $0.6 million for the quarter ended March 31, 2016 when compared to the same period of 2015.  The decrease was the result of a $0.6 million decrease in net discount accretion recognized into income when compared to the same period of 2015.  Excluding the net discount accretion impact, Bay was able to offset decreases in earning asset yield, with a reduction in deposit costs due to pricing discipline and a favorable change in deposit mix and effective utilization of short-term wholesale funding alternatives.  The net interest margin for the quarter ended March 31, 2016 decreased to 4.20% from 4.73% for the same period of 2015.  As of March 31, 2016, the remaining net loan discounts on the Bank’s acquired loan portfolio totaled $9.0 million.

Noninterest income for the three months ended March 31, 2016 was $1.2 million compared to $1.2 million for the same period of 2015.  A $0.24 million net decrease in mortgage banking fees and gains were offset by a $0.2 million increase in gains on security sales and redemptions during the quarter ended March 31, 2016.  Expectations are for increased mortgage banking fees and gains to expand throughout 2016.

Noninterest expense reduction continues as a key focus for 2016 net income improvement.  For the three months ended March 31, 2016, noninterest expense was $5.3 million compared to $5.7 million for the same period of 2015.  The contributors to the decrease when compared to the quarter ended March 31, 2015 were broad based and led by decreases of $0.12 million in occupancy and equipment expenses, $0.06 million in loan collection costs, $0.06 million in data processing and item processing services and a $0.06 million in core deposit intangible amortization.  The decrease is more substantial after consideration that 2016 contains $0.06 million in Hopkins Merger related expenses.

 

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”, as well as the cautionary statements contained in the other reports and documents that Bay Bancorp, Inc. files with or furnishes the SEC.

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

410-312-5415

lpickett@baybankmd.com

7151 Columbia Gateway Drive,

Suite A

Columbia, MD 21046

Columbia, Md. (April 6, 2016) — Bay Bank, the bank built for entrepreneurs by entrepreneurs, announced today that Todd Warren has joined the company in the newly established role of Baltimore Market President and Senior Vice President.

Warren, a well-known veteran of the banking industry, will lead the effort to further expand Bay Bank’s presence in the Greater Baltimore market. Managing a team of commercial lenders from banking offices in Lutherville, Warren will be responsible for generating growth for Bay Bank among entrepreneurs and established business customers.

With nearly 20 years in the banking industry, Warren has distinguished himself as a professional best known for finding innovative solutions to complex customer issues. He joins Bay Bank after six years at Sandy Spring Bank, where he most recently served as Senior Vice President and Senior Relationship Manager. His prior banking experience includes leadership and lending roles at K Bank, Susquehanna Bank and Bank of America.

“Todd’s deep knowledge of the Baltimore market, his innovative approach to solving problems and his professional commitment to ensure customer success make him a perfect fit for Bay Bank,” said Joe Thomas, Bay Bank President and CEO. “He is a proven leader with a track record of success and growth. Our team is pleased to have him in this key role to drive banking solutions and build lead relationship with entrepreneurs in the Baltimore market.”

Warren’s appointment is the latest in a series of growth announcements from Bay Bank, including the acquisition of Hopkins Bank, the expansion of its business and commercial banking services and the relocation of its headquarters to Columbia. 

“I’m thrilled to join a thriving company like Bay Bank,” said Warren. “As a community bank, we have a great opportunity to make a real impact on the business community in Baltimore, finding smart solutions for entrepreneurial customers throughout the metro region.”

Warren is also active in the Greater Baltimore community and has served on the boards of organizations including Star-Spangled Banner Flag House, Academy of Finance for Baltimore County Schools and Center for Progressive Learning. He is also the first district representative on the planning board for Baltimore County.

About Bay Bank

Bay Bank, FSB is headquartered in Columbia, Maryland, and serves the community with a network of 11 branches strategically located throughout the region. Founded in 2010, the bank has quickly developed a strong reputation for its focus on being the bank built by entrepreneurs, for entrepreneurs. The bank has total assets of around $480 million. The bank’s parent company, Bay Bancorp, Inc., trades on the NASDAQ Capital Market under the ticker symbol “BYBK.”

 

Columbia, Md. (March 14, 2016) — Bay Bank, the bank built by entrepreneurs for entrepreneurs, announced today that Gregory Manuel has joined the company as vice president and commercial real estate relationship manager.

Manuel comes to Bay Bank with 30 years of experience in the banking industry, having held several leadership positions at Susquehanna Bank, BBVA Compass Bank and Northwest Savings Bank. He has a long history in the greater Baltimore region managing large commercial real estate portfolios and working with commercial real estate developers, investors and residential home builders.  Manuel’s extensive expertise in this segment allows him to assess complex credits and structure loans to benefit the needs of the borrower.

In his new role, he will be under the leadership of George D. Decker, a 40 year veteran in the commercial banking industry in the greater Baltimore Metro area. Manuel will be responsible for revenue growth by developing, growing and managing a profitable commercial real estate portfolio.

“Greg’s professional experience and extensive background in Commercial Real Estate and Commercial Lending is a great asset to the bank,” said George Decker, Senior Vice President and Commercial Real Estate Manager.  “He has a proven track record of developing new business and is well suited for this position.  We are happy to have him here at Bay Bank as we continue to grow our commercial real estate presence in the region.”

Manuel is an active member of RMA.  He holds a Bachelor’s of Science degree from the University of Baltimore.

Manuel will be serving these markets from the Bank’s Lutherville office located at 2328 West Joppa Road.

This recent hire is the latest in a series of growth announcements from Bay Bank, including their intent to acquire Hopkins Federal Savings Bank, expanding its business and commercial banking services and hiring key positions within the organization to further promote growth.

About Bay Bank

Bay Bank, FSB is headquartered in Columbia, Maryland, and serves the community with a network of 11 branches strategically located throughout the region. Founded in 2010, the bank has quickly developed a strong reputation for its focus on being the bank built by entrepreneurs for entrepreneurs. The bank has total assets of around $491 million. The bank’s parent company, Bay Bancorp, Inc., trades on the NASDAQ Capital Market under the ticker symbol “BYBK.”

Columbia Maryland—February 1, 2016—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”.


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
Columbia, MD, December 18, 2015 (GLOBE NEWSWIRE) – Bay Bancorp, Inc. (Nasdaq: BYBK), the parent company of Bay Bank, FSB, and Hopkins Bancorp, Inc. (“Hopkins”), the parent company of Hopkins Federal Savings Bank, today jointly announced the execution of a definitive merger agreement (the “Merger Agreement”) that provides for the acquisition of Hopkins by Bay Bancorp, Inc. for cash in a deal valued at approximately $23.8 million (the “merger consideration”) after giving effect to a $16.0 million cash dividend that Hopkins Bancorp, Inc. 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 deducing all of Hopkins’ transaction-related expenses.

Bay Bancorp, Inc., with assets of approximately $475 million at September 30, 2015, serves entrepreneurs, private real estate investors and professionals in the greater Baltimore-Washington, D.C. metropolitan area through 11 banking locations. Hopkins, with assets of approximately $242 million at September 30, 2015, serves customers located primarily in the Baltimore, Maryland metropolitan area with a branch and offices in Pikesville, Maryland and a branch in Baltimore City. The combination is expected to create a $700 million banking institution serving one of the largest, healthiest and fastest growing markets in the nation. The transaction is expected to be immediately accretive to Bay Bancorp, Inc.’s fully diluted earnings per share in 2016 and 2017.

Pursuant to the terms of the Merger Agreement, which has been unanimously approved by the Boards of Directors of both companies, Hopkins will be merged with and into Bay Bancorp, Inc., with Bay Bancorp, Inc. surviving the merger (the “Merger”). Immediately after the Merger, Hopkins Federal Savings Bank will merge with and into Bay Bank, FSB, with Bay Bank, FSB as the surviving federal savings bank. The Merger, which is subject to regulatory approval, is anticipated to close in the second quarter of 2016.

Commenting on the announcement, Joseph J. Thomas, President and Chief Executive Officer of Bay Bancorp, Inc., said, "We are pleased to announce the combination of Bay Bank and Hopkins Federal Savings Bank. Hopkins has a rich legacy in the Baltimore community and a talented group of seasoned bankers. We are excited about the opportunities this merger will bring to expand on the Hopkins customer relationships with the council of Alvin M. Lapidus as our anticipated new Chairman Emeritus. We also look forward to engaging Hopkins’ professionals in the mortgage business to enhance the growth of Bay Bank Mortgage. This transaction epitomizes our entrepreneurial strategy of growing within our existing markets both organically and through acquisition. It will allow us to continue to enhance the resources we offer to our customers and to improve performance for our shareholders."

Alvin M. Lapidus, Chairman of Hopkins, added, "We are pleased to join forces with Bay Bank to provide enhanced and long-term value to our customers and communities. Our merger with Bay, with combined total assets of approximately $700 million, will provide greater capital resources and operational scale that will allow us to grow together with a diverse product mix and allow our team to continue to support the Baltimore community. With Bay’s board and executive team having deep roots in the Baltimore community, we know the heritage of Hopkins is in good hands. Bay has an enviable track record for successfully integrating employees in a merger and creating and growing customer relationships.”

Under the terms of the Merger Agreement, Bay Bancorp, Inc. 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 $400,000 in cash bonuses that Hopkins may choose to pay to certain directors and employees at the closing (the “bonuses”), and the proposed $16.0 million cash dividend . 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 Bancorp, Inc. 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. If Bay Bancorp, Inc. or Hopkins terminates the Merger Agreement because of a material breach by the other party or certain other actions or inactions by the other party that prevent or hinder the Merger, then it will be entitled to a $1.0 million termination fee from the other party.

Mr. Lapidus and certain of his affiliates have, in their individual capacities as stockholders of Hopkins, entered into a Support Agreement with Hopkins pursuant to which they have agreed, among other things, to vote their shares of Hopkins common stock in favor of the Merger, to take certain other actions in support of the Merger, and to forbear from taking certain actions detrimental to the Merger. Pursuant to the Merger Agreement, the boards of directors of Bay Bancorp, Inc. and Bay Bank, FSB will appoint Mr. Lapidus to serve as an advisor to those boards, with the title of Chairman Emeritus, and he will enter into an agreement with Bay Bancorp, Inc. at the closing that will prohibit him from engaging in certain competitive activities or soliciting Bay Bancorp, Inc.’s customers.

The Merger Agreement and the transactions contemplated thereby are subject to customary closing conditions, including approval by Hopkins’ stockholders and applicable banking regulatory authorities. The Merger Agreement will be included as an exhibit to a Current Report on Form 8-K to be filed by Bay Bancorp, Inc. with the Securities and Exchange Commission (the “SEC”) within four business days of this release.

Gordon Feinblatt LLC acted as legal counsel to Bay Bancorp, Inc. and Keefe, Bruyette & Woods, Inc. provided certain financial advisory assistance. Ober, Kaler, Grimes & Shriver, a Professional Corporation, acted as legal counsel to Hopkins Bancorp, Inc. and RP Financial, LC. acted as its financial advisor.

About Bay Bancorp, Inc.

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, Anne Arundel, Howard, and Harford. Bay Bank, FSB 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. Bay Bank, FSB 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.

About Hopkins Bancorp, Inc.

Hopkins is a privately owned savings and loan holding company headquartered in Pikesville, Maryland. Hopkins is the parent company of Hopkins Federal Savings Bank, a federal savings bank. The bank is locally owned and operated, serving the residents of the City of Baltimore and nearby communities since 1921. The bank operates from two locations with its main office in Highlandtown (East Baltimore) and a branch office in Pikesville (Northwest Baltimore), providing 1-4 family residential, construction, multifamily and commercial real estate loans within its local market area. The bank offers traditional retail deposit products primarily to consumers. In addition, the bank has five wholly-owned subsidiaries, including Hopkins Financial Corporation and Hopkins Properties, Inc. (“HPI”), and owns a 51% equity interest in iReverse Home Loans, LLC. HPI originates loans held for sale and iReverse Home Loans brokers reverse mortgage loans.

Caution Regarding Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, risks related to the satisfaction of the conditions to closing the acquisition in the anticipated timeframe or at all, including risks related to the failure to obtain necessary regulatory and Hopkins stockholder approvals and the possibility that the Merger does not close, including in circumstances in which Hopkins would be obligated to pay Bay Bancorp, Inc. a termination fee or other expenses and vice versa; risks related to the ability to realize the anticipated benefits of the acquisition, including the possibility that the expected synergies from the proposed Merger will not be realized or will not be realized within the expected time period; the risk that the businesses will not be integrated successfully; disruption from the transaction making it more difficult to maintain business and operational relationships; negative effects of this announcement or the consummation of the proposed acquisition on the market price of Bay Bancorp, Inc.’s common stock; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the proposed acquisition; other business effects, including the effects of industry, market, economic, political or regulatory conditions; future interest rates; changes in tax laws, regulations, rates and policies; competitive developments; and other risk factors detailed from time to time in filings made by Bay Bancorp, Inc. with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Bay Bancorp, Inc. and Hopkins expressly disclaim any current intention to update publicly any forward-looking statement after the distribution of this release, whether as a result of new information, future events, changes in assumptions or otherwise.

Additional Information and Where to Find It

In connection with the proposed Merger, Hopkins will mail or otherwise provide to its stockholders a proxy statement regarding the proposed Merger. BEFORE MAKING ANY VOTING DECISION, HOPKINS’ STOCKHOLDERS ARE URGED TO READ THE PROXY STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER DOCUMENTS THAT BAY BANCORP, INC. MAY FILE WITH THE SEC IN CONNECTION WITH THE PROPOSED MERGER OR INCORPORATED BY REFERENCE THEREIN BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER AND THE PARTIES TO THE PROPOSED MERGER.

For Bay Bancorp, Inc. investor inquiries contact:

Joseph J. Thomas
President and CEO
7151 Columbia Gateway Drive,
Suite A
Columbia, MD 21046
410-536-7336
jthomas@baybankmd.com

For Bay Bancorp, Inc. further information contact:

Larry D. Pickett, Chief Financial Officer
lpickett@baybankmd.com
410-312-5415

For Hopkins Bancorp, Inc. inquiries or further information contact:

Michael L. Shomper
President
1726 Reisterstown Road, Suite 200
Baltimore, MD 21208
410-484-4555
mshomper@hopkinsfsb.com