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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 >>

What matters to you, matters to us. 

Our commitment is to exceed expectations one customer at a time. At Bay Bank, you'll find a bank where bankers and customers actually know one another. You’ll have access to products, services and resources that provide the ability to achieve your financial goals.

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. 

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Recent News View All
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
Columbia, Md. (November 5, 2015) — Bay Bank, the bank built by entrepreneurs for entrepreneurs, announced today that Travis Teal has joined its team as vice president and business banking sales manager.

Under the direction of Deanna Lintz, executive vice president and chief banking officer, Teal will be responsible for driving sales performance in Branch Sales Offices with specific focus on business development resulting in Business Banking loan and deposit growth.

Teal comes to Bay Bank with nearly 10 years of experience in the banking industry after holding several leadership positions at SunTrust Bank, BB&T Bank and Wells Fargo. His prior responsibilities included managing sales, processes and credits. He also played a vital role in Wells Fargo’s acquisition of Wachovia in 2010 by successfully transferring all of the bank’s processes to the new brand.

“There is nothing more important to us than the success of our customers and their businesses, and the ability to provide exceptional service begins with the quality of people we hire,” said Lintz. “As we continue to expand throughout the Baltimore Washington Corridor, entrepreneurs who rely on Bay Bank will experience innovative financial services from experienced advisors to help them reach their business goals.”

These recent hires are the latest in a series of growth announcements Bay Bank has made in the past few months, including expanding its business and commercial banking services, moving its headquarters to Columbia and promoting several staff members throughout the organization.

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 Maryland—October 29, 2015 – Bay Bancorp, Inc. (“Bay”) (NASDAQ: BYBK), the savings and loan holding company for Bay Bank, FSB (“Bank”), announced today net income of $0.53 million or basic and diluted net income per common share of $.05 for the third quarter of 2015, compared to net income of $0.55 million or basic and diluted net income per common share of $.05 for the second quarter of 2015, and a loss of $0.94 million or basic and diluted loss per common share of $.09 for the third quarter of 2014. 

 

Bay reported net income of $1.42 million or basic and diluted net income per common share of $0.13 for the first nine-months of 2015, compared to $1.79 million or basic or diluted net income per common share of $0.18 for the same period of 2014, which included a bargain purchase gain from the May 30, 2014 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 the company’s pre-tax profitability 18% in the nine months ending September 30, 2015, while we also continued to improve our asset quality as measured in the 30% classified asset ratio.  Excluding the benefit of the 2014 bargain purchase gain and exit of the IRA business, pre-tax income increased by $3.1 million for the first nine months of 2015 when compared to the first nine-months of 2014. With our expanded geographic focus, investments in our banking team, responsive and creative lending capacity, and progressive suite of treasury and technology products, we are poised to drive organic growth and profitability that will  lead to improved returns on our strong capital levels,” continued Thomas. 

 

Highlights from the First Nine Months of 2015

The Bank’s relationship management activities resulted in the growth of new loans in the Bank’s originated portfolio by a 29.8% annualized pace in the first nine-months of 2015.  Deposit mix changes were favorable, with declines in certificate of deposit balances offset by core interest bearing and noninterest-bearing deposit growth, leading to an attractive 0.45% cost of deposits for the 3rd quarter of 2015. Bay has a very strong capital position and capacity for future growth with total regulatory capital to risk weighted assets of 16.5% as of September 30, 2015.  The Bank has a proven record of success in acquisitions and acquired problem asset resolutions and, at September 30, 2015, had $11.1 million in remaining net purchase discounts on acquired loan portfolios.

 

Specific highlights are listed below:

·   The return on average assets for the three- and nine-month periods ended September 30, 2015 was 0.43% and 0.39%, respectively, as compared to -0.77% and 0.54%, respectively, for the same periods of 2014.  The return on average equity for the three- and nine-month periods ended September 30, 2015 was 3.12% and 2.81%, respectively, as compared to -5.62% and 3.89%, respectively, for the same periods in 2014.

 

·   Total assets were $474 million at September 30, 2015 compared to $489 million at June 30, 2015 and $480 million at December 31, 2014.

 

·   Total loans were $389 million at September 30, 2015, an increase of 1.0% from $386 million at June 30, 2015, a decrease of 0.9% from $393 million at December 31, 2014 and a decrease of 1.2% from $394 million at September 30, 2014.

 

·   Total deposits were $382 million at September 30, 2015, a decrease of 0.7% from $384 million at June 30, 2015, a decrease of 1.6% from $388 million at December 31, 2014 and a decrease of 4.3% from $399 million at September 30, 2014.  Non-interest bearing deposits were $92 million at September 30, 2015, an increase of 0.2% from $92 million at December 31, 2014.

 

·   Net interest income for the three- and nine-month periods ended September 30, 2015 totaled $5.4 million and $16.3 million, respectively, compared to $5.5 million and $16.5 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. Earning asset leverage was the primary driver in year-over-year results, as average earning loans and investments increased to $426 million for the nine months ended September 30, 2015, compared to $361 million for the same period of 2014.

 

·   Net interest margin for the three- and nine-month periods ended September 30, 2015 was 4.68% and 4.76%, respectively, compared to 4.80% and 5.50%, respectively, for the same periods of 2014.  The margin for nine-months ended September 30, 2015 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 nine-months ended September 30, 2015, the earning asset portfolio yield was influenced by a $1.19 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $0.92 million decrease in the fair value amortization on deposits when compared to the same period of 2014.  The margin declined by 74 basis points during the nine months ended September 30, 2015 when compared to a year earlier, with the reduction in loan and deposit accretion accounting for 76 basis points of the fluctuation.

 

·   Nonperforming assets decreased to $12.8 million at September 30, 2015 or 2.0%, from $13.1 million at June 30, 2015, and declined 37.9% from $20.7 million at September 30, 2014.  The third quarter of 2015 decreases resulted from the Bank’s continued resolution of acquired nonperforming loans.

 

·   The provision for loan losses for the three and nine months ended September 30, 2015 was $306,000 and $878,000, respectively, compared to $220,000 and $580,000, respectively, for the same periods of 2014.  The increases for the 2015 periods were primarily the result of increases in loan originations.  As a result, the allowance for loan losses was $1.62 million at September 30, 2015, representing 0.42% of total loans, compared to $1.43 million, or 0.37% of total loans, at June 30, 2015 and $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 accretion of the discount on the acquired loan portfolios and an increase in new loan originations 

 

Stock Repurchase Program

 

During the third quarter of 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.

 

 

Third Quarter Events

 

On July 1, 2015, the Bank announced it moved its corporate headquarters to Columbia, Maryland, where it also opened a new full service branch on April 27, 2015.  This is the Bank’s first branch in Howard County, Maryland.  The headquarters and branch are located at 7151 Columbia Gateway Drive.  The headquarters change resulted in 14 associates relocating to Columbia and 13 associates remaining in the Lutherville sales offices.

 

Balance Sheet Review

 

Total assets were $474 million at September 30, 2015, a decrease of $5.8 million, or 1.2%, when compared to December 31, 2014.  Investment securities decreased by $1.6 million or 4.4% for the nine-month period, while loans held for sale increased by $3.3 million or 45.1%.  These changes were partially offset by a $3.7 million or 0.9% decline in loans held for investment.

 

Total deposits were $382 million at September 30, 2015, a decrease of $6.3 million, or 1.6%, when compared to December 31, 2014.  The decrease was primarily due to managed declines in certificates of deposits and seasonal deposit fluctuations, offset by a $.2 million or 0.2% increase in non-interest bearing deposits.

 

Stockholders’ equity increased to $66.9 million at September 30, 2015 compared to $66.1 million at June 30, 2015, $66.6 million at December 31, 2014, and $65.2 million at September 30, 2014.  The third quarter 2015 increases related to corporate earnings, which were partially offset by net market value adjustments on bank owned investment securities.  The increase over the first nine months of 2015 includes an increase in the Bank’s retirement income plan liability due to changes in actuarial assumptions, offset by related deferred taxes.  The book value of Bay’s common stock was $6.05 at September 30, 2015 compared to $5.99 per share at June 30, 2015 and $5.92 per share at September 30, 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 $12.8 million at September 30, 2015 from $13.1 million at June 30, 2015 and from $14.3 million at December 31, 2014.  The improvements were driven by related decreases in purchased credit impaired loans of $0.25 million and $2.03 million from June 30, 2015 and December 31, 2014, respectively.  Nonperforming assets represented 2.71% of total assets at September 30, 2015, compared to 2.68% at June 30, 2015 and 4.31% at September 30, 2014.

At September 30, 2015, the Bank remained above all “well-capitalized” regulatory requirement levels.  The Bank’s tier 1 risk-based capital ratio was 16.09% at September 30, 2015 as compared to 15.84% at September 30, 2014 and 16.66% 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- and nine-month periods ended September 30, 2015 was $0.53 million and $1.42 million, respectively, compared to a net loss of $0.94 million and net income of $1.79 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 $0.51 million and the 2014 recognition of the remaining interest rate mark-to-market adjustment of $2.4 million related to the exit of our IRA business, changes were less comparable to prior periods. 

 

Net interest income for the three months ended September 30, 2015 totaled $5.4 million compared to $5.5 million 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.  A decrease of $0.2 million in certificate of deposit interest mark amortization was offset by favorable changes in Bay’s deposit mix and the resulting reduction in deposit costs.

 

Net interest income decreased to $16.3 million for the nine months ended September 30, 2015 compared to $16.5 million for the same period of 2014.  The decrease was the result of a $64.2 million growth in average interest-earning assets largely due to the Slavie Acquisition, offset by a $1.19 million decline in net discount accretion of purchased loan discounts recognized in interest income and a $0.92 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 nine months ended September 30, 2014.  The net interest margin for third quarter of 2015 decreased to 4.68% from 4.88% for the second quarter of 2015.  The net interest margin for the nine months ended September 30, 2015 decreased to 4.76% compared to 5.50% for the same period of 2014 due to the decline in discount accretion on loans and deposits.  As of September 30, 2015, the remaining net loan discounts on the Bank’s loan portfolio, including loans acquired in the Slavie Acquisition, totaled $11.1 million.

 

Noninterest income for the three months ended September 30, 2015 was $1.5 million compared to $1.6 million for the three months ended June 30, 2015 and $1.1 million for the three months ended September 30, 2014.  The change from the immediately prior quarter was primarily the result of a $0.12 million gain from the sale of certain securities, offset by a $0.09 million decrease in mortgage banking fees and gains.  The increase from the third quarter of 2014 was primarily the result of a $0.26 million increase in mortgage banking fees and gains and a $0.12 million gain from the sale of certain securities in 2015.

 

Noninterest income for the nine months ended September 30, 2015 was $4.3 million compared to $6.6 million for the same period of 2014.  This decrease was primarily the result of the $2.4 million remaining interest rate mark-to-market adjustment on IRA deposits recognized in 2014, the $0.51 million bargain purchase gain recognized in 2014 and a $0.16 million decrease in electronic banking fees, offset by a $0.74 million increase in mortgage banking fees and gains and a $0.20 million gain from the sale of certain securities in 2015. Expectations are for mortgage fees and gains to decrease during the final quarter of 2015, although Bay anticipates that they will remain above the pace recorded in 2014.

Noninterest expense reduction is a key focus for 2015 net income improvement.  For the three months ended September 30, 2015, noninterest expense was $5.8 million compared to $5.9 million for the prior quarter and $8.0 million for the third quarter of 2014.  The primary contributors to the decrease when compared to the third quarter of 2014 were decreases of $0.35 million in salary and employee benefits, $0.09 million in occupancy expense, $0.05 million in foreclosed property expenses, and $0.64 million in merger related expenses and one-time other expenses of $0.98 million recorded in 2014.

For the nine months ended September 30, 2015, noninterest expense was $17.4 million compared to $20.6 million for the same period of 2014.  The primary contributors to the decrease when compared to the first nine-months of 2014 were decreases of $0.81 million in salary and employee benefits, $0.27 million in occupancy expense and $0.22 million in foreclosed property expenses offset by $0.13 million increase in data processing expenses along with $0.98 million in one-time other expenses recorded in 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. (October 21, 2015) — Bay Bank, the bank built by entrepreneurs for entrepreneurs, is pleased to announce that Vice President and Relationship Manager Richard Yoskey has been selected as a winner of SmartCEO’s 2015 Money Manager Awards. The winners were announced at a ceremony on Oct. 15, 2015, at The Grand in Baltimore where more than 200 executives and decision makers were in attendance.

“We are proud to see a leader like Rich receive recognition for the outstanding work he does for our clients and in the local banking community,” said Bay Bank EVP and Chief Lending Officer King Corbett. “He sets the bar high and we congratulate him for a well-deserved win.”

The Money Manager Awards program honors bankers, wealth managers and advisors who have been instrumental in the growth and success of their clients’ organizations and/or portfolios. Finalists were chosen by an independent committee of local business leaders.

“The financial landscape is ever changing. And whether you are growing a business or are managing a personal portfolio, having a trusted financial advisor could make all the difference,” says Jaime Nespor-Zawmon, president of SmartCEO Events. “That’s why we’re recognizing the region’s top money managers. These dedicated men and women commit themselves to helping businesses and individuals build stronger financial futures.”

The 2015 Money Manager Award finalists and winners were profiled in the September/October issue of Baltimore SmartCEO magazine. To view the full list of winners online, please visit www.smartceo.com/baltimore-money-manager.

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.”