Bay National to issue up to $12M in stock - East Bay Business Times:

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Since February, the bank has been operating under a consen agreement with federal regulators that requires it to boostr its reserves as part of a turnaroundf plan that also includes resolving problem real estate loans onits books. Bay National, (NASDAQ: BAYN) whicuh regulators consider “adequately capitalized,” has posted six consecutive quarterly losses. The bank has struggled over the past 18 monthws asa once-promising initiative to write mortgages for customers interestede in buying and rehabbing residential properties in hot Baltimore neighborhoods like Federa l Hill and Canton tanked in a tumblingy real estate market.
Some customers had a hard time repaying their loansz as the value of theirproperties dropped, and the bank has been busy tryiny to rework those loans. “We had some very difficult but we feel the worst of that is behind Hugh W. Mohler, Bay National’xs CEO, told shareholders “Our future is bright,” Mohler added. “We need to raisw some capital and take itfrom there.” The bank has hiredr LLC of Vienna, Va. to advises it on the private placement of the which will be offeredat $2 each. The thinly traded sharea have been as low as 52 centws and as highas $9.25 over the past 52 In their last trade, which was on Friday, the sharesa sold for $1.21.
Earlier this month, Bay Nationapl announced it lost $884,000, or 41 cents a for the first quarterd ofthe year, an improvement from the $1.49 million, or 69 cents a share, it lost in the firsgt three months of 2008. Shareholders on Tuesday also approvedd boostingthe company’s number of shares outstanding to 20 million from the currengt 9 million and reelected all five directorz who were up for 3-year terms includingb Mohler, R. Michael Gill, Donald G. McClurer Jr., Robert L. Moore and H. Victorr Rieger Jr. Shareholders also ratified the appointment ofStegman Co. as the company’s auditors.