275119--3/15/2010--BAYLAKE

related topics

{loan, real, estate}

{loss, insurance, financial}

{stock, price, share}

{competitive, industry, competition}

{product, market, service}

{regulation, change, law}

{condition, economic, financial}

{acquisition, growth, future}

{regulation, government, change}

{system, service, information}

{personnel, key, retain}

{financial, litigation, operation}

{operation, natural, condition}

{control, financial, internal}

{stock, price, operating}

Our business may be adversely affected by conditions in the financial markets and economic conditions generally. Our operations are geographically limited and are more at risk for downturns in those areas. Weakness in the markets for residential or commercial real estate, including the secondary residential mortgage loan markets, could reduce our net income and profitability We are subject to interest rate risk. We are subject to lending risk. Our allowance for loan losses may be insufficient. Uncertainty in the financial markets could result in lower fair values for our investment securities, which fair values may not be realizable if we were to sell those securities today. We are subject to environmental liability risk associated with collateral securing our real estate lending. We may be adversely affected by the soundness of other financial institutions. Competition may affect our results. Maintaining or increasing our market share may depend on lowering prices and market acceptance of new products and services. Acts or threats of terrorism and political or military actions by the United States or other governments could adversely affect general economic industry conditions. We operate in a highly regulated environment, which could increase our cost structure or have other negative impacts on our operations. Recent legislative and regulatory actions taken to stabilize the United States banking system and additional actions being considered may not succeed or may disadvantage us. We are subject to increases in FDIC insurance premiums and special assessments by the FDIC. Unauthorized disclosure of sensitive or confidential client or customer information, whether through a breach of our computer system or otherwise, could severely harm our business. Customers may decide not to use banks to complete their financial transactions, which could result in a loss of income to us. Our controls and procedures may fail or be circumvented. We rely on the accuracy and completeness of information about customers or counterparties, and inaccurate or incomplete information could negatively impact our consolidated financial condition and results of operations. We are subject to examinations and challenges by taxing authorities. We could experience an unexpected inability to obtain needed liquidity. A decline in our stock price could require a write-down of some portion or all of our goodwill. Future growth or operating results may require us to raise additional capital but that capital may not be available. The holders of our junior subordinated debentures have rights that are senior to those of our shareholders. The holders of our convertible notes will have rights that are senior to those of our shareholders. Our securities are not an insured deposit. The holding company cannot rely on dividends from Baylake Bank. We may not be able to attract and retain skilled people. We continually encounter technological change. Possible restrictions on bank overdraft programs could significantly reduce our deposit service charge income.

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275119--3/15/2010--BAYLAKE_CORP