Baylake Corp. Performance and Planned Leadership Changes Highlight Annual Meeting

Baylake Corp., the holding company for Baylake Bank, held its annual shareholders’ meeting Monday, June 5, 2006, at Stone Harbor Resort and Conference Center in Sturgeon Bay. Over 135 shareholders were present, with approximately 84% of total shares represented by proxy, as Chairman of the Board T.L. Herlache welcomed meeting attendees and introduced Baylake Bank representatives.

During the course of the regular business meeting, 2005 performance and trends were discussed with shareholders. According to Herlache the year brought continued growth in assets and efforts to gain more core and retail deposits was successful during the year. Herlache also discussed a number of non-recurring income and expense items that occurred during the year and it was explained that the non-recurring income items were approximately equal to the non-recurring expense items.

Mike Gilson Executive Vice President Business Services was then introduced and provided shareholders with updates regarding Baylake Bank’s loan performance during 2005.

The financial review was followed by a brief update from Baylake Corp. Director Robert Agnew who presented information to shareholders as chair of the CEO Nominating Committee.

According to Agnew, the committee was formed in August of 2005 to begin the process of identifying a successor to replace T.L. Herlache upon his planned retirement in 2007. The committee, made up of Baylake Corp. Directors T.L. Herlache, Bill Parsons, Roger Ferris, Richard Braun, and Agnew as Chairman, intends to identify a candidate who would serve as President and Chief Operating Officer, and would be in position to take on the additional responsibilities of Chief Executive Officer within about a one-year period.

To date, the committee has interviewed a number of highly qualified internal and external candidates and is in the process of completing this effort. The committee hopes to fill this position within the next 60 days.

Another change of leadership was announced, as T.L. Herlache thanked retiring Director Ronald D. Berg and recognized his 27 years of service to Baylake Corp. Berg joined Bank of Sturgeon Bay on May 3, 1971 as an Assistant Vice President and Loan Officer. He was promoted to Vice President in 1977 and later to Senior Vice President in 1980. He has participated on and chaired numerous committees throughout his years of service, serving with distinction in his many years of employment until finally retiring from Baylake Bank in 1994.

Berg was elected as a Director of Baylake Corp. on July 14, 1979. He was appointed to the Executive Committee in 1980, the Personnel and Compensation Committee, appointed in 1984 serving through 1992; the Non-Bank Services Committee, appointed in 1986 and serving through 1990; the Director Loan Committee, appointed in 1986 and serving through his retirement from the bank in 1994; and was further a member of the Audit and Legal Committee, appointee in 1990 and serving as the Chairman since his appointment.

T.L. Herlache thanked Berg for his years of service and dedication. “Ron’s experience and background have been of great value to this bank. He will be missed.” Herlache said.

Herlache concluded the meeting with comments shared regarding his vision for Baylake Corp. and Baylake Bank.

“It is our vision to maximize our franchise value by being viewed by the people in the communities we serve, our current and prospective employees, and the banking community as the premier community bank in Northeastern Wisconsin,” Herlache said.

He shared target goals with shareholders that included the goal to return to 13-16% return on equity, target profitability growth of 10% per year, and to improve net non-interest margin to 1% of average assets over the next few years.

He addressed the reasons for establishing Market President positions and the realigning of the Wealth Services division and the role each will have developing business and customer relationships for Baylake Bank in the future. Herlache concluded by recognizing the importance of the company’s culture, and the quality work environment with employees who respect one another, work hard and enjoy life.

In other business, shareholders elected Class III Directors Richard A. Braun, and William C. Parsons, for three-year terms.

Baylake Corp. provides complete financial services from 27 Baylake Bank financial centers located throughout Brown, Door, Green Lake, Kewaunee, Manitowoc, Outagamie, Waupaca and Waushara Counties, and from their website at www.baylake.com.