bayk-corresp.htm

This letter is submitted by Bay Banks of Virginia, Inc. (the “Company”) in response to your letter dated June 18, 2019 regarding specific disclosures made in the above-referenced annual report on Form 10-K and in the Company’s earnings press release with respect to the quarter ended March 31, 2019, filed as an exhibit to the Company’s current report on Form 8-K on April 30, 2019.

For convenience of reference, we have set forth your comments in bold below, with the Company’s response following.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

We note your disclosure on page 34 of the non-GAAP measure “Net Interest margin excluding the effect of acquisition accounting adjustments”. We also note your disclosure in your March 31, 2019 earnings press release of the following non-GAAP measures: “ALL plus discounts on acquired loans to gross loans”, “Yield on interest-earning assets, excluding accretion of

1801 Bayberry Court, Suite 101, P.O. Box 17310, Richmond, VA 23226
Toll Free: (844) 404-9668 | Fax: (804) 285-1581
vcb.bank

discounts on acquired loans (quarter-to-date annualized)”, “Cost of interest-bearing liabilities, excluding amortization of premium on acquired time deposits (quarter-to-date annualized)”, and “Core Net interest margin”. It appears that disclosing financial measures and metrics excluding the impact of purchase accounting represents an individually tailored recognition and measurement method which could result in a misleading financial metric that violates Rule 100(b) of Regulation G. Please refer to Question 100.04 of the Compliance and Disclosure Interpretations for guidance.

Therefore, in future filings, including Forms 8-K, please do not disclose financial measures and metrics that exclude the impact of purchase accounting.

Per your request, we will remove non-GAAP measures that exclude the impact of purchase accounting from future filings, including all filings made in current reports on Form 8-K.