8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  December 30, 2010

BAYLAKE CORP.

(Exact name of registrant as specified in its charter)

Wisconsin	001-16339	39-1268055
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

217 North Fourth Avenue           Sturgeon Bay, Wisconsin	54235
(Address of principal executive offices)	(Zip code)

                    (920) 743-5551                   

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:

¨  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01.

Other Events.

Today, the Company issued a press release announcing (i) the entry into a written agreement, along with its wholly-owned bank subsidiary, Baylake Bank, with the Federal Reserve Bank of Chicago and the State of Wisconsin Department of Financial Institutions, and (ii) the consummation of a sale of a pool of nonperforming loans.  A copy of this press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this item, including that which is incorporated by reference, is being furnished to the Securities and Exchange Commission.  Such information shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.  The information shall not be deemed incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01.

Financial Statements and Exhibits.

Exhibit No.	Description
99.1	Press Release, dated December 30, 2010

Caution about Forward-Looking Statements

Certain information contained in this Current Report or in an attached exhibit may include “forward-looking statements.”  These forward-looking statements related to the Company’s future growth, profitability, capital and market position, the execution of its business plans, and expected progress on satisfying the terms of the Written Agreement.  Actual results, performance or achievements of the Company may differ materially from those expressed or implied by forward-looking statements.  For details on factors that could affect expectations, see the cautionary language included under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 and other filings with the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  December 30, 2010

BAYLAKE CORP.

By:  /s/ Kevin L. LaLuzerne                             

Kevin L. LaLuzerne

Senior Vice President and Chief Financial

Officer

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EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated December 30, 2010

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EX-99.1

Exhibit 99.1

News Release

Contact: Susan Anschutz

   920-743-5551

Source: Baylake Corp.

Baylake Corp. Signs Agreement with Regulators

Trends are positive; Baylake to continue focus on improving asset strength and loan quality

For Immediate Release

     December 30, 2010

(Sturgeon Bay, WI) Baylake Corp. (OTC BB: BYLK) and its wholly-owned bank subsidiary, Baylake Bank, an FDIC-insured financial institution, today announced they have entered into a formal written agreement with the Federal Reserve Bank of Chicago and the State of Wisconsin Department of Financial Institutions (the “Agreement”) which, among other things, requires the company and the bank to continue reducing non-performing loans, improve earnings and grow their respective capital bases, and specifies other key action items that the company and the bank have already completed or are in the process of implementing.

While the Agreement results from a September 2009 regulatory examination, Baylake Bank has been proactively and aggressively working to improve asset quality since well before the completion of that exam.  “In fact, since the middle of 2009 our asset quality trends and operating performance have improved,” explained Baylake Bank CEO Robert Cera. “The bank has worked diligently to reduce non-performing loans from a peak of $51.6 million as of June 30, 2009 to $18.9 million as of September 30, 2010, a decline of 63.3% during the past fifteen months.”  To further reduce non-performing loans, on December 29, 2010, the Bank entered into and closed on a loan sale agreement with respect to a pool of loans with an aggregate principal balance of $7.9 million and a carrying value of $5.3 million.  A loss of $1.8 million was recorded on the sale, including loan sale fees in the amount of $0.1 million.  “This sale was consistent with the bank’s aggressive strategy to address its nonperforming assets and will result in a further reduction of $5.3 million in such assets,” stated Cera.

“The written agreement will not impact our customers or employees,” Cera explained.  “Customer funds are safe, sound and secure.  Both Baylake Corp. and Baylake Bank are above “well capitalized” thresholds established under applicable bank and bank holding company regulatory guidelines.  We continue to open accounts, make loans and meet the financial services needs of our customers.  Baylake Bank has been in business for more than 130 years and, with our employees and customers, we have weathered other difficult economic times.  We have a constructive working relationship with our regulators and will continue to coordinate closely with them as we work to address the issues in the Agreement as quickly as possible and we believe we will become stronger as a result.”

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Baylake Corp., headquartered in Sturgeon Bay, Wisconsin, is the bank holding company for Baylake Bank. Through Baylake Bank, Baylake Corp. provides a variety of banking and financial services from 27 financial centers located throughout Northeast and Central Wisconsin, in Brown, Door, Green Lake, Kewaunee, Manitowoc, Outagamie, Waupaca, and Waushara Counties.

The following appears in accordance with the Private Securities Litigation Reform Act of 1995:

This news release contains forward-looking statements about the financial condition, results of operations and business of Baylake Corp. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include the words "believe," "expect," "anticipate," "intend," "plan," "estimate" or words of similar meaning, or future or conditional verbs such as "would," "should," "could" or "may."

Forward-looking statements, by their nature, are subject to risks and uncertainties. A number of factors, many of which are beyond the control of Baylake Corp., could cause actual conditions, events or results to differ significantly from those indicated by the forward-looking statements. These factors, which are described in this press release and in the annual and quarterly reports filed by Baylake Corp. with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2009 under “Item 1A. Risk Factors,” include certain credit, market, operational, liquidity and interest rate risks associated with the company’s business and operations. Other factors include changes in general business and economic conditions, developments (including collection efforts) relating to the identified non-performing loans and other problem loans and assets, world events (especially those which could affect our customers’ tourism-related businesses), competit ion, fiscal and monetary policies and legislation.

Forward-looking statements speak only as of the date they are made, and Baylake Corp. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.