<PAGE>

                                 United States
                       Securities and Exchange Commission
                             Washington, D.C. 20549

                                  Form 10-QSB

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934
     For the quarterly period ended March 31, 2000.

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF
     1934
     For the transition period from             to            .
                                    -----------    -----------

                       Commission file number: 333-87781

                           Bay National Corporation
       (Exact name of small business issuer as specified in its charter)

                Maryland                                  52-2176710
     (State or other jurisdiction of                  (I.R.S. Employer
     incorporation or organization)                  Identification No.)


                2328 West Joppa Road, Baltimore, Maryland 21093
                -----------------------------------------------
                   (Address of principal executive offices)

                                (410) 494-2580
                       ---------------------------------
                          (Issuer's telephone number)

     _____________________________________________________________________
        (Former name, former address and former fiscal year, if changed
                              since last report)


     State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of May 5, 2000, there were
1,242,020 shares of the Registrant's common stock, $0.01 par value per share,
issued or outstanding.

Transitional Small Business Disclosure Format (check one): Yes [ ]  No [x]
<PAGE>

                        PART I - FINANCIAL INFORMATION

Item 1.    Financial Statements.

                           BAY NATIONAL CORPORATION
                         (a Development Stage Company)

                                BALANCE SHEETS

                                    ASSETS
<TABLE>
<CAPTION>
                                                        March 31,        December 31,
                                                          2000               1999
                                                        ---------        ------------
<S>                                                    <C>               <C>
Cash                                                   $  395,108         $  763,957
Prepaid expenses                                           19,067             25,557
Premises and equipment - net                              187,427             22,768
Other assets                                               13,331             24,102
                                                       ----------         ----------

     TOTAL ASSETS                                      $  614,933         $  836,384
                                                       ==========         ==========

                     LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES:
 Accounts payable                                      $   40,107         $   44,633
 Accrued professional fees                                226,000            216,000
                                                       ----------         ----------

     Total liabilities                                    266,107            260,633
                                                       ----------         ----------

STOCKHOLDERS' EQUITY:
 Common stock, $.01 par, 9,000,000 shares authorized,
   112,500 shares issued and outstanding                    1,125              1,125
 Surplus                                                1,123,875          1,123,875
 Deficit accumulated during the development stage        (776,174)          (549,249)
                                                       ----------         ----------

     Total stockholders' equity                           348,826            575,751
                                                       ----------         ----------

     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $  614,933         $  836,384
                                                       ==========         ==========
</TABLE>

See accompanying notes.

                                       2
<PAGE>

                           BAY NATIONAL CORPORATION
                         (a Development Stage Company)

                            STATEMENT OF OPERATIONS
                   FOR THE THREE MONTHS ENDED MARCH 31, 2000


REVENUES - Interest income          $   8,580
                                    ---------

EXPENSES:
 Salaries and employee benefits       132,096
 Advertising and promotion                766
 Offering costs                        11,757
 Professional fees                     10,000
 Rent                                  35,133
 Office expenses                        9,584
 Other                                 36,169
                                    ---------

     Total expenses                   235,505
                                    ---------

LOSS BEFORE INCOME TAX BENEFIT       (226,925)

INCOME TAX BENEFIT                          -
                                    ---------

NET LOSS                            $(226,925)
                                    =========

EARNINGS PER SHARE:
 Basic net loss per share              $(2.02)
                                       ======

 Diluted net loss per share            $(2.02)
                                       ======


See accompanying notes.

                                       3
<PAGE>

                           BAY NATIONAL CORPORATION
                         (a Development Stage Company)

                            STATEMENT OF CASH FLOWS
                   FOR THE THREE MONTHS ENDED MARCH 31, 2000


CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                             $(226,925)
  Adjustments to reconcile net loss to net cash
  used in operating activities:
    Depreciation                                           2,882
    Decrease in other assets and prepaid expenses         17,261
    Decrease in accounts payable                          (4,526)
    Increase in accrued professional fees                 10,000
                                                       ---------

      Net cash used in operating activities             (201,308)
                                                       ---------

CASH FLOWS FROM INVESTING ACTIVITIES -
  Acquisition of equipment                              (167,541)
                                                       ---------

NET DECREASE IN CASH                                    (368,849)

CASH AT BEGINNING OF PERIOD                              763,957
                                                       ---------

CASH AT END OF PERIOD                                  $ 395,108
                                                       =========

Supplemental cash flows information:
  Interest payments                                       $    -
                                                          ======

  Income tax payments                                     $    -
                                                          ======


See accompanying notes.

                                       4
<PAGE>

                           BAY NATIONAL CORPORATION
                         (a Development Stage Company)

                         NOTES TO FINANCIAL STATEMENTS
                   FOR THE THREE MONTHS ENDED MARCH 31, 2000



1.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      General
      -------

         The foregoing financial statements are unaudited; however, in the
opinion of management, all adjustments (comprising only normal recurring
accruals) necessary for a fair presentation of the results of the interim period
have been included.  These statements should be read in conjunction with the
financial statements and accompanying notes included in Bay National
Corporation's 1999 Annual Report on Form 10-KSB.  The results shown in this
interim report are not necessarily indicative of results to be expected for the
full year 2000.

         The accounting and reporting policies of Bay National Corporation (the
"Company") conform to generally accepted accounting principles.

      Nature of Business
      ------------------

         Bay National Corporation was incorporated on June 3, 1999 under the
laws of the State of Maryland to operate as the bank holding company of a
proposed new national bank with the name Bay National Bank (the "Proposed
Bank").  It is intended that the Company will purchase all the shares of common
stock to be issued by the Proposed Bank.  The Company's operations to date have
been limited to taking the necessary actions to organize and capitalize the
Company and the Proposed Bank.  The Proposed Bank has not commenced operations
and will not do so unless the public offering of stock by the Company is
successful and the Proposed Bank meets the conditions of the Office of the
Comptroller of the Currency (the "OCC") to receive its charter authorizing it to
commence operations as a national bank, has obtained the approval of the Federal
Deposit Insurance Corporation to insure its deposit accounts, and meets certain
other regulatory requirements.

      Costs Associated with Start-Up Activities
      -----------------------------------------

         The Company expenses costs incurred during the start-up phase of
organization in accordance with the American Institute of Certified Public
Accountants' Statement of Position 98-5 Reporting on the Costs of Start-Up
Activities.

                                       5
<PAGE>

2.  CAPITAL RAISING EFFORTS

      As of April 30, 2000, the termination date of the offering, the Company
had received subscriptions for 1,129,520 shares, or an aggregate of $11,295,200
in subscription funds.  Subscription funds received during the offering were
placed in an escrow account and were invested temporarily in bank accounts,
short-term certificates of deposit or short-term securities issued or guaranteed
by the United States government.

      Bay National Bank may not commence operations until Bay National
Corporation purchases at least $9,000,000 of Bay National Bank's capital stock
and obtains approval from the Federal Reserve Board to become a bank holding
company, and until Bay National Bank meets the conditions of the Office of the
Comptroller of the Currency to receive its certificate of authority to commence
the business of banking and the Federal Deposit Insurance Corporation (FDIC) to
receive deposit insurance.  It is anticipated that these conditions will be
satisfied by May 11, 2000.

                                       6
<PAGE>

Item 2.    Management's Plan of Operation.

General.
-------

      Bay National Corporation was organized on June 3, 1999. Since inception,
Bay National Corporation's activities have been limited to those related to its
organization and capitalization and the organization and capitalization of its
proposed national bank subsidiary, Bay National Bank (in organization). These
limited activities have been financed solely by Bay National Corporation's sale
of an aggregate of 112,500 shares of common stock at a purchase price of $10.00
per share in its organizational offering.

      Bay National Corporation filed a Registration Statement on Form SB-2 with
the Securities and Exchange Commission for an offering of a minimum of 900,000
shares and a maximum of 1,500,000 shares of Bay National Corporation's common
stock, with an offering price of $10.00 per share. The offering commenced on
November 17, 1999 and terminated by its terms on April 30, 2000. The primary
purpose of the offering was to raise the necessary capital to form and
capitalize Bay National Bank. The offering was conditioned upon, among other
things, Bay National Corporation's receipt of acceptable subscriptions for at
least 900,000 shares of common stock.

      As of April 30, 2000, the termination date of the offering, the Company
had received subscriptions for 1,129,520 shares, or an aggregate of $11,295,200
in subscription funds. Subscription funds received during the offering were
placed in an escrow account and were invested temporarily in bank accounts,
short-term certificates of deposit or short-term securities issued or guaranteed
by the United States government.

      Bay National Bank may not commence operations until Bay National
Corporation purchases at least $9,000,000 of Bay National Bank's capital stock
and obtains approval from the Federal Reserve Board to become a bank holding
company, and until Bay National Bank meets the conditions of the Office of the
Comptroller of the Currency to receive its certificate of authority to commence
the business of banking and the Federal Deposit Insurance Corporation (FDIC) to
receive deposit insurance. It is anticipated that these conditions will be
satisfied by May 11, 2000.

Plan of Operations

      Once Bay National Bank opens, expected on or about May 12, 2000, it will
begin business from its offices in North Baltimore, Maryland. It anticipates
that its branch office in Salisbury, Maryland will open on or about May 26,
2000. Bay National Bank will accept checking and savings deposits, and will
offer a wide range of commercial and industrial, real estate, consumer and
residential mortgage loans.

      Bay National Corporation expects that Bay National Bank will incur
approximately $450,000 in expenses in leasehold improvements for its offices and
for furniture, fixtures and equipment for the offices, of which approximately
$166,000 had been incurred as of March 31, 2000. Bay National Bank has
contracted with an outside vendor for its data processing. Bay National
Corporation anticipates a one-time capital expenditure of $486,000 and annual
costs in the first year of operations of approximately $200,000 for data
processing services.

Cash Requirements

      Bay National Corporation believes that the proceeds from the public
offering and the proceeds

                                       7
<PAGE>

from the organizational offering will be sufficient to fund the expenses of
establishing and opening Bay National Bank, and Bay National Corporation's and
Bay National Bank's operations for at least twelve months after the termination
of the public offering. Bay National Corporation does not anticipate a need to
raise additional capital during that period.

      IN ADDITION TO THE HISTORICAL INFORMATION CONTAINED IN PART I OF THIS
QUARTERLY REPORT ON FORM 10-QSB, THE DISCUSSION IN PART I OF THIS QUARTERLY
REPORT ON FORM 10-QSB CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS SUCH AS
STATEMENTS OF BAY NATIONAL CORPORATION'S PLANS, OBJECTIVES, EXPECTATIONS AND
INTENTIONS THAT INVOLVE RISKS AND UNCERTAINTIES.  THESE RISKS AND UNCERTAINTIES
INCLUDE, AMONG OTHERS, THOSE DISCUSSED IN BAY NATIONAL CORPORATION'S
REGISTRATION STATEMENT UNDER THE CAPTION "RISK FACTORS," SUCH AS THE LACK OF AN
OPERATING HISTORY AND EXPECTATION OF LOSSES; DEPENDENCE ON KEY PERSONNEL; RISKS
RELATED TO BAY NATIONAL BANK'S CHOICE OF LOAN PORTFOLIO; RISKS RELATED TO BAY
NATIONAL BANK'S LENDING LIMIT; RISKS OF A COMPETITIVE MARKET; IMPACT OF
GOVERNMENT REGULATION ON OPERATING RESULTS; AND EFFECT OF DEVELOPMENTS IN
TECHNOLOGY. BAY NATIONAL CORPORATION'S ACTUAL RESULTS COULD DIFFER MATERIALLY
FROM THOSE DISCUSSED HEREIN.

                                       8
<PAGE>

PART II - OTHER INFORMATION

Item 1.    Legal Proceedings.

           None.

Item 2.    Changes in Securities and Use of Proceeds.

           (a)  Not applicable.

           (b)  Not applicable.

           (c)  Not applicable.

           (d)  Use of Proceeds.

                     (1) The effective date of the Securities Act registration
statement for which the use of proceeds information is being disclosed was
November 17, 1999. The Commission file number assigned to the registration
statement was 333-87781.

                     (2) The offering commenced on November 17, 1999.

                     (3) The offering did not terminate before any securities
were sold.

                     (4) (i)   The offering terminated as of April 30, 2000. In
the offering, Bay National Corporation sold 1,129,520 of the 1,500,000 shares of
common stock, $0.01 par value per share, that were registered.

                         (ii)  The offering was not underwritten.

                         (iii) Bay National Corporation's common stock, $0.01
par value per share, was registered in the offering.

                         (iv)  Bay National Corporation registered 1,500,000
shares of common stock in the offering, with an aggregate price of $15,000,000.
Bay National Corporation sold 1,129,520 shares of common stock in the offering,
and received aggregate offering proceeds of $11,295,200.

                         (v)   From the effective date of the registration
statement, November 17, 1999, to March 31, 2000, a reasonable estimate of the
expenses incurred by Bay National Corporation in connection with the issuance
and distribution of its common stock is as follows:

        Underwriting discounts and commissions:            N/A
        Finders' fees:                                     N/A
        Expenses paid to or for underwriters:              N/A
        Other expenses:
          Filing fees                                 $  6,800
          Legal and other professional fees           $112,500
          Printing fees (including Edgar
            filing expenses)                          $ 50,400
          Other                                       $ 39,500
                                                      --------
        Total                                         $209,200

                                       9
<PAGE>

      As of March 31, 2000, Bay National Corporation had paid $97,000 of
such estimated expenses.  None of the $97,000 was paid, directly or indirectly,
to directors, officers or owners of ten percent or more of any class of equity
securities of Bay National Corporation or to their associates, or to any
affiliate of Bay National Corporation.

                         (vi)   As of March 31, 2000, the offering was ongoing,
the conditions to the offering had not been satisfied and offering proceeds
remained in escrow. Also, Bay National Corporation incurred expenses related to
the offering after March 31, 2000. Accordingly, the net offering proceeds to Bay
National Corporation after giving effect to the expenses described in paragraph
(4)(v) above cannot be calculated.

                         (vii)  As of March 31, 2000, the offering was ongoing,
the conditions to the offering had not been satisfied and offering proceeds
remained in escrow. Accordingly, there was no application of net offering
proceeds as of March 31, 2000.

                         (viii) Not applicable.


Item 3.    Defaults Upon Senior Securities.

           Not applicable.

Item 4.    Submission of Matters to a Vote of Securities Holders.

           Not applicable.

Item 5.    Other Information.

           Not applicable.

Item 6.    Exhibits and Reports on Form 8-K.

               (a) Exhibits.

               The following exhibit is being filed herewith:

               EXHIBIT 27 Financial Data Schedule

               (b) Reports on Form 8-K.

               None.

                                       10
<PAGE>

                                  SIGNATURES

      In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                              Bay National Corporation

Date: May 11, 2000            By: /s/ Hugh W. Mohler
                                  --------------------------
                              Hugh W. Mohler, President
                              (Principal Executive Officer)

Date: May 11, 2000            By: /s/ John S. DiPietro
                                  --------------------------
                              John S. DiPietro, Treasurer
                              (Principal Accounting and Financial Officer)

                                       11