Bay Banks of Virginia, Inc. Declares Common Stock Dividend

Kilmarnock, VA, May 12, 2008, Bay Banks of Virginia, Inc. (OTC BB: BAYK), holding company for Bank of Lancaster and Bay Trust Company, announced that its Board of Directors declared a quarterly dividend of $0.17 per share on May 7, 2008. The dividend will be paid on June 27, 2008 to shareholders of record June 16, 2008.

This June 27, 2008 dividend of $0.17 per share represents a 3% increase compared to the $0.165 dividend paid June 30, 2007. The annualized dividend rate per share is $0.68 with a total annualized payout of approximately $1.5 million on 2.4 million shares outstanding.

Bay Banks of Virginia, based in Kilmarnock, has seven full service banking offices strategically located in Kilmarnock, White Stone, Warsaw, Montross, Heathsville and Callao; and a Trust Company office in Kilmarnock.

Steady progress continues in the establishment of two additional banking offices. A branch office in Burgess, Northumberland County, Virginia will be the Bank’s 8th retail office and an extension of its market into the eastern region of that county. The Bank plans to open this office by June 2008. The Bank is also establishing a Colonial Beach, Virginia retail office. Colonial Beach is an incorporated town within Westmoreland County. Management also anticipates opening this office by the first quarter of 2009. This will be the Bank’s 9th banking office and the 2nd in Westmoreland County, an extension of its market to that County’s western end.

Bank of Lancaster has total assets of $329.4 million and offers consumers and businesses a wide mix of financial services. Investment services, including financial planning, securities brokerage and insurance products are offered through Investment Advantage. million and offers consumers and businesses a wide mix of financial services. Investment services, including financial planning, securities brokerage and insurance products are offered through Investment Advantage. Management services for personal and corporate trusts, including estate planning, estate settlement and trust administration as well as financial planning, investment services, management of IRAs and other investment accounts are provided through Bay Trust Company.


Investor contact: Austin L. Roberts III, President and Chief Executive Officer, at 804-435-1171 or aroberts@banklanc.com.