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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary proxy statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12

BAYLAKE CORP.
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(Name of Registrant as Specified in Its Charter)

BAYLAKE CORP.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of filing fee (Check the appropriate box):

[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2).
or Item 22(a)(2) of Schedule 14A.

[ ] $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transactions applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.

(1) Amount previously paid:

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(2) Form, schedule or registration statement no.:

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(3) Filing party:

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(4) Date filed:

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April 27, 1995

Dear Baylake Shareholder:

You are invited to attend the Annual Meeting of Shareholders of
Baylake Corp. to be held on Saturday, June 3, 1995, at the Cornerstone
Conference Center, 222 North Third Avenue, Sturgeon Bay, Wisconsin. The Annual
Meeting will begin at 10:00 a.m..

At the Annual Meeting, you will be asked to elect four (4) directors
in Class I, whose term will expire in 1998, and consideration of any other
matter which may properly come before the meeting.

To assure that your shares are represented in voting on these very
important matters, please complete and return the accompanying proxy card
promptly in the enclosed envelope, whether or not you plan to attend the Annual
Meeting. If you do attend, you may revoke your proxy and vote your shares in
person at the Annual Meeting.

The attached Request Form should be completed by you ONLY if you plan
to attend the meeting. Upon receipt of the form, we will send you an Entrance
Card which is to be presented to us when you attend the meeting. Please return
the form by May 10th to allow us to make proper accommodations for those
attending the meeting.

If you require assistance, please contact Stephen A. Kase at Baylake
at (414) 743-5551.

Very truly yours,

Thomas L. Herlache,
President

REQUEST FOR ENTRANCE CARD

If you plan to attend the Annual Meeting, please complete and return in the
proxy envelope.

NAME: _________________________________

ADDRESS: ______________________________

BAYLAKE CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 3, 1995

To the Shareholders of Baylake Corp.:

NOTICE is hereby given that the Annual Meeting of the shareholders of
Baylake Corp., a Wisconsin corporation ("Baylake"), will be held at the
Cornerstone Conference Center, 222 North Third Avenue, Sturgeon Bay, Wisconsin
on Saturday, June 3, 1995, at 10:00 a.m., local time, for the purpose of
considering and voting upon the following matters:

1. Election of four (4) directors of Class I, whose terms will
expire in 1998;

2. Such other matters relating to the foregoing as may properly be
brought before the meeting or any adjournment thereof;

all as set forth in the accompanying Proxy Statement.

The Board of Directors has fixed the close of business on April 20,
1995, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting or any adjournment thereof.

WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE MARK, SIGN,
DATE, AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ACCOMPANYING POSTAGE-PAID
ENVELOPE. IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL
MEETING, WHETHER YOUR HOLDINGS ARE LARGE OR SMALL. IF FOR ANY REASON YOU
SHOULD DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT ANY TIME BEFORE IT IS
VOTED.

By order of the Board of Directors,

Daniel F. Maggle, Secretary

April 27, 1995
Sturgeon Bay, Wisconsin
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PROXY FOR BAYLAKE CORP.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 3, 1995

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned appoints Thomas L. Herlache and William C. Parsons as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of Baylake Corp. held on record by the undersigned on April 20, 1995 at
the Annual Meeting of shareholders to be held on June 3, 1995, or any
adjournment thereof.

ELECTION OF DIRECTORS - Nominees for Class I of the Board of Directors are:

Ivan Bissen John W. Bunda L. George Evenson Thomas L. Herlache

(Instruction: To withhold authority to vote for any individual nominee, strike
a line through the name of the nominee in the list stated above.)

1. Election of Directors: Vote for all names above _________________________
Vote for all above, except those crossed out ______
Withhold vote for all names above _________________

2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting:

THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDERS. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED IN FAVOR OF PROPOSAL NUMBER ONE AND TWO.

Please sign exactly as your name appears on this Proxy. When shares
are held by joint tenants, both should sign. When signing as attorney,
personal representative, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate name, by the
President or other such authorized officer. If a partnership, please sign in
the partnership name by an authorized person.

Dated: , 1995.

Signature Signature, if jointly held

PLEASE MARK, SIGN, DATE AND THEN RETURN THE PROXY PROMPTLY, USING THE
ENCLOSED ENVELOPE FOR YOUR CONVENIENCE.

(ADDRESS LABEL)
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PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
OF
BAYLAKE CORP.

-------------

This Proxy Statement is being furnished to the shareholders of Baylake
Corp. ("Baylake") in connection with the solicitation of proxies on behalf of
Baylake's Board of Directors to be voted at the Annual Meeting of Baylake
Shareholders to be held at 10:00 a.m., local time, on June 3, 1995, at the
Cornerstone Conference Center, 222 North Third Avenue, Sturgeon Bay, Wisconsin,
and at any adjournment thereof (the "Annual Meeting"). This Proxy Statement
and the enclosed proxy card are being mailed to the shareholders on or about
April 27, 1995.

At the Annual Meeting, Baylake shareholders will be asked to elect
four (4) directors to serve as Class I directors, whose terms as directors will
expire in 1998. The Baylake Board of Directors does not intend to present any
other matters before the Annual Meeting. Presence, in person or by proxy, of
the holders of a majority of the outstanding shares of Baylake Common for any
matter constitutes a quorum for all matters to be considered at the Annual
Meeting. Absentations and broker non-votes are counted for purposes of
determining the presence or absence of a quorum. The Inspector of Election
appointed by the Board of Directors will determine the shares represented at
the Annual Meeting and the validity of proxies and ballots, and will count all
votes and ballots. The voting requirements and procedures described below are
based upon the provisions of the Wisconsin Business Corporation Law, Baylake's
charter documents and any other requirements applicable to the matters to be
voted upon. Each shareholder of record of Baylake Common at the close of
business on April 20, 1995, will be entitled to one vote for each share of
Baylake Common registered in such shareholder's name. At that date there were
2,452,137 shares of Baylake Common issued and outstanding, all of which are
entitled to vote.

Shares represented at the Annual Meeting by properly executed proxy
will be voted in accordance with the specifications made on the proxy. Unless
otherwise directed, proxies will be voted FOR the election of the named
individuals in Class I. If any of the nominees would decline or be unable to
act, which eventuality is not foreseen, proxies will be voted with
discretionary authority for a substitute nominee to be designated by the Board
of Directors.

Directors are elected by a plurality of the votes cast by holders of
Baylake Common entitled to vote in the election at a meeting at which a quorum
is present. "Plurality" means that the individuals who receive the largest
number of votes are elected as directors up to the maximum number of directors
to be chosen at the meeting. Therefore, any shares not voted, whether by
withheld authority, broker non-vote or otherwise, have no effect in the
election of directors except to the extent that the failure to vote for an
individual results in another individual receiving a larger number of votes.

Any shareholder submitting a proxy has the right to revoke the proxy
at any time before it is voted by giving written notice to the secretary of
Baylake, by giving oral notice to the presiding officer during the Annual
Meeting that the shareholder intends to vote in person, or by submitting a
subsequently dated proxy. Attendance by a shareholder at the Annual Meeting
will not in and of itself constitute revocation of a proxy.

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The expense of preparing, printing and mailing this Proxy Statement
and the solicitation of proxies will be borne by Baylake. In addition to
solicitation by mail, directors, officers and employees of Baylake may solicit
proxies by telephone, facsimile transmission or personal contact, but will
receive no additional compensation for such services.

Baylake shareholders of record or beneficially on April 20, 1995 may
obtain a copy (without exhibits) of Baylake's (i) Annual Report on Form 10-K,
as amended, for the year ended December 31, 1994, and (ii) Quarterly Report on
Form 10-Q, for the three months ended March 31, 1995, without charge, upon the
written request of such person to: Steven Jennerjohn, Chief Financial Officer,
Baylake Corp., 217 N. Fourth Avenue, P.O. Box 9, Sturgeon Bay, WI 54235.

MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING

THE BOARD OF DIRECTORS OF BAYLAKE UNANIMOUSLY RECOMMENDS:

a vote FOR each of the nominees for Class I director,

AS THE BOARD BELIEVES SUCH ACTION TO BE IN THE BEST INTERESTS
OF BAYLAKE AND ITS SHAREHOLDERS

Election of Directors

The Bylaws of Baylake provide for classification of the Board of
Directors into three classes as nearly equal in number as practicable, each to
serve staggered three-year terms, with the term of one class expiring each
year. The Bylaws also provide that the Board may consist of not less than five
(5) nor more than seventeen (17) directors as shall be determined from year to
year by the shareholders. The Board of Directors currently consists of
fourteen (14) directors, including five (5) Class I directors, whose terms
expire in 1995, four (4) Class II directors whose terms expire in 1996, and
five (5) Class III directors whose terms expire in 1997. One of the Class I
directors, Roger Miller, has recently announced that he will not stand for
re-election, after having served as a director since 1977. The Board of
Directors has nominated the four (4) individuals named below for election as
directors of Class I, to serve for terms expiring at the 1998 Annual Meeting of
Shareholders and upon the election of their successors. All of the nominees
are currently directors of Baylake.

The following also sets forth information as to current directors of
Baylake who will serve as directors for the indicated terms. Except as
otherwise indicated, each of the directors has been employed in such director's
current occupation for at least five years. All of the directors of Baylake
also serve as directors of Baylake Bank.

Nominees for Election as Class I Directors for Term Expiring in 1998:

PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE SINCE
------------ -------------------------- --------

Ivan Bissen (56) Owner of Bissen Co, Ltd. 1987
(2)(5) (excavating and asphalt paving)

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John W. Bunda (60) Owner and manager of Bunda's Hutch 1972
(3) (retail clothing) and Bunda drug
(retail sales)

L. George Evenson (66) Retired; formerly, Dairy Farmer 1978
(1)(4) (1949-1993)

Thomas L. Herlache (52) President, Chief Executive Officer and; 1970
(1)(2)(4) Vice Chairman of Baylake; President,
Chief Executive Officer, Vice Chairman
and Trust Officer of Baylake Bank

Continuing Class II Directors Whose Term Expires in 1996:

PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE SINCE
------------ -------------------------- ---------

John D. Collins (64) Owner of C&S Manufacturing 1979
(2) (metal production)

George Delveaux, Jr. (52) Dairy Farmer 1981
(3)

Glenn Miller (64) Senior Vice President and Co-Owner of 1983
(2)(4) Sturgeon Bay Yacht Harbor; Co-Owner
of Ephraim Yacht Harbor

Ellsworth L. Peterson (71) Chairman of the Board of Directors of 1965
(1)(4)(5) Baylake and Baylake Bank; President of
Peterson Builders, Inc. (shipbuilding)

Continuing Class III Directors Whose Term Expires in 1997:

PRINCIPAL OCCUPATION AND DIRECTOR
NAME AND AGE BUSINESS EXPERIENCE SINCE
------------ -------------------------- ---------

Ronald D. Berg (60) Senior Vice President of Baylake Bank 1979
(1)(3)

Marie Bertschinger (67) Management of Alpine, Inc. 1979
(2)(3) (resort)

Richard A. Braun (52) President, Chief Executive Officer 1994
(1) of Baylake Bank - Kewaunee (f/k/a
State Bank of Kewaunee); President
of Kewaunee County Banc-Shares, Inc.

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Ruth Nelson (60) General Manager of Ephraim Shores 1983
(1)(5) (motel and restaurant)

William C. Parsons (58) President of Palmer Johnson Enterprises 1979
(1)(3)(4) (shipbuilding and marine components)

(1) Member of the Executive Committee, which reviews the financial,
administrative and regulatory, activities of Baylake and Baylake
Bank. It is authorized by the Board of Directors to act on its behalf
on any matter permitted by law. This committee generally meets on a
weekly basis (except for the third Tuesday of each month), and held 33
meetings during 1994.

(2) Member of the Director Loan Committee which reviews certain loan
transactions of Baylake Bank. This committee generally meets on a
weekly basis, and held 52 meetings during 1994.

(3) Member of the Audit and Legal Committee which reviews financial and
legal matters of Baylake and held 12 meetings in 1994.

(4) Member of the Salary and Compensation Committee, which reviews the
personnel policies and annual compensation levels of Baylake Bank.
Officers and employees of Baylake receive no separate compensation, as
all compensation is paid by Baylake Bank. This committee held 1
meeting during 1994.

(5) Member of the Non-Bank Services Committee, which reviews the functions
and administration of the trust and financial services departments of
Baylake Bank and Baylake's non-bank subsidiaries. This committee
meets on a monthly basis, and held 12 meetings during 1994.

Each member of the Board of Directors attended at least 75% of the meetings of
the Board of Directors and of all committees on which such directors served,
during 1994, with the exceptions of John W. Bunda attending 71% and William C.
Parsons attending 61%. Baylake does not have any nominating committee.

Ruth Nelson is the sister of Thomas L. Herlache, and Roger Miller is
the uncle of Michael J. Gilson, Vice President - Commercial Division of Baylake
Bank.

Ownership of Baylake Common

The table below sets forth information regarding the beneficial
ownership of Baylake Common as of April 20, 1995 by each director and nominee
for director (including the named executive officer in the Summary Compensation
Table below) and by all executive officers and directors as a group. Such
information, including addresses, is also given for all persons who are known
to Baylake to beneficially own more than 5% of the outstanding shares of
Baylake Common as of such date.

Name (1) Number of Shares Percent
---------------------------- ---------------- -------

Ellsworth L. Peterson 222,935 9.09%
55 Utopia Circle
Sturgeon Bay, WI 54235

Thomas L. Herlache 36,017(2) 1.45%

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Ronald D. Berg 3,770 *

Marie Bertschinger 48,681 1.99%

Ivan Bissen 15,111 *

Richard A. Braun 25,104 1.02%

John W. Bunda 8,133 *

John D. Collins 19,059 *

George Delveaux, Jr. 454 *

L. George Evenson 2,987 *

Glenn Miller 2,304 *

Roger Miller 4,245 *

Ruth Nelson 37,821 1.54%

William C. Parsons 27,688 1.13%

All executive officers and directors 463,143(3) 18.89%
as a group (17) persons

Oliver Ulvilden 138,645 5.66%
P.O. Box 189
Ephraim, WI 54211

- - ---------------
* Less than 1%

(1) Includes any shares held by, jointly with, or in trust for the
benefit of, spouse and dependent children. The shares are
reported in such cases on the presumption that the individual
may share voting and/or investment power because of the family
relationship.

(2) Includes options to purchase 4,800 shares exercisable currently
or within 60 days of the date hereof.

(3) Includes options to purchase aggregate of 8,800 shares
exercisable currently or within 60 days of the date hereof.

Directors' Fees and Benefits

Directors of Baylake or Baylake Bank are paid $300 for each general
board meeting attended, and $100 for each board meeting which is not attended.
Member of any of the identified committees also receive $100 for each committee
meeting attended.

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Baylake also has deferred compensation agreements with certain of its
directors, including Marie Bertschinger, Ivan Bissen, John W. Bunda, George
Delveaux, Jr., L. George Evenson, Ruth Nelson, William C. Parsons and Ellsworth
L. Peterson. Under these agreements, participating directors may elect to
defer their annual directors' fees until retirement, termination, death or
disability, at which time the deferred amount, including any income or gains
thereon, are payable in a lump sum or in annual installments. At death, all
sums held in the account of a participating director are payable to designated
beneficiaries. Although Baylake maintains policies of insurance to support
payments under these agreements, participating directors have no interest in
such policies or any benefits accruing under such policies.

Baylake and Ronald D. Berg have entered into an Agreement for Early
Retirement, dated January 1, 1993, pursuant to which Mr. Berg will phase into
full retirement by July 31, 1996. Mr. Berg will be considered "semi-retired"
from January 31, 1993 through July 31, 1996, although during that time he will
retain the title of Senior Vice President of Baylake Bank and nomination for a
seat on the Board of Directors of Baylake and Baylake Bank, as well as
positions as a representative of Baylake Bank on boards and committees of
various civic and community organization. Under the agreement, Mr. Berg will
receive minimum annual compensation of $89,000, payable in monthly installments
through January 31, 1994, and $62,000, from February 1, 1994 through July 31,
1996, plus full benefits. At full retirement on July 31, 1996, Mr. Berg will
receive cumulative, integrated benefits (including those of social security
benefits and personal retirement savings plans) to equal an estimated $62,000
per year during his lifetime. In 1994, Mr. Berg received total benefits under
the Agreement for Early Retirement equal to $76,031, consisting of salary,
bonus, deferred compensation and retirement benefits.

As a result of its acquisition by merger of Kewaunee County
Banc-Shares, Inc. in August 1994, Baylake became subject to a certain Deferred
Compensation Agreement for Richard A. Braun, the current President and Chief
Executive Officer of Baylake Bank - Kewaunee. The Deferred Compensation
Agreement provides for annual payments of $51,286 during Mr. Braun's lifetime.
Baylake has elected to fund this future obligation by purchasing an annuity in
late 1994 for $633,534.

Executive Compensation

Compensation Summary. The following table summarizes certain
information for each of the last three years concerning all compensation
awarded or paid to or earned by the Chief Executive Officer of Baylake. No
other executive officers of Baylake and/or Baylake Bank received total annual
salary and bonus exceeding $100,000 for fiscal year 1994.

SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(6)
----------------------------

Options/ All other
Name and Principal Salary Bonus SARs Compensation
Position Year ($)(1) ($)(2) (#)(3) ($)(4)
- - ---------------------- ---- ------ ------ ------ -------------

Thomas L. Herlache 1994 172,120(5) 12,644 8,000 7,250
President and Chief 1993 152,040(5) 23,375 8,000 6,577
Executive Officer 1992 152,570 26,280 0 7,556

(1) The salary amount set forth include base salaries, directors' fees and
employee contributions made

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to the account of the named executive officer pursuant to the Baylake
Bank's 401(k) Plan.

(2) Consists of bonuses earned during the year indicated pursuant to
Baylake Bank's Pay-for-Performance Program and prior bonus plans,
which amount were paid as soon as practicable in the following year.
See "Board of Directors/Compensation Committee Report on Management
Compensation -- Year-end Bonuses" below for more detailed information.

(3) Consists solely of non-qualified stock options granted to the named
executive officer under Baylake's 1993 Stock Option Plan.

(4) Consists of employer matching and other contributions made to the
account of the named executive officer under Baylake Bank's 401(k)
Plan.

(5) Includes annual compensation deferred at Mr. Herlache's election
pursuant to the Thomas L. Herlache Deferred Compensation Plan, under
which Mr. Herlache may defer a portion of his annual compensation in
an amount equal to the greater of $20,500 or 15.6% of his base salary.
Amounts deferred are held in a rabbi trust for the benefit of Mr.
Herlache.

(6) Although the named individual received perquisited or other personal
benefits in the years shown, in accordance with SEC regulations the
value of these benefits is not shown because they did not in the
aggregate exceed 10% of the individual's salary and bonus in any year.

Mr. Herlache also has a Preferred Compensation Agreement with Baylake
Bank under which Mr. Herlache is entitled to receive a minimum cash benefit of
$20,000 per year (payable in monthly installments) upon his death, disability
or retirement at age 65. Such payment will be made for a period of at least
ten years. If Mr. Herlache decides to retire before age 65, he will be
entitled to reduced annual benefits (with the reduction equal to 6.5%
multiplied by the difference between his age at early retirement and age 65);
however, Mr. Herlache will not be entitled to any such benefits upon retirement
prior to age 65.

Stock Options. The following tables set forth certain information
concerning grants of options to purchase Baylake Common made to the named
executive officer during 1994 and the number and value of options outstanding
at the end of 1994 for the named executive officer. No options were exercised
by the named executive officer during 1994.

OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants(1)

Potential Realizable
Percent of Value at Assumed
Total Options/ Annual Rates of Stock
Options/ SARs Granted Exercise Market Price Price Appreciation
SARs to Employees or Base at Date Expiration For Option Term
Name Granted(#) in Fiscal Year Price($/sh) of Grant Date 5%($) 10%($)
- - ---- ---------- -------------- ----------- -------- --------- ----- ------

Thomas L. Herlache 8,000 22.2% $28.50 $28.50 1/3/04 143,388 363,373

- - -------------------
(1) Consists entirely of non-qualified stock option granted pursuant to
Baylake's 1993 Stock Option

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Plan. All options granted after April 30, 1993 have and will have
exercise prices equal to 100% of the fair market value of the Baylake
Common on the date of grant. The options granted to date become
exercisable 20% per year, commencing one year from date of grant.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES(1)

Number of Unexercised Value of Unexercised
Options/SARs at Fiscal In-the-Money Options/SARs
Year-End (#) at Fiscal Year-End ($)(2)
--------------------- --------------------------

Name Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ------------- ----------- -------------

Thomas L. Herlache 1,600 14,400 32,800 179,200

- - --------------------

(1) Consists entirely of non-qualified stock options; no SARs have been
granted or exercised. The named executive officer did not exercise
any stock options during 1994.

(2) Calculated assuming market price of Baylake Common at fiscal year-end
of $34.50 per share.

Board of Directors/Compensation Committee Report on Management Compensation

The Board of Directors determines the compensation of Baylake Bank's
executive officers, based on the recommendations of the Salary and Compensation
Committee (the "Committee). However, with respect to the compensation of
Thomas L. Herlache, Baylake Bank's President and Chief Executive Officer, the
Board of Directors determined his compensation on its own, generally without
any recommendations from the Committee. Directors and committee members who
are also executive officers of Baylake Bank do not participate in discussions
concerning their compensation. The Board of Directors unanimously adopted the
recommendations of the Committee without modifications during the last fiscal
year.

The Committee is comprised of six persons, including four outside
directors, Thomas L. Herlache and Sharon Haines, Director of Human Resources.
Ms. Haines is substantially responsible for initially formulating the
Committee's recommended compensation levels of the salaried employees and
executive officers. The Committee generally meets one time during the year to
consider compensation levels and make recommendations to the Board. It works
with the human resources department which gathers and provides useful
information for the Committee's review.

The general philosophy of the Committee is to offer employees fair and
competitive compensation, based on the employee's individual contribution,
experience and performance and on Baylake Bank's overall growth and
performance. Baylake Bank's executive compensation policies are intended to
attract and retain competent management with a balance of short- and long-term
considerations and to provide incentives to individuals based upon the Bank's
growth and earnings and the attainment of certain goals. The Board of
Directors believes that this policy is critical to the long-term success and
competitiveness of Baylake.

In making its executive compensation recommendations for 1994, the
Committee considered various factors, including the following: (i) the
financial performance of Baylake Bank as a whole on both

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a short-term and long-term basis (including net income, an increase in deposits
and loans, return on average shareholders' equity, and return on average
asserts); (ii) with respect to each individual executive officer, the financial
performance of that area of Baylake Bank, if any, for which such executive is
responsible, including whether or not that area of the Bank achieved its goals
for 1994; (iii) the length of service of the executive and an evaluation of the
executive's overall job performance; (iv) the compensation levels of executive
officers in similar positions with similar companies; and (v) other information
(such as cost of living increases) and subjective factors which the Committee
deems appropriate in the case of a particular executive. The Committee
subjectively analyzes these factors, and certain factors may weigh more heavily
than others with regard to any individual executive officer. The Board of
Directors considered substantially similar factors in determining Mr.
Herlache's compensation for 1994.

The main components of Baylake Bank's executive compensation program
consist of base salary, a year-end bonus, and stock options, in addition to
standard medical, life and disability benefits and a 401(k) profit sharing plan
made available to all employees.

Base Salary. The principal component of executive compensation is
base salary. The Committee believes that base salary is most important in
retaining highly qualified officers. Accordingly, it reviews compensation
surveys and comparisons collected by the human resources department and seeks
to recommend salaries at levels above those applicable to other financial
institutions and businesses similarly situated on the basis of type, size and
community, although the Committee and human resources department do not perform
any mathematical calculations or statistical analyses to arrive at any
percentile comparison. Salary surveys include both informal surveys conducted
by the human resources department with the cooperation of nearby community
financial institutions and businesses, and formal financial surveys conducted
by independent banking consultants and banking associations.

In recommending base salary levels for 1994, the Committee (and the
Board, as to the salary of Mr. Herlache) considered such factors as growth in
net income and earnings per share and return on average assets and average
stockholders' equity. With respect to Mr. Herlache's salary in particular, the
Board took into account the sustained top performance of Baylake under his
leadership as well as Baylake's most recent annual performance. In view of
these considerations, the Board and Committee determined that a salary increase
for the executive officers ranging from 3.33% to 15.13%, including a salary
increase for Mr. Herlache of 10.23%, would be appropriate.

Year-End Bonuses. The Board of Directors, in conjunction with the
Committee, implemented a year-end bonus program, called the "Pay-
for-Performance Program," which commenced in 1993. The Pay-for-Performance
Program offers incentives to executive officers and other key employees to earn
bonuses which are directly dependent on the Bank's performance in numerous
select areas and in various divisions. The bonus plans reflect the philosophy
of the Board that a significant portion of executive compensation should be
related to the financial performance of the Bank.

The Pay-for-Performance Program is intended to motivate and reward
management and other employees by linking bonuses to critical financial
performance components of the Bank. Under the Program, key indicators have
been identified which are considered by the Board to have an impact on the
earnings of Baylake Bank. These indicators include the following: growth in
deposit and loan volumes; profit in terms of both net interest margin and fee
income; asset quality with respect to loans past due over 60 days and net
charge-offs; and productivity measured by net non-interest expense as a
percentage of average assets and pre-tax income as a percentage of salary and
employee benefits expense. Certain

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quantitative goals were assigned to each of these indicators (ranging from goal
1 to goal 5), and each indicator was assigned a weighted value based on its
perceived influence on earnings. The Board determined that achievement of the
maximum goals (goal 5) across all indicators in 1994 should generate at least
$2,787,600 in additional pre-tax income, and that the bonus pool should
constitute 25% of additional net income attributable to the performance
indicators (resulting in a maximum potential bonus pool of approximately
$697,000 for 1994). However, it was agreed that no bonuses would be awarded
unless Baylake's return on average stockholders' equity for 1994 was at least
13%.

After determining the bonus pool, a calculation is made as to the size
of the bonus pool set forth as a percentage of total salary expense, and each
employee is eligible to receive a bonus equal to such percentage multiplied by
their base salary. Half of the bonus is guaranteed to them, with the other
half constituting an additional pool from which bonuses may be paid depending
upon the achievement of qualitative criteria applicable to divisions of the
Bank in which such employees are associated. The Board of Directors, however,
determined that Mr. Herlache should be entitled to 100% of his bonus based
exclusively on the performance indicators and should not be subject to
divisional criteria because of his overall supervisory and other significant
responsibilities as President and Chief Executive Officer of Baylake and
Baylake Bank.

Based on actual results for 1994 among the various indicators which
achieved prescribed goals, a bonus pool of approximately $220,693 was
established. The maximum goal (goal 5) was achieved and in fact exceeded in
each component of the asset quality and productivity indicators, the loan
volume component of the growth indicator (with goal 4 achieved in the deposit
volume component), and the fee income component of the profit indicator. The
bonus pool amounted to approximately 7.81% of total salaries. Executive
officers of Baylake Bank received bonuses ranging from 7.50% to 8.72% of their
base salaries (as a result of qualitative criteria affecting the divisions for
which they are responsible), with Mr. Herlache receiving a bonus of $12,644 or
8.72% of his base salary.

Stock Options. In April 1993, the Board of Directors approved
Baylake's 1993 Stock Option Plan (the "Option Plan"), which was later approved
by the shareholders in June 1993. The Option Plan was established to provide a
long-term incentive to the Bank's executive officers and other key employees,
to increase the overall value of Baylake in future years. The Board seeks to
further motivate management by granting them options to purchase shares of
Baylake Common and thus offering them a greater stake in Baylake's future. The
Board also views the Option Plan as a significant component of the Bank's
overall compensation package and is a complement to base salary and bonus. The
Option Plan also enables the Bank to compensate its officer without having to
make any cash payments.

A total of 200,000 shares of Baylake Common has been reserved for
issuance upon exercise of options granted and to be granted under the Option
Plan. To date, options to purchase up to 106,000 shares in aggregate have been
granted to a total of ten executive officers of the Bank. Options to purchase
an additional 36,000 shares were granted in January 1994 and 1995 at an
exercise price of $28.50 and $34.50 per share respectively, which approximate
the then current market value of the Baylake Common. All options granted in
the future will have an exercise price equal to the market value of the Baylake
Common at the date of grant. Option grants have been and will be made at or
near the current market value so that any value to the executive officer is
dependent upon an increase in the market value of the Baylake Common. The
options vest over five years (20% per year), commencing one year after date of
grant, and expire after 10 years if not exercised.

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The total number of options granted to Baylake Bank's executive
officers (including Mr. Herlache) in 1994 was generally based on the Bank's
overall improved performance in 1993 as compared to 1992, and the number of
options granted on an individual basis took into account the executive
officer's relative cash compensation, experience, responsibilities and
attribution to the Bank's past and future performance. In 1994, Mr. Herlache
was granted options to purchase 8,000 shares of Baylake Common, while other
divisional vice presidents were granted options to purchase 4,000 shares and
the director of human resources was granted options to purchase 2,000 shares.
The additional options granted in 1995 were based on the Bank's performance in
1994, which exceeded its performance in 1993 in all measurable categories, and
complemented the bonuses paid to the executive officers.

MEMBERS OF THE SALARY AND COMPENSATION COMMITTEE:

L. George Evenson, Sharon Haines (non-director), Thomas L. Herlache,
Glenn Miller, William C. Parsons and Ellsworth L. Peterson

Compensation Committee Interlocks and Insider Participation

As indicated above, Thomas L. Herlache, President and Chief Executive
Officer of Baylake and Baylake Bank, and Sharon Haines, Director of Human
Resources, serve as members of the Salary and Compensation Committee. Mr.
Herlache is a member of the Baylake Board of Directors, although he does not
participate on decisions affecting his own compensation. Mr. Herlache is also
a director of Alpine, Inc., the organization of which Marie Bertschinger, a
director of Baylake, was assistant manager until 1992. Alpine, Inc. does not
have a compensation committee, and Mr. Herlache has not otherwise participated
in decisions regarding compensation matters for that company.

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Performance Graph

The following graph shows the cumulative stockholder return on the
Baylake Common over the last five fiscal years compared to the returns of
Standard & Poors 500 Stock Index and the Keefe, Bruyette & Woods 50 Bank Index
(the "KBW 50"). The KBW 50 is a market-capitalization-weighted index of the
market performance of the 50 largest U.S. banks, including all money center and
most major regional banks, and is published in various financial and banking
literature.

Comparison of Five Year Cumulative Return
Among S & P index, KBW Bank 50 Bank Index,
and Baylake Corp.

Measurement Period
(Fiscal Year Covered) S & P Index KBW 50 Bank Baylake Corp.
--------------------- ----------- ----------- -------------

Measurement Pt - 12/31/89 $100 $100 $100
FYE 1990 $96.9 $71.8 $112.1
FYE 1991 $126.5 $113.7 $113.4
FYE 1992 $136.1 $144.8 $152.0
FYE 1993 $149.8 $152.9 $309.5
FYE 1994 $151.8 $145.1 $374.6

(1) Assumes $100 invested on December 31, 1989 in Baylake Corp. Common
Stock compared to the same amount invested in other funds shown at the
same time. Dividends are assumed to be reinvested.

Index 1989 1990 1991 1992 1993 1994
- - ------------------------------------------------------------------------------

Baylake 100.0 112.1 113.4 152.0 309.5 374.6
KBW 100.0 71.8 113.7 144.8 152.9 145.1
S & P 500 100.0 96.9 126.5 136.1 149.8 151.8

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Certain Transactions with Management

Baylake Bank has, and expects to continue to have, regular
dealings with officers and directors of Baylake as well as their associates.
Since January 1, 1994, several such persons have been indebted to Baylake Bank
for loans made in the ordinary course of business. Loans to all such persons
remain on substantially the same terms including interest rates and collateral,
on those prevailing at the time for comparable transactions with other persons,
are current with respect to payments, and do not involve more than the normal
risk of collectability or present other unfavorable features.

Compliance with Section 16(a) of the Exchange Act

Under Section 16(a) of the Exchange Act, Baylake's directors
and executive officers, and any persons holding more than 10% of the
outstanding Baylake Common are required to report their initial ownership of
the Baylake Common and any subsequent changes to such ownership to the
Securities and Exchange Commission. Specific due dates for these reports have
been established, and Baylake is required to disclose in this Proxy
Statement/Prospectus any failure to file such reports by these dates during
1994.

Based upon a review of transactions in Baylake securities and
copies of Section 16(a) forms furnished to Baylake, Baylake believes that
options granted in 1993 to Thomas L. Herlache, Daniel F. Maggle, Paul C.
Wickmann and Steven D. Jennerjohn were not disclosed on Forms 4 on a timely
basis, that Richard A. Braun failed to file a Form 3 upon becoming a director
of Baylake following its acquisition of Kewaunee County Banc-Shares, and that
the exercise of stock options and the subsequent sale of stock by each of
Messrs. Maggle and Jennerjohn were not timely reported on Forms 4. Each of
these events and transactions have subsequently been reported on Forms 5 filed
with the SEC in February 1995.

EXPERTS

The Board of Directors intends to continue to use the
accounting firm of Smith & Gesteland as independent auditors to audit the
financial statements of Baylake for 1995. Representatives of Smith & Gesteland
are expected to be present at the Baylake Annual Meeting to respond to
appropriate questions and to make a statement if they desire to do so.

The standing Audit and Legal Committee has, on a continuing
basis, considered the possibility of a conflict of interest arising as a result
of Smith & Gesteland performing independent audit services and other non-audit
services. In each case, it was determined that no conflict resulted and that
the independence of the auditor was not compromised. Prior authorization was
granted by the Committee in each case before any services were performed.

FINANCIAL STATEMENTS AND ANNUAL REPORT

A copy of the 1994 Annual Report to shareholders is enclosed
with your proxy materials. The consolidated statements of Baylake are
contained in the 1994 Annual Report. However, such report and financial
statements contained therein are not to be considered as part of this proxy
statement.

Future Shareholder Proposals

Shareholder proposals must be received by Baylake no later
than December 30, 1995 in order to be considered at Baylake's 1996 Annual
Meeting of Shareholders.