1
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

[X] Definitive proxy statement

[ ] Definitive additional materials

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

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

BAYLAKE CORP.
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

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(j)(2).

[ ] $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:

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

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

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

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:

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

(4) Proposed maximum aggregate value of transaction:

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

[ ] 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:

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

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

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

(3) Filing party:

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

(4) Date filed:

- --------------------------------------------------------------------------------
(1) Set forth the amount on which the filing fee is calculated and state how it
was determined.
2

April 30, 1996

Dear Baylake Shareholder:

You are invited to attend the Annual Meeting of Shareholders of Baylake
Corp. to be held on Monday, June 3, 1996, at the Cornerstone Conference Center,
222 North Third Avenue, Sturgeon Bay, Wisconsin. The Annual Meeting will begin
at 7:00 p.m.

At the Annual Meeting, you will be asked to elect four (4) directors in
Class II, whose term will expire in 1999, 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: ____________________________________________________

____________________________________________________

3
BAYLAKE CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 3, 1996

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 Monday, June 3, 1996, at 7:00 p.m., local time, for the purpose of
considering and voting upon the following matters:

1. Election of four (4) directors of Class II, whose
terms will expire in 1999;

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 25, 1996,
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 30, 1996
Sturgeon Bay, Wisconsin

4
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 7:00 p.m., local time, on June 3, 1996, 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 30, 1996.

At the Annual Meeting, Baylake shareholders will be asked to elect four
(4) directors to serve as Class II directors, whose terms as directors will
expire in 1999. 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. Abstentions 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 25, 1996, will be entitled to one vote for each share of
Baylake Common registered in such shareholder's name. At that date there were
2,452,937 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 II. 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.

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 25, 1996 may
obtain a copy (without exhibits) of Baylake's (i) Annual Report on Form 10-K,
as amended, for the year ended December 31, 1995, and (ii) Quarterly Report on
Form 10-Q, for the three months ended March 31, 1996, 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 II 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 four (4) Class I directors, whose terms expire in 1998,
five (5) Class II directors whose terms expire in 1996, and five (5) Class III
directors whose terms expire in 1997. One of the Class II directors, Ellsworth
Peterson, has recently reached retirement age and will not stand for
re-election, after having served as a director since 1965. The Board of
Directors has nominated the four (4) individuals named below for election as
directors of Class II, to serve for terms expiring at the 1999 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 II Directors for Term Expiring in 1999:

Principal Occupation and Director
Name and Age Business Experience Since
- ------------ ------------------------ --------
John D. Collins (65) Owner of C&S Manufacturing 1979
(2) (metal production)

George Delveaux, Jr. (53) Dairy Farmer 1981
(3)(5)

Glenn Miller (65) Retired. Previously Senior Vice 1983
(2)(4) President and Co-Owner of
Sturgeon Bay Yacht Harbor;
Co-Owner of Ephraim Yacht Harbor

Joseph Morgan (53) President of Mary Morgan, Inc. 1995
(printing)

Class II Director not standing for reelection whose term expires in 1996:

Ellsworth L. Peterson (72) Chairman of the Board of Directors of 1965
(1)(4)(5) Baylake and Baylake Bank; President of
Peterson Builders, Inc. (shipbuilding)

Continuing Class I Directors Whose Term Expires in 1998:

Principal Occupation and Director
Name and Age Business Experience Since
- ------------ ------------------------ --------
Ivan Bissen (57) Owner of Bissen Co, Ltd. 1987
(2)(5) (excavating and asphalt paving)

John W. Bunda (61) Owner and manager of Bunda's Hutch 1972
(3) (retail clothing) and Bunda Drug
(retail sales)

L. George Evenson (67) Retired; formerly, dairy farmer 1978
(1)(4) (1949-1993)

Thomas L. Herlache (53) President, Chief Executive Officer and; 1970
(1)(2)(4) Vice Chairman of Baylake; President,
Ex officio:(3)(5) Chief Executive Officer, Vice Chairman
and Trust Officer of Baylake Bank

Continuing Class III Directors Whose Term Expires in 1997:

Principal Occupation and Director
Name and Age Business Experience Since
- ------------ ------------------------ --------
Ronald D. Berg (61) Senior Vice President of Baylake Bank 1979
(1)(3)

Marie Bertschinger (68) Management of Alpine, Inc. 1979
(2)(3) (resort)

7
Richard A. Braun (53) Executive Vice President of Baylake 1994
(1) Bank and previously President of Baylake
Bank - Kewaunee and President of
Kewaunee County Banc-Shares, Inc.

Ruth Nelson (61) General Manager of Ephraim Shores 1983
(1)(5) (motel and restaurant)

William C. Parsons (59) 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 35 meetings during
1995.

(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 1995.

(3) Member of the Audit and Legal Committee which reviews financial and legal
matters of Baylake and held 12 meetings in 1995.

(4) Member of the Personnel 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
1995.

(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 1995.

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 1995 except that E.L. Peterson attended 34% of
Executive Committee meetings.

Ownership of Baylake Common

The table below sets forth information regarding the beneficial ownership
of Baylake Common as of April 25, 1996 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 226,970 9.25%
55 Utopia Circle
Sturgeon Bay, WI 54235

Thomas L. Herlache 36,603(2) 1.49%

Ronald D. Berg 3,895 *

Marie Bertschinger 50,290 2.05%

Ivan Bissen 15,611 *

Richard A. Braun 25,300 1.03%

John W. Bunda 6,645 *

John D. Collins 19,689 *

George Delveaux, Jr. 469 *

L. George Evenson 3,284 *

Glenn Miller 2,566 *

Joseph Morgan 813 *

Ruth Nelson 37,845 1.54%

William C. Parsons 27,688 1.13%

All executive officers and 463,143(3) 19.32%
directors as a group
(24) persons

Oliver Ulvilden 139,486 5.68%
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 8,800 shares exercisable currently or within
60 days of the date hereof.

(3) Includes options to purchase aggregate of 21,600 shares exercisable
currently or within 60 days of the date hereof.

Directors' Fees and Benefits

Directors of Baylake or Baylake Bank are paid $350 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 $150 for each committee meeting
attended.

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 insurance policies to support
payments under these agreements, participating directors have no interest in
policies or any benefits accruing thereunder.

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 1995.

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 1995 222,181 43,750 4,000 15,000
President and Chief 1994 172,120(5) 12,644 8,000 7,250
Executive Officer 1993 152,040(5) 23,375 8,000 6,577

(1) The salary amount set forth include base salaries, directors' fees and
employee contributions made 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 perquisites 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 1995 and the number and value of options outstanding
at the end of 1995 for the named executive officer. No options were exercised
by the named executive officer during 1995.

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 4,000 11.1% $34.50 $34.50 1/3/05 86,787 219,936

(1) Consists entirely of non-qualified stock option granted pursuant to
Baylake's 1993 Stock Option 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 4,800 15,200 40,800 61,200

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

(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 1995.

(2) Calculated assuming market price of Baylake Common at fiscal year-end of
$26.75 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 Personnel 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 based
upon an independent evaluation by Executive Studies Group, comparing financial
institutions of equivalent asset size. Criteria selected for salary
comparisons included return on assets and net income growth and, in addition,
return on assets and return on equity results. 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.

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 or two times 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 1995, the
Committee considered various factors, including the following: (i) the
financial performance of Baylake Bank as a whole on both 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 assets); (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 1995;
(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 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 equal to those applicable to other financial institutions
and businesses similarly situated on the basis of type, size and community,
although the Committee and Human

12
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 1995, 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 3.08% to 25.71% including a salary
increase for Mr. Herlache of 20.69% 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 quantitative goals were assigned to each of
these indicators (ranging from goal 1 to goal 10), 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 10) across all
indicators in 1995 should generate at least $3,580,000 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 $895,000 for 1995). However, it was agreed that no
bonuses would be awarded unless Baylake's return on average stockholders'
equity for 1995 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 1995 among the various indicators which
achieved prescribed goals, a bonus pool of approximately $313,000 was
established. The goal level of at least 6 was achieved in each component of the
asset quality and productivity indicators, the loan volume component of the
growth

indicator and in the deposit volume component. The goal level of 3 was achieved
the income component of the profit indicator. The bonus pool amounted to
approximately 8.31% of total salaries. Executive officers of Baylake Bank
received bonuses ranging from 7.50% to 25.00% of their base salaries (as a
result of qualitative criteria affecting the divisions for which they are
responsible). However, Mr. Herlache did not receive any pay for performance
bonus. The payment of $43,750 or 25.00% of his base salary was based on the
recommendation for salary adjustment resulting from the study.

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.
Options to purchase an additional 36,000 shares were granted in January 1995 at
an exercise price of $26.75 per share, which approximate the then current
market value of the Baylake Common. To date, options to purchase up to 142,000
shares in aggregate have been granted to a total of ten executive officers of
the Bank. All options granted 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 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.

The total number of options granted to Baylake Bank's executive officers
in 1995 was generally based on the Bank's continued performance in 1995 as
compared to 1994, 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
1996, Mr. Herlache was granted options to purchase 4,000 shares of Baylake
Common, while other divisional vice presidents were granted options to purchase
4,000 shares and the Chief Investment Officer and Executive Vice-President were
granted options to purchase 2,000 shares.

Members of the Personnel 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 Personnel 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.

14
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 50 Bank Index
and Baylake Corp.

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

Measurement Pt - 12/31/90 $100 $100 $100
FYE 1991 $131 $158 $101
FYE 1992 $141 $202 $126
FYE 1993 $155 $213 $256
FYE 1994 $157 $202 $319
FYE 1995 $216 $324 $257

(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.

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, 1995, 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 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 1996. 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 1995 Annual Report to shareholders is enclosed with your
proxy materials. The consolidated statements of Baylake are contained in the
1995 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, 1996 in order to be considered at Baylake's 1997 Annual Meeting of
Shareholders.

16
PROXY FOR BAYLAKE CORP.
ANNUAL MEETING OF SHAREHOLDERS - JUNE 3, 1996

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 25, 1996 at
the Annual Meeting of shareholders to be held on June 3, 1996, or any
adjournment thereof.

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

John D. Collins George Delveaux Jr. Glenn Miller Joseph Morgan

(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: , 1996.
---------------

- ------------------------------- ------------------------------------
Signature Signature, if jointly held

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

(ADDRESS LABEL)