0001649739FALSE00016497392024-01-252024-01-25


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 25, 2024 

BAYFIRST FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
 
 
Florida 001-41068 59-3665079
(State or other jurisdiction
of incorporation)
 
(Commission
file number)
 
(IRS employer
identification no.)
700 Central Avenue33701
St. Petersburg, Florida
(Zip Code)
(Address of principal executive offices)
(727) 440-6848
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities Registered pursuant to Section 12(b) of the Act:
Title of each class registeredTrading Symbol(s)Name of exchange on which registered
Common StockBAFNThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1933 (§240.12b-2 of this chapter)
Emerging growth company ☑
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02. Results of Operations and Financial Condition
On January 25, 2024, BayFirst Financial Corp. (the “Company”) issued a press release announcing its financial results for the fourth quarter of 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
The Company has prepared presentation materials (the “Conference Call & Webcast Presentation”) that management intends to use during its previously announced Fourth Quarter 2023 conference call on Friday, January 26, 2024 at 9:00 am Eastern Time, and from time to time thereafter in presentations about the Company’s operations and performance. The Company may use the Conference Call & Webcast Presentation, possibly with modifications, in presentations to current and potential investors, analysts, lenders, business partners, acquisition candidates, customers, employees and others with an interest in the Company and its business.
A copy of the Conference Call & Webcast Presentation is furnished as Exhibit 99.2 to this report and incorporated here by reference. The Conference Call & Webcast Presentation is also available on the Company's website at www.bayfirstfinancial.com. Materials on the Company’s website are not part of, or incorporated by reference into, this report.
Item 8.01. Other Events
On January 23, 2024, the Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share. The dividend will be payable March 15, 2024 to common shareholders of record as of March 1, 2024. This dividend marks the 31st consecutive quarterly cash dividend paid since BayFirst initiated cash dividends in 2016.
Item 9.01 Financial Statements and Exhibits.
The information in this report (including the exhibits) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BAYFIRST FINANCIAL CORP.
Date:1/25/2024
By:/s/ Scott J. McKim
Scott J. McKim
Chief Financial Officer



picture1a.jpg
Contacts:
Thomas G. ZernickScott J. McKim
Chief Executive OfficerChief Financial Officer
727.399.5680 727.521.7085
BayFirst Financial Corp. Reports Fourth Quarter 2023 Results;
Highlighted by Net Interest Margin Expansion and Strong SBA Loan Originations
ST. PETERSBURG, FL. — January 25, 2024 — BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or the “Company”), parent company of BayFirst National Bank (the “Bank”) today reported net income of $1.7 million, or $0.32 per diluted common share, for the fourth quarter of 2023 compared to $1.9 million, or $0.41 per diluted common share, in the third quarter of 2023. Net income from continuing operations was $1.7 million for the fourth quarter of 2023, compared to net income from continuing operations of $2.0 million in the third quarter of 2023 and $2.1 million in the fourth quarter of 2022.
Earnings benefited from higher net interest income and lower provision for credit losses during the fourth quarter, as compared to the third quarter of 2023. This was offset by higher noninterest expense and a gain recorded in the third quarter for the sale of other real estate owned that did not recur in the fourth quarter.
“BayFirst reported solid fourth quarter results, highlighted by net interest margin expansion and supported by the strength of our community bank and our CreditBench government guaranteed lending division,” stated Thomas G. Zernick, Chief Executive Officer. “Our fourth quarter progress is the result of our continued focus on expanding our footprint and becoming the premier community bank in the Tampa Bay market. During the fourth quarter, we opened a new banking center in North Sarasota, representing our eleventh banking center and our fourth banking center in the Sarasota Bradenton area of the Tampa Bay region. Our retail banking centers continue to build franchise value, and we were successful in growing net new number of checking accounts by 4% during the quarter, and by 27% since the start of the year. We maintain a community focused business model serving individuals, families, and small businesses, with a focus on checking and savings accounts which are not only less rate sensitive than time or money market deposits, they are also far less volatile in times of economic disruptions."
“Another highlight of the quarter was originating the 5th highest in dollar volume of SBA 7(a) loans nationwide, as compared to the 7th highest during the SBA's 2023 fiscal year ended September 30, 2023,” Zernick continued. “CreditBench produced $144.9 million in new loans during the fourth quarter, with $102.3 million of that production coming from the SBA Bolt small loan program, which are loans of $150 thousand or less that carry an 85% government guaranty as well as a higher yield than other SBA loans. In addition, loans originated through our community bank had solid growth during the quarter, with total loans, excluding PPP loans, increasing $49.3 million from the prior quarter. Despite economic headwinds and the unprecedented rise in interest rates, our asset quality remains well within acceptable levels, with our conventional C&I, owner occupied commercial real estate, and non owner-occupied commercial real estate portfolios all performing well. Further, we continue to have minimal exposure to non owner-occupied CRE loans, with only 5.5% of our loans held for investment in that category at year end.”
Fourth Quarter 2023 Performance Review
•The Company’s government guaranteed loan origination platform, CreditBench, originated $144.9 million in new government guaranteed loans during the fourth quarter of 2023, a decrease of 7.0% from $155.9 million of loans produced in the previous quarter, and a 32.8% increase over $109.2 million of loans produced during the fourth quarter of 2022. Demand remains strong for the Company's Bolt loan program, an SBA 7(a) loan product designed to expeditiously provide working capital loans of $150 thousand or less to businesses throughout the country. Since the launch in late second quarter of 2022, the Company has originated 3,408

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
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Bolt loans totaling $441.8 million, of which 779 Bolt loans totaling $102.3 million were originated during the quarter.
•Loans held for investment, excluding PPP loans of $3.2 million, increased by $49.3 million, or 5.7%, during the fourth quarter of 2023 to $912.5 million and increased $203.0 million, or 28.6%, over the past year. During the quarter, the Company originated $202.1 million of loans, purchased $5.4 million of government guaranteed loans, and sold $124.3 million of government guaranteed loan balances.
•Deposits decreased $32.7 million, or 3.2%, during the fourth quarter of 2023 and increased $190.1 million, or 23.9%, over the past year to $985.1 million. A $43.3 million decrease in time deposits was partially due to the maturity of $70.7 million of time deposits in the fourth quarter of 2023, of which the majority were not expected to renew.
•Balance sheet liquidity remains strong, with $63.0 million in cash balances and time deposits with other banks as of December 31, 2023. Additionally, the Company maintains significant borrowing capacity through the FHLB and Federal Reserve discount window. Approximately 84% of the Company's deposits were insured at the end of 2023.
•Book value and tangible book value at December 31, 2023 were $20.60 per common share, an increase from $20.12 at September 30, 2023.
•Net interest margin including discontinued operations increased by 12 bps to 3.48% in the fourth quarter of 2023, from 3.36% in the third quarter of 2023, primarily due to increases in loan yields.
Results of Operations
Net Income (Loss)
Net income was $1.7 million for the fourth quarter of 2023, compared to $1.9 million in the third quarter of 2023 and $1.3 million in the fourth quarter of 2022. The decrease in net income for the fourth quarter of 2023 from the preceding quarter was primarily the result of increases in deposit interest expense of $0.7 million and noninterest expense of $1.0 million. This was partially offset by an increase in total interest income of $1.2 million and a decrease in provision for credit losses of $0.3 million. The increase in net income from the fourth quarter of 2022 was due to increases in gain on sale of government guaranteed loans of $1.2 million, government guaranteed loan fair value gains of $3.5 million, and other noninterest income of $1.3 million, and a decrease in net loss from discontinued operation of $0.8 million. This was partially offset by increases in provision for credit losses of $2.0 million and noninterest expense of $5.0 million. In the third quarter of 2022, the Company made the strategic decision to discontinue the Bank’s nationwide residential mortgage operations which resulted in the net loss from discontinued operations.
For the year ended 2023, net income was $5.7 million, an increase of $6.0 million from the net loss of $0.3 million for the year ended 2022. The increase was primarily the result of a $5.8 million net loss from discontinued operations in 2022, as well as an increase in net income from continuing operations of $0.4 million primarily as a result of increased loan origination volume.
Net Interest Income and Net Interest Margin
Net interest income from continuing operations was $8.9 million in the fourth quarter of 2023, an increase of $0.5 million, or 5.8%, from the third quarter of 2023, and an increase of $0.3 million, or 3.5%, from the fourth quarter of 2022. The net interest margin expanded by 12 bps to 3.48% in the fourth quarter of 2023, from 3.36% in the third quarter of 2023.

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 3

The increase during the fourth quarter of 2023 as compared to the third quarter of 2023 was mainly due to an increase in loan interest income, including fees, of $1.7 million, partially offset by higher interest expense on deposits of $0.7 million and lower interest income on interest bearing deposits in banks and other of $0.4 million.
The increase during the fourth quarter of 2023 as compared to the year ago quarter was mainly due to an increase in interest income of $6.3 million, partially offset by higher interest expense on deposits of $6.0 million.
Net interest income from continuing operations was $36.4 million for the year ended 2023, an increase of $6.4 million or 21.4%, from $30.0 million for the year ended 2022. The increase was mainly due to an increase in loan interest income, including fees, of $26.7 million, partially offset by an increase in deposit interest expense of $23.0 million.
Noninterest Income
Noninterest income from continuing operations was $14.7 million for the fourth quarter of 2023, which was unchanged from the third quarter of 2023 and an increase of $6.3 million, or 74.8%, from $8.4 million in the fourth quarter of 2022. The increase in the fourth quarter of 2023, as compared to the fourth quarter of 2022, was the result of increases in gain on sale of government guaranteed loans of $1.2 million, fair value gains related to held for investment government guaranteed loans of $3.5 million, and other noninterest income of $1.3 million. The increase in other noninterest income was primarily attributable to an increase in government guaranteed loan packaging fees.
Noninterest income from continuing operations was $49.8 million for the year ended 2023, an increase of $18.2 million, or 57.7%, from $31.6 million for the year ended 2022. The increase was primarily due to higher gains on the sale of government guaranteed loans of $2.8 million, an $11.0 million increase in fair value gains related to held for investment government guaranteed loans, and an increase in other noninterest income of $3.2 million. The increase in other noninterest income was primarily due to higher government guaranteed loan packaging fees of $2.9 million.
Noninterest Expense
Noninterest expense from continuing operations was $18.5 million in the fourth quarter of 2023, which was a $1.0 million, or 6.0%, increase from $17.4 million in the third quarter of 2023 and a $5.0 million, or 36.9%, increase compared to $13.5 million in the fourth quarter of 2022. The increase in the fourth quarter of 2023, as compared to the prior quarter, was primarily due to increases in incentive costs related to loan production. The increase in the fourth quarter of 2023, as compared to the fourth quarter of 2022 was primarily due to higher compensation costs of $2.9 million and higher loan origination expense of $1.5 million.
Noninterest expense from continuing operations was $67.7 million for the year ended 2023, which was a $12.5 million, or 22.6%, increase from $55.2 million for the year ended 2022. The increase was primarily the result of higher compensation costs and loan origination expense.
Discontinued Operations
Net loss on discontinued operations was $6 thousand in the fourth quarter of 2023, compared to the net loss of $47 thousand in the third quarter of 2023. The Company recorded a net loss on discontinued operations of $791 thousand in the fourth quarter of 2022. The losses in the third and fourth quarters of 2023 were partially due to lagging facilities costs as we seek to sublease vacant space. The $785 thousand decrease in the net loss from the year-ago quarter was primarily due to a decrease in noninterest expense of $2.2 million, partially offset by decreases in each of residential loan fee income of $883 thousand, interest income of $281 thousand, and income tax benefit of $260 thousand.
Net loss from discontinued operations was $213 thousand for the year ended 2023, which was a $5.6 million reduction from a net loss of $5.8 million for the year ended 2022. The majority of the discontinued loss in 2022 was recorded in the third quarter of 2022. As such, the net loss from discontinued operations for the year ended 2022 included restructuring charges of $4.3 million and the discontinued loss in the year ended 2023 represented a modest amount of trailing expenses from the discontinuation.
Balance Sheet
Assets
Total assets decreased $16.2 million, or 1.4%, during the fourth quarter of 2023 to $1.12 billion, mainly due to a decrease of $54.2 million in cash and cash equivalents and the sale of $124.3 million in government guaranteed loans,

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 4

partially offset by new loan production. The reduction in cash and cash equivalents reflects lower liquidity needs compared to early 2023 when the Bank retained additional liquidity after the bank failures generated uncertainty for all banks. The result is a more efficient balance sheet.
Loans
Loans held for investment, excluding PPP loans, increased $49.3 million, or 5.7%, during the fourth quarter of 2023 and $203.0 million, or 28.6%, over the past year to $912.5 million, due to originations in both conventional community bank loans and government guaranteed loans, partially offset by government guaranteed loan sales. PPP loans, net of deferred origination fees, decreased $12.0 million in the fourth quarter of 2023 to $3.2 million.
Deposits
Deposits decreased $32.7 million, or 3.2%, during the fourth quarter of 2023 and increased $190.1 million, or 23.9%, from December 31, 2022, ending the fourth quarter of 2023 at $985.1 million. During the fourth quarter, there were decreases in noninterest-bearing deposit account balances of $4.3 million, interest-bearing transaction account balances of $8.0 million and time deposit balances of $43.3 million, partially offset by an increase in savings and money market deposit account balances of $22.9 million.
Asset Quality
In accordance with changes in generally accepted accounting principles, the Company adopted the new credit loss accounting standard known as CECL on January 1, 2023. At the time of adoption, the allowance for credit losses ("ACL") for loans increased by $3.1 million to 1.73% of loans, the reserve on unfunded commitments increased $213 thousand, and an $18 thousand reserve was established for held to maturity investment securities. These one-time increases resulted in an after-tax decrease to capital of $2.5 million, with no impact to earnings. Under CECL, the ACL is based on projected credit losses rather than on incurred losses.
The Company recorded a provision for credit losses in the fourth quarter of $2.7 million, compared to a $3.0 million provision for the third quarter of 2023. The Company recorded a $0.7 million provision for loan losses under the incurred loss methodology during the fourth quarter of 2022. The Company recorded a provision for credit losses in the year ended 2023 of $10.4 million, compared to a $0.7 million negative provision under the incurred loss methodology for the year ended 2022.
The ratio of ACL to total loans held for investment at amortized cost was 1.64% at December 31, 2023, 1.68% as of September 30, 2023, and 1.29% as of December 31, 2022. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loans, was 2.03% at December 31, 2023, 2.03% as of September 30, 2023, and 1.62% as of December 31, 2022.
Net charge-offs for the fourth quarter of 2023 were $2.6 million, a $0.4 million increase from $2.2 million for the third quarter of 2023 and a $1.2 million increase compared to $1.4 million in the fourth quarter of 2022. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost, excluding PPP loans, were 1.29% for the fourth quarter of 2023, up from 1.15% in the third quarter of 2023 and 0.82% in the fourth quarter of 2022. Net charge-offs for the year ended 2023 were elevated by $2.8 million due to the performance from a purchased portfolio of unsecured consumer loans. The Company stopped purchasing these loans at the end of 2022 and the portfolio balances decreased from $30.9 million to $17.0 million during 2023. Nonperforming assets to total assets was 0.94% as of December 31, 2023, compared to 0.92% as of September 30, 2023, and 1.12% as of December 31, 2022. Nonperforming assets, excluding government guaranteed loans, to total assets was 0.81% as of December 31, 2023, compared to 0.77% as of September 30, 2023, and 0.40% as of December 31, 2022.
Capital
The Bank’s Tier 1 leverage ratio was 9.38% as of December 31, 2023, compared to 9.16% as of September 30, 2023, and 10.79% at December 31, 2022. The CET 1 and Tier 1 capital ratio to risk-weighted assets were 11.77% as of December 31, 2023, compared to 12.21% as of September 30, 2023, and 13.75% as of December 31, 2022. The total capital to risk-weighted assets ratio was 13.02% as of December 31, 2023, compared to 13.47% as of September 30, 2023, and 15.00% as of December 31, 2022.

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
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Liquidity
The Bank has liquidity well in excess of Bank’s internal minimums and those required to be categorized as well-capitalized by our bank regulators. The Bank’s overall liquidity position remains strong and stable. The on-balance sheet liquidity ratio at December 31, 2023 was 9.33%, as compared to 12.58% at December 31, 2022. The Bank retained additional liquidity after the bank failures generated uncertainty for all banks in early 2023. The Bank has robust liquidity resources. These resources include secured borrowings available from the Federal Home Loan Bank, the Federal Reserve, and lines of credit with other financial institutions. As of December 31, 2023, the Bank had $10.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions. This compares to $25.0 million of borrowings from the FRB and no borrowings from the FHLB or other financial institutions at December 31, 2022.
Recent Events
Preferred Stock Offering. On September 30, 2023, the Company issued 1,835 shares of 11.0% Series C Cumulative Convertible Preferred Stock. These shares have no par value and a liquidation preference of $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution is made in full. An additional 1,995 shares, 1,760 shares, 731 shares, and 125 shares were issued on October 18, 2023, October 31, 2023, November 30, 2023, and December 28, 2023, respectively. Total gross proceeds from the preferred stock offering totaled $6.45 million, which will be used for operating expenses or to contribute capital to BayFirst National Bank to support its growth and operations.
First Quarter Common Stock Dividend. On January 23, 2024, BayFirst’s Board of Directors declared a first quarter 2024 cash dividend of $0.08 per common share. The dividend will be payable March 15, 2024 to common shareholders of record as of March 1, 2024. This dividend marks the 31st consecutive quarterly cash dividend paid since BayFirst initiated cash dividends in 2016.
Conference Call
BayFirst’s management team will host a conference call on Friday, January 26, 2024 at 9:00 a.m. ET to discuss its fourth quarter results. Interested investors may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com. Investment professionals are invited to dial (888) 259-6580 to participate in the call using Conference ID 44206141. A replay will be available for one week at (877) 674-7070 using playback access code 206141# or at www.bayfirstfinancial.com.
About BayFirst Financial Corp.
BayFirst Financial Corp. is a registered bank holding company based in St. Petersburg, Florida which commenced operations on September 1, 2000. Its primary source of income is derived from its wholly owned subsidiary, BayFirst National Bank, a national banking association which commenced business operations on February 12, 1999. The Bank currently operates eleven full-service banking offices throughout the Tampa Bay region and offers a broad range of commercial and consumer banking services to businesses and individuals. The Bank was the 5th largest SBA 7(a) lender by dollar volume and 2nd by number of units originated nationwide through the first quarter ended December 31, 2023, of SBA's 2024 fiscal year. Additionally, it was the number one SBA 7(a) lender in dollar volume in the 5 county Tampa Bay market for the SBA's 2023 fiscal year. As of December 31, 2023, BayFirst Financial Corp. had $1.12 billion in total assets.
Forward-Looking Statements
In addition to the historical information contained herein, this presentation includes "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, or climate change, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 6

loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements.

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 7

BAYFIRST FINANCIAL CORP.
SELECTED FINANCIAL DATA (Unaudited)

At or for the three months ended
(Dollars in thousands, except for share data)12/31/20239/30/20236/30/20233/31/202312/31/2022
Balance sheet data:
Average loans held for investment at amortized cost, excluding PPP loans$812,446 $773,749 $763,854 $699,355 $677,172 
Average total assets1,108,550 1,088,517 1,064,068 969,489 925,194 
Average common shareholders’ equity82,574 81,067 80,310 78,835 80,158 
Total loans held for investment915,726 878,447 836,704 792,777 728,652 
Total loans held for investment, excluding PPP loans912,524 863,203 821,016 774,467 709,479 
Total loans held for investment, excl gov’t gtd loan balances698,106 687,141 638,148 596,505 569,892 
Allowance for credit losses (1)
13,497 13,365 12,598 12,208 9,046 
Total assets1,117,766 1,133,979 1,087,399 1,069,839 938,895 
Common shareholders’ equity84,656 82,725 81,460 80,734 82,279 
Share data:
Basic earnings per common share$0.32 $0.42 $0.29 $0.13 $0.28 
Diluted earnings per common share0.32 0.41 0.29 0.13 0.28 
Dividends per common share0.08 0.08 0.08 0.08 0.08 
Book value per common share20.60 20.12 19.85 19.70 20.35 
Tangible book value per common share (2)
20.60 20.12 19.85 19.70 20.35 
Performance and capital ratios:
Return on average assets(3)
0.60 %0.71 %0.52 %0.30 %0.57 %
Return on average common equity(3)
6.37 %8.46 %5.86 %2.69 %5.56 %
Net interest margin3.48 %3.36 %4.18 %4.17 %4.19 %
Dividend payout ratio25.03 %19.15 %27.89 %61.48 %28.99 %
Asset quality ratios:
Net charge-offs(3)
$2,612 $2,234 $2,253 $1,887 $1,393 
Net charge-offs/avg loans held for investment at amortized cost, excl PPP(3)
1.29 %1.15 %1.18 %1.08 %0.82 %
Nonperforming loans$10,456 $10,393 $8,606 $5,890 $10,468 
Nonperforming loans (excluding gov't gtd balance)$9,032 $8,776 $6,590 $2,095 $3,671 
Nonperforming loans/total loans held for investment1.14 %1.18 %1.03 %0.74 %1.44 %
Nonperforming loans (excl gov’t gtd balance)/total loans held for investment0.99 %1.00 %0.79 %0.26 %0.50 %
ACL/Total loans held for investment at amortized cost (1)
1.64 %1.68 %1.61 %1.69 %1.29 %
ACL/Total loans held for investment at amortized cost, excl PPP loans (1)
1.64 %1.72 %1.64 %1.73 %1.33 %
ACL/Total loans held for investment at amortized cost, excl government guaranteed loans (1)
2.03 %2.03 %2.03 %2.10 %1.62 %
Other Data:
Full-time equivalent employees305307302300291
Banking center offices1110998
(1) Prior to January 1, 2023, the incurred loss methodology was used to estimate credit losses. Beginning with that date, credit losses are estimated using the CECL methodology.
(2) See section entitled "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below for a reconciliation to most comparable GAAP equivalent.
(3) Annualized


BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 8

GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures
Some of the financial measures included in this report are not measures of financial condition or performance recognized by GAAP. These non-GAAP financial measures include tangible common shareholders' equity and tangible book value per common share. Our management uses these non-GAAP financial measures in its analysis of our performance, and we believe that providing this information to financial analysts and investors allows them to evaluate capital adequacy.
The following presents these non-GAAP financial measures along with their most directly comparable financial measures calculated in accordance with GAAP:
Tangible Common Shareholders' Equity and Tangible Book Value Per Common Share (Unaudited)
As of
(Dollars in thousands, except for share data)December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022
Total shareholders’ equity$100,707 $94,165 $91,065 $90,339 $91,884 
Less: Preferred stock liquidation preference(16,051)(11,440)(9,605)(9,605)(9,605)
Total equity available to common shareholders84,656 82,725 81,460 80,734 82,279 
Less: Goodwill— — — — — 
Tangible common shareholders' equity$84,656 $82,725 $81,460 $80,734 $82,279 
Common shares outstanding4,110,470 4,110,650 4,103,834 4,098,805 4,042,474 
Tangible book value per common share$20.60 $20.12 $19.85 $19.70 $20.35 


BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 9

BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)12/31/20239/30/202312/31/2022
AssetsUnauditedUnaudited
Cash and due from banks$4,099 $4,501 $3,649 
Interest-bearing deposits in banks54,286 108,052 62,397 
Cash and cash equivalents58,385 112,553 66,046 
Time deposits in banks4,646 4,631 4,881 
Investment securities available for sale, at fair value (amortized cost $43,597, $44,569, and $47,374 at December 31, 2023, September 30, 2023, and December 31, 2022, respectively)
39,575 39,683 42,349 
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $17, $19, and $0 (fair value: $2,347, $2,282, and $4,755 at December 31, 2023, September 30, 2023, and December 31, 2022, respectively)
2,484 2,482 5,002 
Nonmarketable equity securities
4,770 4,250 4,037 
Government guaranteed loans held for sale— 1,855 — 
Government guaranteed loans held for investment, at fair value
91,508 84,178 27,078 
Loans held for investment, at amortized cost net of allowance for credit losses of $13,497, $13,365, and $9,046 at December 31, 2023, September 30, 2023, and December 31, 2022, respectively)
810,721 780,904 692,528 
Accrued interest receivable7,130 6,907 4,452 
Premises and equipment, net38,874 37,992 35,440 
Loan servicing rights14,959 14,216 10,906 
Deferred income tax assets— 414 980 
Right-of-use operating lease assets2,416 2,594 3,177 
Bank owned life insurance25,800 25,630 25,159 
Other assets16,150 15,292 15,649 
Assets from discontinued operations348 398 1,211 
Total assets$1,117,766 $1,133,979 $938,895 
Liabilities:
Noninterest-bearing deposits$93,708 $98,008 $93,235 
Interest-bearing transaction accounts259,422 267,404 202,656 
Savings and money market deposits373,000 350,110 363,053 
Time deposits259,008 302,274 136,126 
Total deposits985,138 1,017,796 795,070 
FHLB and FRB borrowings10,000— 25,000 
Subordinated debentures5,9495,9475,992
Notes payable2,389 2,503 2,844 
Accrued interest payable882 632 704 
Operating lease liabilities2,619 2,812 3,538 
Deferred income tax liabilities482 — — 
Accrued expenses and other liabilities8,980 9,409 12,205 
Liabilities from discontinued operations620 715 1,658 
Total liabilities1,017,059 1,039,814 847,011 

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 10

BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)12/31/20239/30/202312/31/2022
Shareholders’ equity:UnauditedUnaudited
Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at December 31, 2023, September 30, 2023, and December 31, 2022; aggregate liquidation preference of $6,395 each period
6,161 6,161 6,161 
Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210 shares issued and outstanding at December 31, 2023, September 30, 2023, and December 31, 2022; aggregate liquidation preference of $3,210 each period
3,123 3,123 3,123 
Preferred stock, Series C; no par value, 10,000 shares authorized, 6,446 and 1,835 shares issued and outstanding at December 31, 2023 and September 30, 2023, respectively, and no shares issued and outstanding as of December 31, 2022; aggregate liquidation preference of $6,446 and $1,835 at December 31, 2023 and September 30, 2023, respectively
6,446 1,835 — 
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,110,470, 4,110,650, and 4,042,474 shares issued and outstanding at December 31, 2023, September 30, 2023, and December 31, 2022, respectively
54,521 54,500 53,023 
Accumulated other comprehensive loss, net(2,981)(3,621)(3,724)
Unearned compensation(958)(1,242)(178)
Retained earnings34,395 33,409 33,479 
Total shareholders’ equity100,707 94,165 91,884 
Total liabilities and shareholders’ equity$1,117,766 $1,133,979 $938,895 

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 11

BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
For the Quarter EndedYear-to-Date
(Dollars in thousands, except per share data)12/31/20239/30/202312/31/202212/31/202312/31/2022
Interest income:UnauditedUnauditedUnauditedUnaudited
Loans, including fees$17,714 $16,032 $11,680 $63,189 $36,492 
Interest-bearing deposits in banks and other1,140 1,588 840 5,328 2,074 
Total interest income18,854 17,620 12,520 68,517 38,566 
Interest expense:
Deposits9,719 9,055 3,711 30,795 7,844 
Other258 172 235 1,291 722 
Total interest expense9,977 9,227 3,946 32,086 8,566 
Net interest income8,877 8,393 8,574 36,431 30,000 
Provision for credit losses2,737 3,001 700 10,445 (700)
Net interest income after provision for credit losses6,140 5,392 7,874 25,986 30,700 
Noninterest income:
Loan servicing income, net677 760 532 2,826 2,040 
Gain on sale of government guaranteed loans, net6,977 7,139 5,805 24,553 21,720 
Service charges and fees555 408 355 1,721 1,306 
Government guaranteed loans fair value gain, net4,697 4,543 1,246 15,718 4,756 
Other noninterest income1,785 1,829 466 4,937 1,728 
Total noninterest income14,691 14,679 8,404 49,755 31,550 
Noninterest Expense:
Salaries and benefits7,446 7,912 6,245 30,973 27,422 
Bonus, commissions, and incentives2,211 1,406 561 5,726 2,394 
Occupancy and equipment1,150 1,262 985 4,758 3,995 
Data processing1,422 1,526 1,342 5,611 4,828 
Marketing and business development640 929 560 3,336 2,660 
Professional services1,070 816 994 3,657 4,083 
Loan origination and collection2,728 1,981 1,225 7,425 3,711 
Employee recruiting and development510 543 577 2,177 2,230 
Regulatory assessments266 284 158 881 457 
Other noninterest expense1,023 768 846 3,163 3,432 
Total noninterest expense18,466 17,427 13,493 67,707 55,212 
Income before taxes from continuing operations2,365 2,644 2,785 8,034 7,038 
Income tax expense from continuing operations704 674 672 2,119 1,560 
Net income from continuing operations1,661 1,970 2,113 5,915 5,478 
Loss from discontinued operations before income taxes(8)(62)(1,053)(283)(7,759)
Income tax benefit from discontinued operations(2)(15)(262)(70)(1,932)
Net loss from discontinued operations(6)(47)(791)(213)(5,827)
Net income (loss)1,655 1,923 1,322 5,702 (349)
Preferred dividends341 208 208 965 832 
Net income available to (loss attributable to) common shareholders$1,314 $1,715 $1,114 $4,737 $(1,181)

BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 12

BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
For the Quarter EndedYear-to-Date
(Dollars in thousands, except per share data)12/31/20239/30/202312/31/202212/31/202312/31/2022
Basic earnings (loss) per common share:UnauditedUnauditedUnauditedUnaudited
Continuing operations$0.32 $0.43 $0.47 $1.21 $1.16 
Discontinued operations— (0.01)(0.19)(0.05)(1.45)
Basic earnings (loss) per common share$0.32 $0.42 $0.28 $1.16 $(0.29)
Diluted earnings (loss) per common share:
Continuing operations$0.32 $0.42 $0.47 $1.17 $1.16 
Discontinued operations— (0.01)(0.19)(0.05)(1.38)
Diluted earnings (loss) per common share$0.32 $0.41 $0.28 $1.12 $(0.22)
    


BayFirst Financial Corp. Reports Fourth Quarter 2023 Results
January 25, 2024
Page 13

Loan Composition
(Dollars in thousands)
12/31/20239/30/20236/30/20233/31/202312/31/2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Government guaranteed loans held for investment, at fair value$91,508 $84,178 $52,165 $69,047 $27,078 
Real estate:
Residential
264,126 248,973 235,339 214,638 202,329 
Commercial
293,595 280,620 272,200 239,720 231,281 
Construction and land
26,272 25,339 15,575 11,069 9,320 
Commercial and industrial
177,566 174,238 198,639 199,721 194,643 
Commercial and industrial - PPP
3,202 15,364 15,808 18,430 19,293 
Consumer and other
47,287 39,024 38,103 32,697 37,288 
Loans held for investment, at amortized cost, gross
812,048 783,558 775,664 716,275 694,154 
Deferred loan costs, net
14,707 12,928 11,506 10,678 10,740 
Discount on government guaranteed loans sold
(7,040)(6,623)(5,937)(6,046)(5,621)
Premium on loans purchased, net
4,503 4,406 3,306 2,823 2,301 
Allowance for credit losses (1)
(13,497)(13,365)(12,598)(12,208)(9,046)
Loans held for investment, at amortized cost, net
810,721 780,904 771,941 711,522 692,528 
Total loans held for investment, net
$902,229 $865,082 $824,106 $780,569 $719,606 

Nonperforming Assets (Unaudited)
(Dollars in thousands)12/31/20239/30/20236/30/20233/31/202312/31/2022
Nonperforming loans (government guaranteed balances)
$1,424 $1,617 $2,016 $3,795 $6,797 
Nonperforming loans (unguaranteed balances)
9,032 8,776 6,590 2,095 3,671 
Total nonperforming loans
10,456 10,393 8,606 5,890 10,468 
OREO
— — 3 3 56 
Total nonperforming assets
$10,456 $10,393 $8,609 $5,893 $10,524 
Nonperforming loans as a percentage of total loans held for investment
1.14 %1.18 %1.03 %0.74 %1.44 %
Nonperforming loans (excluding government guaranteed balances) to total loans held for investment
0.99 %1.00 %0.79 %0.26 %0.50 %
Nonperforming assets as a percentage of total assets
0.94 %0.92 %0.79 %0.55 %1.12 %
Nonperforming assets (excluding government guaranteed balances) to total assets
0.81 %0.77 %0.61 %0.20 %0.40 %
ACL to nonperforming loans (1)
129.08 %128.60 %146.39 %207.27 %86.42 %
ACL to nonperforming loans (excluding government guaranteed balances) (1)
149.44 %152.29 %191.17 %582.72 %246.42 %
(1) Prior to January 1, 2023, the incurred loss methodology was used to estimate credit losses. Beginning with that date, credit losses are estimated using the CECL methodology.

Note: Transmitted on Globe Newswire on January 25, 2024, at 4:00 p.m. ET.

BayFirst Financial Corp. (NASDAQ:BAFN) 2023 – Fourth Quarter Results (Unaudited)

 
22 In addition to the historical information contained herein, this presentation includes "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, or climate change, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward- looking statements. Cautionary Statement Concerning Forward-Looking Information Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

 
3 ABOUT BAYFIRST FINANCIAL CORP. TAMPA BAY’S PREMIER BANKING FRANCHISE IN THE TAMPA BAY/ SARASOTA REGION(1) HOW WE RANK 2 ASSET SIZE BILLION TOTAL ASSETS (2)$1.12 SBA ORIGINATION SBA 7(a) ORIGINATOR IN THE NATION (3) #5 GROWTH ASSET GROWTH SINCE DEC 31, 2018(2)206% 1. Deposit ranking of banks with assets less than $10B headquartered in the Tampa/Sarasota region as of September 30, 2023 from Uniform Bank Performance Reports 2. Financial data as of December 31, 2023 3. As of SBA’s quarter ended December 31, 2023 INITIATIVES ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FOCUSED ESG DEPOSITS 19% TRANSACTION ACCOUNT BALANCE GROWTH DURING THE YEAR(2) BANKING CENTERS THE FOURTH BANKING CENTER IN SARASOTA-BRADENTON AREA OPENED IN NORTH SARASOTA IN DECEMBER BRINGING THE TOTAL BANKING CENTERS TO 11 IN THE TAMPA BAY REGION

 
Divider + Image Click image icon to insert rectangular image. No content below the lineNo content below the line Only use S&P Global Red for key text high- lights, not shapes or charts. It’s available in the custom color palette. Footer : Never change the footer text on individual slides. Change, turn on or off footer by using Insert Header & Footer Enter / change text Click Apply All. Data color order: Used with accent colors: Complimentary colors: Font: Follow the link below to download Akkurat, the S&P Global Font: https:// mediaportal.spglobal.c om/ selection/044f0784c26 0101db38e31ccde3bbe ff/detail/28188 4 KEY INVESTMENT POINTS Second largest community bank (deposits) based in attractive Tampa Bay region Total asset growth of 206% since YE2018 Innovative technology driven bank planning for the future of banking Among the nation’s top SBA loan originators Solid deposit growth of 24% since same period last year Experienced management team with strong insider ownership of 14% ✔ ✔ ✔ ✔ ✔ ✔ ✔ 30 consecutive quarters of dividend payments, which increased 100% over past 5 years

 
55 ABOUT BAYFIRST FINANCIAL CORP. CURRENT BANKING CENTER LOCATION FUTURE BANKING CENTER LOCATION EXPANDING BANKING CENTER FRANCHISE

 
6 • Advanced technology platform to support innovative products and services while improving efficiencies • PowerLOS for government guaranteed and commercial lending platform • Working with FinTechs to offer new and innovative services through Mulesoft API platform • 11 banking centers in Tampa Bay, expected to grow to 12 banking centers over the next year • Full suite of commercial and consumer loan and deposit products to meet the needs of Tampa Bay individuals, families and small businesses • BayFirst’s in-house government guaranteed lending platform • #5 SBA lender in dollars and #2 in units as of SBA's quarter ended 12/31/23 • #1 SBA lender in the five county Tampa Bay area at SBA’s FY ended 9/30/23 • FlashCap program: ▪ SBA 7(a) loans of $350K or less ◦ Small Loan Balance program: ▪ Includes Bolt SBA 7(a) loans for $150K or less, up to 85% government guarantee • Core program: ▪ Focus on greater than $150K ▪ Loan generation from organic sales and FinTech partners COMMUNITY BANKING TECHNOLOGY FOCUSED INNOVATIVE COMMUNITY BANK Technology focused community bank with diversified revenue streams CREDITBENCH

 
7 ATTRACTIVE LOAN COMPOSITION Composition of Loans Held for Investment as of December 31, 2023 28.0% 18.0% 11.1% 28.9% 5.5% 2.9% 0.5% 5.2% C&I Residential HELOC Owner-occupied nonfarm/nonresidential Other nonfarm/nonresidential C&D Multifamily residential and farmland Consumer & Other Loan Highlights • Loan portfolio is well-diversified across major loan types with a low concentration of non owner-occupied commercial real estate loans • Total loan production of $202 million during the quarter • Loans held for investment grew $49 million during the quarter (1) (1) Excludes PPP loans

 
8 SOLID DEPOSIT COMPOSITION Deposit Portfolio Composition as of December 31, 2023 • Transaction account balances increased $57 million or 19% during the year • Approximately 84% of deposits are insured • Minimal use of short-term brokered deposits ($30 million as of December 31, 2023) • Grew number of checking accounts by 27% YTD Noninterest Bearing Transaction, 9.5% Interest Bearing Transaction, 26.3% Savings & Money Market, 37.9% Time Deposits, 26.3% Deposit Highlights

 
9 INVESTMENT SECURITIES AFS Investment Securities Portfolio as of December 31, 2023 (fair market value, in thousands) (1)Investment Securities Portfolio Details • Minimal exposure to market value losses due to modest investment securities portfolio (4% of total assets) • Other Comprehensive Loss of $3.0 million reduced Tangible Book Value by $0.73 as of December 31, 2023 ◦ We intend and have the ability to hold the available for sale investment securities to maturity; no plan to sell ◦ No impact to regulatory capital ratios • $2.5 million of HTM investment securities, net of ACL of $17 thousand (1) HTM Investment Securities make up 10% of total investment securities portfolio Asset-backed securities, $7,933 MBS: U.S. Government- sponsored enterprises, $3,236 CMO: U.S. Government- sponsored enterprises, $17,098 Corporate bonds, $11,308

 
10 STRATEGIC PILLARS 2024 Maintain Strong Capital Manage and Evolve Risk Management Leverage Our SBA Expertise Promote Innovation Maintain Granularity of Deposit and Loan Portfolios Leverage Banking Center Franchise and Core Deposit Base Continue to Promote Workplace Culture and Social Responsibility

 
Divider + Image Click image icon to insert rectangular image. No content below the lineNo content below the line Only use S&P Global Red for key text high- lights, not shapes or charts. It’s available in the custom color palette. Footer : Never change the footer text on individual slides. Change, turn on or off footer by using Insert Header & Footer Enter / change text Click Apply All. Data color order: Used with accent colors: Complimentary colors: Font: Follow the link below to download Akkurat, the S&P Global Font: https:// mediaportal.spglobal.c om/ selection/044f0784c26 0101db38e31ccde3bbe ff/detail/28188 11 2024 GOALS & INITIATIVES • Increase the volume of small-balance SBA loans • Focus on revenue growth and optimize the Bank’s efficiency ratio • Maximize existing banking centers to increase brand awareness and core deposit customers • Partner with Fintech firms to create fee income and loan and deposit opportunities • Grow capital and expand the Company’s shareholder base • Enhance overall customer experience, engagement, and satisfaction • Improve digital channels and functionalities to elevate customer engagement • Maximize the investment in technology • Position the Bank to achieve an “Outstanding” CRA rating

 
12 Q4 2023 For the Three Months Ended ($000s) 12/31/2023 9/30/2023 Increase/ (Decrease) 12/31/2022 Increase/ (Decrease) Interest income $ 18,854 $ 17,620 $ 1,234 $ 12,520 $ 6,334 Interest expense 9,977 9,227 750 3,946 6,031 Net interest income 8,877 8,393 484 8,574 303 Provision for credit losses 2,737 3,001 (264) 700 2,037 Noninterest income 14,691 14,679 12 8,404 6,287 Noninterest expense 18,466 17,427 1,039 13,493 4,973 Income tax expense 704 674 30 672 32 Net income from continuing operations 1,661 1,970 (309) 2,113 (452) Net income (loss) from discontinued operations (6) (47) 41 (791) 785 Net income 1,655 1,923 (268) 1,322 333 Preferred dividends 341 208 133 208 133 Net income available to common shareholders $ 1,314 $ 1,715 $ (401) $ 1,114 $ 200

 
13 Q4 2023 Year Ended December 31, ($000s) 2023 2022 Increase/ (Decrease) Interest income $ 68,517 $ 38,566 $ 29,951 Interest expense 32,086 8,566 23,520 Net interest income 36,431 30,000 6,431 Provision for credit losses 10,445 (700) 11,145 Noninterest income 49,755 31,550 18,205 Noninterest expense 67,707 55,212 12,495 Income tax expense 2,119 1,560 559 Net income from continuing operations 5,915 5,478 437 Net income (loss) from discontinued operations (213) (5,827) 5,614 Net income (loss) 5,702 (349) 6,051 Preferred dividends 965 832 133 Net income available to (loss attributable to) common shareholders $ 4,737 $ (1,181) $ 5,918

 
14 Q4 2023 As of and For the Three Months Ended As of and For the Year Ended 12/31/2023 9/30/2023 12/31/2022 12/31/2023 12/31/2022 Return on average assets(1) 0.60 % 0.71 % 0.57 % 0.54 % (0.04) % Return on average common equity(1) 6.37 % 8.46 % 5.56 % 5.87 % (1.43) % Tangible book value per common share $ 20.60 $ 20.12 $ 20.35 $ 20.60 $ 20.35 Diluted earnings from continuing operations per common share $ 0.32 $ 0.88 $ 0.47 $ 1.17 $ 1.16 Dividend payout ratio 25.03 % 19.15 % 28.99 % 27.70 % (108.95) % Total Capital (to risk-weighted assets) 13.02 % 13.47 % 15.00 % 13.02 % 15.00 % Common Equity Tier 1 Capital (to risk-weighted assets) 11.77 % 12.21 % 13.75 % 11.77 % 13.75 % Tier 1 Capital (to total assets) 9.38 % 9.16 % 10.79 % 9.38 % 10.79 % Nonperforming loans (excl gov’t gtd balance)/ total loans held for investment 0.99 % 1.00 % 0.50 % 0.99 % 0.50 % ACL/Total loans held for investment at amortized cost, excl PPP loans (2) 1.64 % 1.72 % 1.33 % 1.64 % 1.33 % (1) Annualized (2) Prior to January 1, 2023, the incurred loss methodology was used to estimate credit losses. Beginning with that date, credit losses are estimated using the CECL methodology.

 
15 $82 $81 $81 $83 $85 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $20 $40 $60 $80 $100 $120 Strong balance sheet on track for continued organic growth ORGANIC GROWTH Total Assets excluding PPP Loans ($M) Total Net Loans HFI excluding PPP loans ($M) Total Deposits ($M) Tangible Common Equity ($M) $920 $1,052 $1,072 $1,119 $1,115 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $200 $400 $600 $800 $1,000 $1,200 $700 $762 $808 $850 $899 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $200 $400 $600 $800 $1,000 $795 $933 $945 $1,018 $985 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $200 $400 $600 $800 $1,000 $1,200 CECL adoption decreased capital by $2.5M in ‘23

 
16 RETURN TO PROFITABILITY ROAA (%)(1) ROATCE (%)(1) Net Interest Margin (%)(1) Noninterest Income / Total Revenue from Continuing Operations 0.57% 0.30% 0.52% 0.71% 0.60% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.00% 0.50% 1.00% 5.56% 2.69% 5.86% 8.46% 6.37% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.00% 5.00% 10.00% 15.00% 4.19% 4.17% 4.18% 3.36% 3.48% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 49.50% 51.07% 51.97% 63.62% 62.33% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 20% 30% 40% 50% 60% 70% (1) Annualized

 
17 SHAREHOLDER VALUE CREATION $11.49 $12.77 $16.02 $21.75 $20.35 $19.70 $19.85 $20.12 $20.60 Tangible Book Value Per Share 2018Y 2019Y 2020Y 2021Y 2022Y Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $5 $10 $15 $20 $25 CECL adoption decreased equity by $2.5M in Q1 ‘23Record earnings fro m residential m ortgage and PPP lending in ‘20 and ‘21 Discontinuation of nationwide residential lending platform in ‘22

 
18 $109 $122 $125 $156 $145 539 563 676 729 849 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $25 $50 $75 $100 $125 $150 $175 500 600 700 800 900 1,000 • Nationally ranked #5 in total SBA dollars and #2 in units for the quarter ended December 31, 2023 • Strategic initiative to expand USDA business and industry lending program: an experienced USDA lender recently hired to support this effort • Total Q4 2023 government guaranteed loan production increased 32.8% from Q4 2022 • The demand remains strong for the Company’s specialty Bolt program, an SBA 7(a) loan product designed to provide working capital loans of $150 thousand or less to businesses throughout the country ◦ Since the launch in June 2022, the Company originated loans totaling $441.8 million, including $102.3 million in Q4 2023 ◦ New automation program launched through proprietary loan origination system PowerLOS and Open API, allowing increased volume and efficiency while limiting additional staff CREDITBENCH (SBA/USDA LENDING) Q4 2023 Highlights Government Guaranteed Loan Amount ($M) and Unit Volume

 
19 $961 $1,044 $1,122 $1,199 $1,252 $300 $350 $364 $373 $396 $661 $694 $758 $826 $856 HFI Government Guaranteed Loans (1) Government Guaranteed Loans Serviced for Others 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 CREDITBENCH (SBA/USDA LOANS) Guaranteed Loans HFI and Loans Serviced for Others ($M) (1) Excludes PPP loans

 
20 Quarter Ended Year Ended ($000s) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2023 Core 7(a) $ 19,998 $ 29,638 $ 28,758 $ 26,132 $ 104,526 Core 504 16,022 — 14,571 482 31,075 Core USDA 13,625 5,525 19,800 9,080 48,030 Bolt 58,633 74,785 84,905 102,264 320,587 FlashCap 13,834 14,557 7,877 6,983 43,251 Total $ 122,112 $ 124,505 $ 155,911 $ 144,941 $ 547,469 GOVERNMENT GUARANTEED LOAN PRODUCTION

 
21 ASSET QUALITY Strong reserve well-positioned to withstand volatility in economic conditions 0.82% 1.08% 1.18% 1.15% 1.29% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.0% 0.5% 1.0% 1.5% Net charge-offs/Total average loans HFI at amortized cost, excluding PPP loans ACL/Total loans held for investment at amortized cost, excluding PPP loans(1) 1.33% 1.73% 1.64% 1.72% 1.64% 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 0.0% 0.5% 1.0% 1.5% 2.0% ACL to nonperforming loans(1)(2) Past due and Nonaccrual loans to Total loans HFI at amortized cost(2) 246.42% 582.72% 191.17% 152.29% 149.44% 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 0.0% 250.0% 500.0% 750.0% 1.08% 1.05% 1.67% 2.04% 2.24% 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 0.0% 1.0% 2.0% 3.0% (2) Excludes government guaranteed balances (1) Prior to January 1, 2023, the incurred loss methodology was used to estimate credit losses. Beginning with that date, credit losses are estimated using the CECL methodology.

 
22 Quarter ended Year End ($000s) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2023 Ending balance $ 26,521 $ 23,255 $ 20,006 $ 17,027 $ 17,027 31-90 days past due 604 700 852 1,021 1,021 90+ days past due 142 220 351 258 258 Net charge-offs 567 601 755 896 2,819 Net charge-offs to average loans (annualized) 7.80 % 9.63 % 13.97 % 19.32 % 11.99 % UPGRADE CONSUMER LOANS Purchased unsecured consumer loans (no purchases after 2022: additional purchases are not planned)

 
23 COMMUNITY BANKING PERFORMANCE Q4 2023 Loan Production Summary: ▪ Loan production during the quarter was $57.2 million(1) ▪ Loans held for investment, including government guaranteed loans, increased by a net $49.3 million QoQ Q4 2023 Deposit Summary: ▪ Deposit balances decreased $32.7 million QoQ ▪ Deposit portfolio increased by 0.2% in number of accounts (to 19,064 accounts totaling $985.1 million) QoQ New Banking Center: • Opened fourth banking center in North Sarasota in December 2023 bringing the total to 11 banking centers in the Tampa Bay region Q4 2023 Highlights Banking Center & Deposits ($ in 000s) Total Deposits # Branch Year Opened 12/31/2023 12/31/2022 12/31/2021 1 St. Petersburg(2) 2017 $ 265,715 $ 246,813 $ 212,631 2 Seminole 1999 143,073 131,257 157,561 3 Pinellas Park 2005 96,019 69,976 63,561 4 Downtown Sarasota 2018 164,594 159,302 148,021 5 Countryside 2018 59,172 66,827 60,214 6 West Tampa 2020 102,958 68,834 33,046 7 Belleair Bluffs 2021 38,531 31,011 — 8 West Bradenton 2022 54,307 21,050 — 9 Carrollwood 2023 39,341 — — 10 Bee Ridge 2023 21,426 — — 11 North Sarasota 2023 2 — — Total Branches (11) $ 985,138 $ 795,070 $ 675,034 (1) Excludes government guaranteed loan production (2) St. Petersburg branch deposits include other deposits generated by CreditBench, Cash Management, Corporate Treasury, and Virtual

 
APPENDIX

 
25 BOLT SINGLE LOAN EARNINGS EXAMPLE Immediate One-Time Impact Loan amount (Average amount of a Bolt loan) $ 130,000 Guaranteed amount (85% of total loan) 110,500 Unguaranteed amount (15% of total loan, retained by BayFirst) 19,500 Premium earned on sale of guaranteed amount 10,166 (The gross premium paid when the loan is sold, less 50% of the amount over 10% to be shared with SBA and approximately 20% which is deferred and recognized over the remaining life of the unguaranteed loan amount) Cost to originate (Includes third party referral fees and internal labor and origination costs) (3,868) Packaging fee (Paid by borrower to compile and transmit SBA compliant loan package) 1,560 Servicing right gain (Reflects future value of servicing on sold loans) 2,652 Provision for credit loss on unguaranteed amount (Booked according to ASC 326) (1,560) Net one-time impact 8,950 First year income statement impact from unguaranteed amount 1,216 (Includes net interest margin and accretion of deferred gain, offset by amortization of deferred costs and servicing asset) Combined immediate one-time and first year earnings impact $ 10,166 This example is for illustrative purposes and is not a guarantee of future loan size or volume and may not be indicative of the financial impact of future loans. The size, volume, and financial impact of such loans involve known and unknown risks and uncertainties, which may cause actual performance and results to be materially different.

 
26 OWNERSHIP OVERVIEW Total Common Stock Ownership Mix Note: Ownership information based on most recently disclosed common shares outstanding of 4,110,650 as of 1/19/24 Source: S&P Capital IQ Pro Vanguard Group Inc., 3.34% First Manhattan Co., 3.38% 1st & Main Growth Partners, 3.25% All Other Institutions, 7.96% Mark S. Berset, 6.85% All Other Directors/ Executive Officers, 7.44% Public/Other, 67.78%

 
Divider + Image Click image icon to insert rectangular image. No content below the lineNo content below the line Only use S&P Global Red for key text high- lights, not shapes or charts. It’s available in the custom color palette. Footer : Never change the footer text on individual slides. Change, turn on or off footer by using Insert Header & Footer Enter / change text Click Apply All. Data color order: Used with accent colors: Complimentary colors: Font: Follow the link below to download Akkurat, the S&P Global Font: https:// mediaportal.spglobal.c om/ selection/044f0784c26 0101db38e31ccde3bbe ff/detail/28188 27 DEPOSITS IN TAMPA BAY/SARASOTA REGION Total Deposits (Total Assets <$10BN and HQ in Tampa/St. Petersburg/Sarasota Region) Note: Deposit data as of June 30, 2023 Source: Uniform Bank Performance Reports Average Deposits Branches Deposits per Branch Rank Institution ($ millions) (No.) ($ millions) 1 Bank of Tampa $2,876 13 $221 2 BayFirst National Bank 1,018 10 102 3 Flagship Bank 518 6 86 4 Climate First 385 3 128 5 Gulfside Bank 255 1 255 6 TCM Bank NA 252 1 252 7 Central Bank 256 4 64 8 Century Bank of Florida 90 1 90 9 Waterfall Bank 122 1 122

 
Divider + Image Click image icon to insert rectangular image. No content below the lineNo content below the line Only use S&P Global Red for key text high- lights, not shapes or charts. It’s available in the custom color palette. Footer : Never change the footer text on individual slides. Change, turn on or off footer by using Insert Header & Footer Enter / change text Click Apply All. Data color order: Used with accent colors: Complimentary colors: Font: Follow the link below to download Akkurat, the S&P Global Font: https:// mediaportal.spglobal.c om/ selection/044f0784c26 0101db38e31ccde3bbe ff/detail/28188 28 LIQUIDITY SOURCES • Available Liquidity ◦ $63 million in cash and due from other banks ◦ $40 million in AFS investment securities • Off Balance Sheet Sources of Liquidity ◦ $153 million of unused, available borrowing capacity at the FHLB based on pledged loans ◦ $40 million available at the Federal Reserve Bank based on pledged loans ◦ $50 million in available Fed Funds borrowing lines from other banks • Contingent Sources ◦ Up to $138 million in brokered deposits (1) ◦ Up to $328 million in listing service deposits (1) (1) Based on Bank’s policy limits Data as of December 31, 2023

 
29 EXPERIENCED LEADERSHIP TEAM • Joined BayFirst as CFO in Q2 2018; Prior to joining BayFirst, Controller of Central Bank & Trust Co., a $2.5 billion privately held financial institution in Lexington, Kentucky, from May 2014 to June 2018 • Approximately 16 years with Crowe LLP as an auditor in the financial institution practice; served over 80 financial institution clients with assets ranging from $50 million to $4.5 billion throughout career, including several SEC registrants and FDICIA reporting institutions • B.S. in Accounting from the University of Kentucky • Joined BayFirst in Q1 2016 • Previous experience includes Florida Market President of Stearns Bank, SBA Product Manager of HomeBanc, and Community Bank President and SBA President of Republic Bank (MI) • B.A. in Business Administration from University of Notre Dame Robin Oliver Thomas G. Zernick Chief Executive Officer & Director of BayFirst and the Bank President & Chief Operating Officer of BayFirst and the Bank 29 Scott J. McKim EVP, Chief Financial Officer of BayFirst and the Bank • Joined BayFirst in July 2023 • Previous experience includes Chief Strategy Officer of 121 Financial Credit Union, Chief Financial Officer and Chief Lending Officer of Publix Employees Federal Credit Union, and Director of Corporate Finance and Divisional CFO for Huntington Bancshares • B.S. in Accounting from Bowling Green State University and a M.B.A from Max M. Fisher College of Business, The Ohio State University

 
30 EXPERIENCED LEADERSHIP TEAM • Joined BayFirst in Q4 2017; Prior to joining BayFirst, over fifteen years of Mortgage Banking administration experience as well as Human Resources experience supporting mid-size financial institutions • B.B.S from The University of Florida and M.B.A from The University of Tampa Brandi Jaber John Macaluso EVP, Chief Production Officer EVP, Chief Technology Officer 30 Lewis Benner EVP, Chief Credit Officer • Joined BayFirst in 2018; Prior to joining BayFirst, Mr. Benner served in leadership roles from multiple financial institutions • B.A. in Business Administration from Elizabethtown College • Joined BayFirst in 2018 • Held leadership positions at multiple institutions amassing expertise in many areas of community banking and business development • B.S. in Economics with an emphasis in Mathematics from University of Wisconsin-Madison Thomas Quale EVP, Chief Lending Officer and Market President • Joined BayFirst in Q4 2020 • 37 years of information technology experience • Served as CTO for Fiserv, Inc. • B.A. from University of South Florida

 
v3.23.4
Cover
Jan. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 25, 2024
Entity Registrant Name BAYFIRST FINANCIAL CORP.
Entity Incorporation, State or Country Code FL
Entity File Number 001-41068
Entity Tax Identification Number 59-3665079
Entity Address, Address Line One 700 Central Avenue
Entity Address, City or Town St. Petersburg
Entity Address, State or Province FL
Entity Address, Postal Zip Code 33701
City Area Code 727
Local Phone Number 440-6848
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol BAFN
Security Exchange Name NASDAQ
Entity Emerging Growth Company true
Entity Ex Transition Period false
Entity Central Index Key 0001649739
Amendment Flag false
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