8-K
BayFirst Financial Corp. (BAFN)
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 24, 2023
BAYFIRST FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
| Florida | 001-41068 | 59-3665079 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>file number) | (IRS employer<br><br>identification no.) |
| 700 Central Avenue | 33701 | |
| 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 registered | Trading Symbol(s) | Name of exchange on which registered |
| Common Stock | BAFN | The 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 26, 2023, BayFirst Financial Corp. issued a press release announcing its financial results for the fourth quarter of 2022. 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 2022 conference call on Friday, January 27, 2023 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 24, 2023, the Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share. The dividend will be payable March 15, 2023 to common shareholders of record as of March 1, 2023. This dividend marks the 27th consecutive quarterly cash dividend paid since BayFirst initiated cash dividends in 2016.
Item 9.01 Financial Statements and Exhibits.
| (d) Exhibits | ||
|---|---|---|
| Exhibit Number | Exhibit Name | Filed Herewith |
| 99.1 | BayFirst Financial Corp. Press Release datedJanuary 27, 2023 | * |
| 99.2 | BayFirst Financial Corp. Fourth Quarter 2022 Investor Presentation | * |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | * |
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: | 1/26/2023 |
| By: | /s/ Robin L. Oliver |
| Robin L. Oliver | |
| Chief Financial Officer and<br>Chief Operating Officer |
Document
Contacts:
Anthony N. Leo Robin L. Oliver
Chief Executive Officer Chief Financial Officer
727.399.5678 727.685.2082
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results;
Highlighted by Strong Conventional Loan Production
ST. PETERSBURG, FL. — January 26, 2023 — BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or the “Company”), parent company of BayFirst National Bank (the “Bank”) today reported net income of $1.3 million, or $0.27 per diluted share, for the fourth quarter of 2022 compared to a net loss of $1.4 million, or $0.35 per diluted share, in the third quarter of 2022. In the fourth quarter of 2021, net income was $2.8 million, or $0.61 per diluted share. Net income from continuing operations was $2.1 million for the fourth quarter of 2022 compared to $3.1 million in the third quarter of 2022 and $856 thousand in the fourth quarter of 2021. Quarterly financial results were highlighted by robust loan production in community banking, up 98% year over year, as well as strong SBA 7(a) loan production.
The decrease in earnings from continuing operations during the fourth quarter of 2022, compared to the third quarter of 2022, was the result of lower gain on sale of SBA loans of $1.6 million and higher interest expense on deposits of $1.9 million, partially offset by higher loan interest income, including fees, of $1.0 million.
BayFirst’s management team will host a conference call on Friday, January 27, 2023 at 9:00 a.m. EST 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) 396-8049 to participate in the call. A replay will be available for one week at (877) 674-7070 using access code 736702# or at www.bayfirstfinancial.com.
“BayFirst’s fourth quarter results reflect the progress we are making in our efforts to become the premier community bank of Tampa Bay,” stated Anthony N. Leo, Chief Executive Officer. “Supported by our top 10 SBA lending division CreditBench, the strength of our community banking division and the investments we’ve made in an advanced technology platform, we have entered a new stage of growth and profitability. Despite the charges associated with discontinuation of the mortgage lending division during the prior quarter we are extremely pleased with our results, with net income from continuing operations at $2.1 million for the fourth quarter of 2022.”
“With the discontinuation of our nationwide residential lending business, we expect to return to more normalized levels of profitability in 2023. Specifically, our goal is to achieve a return on average assets in the range of 1%. Our ability to achieve our profitability goals will be dependent upon our success in continuing to generate conventional and government guaranteed loans in the current rate environment, as well as our efforts to control non-interest expense and generate deposits at reasonable rates. While we believe our loan loss reserve is well positioned for current economic conditions, deterioration during 2023 could adversely affect our financial performance and condition.”
“Due to the hard work and continued efforts of our lending team to bring new customers into the Bank, loan production from community banking and SBA lending for the year was substantial. Loans held for investment excluding PPP loans were up 7.7% during the fourth quarter, and 40.6% over the past year, with growth in both conventional community bank loans and SBA loans. SBA loan production through our CreditBench division grew 84.6% over the past year, but decreased compared to the record production recorded during the prior quarter. We experienced an uptick in deposit costs during the quarter, as a result of increased rates paid on certain deposit products in order to attract and retain deposit customers. While our asset sensitivity lags a quarter due to SBA loan rate adjustments, we expect asset yields to adjust commensurate with deposit costs.”
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 2
“We continue to focus on making an impact on our Tampa Bay markets, with expansion plans to open a second Tampa banking center in early 2023 and two additional branches in Sarasota currently under construction and expected to open late 2023 or early 2024. These new branches will complement the West Bradenton location that we opened in September. In late 2022, we reorganized our community banking division which is now supported by three separate market leaders. The new structure emphasizes the importance of local decision making which is the hallmark of community banking. We operate in one of the most vibrant markets in the country, and will continue to look for branching opportunities in an effort to capture additional market share,” concluded Leo.
Fourth Quarter 2022 Performance Review
•The Company’s SBA loan origination platform, CreditBench, originated $109.4 million in new SBA loans during the fourth quarter of 2022, a 21.4% decrease compared to $139.2 million originated in the third quarter of 2022, and a 84.6% increase over $59.3 million of loans produced during the fourth quarter of 2021. The lower production in the fourth quarter was impacted by seasonality of SBA loans. Late in the second quarter, the Company launched BOLT, an SBA 7(a) loan product designed to expeditiously provide working capital loans of $150 thousand or less to businesses throughout the country. During the year, the Company originated 923 BOLT loans totaling $121.2 million.
•Loans held for investment, excluding PPP loans of $19.2 million, increased by $50.8 million or 7.7% to $709.5 million during the fourth quarter of 2022 and $205.0 million, or 40.6% over the past year. Production during the quarter was partially offset by $78.7 million in sales of balances of SBA loans.
•After the decision to exit the Bank's nationwide residential lending platform in the third quarter of 2022, the Residential Mortgage Division originated during the fourth quarter of 2022 $59.6 million of loans from the remaining pipeline, a reduction of 75.7% compared to $245.4 million originated during the third quarter of 2022, and a 57.4% reduction compared to $477.4 million of loans produced during the fourth quarter of 2021.
•Deposits increased $9.3 million, or 1.2%, during the fourth quarter of 2022 and increased $73.4 million, or 10.2%, over the past year to $795.1 million. During the fourth quarter of 2022, there were increases in interest-bearing transaction account balances of $11.7 million and time deposit balances of $26.2 million partially offset by decreases in money market and savings account balances of $17.5 million and non-interest bearing deposit account balances of $11.0 million.
•Tangible book value at December 31, 2022 was $20.35 per common share, up from $20.10 at September 30, 2022.
•Net interest margin including discontinued operations contracted 44 bps to 4.19% in the fourth quarter of 2022, from 4.63% in the third quarter of 2022, primarily due to an increase in deposit costs.
Results of Operations
Net Income (Loss)
Net income was $1.3 million for the fourth quarter of 2022 compared to a net loss of $1.4 million in the third quarter of 2022, and net income of $2.8 million in the fourth quarter of 2021. The increase in net income for the fourth quarter of 2022 from the preceding quarter was primarily due to a decrease of $3.6 million in restructuring charges to discontinue nationwide residential lending operations, partially offset by a decrease of $1.6 million in gain on sale of SBA loans. The decrease in net income from the fourth quarter of 2021 was partially due to a $2.7 million unfavorable change in revenue from discontinued operations. Additionally, loan loss provision changed unfavorably by $3.2 million from the fourth quarter of 2021. This was partially offset by an increase of $2.8 million in net interest income, an increase of $1.2 million in gain on sale of SBA loans, and an increase of $1.2 million related to held for investment SBA loan fair value gains.
For the year ended 2022, the net loss was $349 thousand, a decrease of $25.0 million from the net income of $24.6 million for the year ended 2021 primarily due to a loss of $21.4 million in revenue from discontinued operations. Additionally, a $13.8 million gain on sale of PPP loans in 2021 did not recur, non-interest expense on continuing operations increased $4.7 million, and PPP fee and interest income decreased $18.3 million. These items were
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 3
partially offset by an $11.6 million increase in non-PPP loan interest income, a $4.6 million increase related to held for investment SBA loan fair value gains, and higher gains on non-PPP SBA guaranteed loan sales of $17.5 million. The increase in the net loss from discontinued operations was primarily the result of a decrease in gain on sale of residential mortgage loans of $64.2 million and the recognition of restructuring charges of $4.3 million for the discontinuation of the nationwide residential mortgage lending division, partially offset by lower noninterest expense of $41.0 million.
Net Interest Income and Net Interest Margin
Net interest income from continuing operations was $8.6 million in the fourth quarter of 2022, a decrease of $596 thousand or 6.5% from $9.2 million in the third quarter of 2022, and an increase of $2.8 million or 49.2% from $5.7 million in the fourth quarter of 2021. The decrease during the fourth quarter of 2022 as compared to the prior quarter was mainly due to an increase in deposit interest expense partially offset by an increase in non-PPP loan interest income. The increase during the fourth quarter of 2022 as compared to the year ago quarter was mainly due to the increase in loan interest income, including fees, of $4.7 million, partially offset by higher interest expense on deposits of $2.5 million.
Net interest income from continuing operations was $30.0 million for the year ended 2022, a decrease of $6.5 million or 17.9% from $36.5 million for the year ended 2021. The decrease was mainly due to a decline in net PPP income of $18.3 million, partially offset by higher interest income on non-PPP loans.
Net interest margin including discontinued operations decreased to 4.19% for the fourth quarter of 2022, which represented a contraction of 44 basis points, compared to 4.63% from the preceding quarter and an expansion of 111 basis points compared to 3.07% from the same quarter last year. Net interest margin including discontinued operations improved to 3.97% for the year 2022, compared to 3.23% for the year 2021.
Noninterest Income
Noninterest income from continuing operations was $8.4 million for the fourth quarter of 2022, a decrease of $1.4 million or 14.3% from $9.8 million in the third quarter of 2022, and an increase of $2.8 million from $5.6 million in the fourth quarter of 2021. The decrease in the fourth quarter of 2022, as compared to the prior quarter, was primarily due to a $1.6 million reduction in gain on sale of SBA loans. The increase from a year ago quarter was primarily the result of an increase of $1.2 million in gains on SBA loan sales and an increase of $1.2 million related to held for investment SBA loan fair value gains.
Noninterest income from continuing operations was $31.6 million for the year ended 2022, an increase of $9.6 million or 43.6% from $22.0 million for the year ended 2021. The increase was primarily due to higher gains on the sale of non-PPP SBA loans of $17.5 million and an increase related to held for investment SBA loan fair value gains of $4.6 million, partially offset by the $13.8 million gain on sale of PPP loans in 2021 which did not recur in 2022.
Noninterest Expense
Noninterest expense from continuing operations was $13.5 million in the fourth quarter of 2022, which was a $665 thousand or 4.7% decrease from $14.2 million in the third quarter of 2022 and a $230 thousand or 1.7% increase compared to $13.3 million in the fourth quarter of 2021.
Noninterest expense from continuing operations was $55.2 million for the year ended 2022, which was a $4.9 million or 9.8% increase from $50.3 million for the year ended 2021. The increase was primarily the result of higher salaries and benefits, occupancy expense and loan origination and collection expense.
Discontinued Operations
Net loss on discontinued operations was $791 thousand in the fourth quarter of 2022, which was a $3.7 million improvement from a net losses of $4.5 million in the third quarter of 2022. The company recorded net income on discontinued operations of $2.0 million in the fourth quarter of 2021. The decrease in the net loss from the previous quarter was the result of a decrease in restructuring charges of $3.6 million for the discontinuation of the nationwide residential mortgage lending division and a decrease of $8.1 million in noninterest expense, excluding restructuring charges, partially offset by a decrease in gains on sale of residential mortgage loans of $6.2 million and a decrease in
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 4
income tax benefit of $1.2 million. The $2.7 million decrease in income from the year ago quarter was primarily due to a decrease in residential loan fee income of $17.7 million partially offset by a decrease in noninterest expense, excluding the restructuring charges, of $14.8 million.
Net loss from discontinued operations was $5.8 million for the year ended 2022, which was a $21.4 million reduction from net income of $15.6 million for the year ended 2021. The reduction in net income was primarily the result of a decrease in residential loan fee income of $64.2 million and the restructuring charges for the discontinuation of residential mortgage lending division of $4.3 million recorded in 2022. This was partially offset by a $41.0 million decrease in noninterest expense excluding the restructuring charge and a decrease in income tax expense of $7.1 million.
Balance Sheet
Assets
Total assets increased $8.6 million or 0.9% during the fourth quarter of 2022 to $938.9 million, mainly due to new loan production and an increase of $29.6 million in cash and cash equivalents, partially offset by the sale of $78.7 million in SBA loans and a decrease in assets from discontinued operations of $75.5 million.
Loans
Loans held for investment, excluding PPP loans, increased $50.8 million or 7.7% during the fourth quarter of 2022 and $205.0 million or 40.6%, over the past year to $709.5 million, due to increases in both conventional community bank loans and SBA loans, partially offset by SBA loan sales. PPP loans, net of deferred origination fees, decreased $3.0 million in the fourth quarter of 2022 to $19.2 million.
Deposits
Deposits increased $9.3 million or 1.2% during the fourth quarter of 2022 and increased $73.4 million or 10.2% compared to December 31, 2021, ending the fourth quarter of 2022 at $795.1 million. During the fourth quarter, time deposit account balances and interest-bearing transaction account balances increased, partially offset by a decrease in interest-bearing transaction, savings, and money market account balances. Over the past year, transaction deposit account and time deposit account balances increased with a decrease in savings and money market deposit account balances.
Asset Quality
Asset quality remained stable in the fourth quarter of 2022. As a result of loan growth, the Company recorded a provision for loan losses in the fourth quarter of $700 thousand, which compared to a $750 thousand provision for the third quarter of 2022. As the financial impact of the COVID-19 pandemic became more predictable throughout 2021 and 2022, the Company began adjusting downward its allowance for loan losses from the historic high levels reached in 2020 at the onset of the pandemic. The Company recorded a $2.5 million negative provision for loan losses during the fourth quarter of 2021.
The ratio of the allowance for loan losses to total loans held for investment at amortized cost, excluding government guaranteed loans, was 1.68% at December 31, 2022, 1.90% as of September 30, 2022, and 4.07% as of December 31, 2021.
Over the past five years, the Company’s loan losses have been incurred primarily in its SBA unguaranteed loan portfolio, particularly loans originated under the SBA 7(a) Small Loan Program. The Small Loan Program represents loans of $350 thousand or less and carry an SBA guaranty of 75% to 85% of the loan, depending on the original principal balance. The default rate on loans originated in the SBA 7(a) Small Loan Program has been higher than the Bank’s other loans.
Net charge-offs for the fourth quarter of 2022 were $1.4 million, an $818 thousand increase from $575 thousand for the third quarter of 2022 and a $729 thousand increase compared to $664 thousand in the fourth quarter of 2021. The increase in the fourth quarter net charge-offs was primarily due to charge-off of one SBA loan of $376 thousand which was fully reserved in prior periods, as well as an increase in net charge-offs on the Bank’s unsecured consumer loan portfolio. Annualized net charge-offs as a percentage of average loans, excluding PPP loans, were 0.79% for the
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 5
fourth quarter of 2022, up from 0.35% in the third quarter of 2022 and 0.51% in the fourth quarter of 2021. Nonperforming assets, excluding government guaranteed loans, to total assets was 0.40% as of December 31, 2022, compared to 0.44% as of September 30, 2022, and 0.43% as of December 31, 2021.
Capital
The Bank’s Tier 1 leverage ratio was 10.79% as of December 31, 2022, an increase from 10.48% as of September 30, 2022, and a decrease from 12.22% at December 31, 2021. The CET 1 and Tier 1 capital ratio to risk-weighted assets were 13.75% as of December 31, 2022, a slight decrease from 13.77% as of September 30, 2022, and a decrease from 19.98% as of December 31, 2021. The total capital to risk-weighted assets ratio was 15.00% as of December 31, 2022, a slight decrease from 15.02% as of September 30, 2022, and a decrease from 21.25% as of December 31, 2021.
Recent Events
Fourth Quarter Common Stock Dividend. On January 24, 2023, BayFirst’s Board of Directors declared a first quarter 2023 cash dividend of $0.08 per common share. The dividend will be payable March 15, 2023 to common shareholders of record as of March 1, 2023. This dividend marks the 27th consecutive quarterly cash dividend paid since BayFirst initiated cash dividends in 2016.
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 eight full-service banking offices throughout the Tampa Bay region and offers a broad range of commercial and consumer banking services to businesses and individuals. It was the 8th largest SBA 7(a) lender nationwide and the number one SBA 7(a) lender in the 5 county Tampa Bay market in the SBA's 2022 fiscal year. As of December 31, 2022, BayFirst Financial Corp. had $938.9 million 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 the COVID-19 pandemic, 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.
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 6
BAYFIRST FINANCIAL CORP.
SELECTED FINANCIAL DATA (Unaudited)
| At or for the three months ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except for share data) | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | ||||||||||
| Balance sheet data: | |||||||||||||||
| Average loans held for investment, excluding PPP loans | $ | 703,193 | $ | 663,716 | $ | 561,455 | $ | 520,559 | $ | 518,697 | |||||
| Average total assets | 925,194 | 939,847 | 879,868 | 872,311 | 923,485 | ||||||||||
| Average common shareholders’ equity | 80,158 | 83,014 | 83,235 | 83,990 | 83,056 | ||||||||||
| Total loans held for investment | 728,652 | 680,805 | 641,737 | 561,797 | 583,948 | ||||||||||
| Total loans held for investment, excluding PPP loans | 709,479 | 658,669 | 610,527 | 517,434 | 504,525 | ||||||||||
| Total loans held for investment, excl gov’t gtd loan balances | 551,150 | 520,408 | 458,624 | 374,353 | 332,977 | ||||||||||
| Allowance for loan losses | 9,046 | 9,739 | 9,564 | 10,170 | 13,452 | ||||||||||
| Total assets | 938,895 | 930,275 | 921,377 | 888,541 | 917,095 | ||||||||||
| Common shareholders’ equity | 82,279 | 81,032 | 83,690 | 85,274 | 86,685 | ||||||||||
| Share data: | |||||||||||||||
| Basic earnings per common share | $ | 0.28 | $ | (0.40) | $ | (0.12) | $ | (0.05) | $ | 0.66 | |||||
| Diluted earnings per common share | 0.27 | (0.35) | (0.10) | (0.05) | 0.61 | ||||||||||
| Dividends per common share | 0.08 | 0.08 | 0.08 | 0.08 | 0.07 | ||||||||||
| Book value per common share | 20.35 | 20.10 | 20.82 | 21.25 | 21.77 | ||||||||||
| Tangible book value per common share (1) | 20.35 | 20.10 | 20.80 | 21.22 | 21.75 | ||||||||||
| Performance and capital ratios: | |||||||||||||||
| Return on average assets | 0.57 | % | (0.60) | % | (0.13) | % | 0.01 | % | 1.22 | % | |||||
| Return on average common equity | 5.56 | % | (7.76) | % | (2.35) | % | (0.93) | % | 12.54 | % | |||||
| Net interest margin | 4.19 | % | 4.63 | % | 3.73 | % | 3.25 | % | 3.07 | % | |||||
| Dividend payout ratio | 28.99 | % | (20.02) | % | (65.54) | % | (164.25) | % | 10.65 | % | |||||
| Asset quality ratios: | |||||||||||||||
| Net charge-offs | $ | 1,393 | $ | 575 | $ | 856 | $ | 882 | $ | 664 | |||||
| Net charge-offs/avg loans held for investment excl PPP | 0.79 | % | 0.35 | % | 0.61 | % | 0.68 | % | 0.51 | % | |||||
| Nonperforming loans | $ | 10,468 | $ | 10,267 | $ | 10,437 | $ | 8,834 | $ | 11,909 | |||||
| Nonperforming loans (excluding gov't gtd balance) | $ | 3,671 | $ | 4,015 | $ | 4,245 | $ | 2,660 | $ | 3,967 | |||||
| Nonperforming loans/total loans held for investment | 1.44 | % | 1.51 | % | 1.63 | % | 1.57 | % | 2.04 | % | |||||
| Nonperforming loans (excl gov’t gtd balance)/total loans held for investment | 0.50 | % | 0.59 | % | 0.66 | % | 0.47 | % | 0.68 | % | |||||
| ALLL/Total loans held for investment at amortized cost | 1.29 | % | 1.48 | % | 1.62 | % | 1.84 | % | 2.34 | % | |||||
| ALLL/Total loans held for investment at amortized cost, excl PPP loans | 1.33 | % | 1.54 | % | 1.71 | % | 2.00 | % | 2.72 | % | |||||
| Other Data: | |||||||||||||||
| Full-time equivalent employees | 291 | 524 | 485 | 575 | 637 | ||||||||||
| Banking center offices | 8 | 8 | 7 | 7 | 7 | ||||||||||
| Loan production offices(2) | 1 | 20 | 19 | 20 | 17 | ||||||||||
| (1) See section entitled "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below for a reconciliation to most comparable GAAP equivalent. | |||||||||||||||
| (2) All nationwide residential loan production offices have been closed. 1 remains in footprint. |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 7
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 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| As of | ||||||||||
| (Dollars in thousands, except per share data) | December 31, 2022 | September 30, 2022 | June 30, 2022 | March 31, 2022 | December 31, 2021 | |||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
| Total shareholders’ equity | $ | 91,884 | $ | 90,637 | $ | 93,295 | $ | 94,879 | $ | 96,290 |
| Less: Preferred stock liquidation preference | (9,605) | (9,605) | (9,605) | (9,605) | (9,605) | |||||
| Total equity available to common shareholders | 82,279 | 81,032 | 83,690 | 85,274 | 86,685 | |||||
| Less: Goodwill | — | — | (100) | (100) | (100) | |||||
| Tangible common shareholders' equity | $ | 82,279 | $ | 81,032 | $ | 83,590 | $ | 85,174 | $ | 86,585 |
| Common shares outstanding | 4,042,474 | 4,031,937 | 4,019,023 | 4,013,173 | 3,981,117 | |||||
| Tangible book value per common share | $ | 20.35 | $ | 20.10 | $ | 20.80 | $ | 21.22 | $ | 21.75 |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 8
BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
| (Dollars in thousands) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||
|---|---|---|---|---|---|---|
| Assets | Unaudited | Unaudited | ||||
| Cash and due from banks | $ | 3,649 | $ | 3,131 | $ | 2,869 |
| Interest-bearing deposits in banks | 62,397 | 33,365 | 106,858 | |||
| Cash and cash equivalents | 66,046 | 36,496 | 109,727 | |||
| Time deposits in banks | 4,881 | 4,881 | 2,381 | |||
| Investment securities available for sale | 42,349 | 42,915 | 30,893 | |||
| Investment securities held to maturity | 5,002 | 5,008 | 2 | |||
| Restricted equity securities, at cost | 4,037 | 2,531 | 2,827 | |||
| SBA loans held for sale | — | 573 | 1,460 | |||
| SBA loans held for investment, at fair value | 27,078 | 24,965 | 9,614 | |||
| Loans held for investment, at amortized cost net of allowance for loan losses of $9,046, $9,739, and $13,452 | 692,528 | 646,101 | 560,882 | |||
| Accrued interest receivable | 4,452 | 3,789 | 3,532 | |||
| Premises and equipment, net | 35,440 | 32,779 | 29,091 | |||
| Loan servicing rights | 10,906 | 9,932 | 6,407 | |||
| Deferred income tax assets | 538 | 1,937 | 454 | |||
| Right-of-use operating lease assets | 3,177 | 2,985 | 3,263 | |||
| Bank owned life insurance | 25,159 | 25,004 | 24,547 | |||
| Other assets | 16,091 | 13,632 | 13,634 | |||
| Assets from discontinued operations | 1,211 | 76,747 | 118,381 | |||
| Total assets | $ | 938,895 | $ | 930,275 | $ | 917,095 |
| Liabilities: | ||||||
| Noninterest-bearing deposits | $ | 93,235 | $ | 104,215 | $ | 83,638 |
| Interest-bearing transaction accounts | 202,656 | 190,985 | 163,495 | |||
| Savings and money market deposits | 363,053 | 380,576 | 423,864 | |||
| Time deposits | 136,126 | 109,960 | 50,688 | |||
| Total deposits | 795,070 | 785,736 | 721,685 | |||
| FHLB and FRB borrowings | 25,000 | 28,000 | — | |||
| Subordinated debentures | 5,992 | 5,990 | 5,985 | |||
| Notes payable | 2,844 | 2,958 | 3,299 | |||
| PPP Liquidity Facility | — | — | 69,654 | |||
| Accrued interest payable | 704 | 236 | 326 | |||
| Operating lease liabilities | 3,538 | 3,355 | 3,431 | |||
| Accrued expenses and other liabilities | 12,205 | 9,374 | 8,965 | |||
| Liabilities from discontinued operations | 1,658 | 3,989 | 7,460 | |||
| Total liabilities | 847,011 | 839,638 | 820,805 |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 9
| (Dollars in thousands) | 12/31/2022 | 9/30/2022 | 12/31/2021 | |||
|---|---|---|---|---|---|---|
| Shareholders’ equity: | Unaudited | Unaudited | ||||
| Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at December 31, 2022, September 30, 2022, and December 31, 2021, respectively; 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, 2022, September 30, 2022, and December 31, 2021; aggregate liquidation preference of $3,210 each period | 3,123 | 3,123 | 3,123 | |||
| Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,042,474, 4,031,937, and 3,981,117 shares issued and outstanding at December 31, 2022, September 30, 2022, and December 31, 2021, respectively | 53,038 | 52,770 | 51,496 | |||
| Accumulated other comprehensive (loss), net | (3,724) | (3,780) | (420) | |||
| Unearned compensation | (193) | (323) | (17) | |||
| Retained earnings | 33,479 | 32,686 | 35,947 | |||
| Total shareholders’ equity | 91,884 | 90,637 | 96,290 | |||
| Total liabilities and shareholders’ equity | $ | 938,895 | $ | 930,275 | $ | 917,095 |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 10
BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
| For the Quarter Ended | Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | 12/31/2022 | 9/30/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | |||||
| Interest income: | Unaudited | Unaudited | Unaudited | Unaudited | ||||||
| Loans, other than PPP | $ | 11,601 | $ | 10,510 | $ | 6,380 | $ | 35,546 | $ | 23,964 |
| PPP loan interest income | 49 | 70 | 258 | 346 | 5,009 | |||||
| PPP origination fee income | 30 | 70 | 374 | 600 | 14,283 | |||||
| Interest-bearing deposits in banks and other | 840 | 634 | 150 | 2,074 | 570 | |||||
| Total interest income | 12,520 | 11,284 | 7,162 | 38,566 | 43,826 | |||||
| Interest expense: | ||||||||||
| Deposits | 3,711 | 1,856 | 1,219 | 7,844 | 4,885 | |||||
| PPPLF borrowings | — | — | 92 | 20 | 1,791 | |||||
| Other | 235 | 258 | 105 | 702 | 624 | |||||
| Total interest expense | 3,946 | 2,114 | 1,416 | 8,566 | 7,300 | |||||
| Net interest income | 8,574 | 9,170 | 5,746 | 30,000 | 36,526 | |||||
| Provision for loan losses | 700 | 750 | (2,500) | (700) | (3,500) | |||||
| Net interest income after provision for loan losses | 7,874 | 8,420 | 8,246 | 30,700 | 40,026 | |||||
| Noninterest income: | ||||||||||
| Loan servicing income, net | 532 | 620 | 423 | 2,040 | 1,864 | |||||
| Gain (loss) on sale of SBA loans, net | 5,805 | 7,446 | 4,564 | 21,720 | 18,024 | |||||
| Service charges and fees | 355 | 347 | 297 | 1,306 | 1,027 | |||||
| SBA loan fair value (loss) gain | 1,246 | 999 | 33 | 4,756 | 184 | |||||
| Other noninterest income | 466 | 392 | 279 | 1,728 | 874 | |||||
| Total noninterest income | 8,404 | 9,804 | 5,596 | 31,550 | 21,973 | |||||
| Noninterest Expense: | ||||||||||
| Salaries and benefits | 6,245 | 6,758 | 6,832 | 27,422 | 24,879 | |||||
| Bonus, commissions, and incentives | 561 | 883 | 840 | 2,394 | 3,216 | |||||
| Occupancy and equipment | 985 | 1,070 | 852 | 3,995 | 3,214 | |||||
| Data processing | 1,342 | 1,247 | 1,022 | 4,828 | 5,288 | |||||
| Marketing and business development | 560 | 662 | 971 | 2,660 | 2,698 | |||||
| Professional services | 994 | 956 | 1,353 | 4,083 | 3,907 | |||||
| Loan origination and collection | 1,225 | 1,068 | 168 | 3,711 | 2,452 | |||||
| Employee recruiting and development | 577 | 518 | 501 | 2,230 | 1,714 | |||||
| Regulatory assessments | 158 | 110 | 102 | 457 | 442 | |||||
| Other noninterest expense | 846 | 886 | 622 | 3,432 | 2,469 | |||||
| Total noninterest expense | 13,493 | 14,158 | 13,263 | 55,212 | 50,279 | |||||
| Income/(loss) before taxes from continuing operations | 2,785 | 4,066 | 579 | 7,038 | 11,720 | |||||
| Income tax expense/(benefit) from continuing operations | 672 | 983 | (277) | 1,560 | 2,691 | |||||
| Net income/(loss) from continuing operations | 2,113 | 3,083 | 856 | 5,478 | 9,029 |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 11
| For the Quarter Ended | Year-to-Date | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Dollars in thousands, except per share data) | 12/31/2022 | 9/30/2022 | 12/31/2021 | 12/31/2022 | 12/31/2021 | |||||
| (Loss)/income from discontinued operations before income taxes | (1,053) | (5,973) | 2,604 | (7,759) | 20,758 | |||||
| Income tax (benefit)/expense from discontinued operations | (262) | (1,488) | 649 | (1,932) | 5,169 | |||||
| Net (loss)/income from discontinued operations | (791) | (4,485) | 1,955 | (5,827) | 15,589 | |||||
| Net income/(loss) | 1,322 | (1,402) | 2,811 | (349) | 24,618 | |||||
| Preferred dividends | 208 | 208 | 208 | 832 | 1,005 | |||||
| Net income available to/(loss attributable to) common shareholders | $ | 1,114 | $ | (1,610) | $ | 2,603 | $ | (1,181) | $ | 23,613 |
| Basic earnings (loss) per common share: | ||||||||||
| Continuing operations | $ | 0.47 | $ | 0.71 | $ | 0.17 | $ | 1.16 | $ | 2.11 |
| Discontinued operations | (0.20) | (1.11) | 0.49 | (1.45) | 4.10 | |||||
| Basic earnings per common share | $ | 0.28 | $ | (0.40) | $ | 0.66 | $ | (0.29) | $ | 6.21 |
| Diluted earnings (loss) per common share: | ||||||||||
| Continuing operations | $ | 0.45 | $ | 0.68 | $ | 0.16 | $ | 1.13 | $ | 2.02 |
| Discontinued operations | (0.18) | (1.03) | 0.45 | (1.34) | 3.72 | |||||
| Diluted earnings per common share | $ | 0.27 | $ | (0.35) | $ | 0.61 | $ | (0.21) | $ | 5.74 |
BayFirst Financial Corp. Reports Fourth Quarter 2022 Results
January 26, 2023
Page 12
Loan Composition
| (Dollars in thousands) | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Real estate: | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
| Residential | $ | 202,329 | $ | 176,574 | $ | 122,403 | $ | 102,897 | $ | 87,235 |
| Commercial | 231,281 | 220,210 | 216,067 | 189,684 | 163,477 | |||||
| Construction and land | 9,320 | 9,259 | 9,686 | 18,038 | 18,632 | |||||
| Commercial and industrial | 194,643 | 183,631 | 168,990 | 180,163 | 217,155 | |||||
| Commercial and industrial - PPP | 19,293 | 22,286 | 31,430 | 44,792 | 80,158 | |||||
| Consumer and other | 37,288 | 37,595 | 35,845 | 13,502 | 3,581 | |||||
| Loans held for investment, at amortized cost, gross | 694,154 | 649,555 | 584,421 | 549,076 | 570,238 | |||||
| Deferred loan costs (fees), net | 10,740 | 9,047 | 7,629 | 7,297 | 7,975 | |||||
| Discount on SBA 7(a) loans sold | (5,621) | (5,068) | (4,743) | (4,624) | (3,866) | |||||
| Premium/(discount) on loans purchased | 2,301 | 2,306 | 2,221 | 1,279 | (13) | |||||
| Allowance for loan losses | (9,046) | (9,739) | (9,564) | (10,170) | (13,452) | |||||
| Loans held for investment, at amortized cost | $ | 692,528 | $ | 646,101 | $ | 579,964 | $ | 542,858 | $ | 560,882 |
Nonperforming Assets (Unaudited)
| (Dollars in thousands) | 12/31/2022 | 9/30/2022 | 6/30/2022 | 3/31/2022 | 12/31/2021 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nonperforming loans (government guaranteed balances) | $ | 6,797 | $ | 6,252 | $ | 6,192 | $ | 6,174 | $ | 7,942 | |||||
| Nonperforming loans (unguaranteed balances) | 3,671 | 4,015 | 4,245 | 2,660 | 3,967 | ||||||||||
| Total nonperforming loans | 10,468 | 10,267 | 10,437 | 8,834 | 11,909 | ||||||||||
| OREO | 56 | 56 | 56 | 3 | 3 | ||||||||||
| Total nonperforming assets | $ | 10,524 | $ | 10,323 | $ | 10,493 | $ | 8,837 | $ | 11,912 | |||||
| Nonperforming loans as a percentage of total loans held for investment | 1.44 | % | 1.51 | % | 1.63 | % | 1.57 | % | 2.04 | % | |||||
| Nonperforming loans (excluding government guaranteed balances) to total loans held for investment | 0.50 | % | 0.59 | % | 0.66 | % | 0.47 | % | 0.68 | % | |||||
| Nonperforming assets as a percentage of total assets | 1.12 | % | 1.11 | % | 1.14 | % | 0.99 | % | 1.30 | % | |||||
| Nonperforming assets (excluding government guaranteed balances) to total assets | 0.40 | % | 0.44 | % | 0.47 | % | 0.30 | % | 0.43 | % | |||||
| ALLL to nonperforming loans | 86.42 | % | 94.86 | % | 91.64 | % | 115.12 | % | 112.96 | % | |||||
| ALLL to nonperforming loans (excluding government guaranteed balances) | 246.42 | % | 242.57 | % | 225.30 | % | 382.33 | % | 339.10 | % |
Note: Transmitted on Globe Newswire on January 26, 2023, at 4:00 p.m. ET.
ex992bayfirstinvestorpre
BayFirst Financial Corp. (NASDAQ:BAFN) 2022 – Year-end and 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 the COVID-19 pandemic, 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 – St. Petersburg MSA(1) HOW WE RANK 2 ASSET SIZE Million total assets (2)$939 SBA ORIGINATION SBA 7(a) ORIGINATOR IN THE NATION (3) #8 GROWTH ASSET GROWTH OVER 5 YEARS157% 1. Deposit market share ranking of banks with assets less than $10B headquartered in the MSA 2. Financial data as of December 31, 2022 3. As of SBA’s fiscal year-end of September 2022 INITIATIVES ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FOCUSED ESG
44 ABOUT BAYFIRST FINANCIAL CORP. CURRENT BANKING CENTER LOCATION FUTURE BANKING CENTER LOCATION EXPANDING BANKING CENTER FRANCHISE
5 • Advanced technology platform to support innovative products and services while improving efficiencies • PowerLOS for SBA and commercial lending • Working with fintechs to offer new and innovative services through Mulesoft API platform • 8 banking centers in Tampa Bay, expected to grow to 12 banking centers over the next two years to three years ▪ 9 commercial and 2 consumer loan production officers • 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 SBA lending platform • #8 SBA lender as of SBA's fiscal year ended 9/30/2022 • #1 SBA lender in the five county Tampa Bay area at SBA’s FY ended 9/30/22 • FlashCap program: ▪ SBA 7(a) loans of $350K or less ▪ Includes BOLT SBA 7(a) loans for $150K or less, with 85% government guarantee • Core program: ▪ Focuses on $350K and above, and is anchored by 8 experienced core lenders ▪ Loan generation from organic sales and FinTech partners COMMUNITY BANKING TECHNOLOGY DRIVEN INNOVATIVE COMMUNITY BANK Technology driven community bank with diversified revenue streams CREDITBENCH
6 ATTRACTIVE LOAN AND DEPOSIT COMPOSITION Composition of Loans Held for Investment as of December 31, 2022 Deposit Portfolio Composition as of December 31, 2022 32.4% 19.0%8.4%1.9% 33.2% 5.1% C&I Residential HELOC C&D Secured by Other Real Estate Consumer & Other 11.7% 25.5% 45.7% 17.1% Noninterest Bearing Transaction Interest Bearing Transaction Savings & Money Market Time Deposits
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 7 KEY STRATEGIC INITIATIVES FOR 2023 AND BEYOND • Grow community banking franchise through new banking centers and expansion of commercial and consumer lending teams • Strive to be a top 5 SBA lender • Promote innovation through the Company while enhancing omnichannel and digital delivery • Optimize efficiency through technology and workflow improvements • Differentiate the Company through a commitment to social responsibility
8 Q4 2022 For the Three Months Ended ($000s) 12/31/2022 9/30/2022 Increase/ (Decrease) 12/31/2021 Increase/ (Decrease) Interest income $ 12,520 $ 11,284 $ 1,236 $ 7,161 $ 5,359 Interest expense 3,946 2,114 1,832 1,416 2,530 Net interest income 8,574 9,170 (596) 5,745 2,829 Provision for loan losses 700 750 (50) (2,500) 3,200 Noninterest income 8,404 9,804 (1,400) 5,597 2,807 Noninterest expense 13,493 14,158 (665) 13,262 231 Income tax expense (benefit) 672 983 (311) (276) 948 Net income (loss) from continuing operations 2,113 3,083 (970) 856 1,257 Net income (loss) from discontinued operations (791) (4,485) 3,694 1,955 (2,746) Net income (loss) 1,322 (1,402) 2,724 2,811 (1,489) Preferred dividends 208 208 — 208 — Net income available to common shareholders $ 1,114 $ (1,610) $ 2,724 $ 2,603 $ (1,489) 8
9 Q4 2022 Year Ended December 31, ($000s) 2022 2021 Increase/ (Decrease) Interest income $ 38,566 $ 43,826 $ (5,260) Interest expense 8,566 7,300 1,266 Net interest income 30,000 36,526 (6,526) Provision for loan losses (700) (3,500) 2,800 Noninterest income 31,550 21,973 9,577 Noninterest expense 55,212 50,279 4,933 Income tax expense (benefit) 1,560 2,691 (1,131) Net income (loss) from continuing operations 5,478 9,029 (3,551) Net income (loss) from discontinued operations (5,827) 15,589 (21,416) Net income (loss) (349) 24,618 (24,967) Preferred dividends 832 1,005 (173) Net income available to common shareholders $ (1,181) $ 23,613 $ (24,794) 9
10 Q4 2022 As of and For the Three Months Ended As of and For the Year Ended 12/31/2022 9/30/2022 12/31/2021 12/31/2022 12/31/2021 Return on average assets 0.57 % (0.60) % 1.22 % (0.04) % 1.90 % Return on average common equity 5.56 % (7.76) % 12.54 % (1.43) % 32.37 % Basic earnings (loss) from continuing operations per common share $ 0.47 $ 0.71 $ 0.17 $ 1.16 $ 2.11 Diluted earnings (loss) from continuing operations per common share $ 0.45 $ 0.68 $ 0.16 $ 1.13 $ 2.02 Dividend payout ratio 28.99 % (20.02) % 10.65 % (108.95) % 4.46 % Total Capital (to risk-weighted assets) 15.00 % 15.02 % 21.25 % 15.00 % 21.25 % Tier 1 Capital (to risk-weighted assets) 13.75 % 13.77 % 19.98 % 13.75 % 19.98 % Common Equity Tier 1 Capital (to risk-weighted assets) 13.75 % 13.77 % 19.98 % 13.75 % 19.98 % Tier 1 Capital (to total assets) 10.79 % 10.48 % 12.22 % 10.79 % 12.22 % Nonperforming loans (excl gov’t gtd balance)/total loans held for investment 0.50 % 0.59 % 0.68 % 0.50 % 0.68 % ALLL/Total loans held for investment at amortized cost, excl PPP loans 1.33 % 1.54 % 2.72 % 1.33 % 2.72 %
11 $43 $56 $85 $82 2019Y 2020Y 2021Y 2022Y $20 $40 $60 $80 $100 $120 Strong balance sheet on track for continued organic growth RECORD ORGANIC GROWTH Total Assets excluding PPP Loans ($M) Total Net Loans HFI excluding PPP loans ($M) Total Deposits ($M) Tangible Common Equity ($M) Capitalizing on $15.0M after-ta x gain on sale of PPP loans in ’20 & ‘21 $531 $706 $844 $920 2019Y 2020Y 2021Y 2022Y $0 $200 $400 $600 $800 $1,000 $303 $471 $491 $700 2019Y 2020Y 2021Y 2022Y $0 $200 $400 $600 $800 $450 $559 $722 $795 2019Y 2020Y 2021Y 2022Y $0 $200 $400 $600 $800 $1,000
12 POSITIONED TO RETURN TO STRONG PROFITABILITY ROAA (%) ROATCE (%) Net Interest Margin (%) Non-Interest Income / Total Revenue from Continuing Operations Volatility in 2022 due to discontinued operations mortgage; company repositioned for future (1) The NIM was depressed due to impact of low yield PPP loan portfolio 0.99% 1.06% 1.90% (0.04)% 2019Y 2020Y 2021Y 2022Y (0.50)% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 11.60% 25.60% 32.40% (1.43)% 2019Y 2020Y 2021Y 2022Y 0.00% 7.50% 15.00% 22.50% 30.00% 4.08% 2.88% 3.23% 3.97% 2019Y 2020Y 2021Y 2022Y 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% (1) (1) 58.22% 7.63% 37.56% 51.26% 2019Y 2020Y 2021Y 2022Y 0% 10% 20% 30% 40% 50% 60%
13 ASSET QUALITY Strong reserve well-positioned to withstand volatility in economic conditions 1.30% 1.44% 1.00% 0.61% 2019Y 2020Y 2021Y 2022Y 0.0% 0.5% 1.0% 1.5% 2.0% Net charge-offs/average loans held for investment excluding PPP ALLL/Total loans held for investment at amortized cost, excluding PPP loans 3.54% 5.49% 2.72% 1.33% 2019Y 2020Y 2021Y 2022Y 0.0% 2.0% 4.0% 6.0% ALLL to nonperforming loans(1) Past due and Nonaccrual loans to Total loans HFI at amortized cost(1) 242.10% 636.07% 339.10% 246.42% 2019Y 2020Y 2021Y 2022Y 0.0% 250.0% 500.0% 750.0% 2.43% 0.45% 1.12% 1.08% 2019Y 2020Y 2021Y 2022Y 0.0% 1.0% 2.0% 3.0% (1) Excludes government guaranteed balances
14 SHAREHOLDER VALUE CREATION Impressive Tangible Book Value Per Share growth in recent years $11.40 $11.49 $12.77 $16.02 $21.75 $20.35 2017Y 2018Y 2019Y 2020Y 2021Y 2022Y $0 $3 $5 $8 $10 $13 $15 $18 $20 $23 $25
15 COMMUNITY BANKING PERFORMANCE Q4’2022 Loan Production Summary: ▪ Loan production during the quarter was $48.1 million(1) ▪ Loans held for investment increased by a net $50.8 million QoQ Q4’2022 Deposit Summary: ▪ Q4’2022 deposit balance grew $73.4 million YoY ▪ Deposit portfolio increased by 3.8% in number of accounts (to 14,673 totaling $795.1 million) QoQ Q4’ 2022 Highlights Branch & Deposits Market Share ($ in 000s) Total Deposits # Branch Year Opened 12/31/2022 12/31/2021 12/31/2020 1 Saint Petersburg(2) 2017 $ 246,813 $ 228,718 $ 207,304 2 Sarasota 2018 159,302 175,427 114,681 3 Seminole 1999 131,257 146,072 125,410 4 Pinellas Park 2005 69,976 68,429 52,535 5 Countryside 2018 66,827 62,201 48,897 6 West Tampa 2020 68,834 40,838 9,957 7 Belleair Bluffs 2021 31,011 — — 8 West Bradenton 2022 21,050 — — Total Branches (8) $ 795,070 $ 721,685 $ 558,784 (1) Excludes SBA loan production and residential mortgage production from discontinued operations (2) Saint Petersburg branch deposits include other deposits generated by CreditBench, Cash Management, Corporate Treasury, and Virtual.
16 $316 $101 $169 $386 1,287 320 374 1,364 2019 2020 2021 2022 $0 $50 $100 $150 $200 $250 $300 $350 $400 0 250 500 750 1,000 1,250 1,500 • Pre- Pandemic: ~80% of loan production sourced through third-party partners • Post- Pandemic: over ~80% of production in-house through CreditBench • Ranked #8 in total SBA production in the SBA fiscal year ending September 30, 2022 • Total Q4’2022 SBA loan production increased 84.6% from Q4’2021 • Launched BOLT, an SBA 7(a) loan product designed to provide working capital loans of $150 thousand or less to businesses throughout the country ◦ June 1 launch and have already done $121.2 million YTD, including $57.6 million in Q4’2022 ◦ New automation program launched through its proprietary loan origination system PowerLOS and Open API, allowing increased volume and speed while limiting additional staff CREDITBENCH (SBA LENDING) Q4’ 2022 Highlights SBA Loan Amount ($M) and Volume (1) CreditBench concentrated on PPP loan production for years 2020 to 2021 Excludes $877M PPP loans originated in ’20 and $329M during ‘21(1)
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 17 KEY INVESTMENT POINTS Second largest community bank (deposits) based in attractive Tampa Bay market area Total asset growth of 157% since YE2017 Innovative technology driven bank planning for the future of banking Among the nation’s top SBA loan generators Experienced management team Strong insider ownership of 15% ✔ ✔ ✔ ✔ ✔ ✔ ✔ Consistent dividend growing 100% over past 5 years
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 18 APPENDIX
19 INVESTMENT SECURITIES AFS Investment Securities Portfolio as of December 31, 2022 (fair market value, in thousands) (1)Investment Securities Portfolio Details • Other Comprehensive Loss of $3.7 million reduced Tangible Book Value by $0.92 QoQ as of December 31, 2022 ◦ We intend and have the ability to hold the available for sale investment securities to maturity; no plan to sell ◦ Cash flows could be used to fund future loan growth as needed ◦ Retained earnings and investments moving down the curve would earn back capital loss ◦ No impact to regulatory capital ratios • In the second quarter, we moved a recently purchased $1.5 million AFS investment to held to maturity investments. The Company also purchased an additional $3.5 million of corporate bonds which were classified as held to maturity at purchase. (1) HTM Investment Securities makes up 10% of total investment securities portfolio $9,605 $3,440 $18,220 $11,084 Asset-backed securities MBS: U.S. Government-sponsored enterprises CMO: U.S. Government-sponsored enterprises Corporate Bonds
20 OWNERSHIP OVERVIEW Total Common Stock Ownership Mix Note: Ownership information based on most recently disclosed common shares outstanding of 4,037,895 Source: S&P Capital IQ Pro Vanguard Group Inc., 3.77% First Manhattan Co., 3.61% Banc Funds Co. LLC, 3.31% All Other Institutions, 8.45% Mark S. Berset, 6.88% All Other Directors/Executive Officers, 8.14% Public/Other, 65.84%
21 ATTRACTIVE FLORIDA MARKETS MEANINGFUL ECONOMIC TAILWINDS #2 state in the U.S.A. for net domestic migration and top 3 growth state* ~$1.4T economy, with 3.8% GDP growth in Q3’22 Attractive tax policy 3.0 million small businesses, more than any other Southeastern state 3rd most populous state Total Deposits in Pinellas, Hillsborough, Manatee and Sarasota Counties of $113bn* …Favorable Population Projections… …and Favorable Expected Household Incomes Tier 1 Markets: • Citrus • Hernando • Pasco • Pinellas • Charlotte • Hillsborough • Polk • Manatee • Sarasota Tier 2 Markets: • Sumter • Lake • Orange • Osceola • Collier • Hardee • DeSoto • Highlands • Lee *Source: S&P Global Market Intelligence as of January 2023, U-haul G ro w th R at e ('2 3 to '2 8) 2.12% 5.00% 5.19% 7.73% USA Florida Tampa MSA Sarasota MSA 0% 3% 5% 8% 10% G ro w th R at e ('2 3 to '2 8) 13.13% 12.55% 13.28% 12.29% USA Florida Tampa MSA Sarasota MSA 0% 5% 10% 15%
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 22 DEPOSIT MARKET SHARE Tampa-St. Petersburg MSA (Total Assets <$10BN and HQ in MSA) Note: Deposit data as of June 30, 2022 Source: S&P Capital IQ Pro Average Deposits Branches Deposits per Branch Market Share Rank Institution ($ millions) (No.) ($ millions) (%) 1 Tampa Bay Banking Co. $2,938 11 $267 65.09 % 2 BayFirst Financial Corp. 618 6 103 13.70 % 3 West Florida Bank Corp. 444 6 73 9.83 % 4 TCM Bank NA 226 1 226 5.00 % 5 Central Financial Holdings Inc. 128 1 128 2.83 % 6 Century Bancshares of Florida Inc. 97 1 97 2.14 % 7 Waterfall Bank 64 1 64 1.41 %
23 EXPERIENCED LEADERSHIP TEAM • Joined BayFirst in Q4 2013; Prior to joining BayFirst, provided management consulting and regulatory advisory services to community banks throughout the state of Florida and served as the interim CEO of three troubled banks between 2009 and 2013 • Managing Director and Executive Vice President of Community Banks, Inc. (Nasdaq: CMTY) in Harrisburg, PA from 1993 until its sale to Susquehanna Bancshares, Inc. (NasdaqGS: SUSQ) in 2007 • B.A. in Political Science from George Washington University and a J.D. from George Washington University Law School • Joined BayFirst 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 Horwath 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 Anthony N. Leo Robin Oliver Thomas G. Zernick Chief Executive Officer & Director of BayFirst and the Bank EVP, Chief Financial Officer and Chief Operating Officer of BayFirst and the Bank President of BayFirst and the Bank
24 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 • Joined BayFirst in Q4 2020 • 37 years information technology experience • Served as CTO for Fiserv, Inc. • B.A. from University of South Florida Brandi Jaber John Macaluso EVP, Chief Production Officer EVP, Chief Technology Officer 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