BayFirst Financial Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>BayFirst Financial Corp. has filed its Q1 2024 10-Q report, detailing its financial performance and operations.</b>

AI Summary

BayFirst Financial Corp. (BAFN) filed a Quarterly Report (10-Q) with the SEC on May 13, 2024. BayFirst Financial Corp. filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of 2024. The company's principal business is commercial banking. BayFirst Financial Corp. was formerly known as First Home Bancorp Inc. The company is incorporated in Florida.

Why It Matters

For investors and stakeholders tracking BayFirst Financial Corp., this filing contains several important signals. This filing provides investors with a quarterly update on the financial health and strategic direction of BayFirst Financial Corp. Understanding the details within this 10-Q is crucial for assessing the company's performance in the current economic climate and its future prospects.

Risk Assessment

Risk Level: — BayFirst Financial Corp. shows moderate risk based on this filing. The filing is a standard quarterly report (10-Q) and does not indicate any immediate or significant financial distress or unusual events.

Analyst Insight

Monitor future 10-Q filings for trends in loan portfolios, net interest margin, and provision for credit losses to gauge ongoing performance.

Key Numbers

• 2024-03-31 — Period End Date (Quarterly report period)
• 2024-05-13 — Filing Date (Date the report was filed)
• 2024-01-01 — Quarter Start Date (Beginning of the reporting quarter)

Key Players & Entities

• BayFirst Financial Corp. (company) — Filer and subject of the report
• First Home Bancorp Inc (company) — Former name of BayFirst Financial Corp.
• 2024-03-31 (date) — Period of report
• 2024-05-13 (date) — Filing date
• FL (location) — State of incorporation
• St. Petersburg (location) — City of business address

FAQ

Risk Factors

• Regulatory Compliance [medium — regulatory]: The company must comply with various federal and state banking regulations, which can change and impact operations.
• Interest Rate Risk [medium — market]: Changes in interest rates can affect the company's net interest income and the market value of its securities.
• Credit Risk [medium — financial]: The company faces risks related to the potential default of borrowers on loans.

Industry Context

BayFirst Financial Corp. operates within the commercial banking sector, providing financial services to individuals and businesses.

Regulatory Implications

As a financial institution, the company is subject to oversight from federal and state regulatory bodies, including the FDIC and state banking departments.

What Investors Should Do

1. Review the full 10-Q for detailed financial statements and management's discussion and analysis.
2. Analyze trends in loan growth, deposit composition, and asset quality from prior filings.
3. Compare BayFirst Financial Corp.'s performance metrics against industry peers.

Year-Over-Year Comparison

This is the initial 10-Q filing for the fiscal year 2024, following the 2023 annual report.

Filing Documents

• bafn-20240331.htm (10-Q) — 2729KB
• ex311-principalexecutiveof.htm (EX-31.1) — 9KB
• ex312-principalfinancialof.htm (EX-31.2) — 9KB
• ex321-principalexecutiveof.htm (EX-32.1) — 5KB
• ex322-principalfinancialof.htm (EX-32.2) — 4KB
• 0001649739-24-000138.txt (&nbsp;) — 13953KB
• bafn-20240331.xsd (EX-101.SCH) — 62KB
• bafn-20240331_cal.xml (EX-101.CAL) — 140KB
• bafn-20240331_def.xml (EX-101.DEF) — 413KB
• bafn-20240331_lab.xml (EX-101.LAB) — 838KB
• bafn-20240331_pre.xml (EX-101.PRE) — 642KB
• bafn-20240331_htm.xml (XML) — 3101KB

- Financial Information

Part I - Financial Information 3 Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets at March 3 1 , 202 4 (Unaudited) and December 31, 202 3 3 Consolidated Statements of Income (Unaudited) for the three months ended March 3 1 , 202 4 and 202 3 5 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three months ended March 3 1 , 202 4 and 202 3 7 Consolidated Statements of Changes in Shareholders' Equity (Unaudited) for the three months ended March 3 1 , 202 4 and 202 3 8 Consolidated Statements of Cash Flows (Unaudited) for the three months ended Ma rch 3 1 , 202 4 and 202 3 9 Notes to the Consolidated Financial Statements (Unaudited) 11 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 35 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 53 Item 4.

Controls and Procedures

Controls and Procedures 54

- Other Information

Part II - Other Information 54 Item 1.

Legal Proceedings

Legal Proceedings 55 Item 1A.

Risk Factors

Risk Factors 55 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 55 Item 3. Defaults Upon Senior Securities 55

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 55 Item 5. Other Information 55 Item 6. Exhibits 56

Signatures

Signatures 57 1 Table of Contents Glossary of Acronyms and Abbreviations The acronyms and abbreviations identified below may be used throughout this Quarterly Report on Form 10-Q or in our other SEC filings. You may find it helpful to refer back to this page while reading this report. ACL: Allowance for Credit Losses FFIEC: Federal Financial Institutions Examination Council AFS: Available for Sale FHLB: Federal Home Loan Bank AIO: Architecture, Infrastructure, and Operations FNBB: First National Bankers Bank ALCO: Asset-Liability Committee FOMC: Federal Open Market Committee AOCI: Accumulated Other Comprehensive Income FRB: Federal Reserve Bank ASC: FASB Accounting Standards Codification FVO: Fair Value Option ASU: FASB Accounting Standards Update GAAP: Generally Accepted Accounting Principles BHCA: Bank Holding Company Act of 1956, as amended HFI: Held for Investment BOLI: Bank Owned Life Insurance HTM: Held to Maturity BSA: Bank Secrecy Act of 1970 IRA: Individual Retirement Account CARES Act: Coronavirus Aid, Relief, and Economic Security Act ISO: Information Security Officer CBLR: Community Bank Leverage Ratio IT: Information Technology CDARS: Certificate of Deposit Account Registry Services JOBS Act: Jumpstart Our Business Startups Act of 2012 CECL: Current Expected Credit Losses LGD: Loss Given Default CEO: Chief Executive Officer LHFS: Loans Held for Sale CET1: Common Equity Tier 1 Capital MMDA: Money Market Deposit Account CFPB: Consumer Financial Protection Bureau NOW: Negotiable Order of Withdrawal C&I: Commercial and Industrial NSPP: Non-Qualified Stock Purchase Plan CRO: Chief Risk Officer OCC: Office of the Comptroller of the Currency CTO: Chief Technology Officer OREO: Other Real Estate Owned DEI: Diversity, Equity, and Inclusion OTTI: Other-Than-Temporary Impairment Dodd-Frank Act: Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 PCAOB: Public Company Accounting Oversight Board DRIP: Dividend Reinve

- Financial Information

Part I - Financial Information

Financial Statements

Item 8. Financial Statements March 31, 2024 December 31, 2023 (1) ASSETS (Unaudited) Cash and due from banks $ 4,425 $ 4,099 Interest-bearing deposits in banks 53,080 54,286 Cash and cash equivalents 57,505 58,385 Time deposits in banks 3,000 4,646 Investment securities available for sale, at fair value (amortized cost: $ 46,816 and $ 43,597 at March 31, 2024 and December 31, 2023, respectively) 42,514 39,575 Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $ 14 and $ 17 (fair value: $ 2,352 and $ 2,263 at March 31, 2024 and December 31, 2023, respectively) 2,487 2,484 Nonmarketable equity securities 5,228 4,770 Government guaranteed loans held for sale 2,226 — Government guaranteed loans HFI, at fair value 77,769 91,508 Loans HFI, at amortized cost, net of allowance for credit losses of $ 13,906 and $ 13,497 at March 31, 2024 and December 31, 2023, respectively 843,193 810,721 Accrued interest receivable 7,625 7,130 Premises and equipment, net 39,327 38,874 Loan servicing rights 15,742 14,959 Right-of-use operating lease assets 2,499 2,416 Bank owned life insurance 25,974 25,800 Other assets 18,805 16,150 Assets from discontinued operations 300 348 Total assets $ 1,144,194 $ 1,117,766 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Noninterest-bearing deposits $ 96,977 $ 93,708 Interest-bearing transaction accounts 250,478 259,422 Savings and money market deposits 391,915 373,000 Time deposits 267,945 259,008 Total deposits 1,007,315 985,138 FHLB borrowings 15,000 10,000 Subordinated debentures 5,950 5,949 Notes payable 2,276 2,389 Accrued interest payable 1,598 882 Operating lease liabilities 2,673 2,619 Deferred income tax liabilities 728 482 Accrued expenses and other liabilities 7,496 8,980 Liabilities from discontinued operations 529 620 Total liabilities 1,043,565 1,017,059 3 Table of Contents BAYFIRST FINANCIAL CORP. CONSOLIDATED BALA

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include BayFirst Financial Corp. and its wholly owned subsidiary, BayFirst National Bank, together referred to as "the Company". These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles followed within the financial services industry for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements. The consolidated balance sheet as of December 31, 2023 has been derived from the audited consolidated financial statements of BayFirst Financial Corp. for that period. The Company currently operates one business segment. In the third quarter of 2022, the Company discontinued the Bank's nationwide residential mortgage loan segment. The operations of this segment are reported as discontinued operations. In the opinion of management, all adjustments, consisting of normal and recurring items, considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts reported in prior periods have been reclassified to conform to current year presentation. These reclassifications did not have a material effect on previously reported net income, shareholders' equity, or cash flows. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2023. The Company's significant accounting policies ar

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) The following is a summary of the assets and liabilities of the discontinued operations of the residential mortgage lending division at March 31, 2024 and December 31, 2023: March 31, 2024 December 31, 2023 Assets Right-of-use operating lease asset $ 300 $ 348 Total assets $ 300 $ 348 Liabilities Operating lease liability $ 529 $ 620 Total liabilities $ 529 $ 620 The following presents operating results of the discontinued operations of the residential mortgage lending division for the three months ended March 31, 2024 and March 31, 2023: Three Months Ended March 31, 2024 2023 Interest income $ — $ 1 Noninterest expense 78 171 Loss from discontinued operations before income taxes ( 78 ) ( 170 ) Income tax benefit ( 19 ) ( 42 ) Net loss from discontinued operations $ ( 59 ) $ ( 128 ) NOTE 3 – INVESTMENT SECURITIES The amortized costs, gross unrealized gains and losses, and estimated fair values of investment securities available for sale and investment securities held to maturity at March 31, 2024 and December 31, 2023 as well as the ACL for investment securities held to maturity at March 31, 2024 and December 31, 2023 are summarized as follows: March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Investment securities available for sale: Asset-backed securities $ 7,263 $ — $ ( 55 ) $ 7,208 Mortgage-backed securities: U.S. Government-sponsored enterprises 8,139 — ( 643 ) 7,496 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 20,084 — ( 3,667 ) 16,417 Corporate bonds 11,330 63 — 11,393 Total investment securities available for sale $ 46,816 $ 63 $ ( 4,365 ) $ 42,514 March 31, 2024 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value ACL Investment securities held to maturity: Mortgage-backed securities: U.S. Government-sponsored enterpris

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Investment securities available for sale: Asset-backed securities $ 8,041 $ 6 $ ( 114 ) $ 7,933 Mortgage-backed securities: U.S. Government-sponsored enterprises 3,842 — ( 606 ) 3,236 Collateralized mortgage obligations: U.S. Government-sponsored enterprises 20,382 — ( 3,284 ) 17,098 Corporate bonds 11,332 — ( 24 ) 11,308 Total investment securities available for sale $ 43,597 $ 6 $ ( 4,028 ) $ 39,575 December 31, 2023 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value ACL Investment securities held to maturity: Mortgage-backed securities: U.S. Government-sponsored enterprises $ 1 $ — $ — $ 1 $ — Corporate bonds 2,500 — ( 238 ) 2,262 17 Total investment securities held to maturity $ 2,501 $ — $ ( 238 ) $ 2,263 $ 17 ` The amortized cost and fair value of investment securities as of March 31, 2024 are shown in the table below by contractual maturity. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Available for Sale Held to Maturity Amortized Cost Fair Value Amortized Cost Fair Value One to five years $ 11,330 $ 11,393 $ 1,500 $ 1,444 Five to ten years 4,458 4,458 1,000 907 Beyond ten years 31,028 26,663 1 1 Total $ 46,816 $ 42,514 $ 2,501 $ 2,352 No ACL for investment securities AFS was needed at March 31, 2024 or December 31, 2023. Declines in the fair value of the AFS investment portfolio are believed by management to be temporary in nature. When evaluating an investment for credit loss, management considers, among other things, the length of time and the extent to which the fair value has been in a loss position; the financial condition of the issuer through the review of credit ratings and, if necessary,

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) The following table presents the activity in the ACL for investment securities HTM by major security type for the three months ended March 31, 2024 and March 31, 2023: For the Three Months Ended For the Three Months Ended Corporate Bonds March 31, 2024 March 31, 2023 Balance at beginning of period $ 17 $ — Impact of adopting ASC 326 — 18 Provision for credit losses ( 3 ) — Investment securities charge-offs/recoveries — — Investment securities recoveries — — Balance at end of period $ 14 $ 18 The following table summarizes investment securities with unrealized losses at March 31, 2024 aggregated by security type and length of time in a

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