BayFirst Financial Corp. Q2 2024 10-Q Filed

TL;DR

BAFN Q2 10-Q is in - check preferred stock and loan details.

AI Summary

BayFirst Financial Corp. filed its 10-Q for the period ending June 30, 2024. The company reported its financial position and results of operations. Key financial data includes preferred stock series A, B, and C, with balances reported as of December 31, 2023, and June 30, 2024. The filing also references government-guaranteed loans as of these dates.

Why It Matters

This filing provides investors with an update on BayFirst Financial Corp.'s financial health and operational performance for the second quarter of 2024.

Risk Assessment

Risk Level: low — This is a routine quarterly filing providing standard financial disclosures.

Key Numbers

• 20240630 — Reporting Period End Date (Indicates the end of the fiscal quarter covered by the report.)
• 20231231 — Prior Year-End Date (Provides a comparative point for financial performance.)

Key Players & Entities

• BayFirst Financial Corp. (company) — Filer of the 10-Q
• June 30, 2024 (date) — End of the reporting period
• December 31, 2023 (date) — Previous year-end reporting date
• Series A Preferred Stock (dollar_amount) — Financial instrument reported
• Series B Preferred Stock (dollar_amount) — Financial instrument reported
• Series C Preferred Stock (dollar_amount) — Financial instrument reported
• Government-Guaranteed Loans (dollar_amount) — Asset class reported

FAQ

Filing Documents

• bafn-20240630.htm (10-Q) — 3199KB
• 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
• 0001649739-24-000215.txt ( ) — 14867KB
• bafn-20240630.xsd (EX-101.SCH) — 64KB
• bafn-20240630_cal.xml (EX-101.CAL) — 145KB
• bafn-20240630_def.xml (EX-101.DEF) — 409KB
• bafn-20240630_lab.xml (EX-101.LAB) — 851KB
• bafn-20240630_pre.xml (EX-101.PRE) — 643KB
• bafn-20240630_htm.xml (XML) — 3310KB

- Financial Information

Part I - Financial Information 3 Item 1.

Financial Statements

Financial Statements 3 Consolidated Balance Sheets at June 30 , 2024 (Unaudited) and December 31, 2023 3 Consolidated Statements of Income (Unaudited) for the three and six months ended June 30 , 2024 and 2023 5 Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the three and six months ended June 3 0 , 2024 and 2023 7 Consolidated Statements of Changes in Shareholders' Equity (Unaudited) for the three and six months ended June 3 0 , 2024 and 2023 8 Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 3 0 , 2024 and 2023 10 Notes to the Consolidated Financial Statements (Unaudited) 12 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 37 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 57 Item 4.

Controls and Procedures

Controls and Procedures 58

- Other Information

Part II - Other Information 59 Item 1.

Legal Proceedings

Legal Proceedings 59 Item 1A.

Risk Factors

Risk Factors 59 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 59 Item 3. Defaults Upon Senior Securities 59

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 59 Item 5. Other Information 59 Item 6. Exhibits 60

Signatures

Signatures 61 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 June 30, 2024 December 31, 2023 (1) ASSETS (Unaudited) Cash and due from banks $ 4,226 $ 4,099 Interest-bearing deposits in banks 56,546 54,286 Cash and cash equivalents 60,772 58,385 Time deposits in banks 2,261 4,646 Investment securities available for sale, at fair value (amortized cost: $ 42,885 and $ 43,597 at June 30, 2024 and December 31, 2023, respectively) 38,685 39,575 Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $ 14 and $ 17 (fair value: $ 2,273 and $ 2,263 at June 30, 2024 and December 31, 2023, respectively) 2,486 2,484 Nonmarketable equity securities 7,132 4,770 Government guaranteed loans HFI, at fair value 86,142 91,508 Loans HFI, at amortized cost, net of allowance for credit losses of $ 13,843 and $ 13,497 at June 30, 2024 and December 31, 2023, respectively 908,329 810,721 Accrued interest receivable 8,000 7,130 Premises and equipment, net 39,088 38,874 Loan servicing rights 15,770 14,959 Right-of-use operating lease assets 2,305 2,416 Bank owned life insurance 26,150 25,800 Other real estate owned 1,633 — Other assets 19,080 16,150 Assets from discontinued operations 36 348 Total assets $ 1,217,869 $ 1,117,766 LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Noninterest-bearing deposits $ 94,040 $ 93,708 Interest-bearing transaction accounts 236,447 259,422 Savings and money market deposits 420,271 373,000 Time deposits 291,630 259,008 Total deposits 1,042,388 985,138 FHLB borrowings 55,000 10,000 Subordinated debentures 5,952 5,949 Notes payable 2,162 2,389 Accrued interest payable 1,172 882 Operating lease liabilities 2,497 2,619 Deferred income tax liabilities 1,000 482 Accrued expenses and other liabilities 6,565 8,980 Liabilities from discontinued operations 171 620 Total liabilities 1,116,907 1,017,059 3 Table of Contents BAYFIRST FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS CONTINUED

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 six months ended June 30, 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 are d

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) in this ASU improve financial reporting by requiring disclosure of incremental segment information including significant segment expenses regularly provided to the chief operating decision maker as well as the amount and composition of other segment items on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Retrospective application is required in all prior periods unless impracticable to do so. The amendments in this standard will be effective for the Company for the fiscal year ended December 31, 2024 and subsequent interim periods. The Company is evaluating the impact of this standard and does not expect it to have a material impact on the Company's consolidated financial statements. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) Improvements to Income Tax Disclosures ("ASU 2023-09"). This ASU was issued to enhance the transparency and decision usefulness of income tax disclosures. The ASU addresses investor requests for more transparency about income tax information through improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. Retrospective application in all prior periods is permitted. The amendments in this standard will be effective for the Company on January 1, 2025. The Company is currently assessing the impact of this standard and does not expect it to have a material impact on the Company's consolidated financial statements. NOTE 2 – DISCONTINUED OPERATIONS During the third quarter of 2022, the Company discontinued the Bank's nationwide residential mortgage loan production operations. The decision was based on a number of strategic priorities and other factors, including the precipitous decline in mortgage volumes and the uncertain outlook for mortgage lending over future periods. As

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Dollars in thousands, except per share data) NOTE 3 – INVESTMENT SECURITIES The amortized costs, gross unrealized gains and losses, and estim

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