• BayFirst Financial Corp. Reports Fourth Quarter 2022 Results; Highlighted by Strong Conventional Loan Production

    Источник: Nasdaq GlobeNewswire / 26 янв 2023 16:00:36   America/New_York

    ST. PETERSBURG, Fla., Jan. 26, 2023 (GLOBE NEWSWIRE) -- 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.”

    “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 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 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 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.

    Contacts:
    Anthony N. Leo Robin L. Oliver
    Chief Executive Officer Chief Financial Officer
    727.399.5678 727.685.2082


    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.

    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.
    CONSOLIDATED BALANCE SHEETS

    (Dollars in thousands)12/31/20229/30/202212/31/2021
    AssetsUnauditedUnaudited 
    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 
    Shareholders’ equity:UnauditedUnaudited 
    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.
    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 
    (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 

            

    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%


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