Bayfirst Financial Corp. · NASDAQ:BAFN
Bayfirst Financial — Q4 2023 Earnings Presentation
30 slides from Bayfirst Financial's earnings presentation, Jan 25, 2024
Slide 1: 2023 Fourth Quarter Results (Unaudited)
BayFirst Financial Corp. (NASDAQ:BAFN) 2023 – Fourth Quarter Results (Unaudited)
Slide 2: Cautionary Statement Concerning Forward-Looking Information
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,
Slide 3: About BayFirst Financial Corp.
3 ABOUT BAYFIRST FINANCIAL CORP. TAMPA BAY’S PREMIER BANKING FRANCHISE IN THE TAMPA BAY/ SARASOTA REGION(1) HOW WE RANK 2 ASSET SIZE BILLION TOTAL ASSETS (2)$1.12 SBA ORIGINATION SBA 7(a) ORIGINATOR IN THE NATION (3) #5 GROWTH ASSET GROWTH SINCE DEC 31, 2018(2)206% 1. Deposit ranking of banks with a
Slide 4: Key Investment Points
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Slide 5: Expanding Banking Center Franchise
55 ABOUT BAYFIRST FINANCIAL CORP. CURRENT BANKING CENTER LOCATION FUTURE BANKING CENTER LOCATION EXPANDING BANKING CENTER FRANCHISE
Slide 6: Technology platform and products and services
6 • Advanced technology platform to support innovative products and services while improving efficiencies • PowerLOS for government guaranteed and commercial lending platform • Working with FinTechs to offer new and innovative services through Mulesoft API platform • 11 banking centers in Tampa Bay,
Slide 7: Attractive Loan Composition
7 ATTRACTIVE LOAN COMPOSITION Composition of Loans Held for Investment as of December 31, 2023 28.0% 18.0% 11.1% 28.9% 5.5% 2.9% 0.5% 5.2% C&I Residential HELOC Owner-occupied nonfarm/nonresidential Other nonfarm/nonresidential C&D Multifamily residential and farmland Consumer & Other Loan Highlight
Slide 8: Solid Deposit Composition
8 SOLID DEPOSIT COMPOSITION Deposit Portfolio Composition as of December 31, 2023 • Transaction account balances increased $57 million or 19% during the year • Approximately 84% of deposits are insured • Minimal use of short-term brokered deposits ($30 million as of December 31, 2023) • Grew number
Slide 9: Investment Securities AFS
9 INVESTMENT SECURITIES AFS Investment Securities Portfolio as of December 31, 2023 (fair market value, in thousands) (1)Investment Securities Portfolio Details • Minimal exposure to market value losses due to modest investment securities portfolio (4% of total assets) • Other Comprehensive Loss of
Slide 10: Strategic Pillars 2024
10 STRATEGIC PILLARS 2024 Maintain Strong Capital Manage and Evolve Risk Management Leverage Our SBA Expertise Promote Innovation Maintain Granularity of Deposit and Loan Portfolios Leverage Banking Center Franchise and Core Deposit Base Continue to Promote Workplace Culture and Social Responsibilit
Slide 11: 2024 Goals & Initiatives
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Slide 12: Q4 2023 Three Months Results
12 Q4 2023 For the Three Months Ended ($000s) 12/31/2023 9/30/2023 Increase/ (Decrease) 12/31/2022 Increase/ (Decrease) Interest income $ 18,854 $ 17,620 $ 1,234 $ 12,520 $ 6,334 Interest expense 9,977 9,227 750 3,946 6,031 Net interest income 8,877 8,393 484 8,574 303 Provision for credit losses 2,
Slide 13: Q4 2023 Year Ended December 31
13 Q4 2023 Year Ended December 31, ($000s) 2023 2022 Increase/ (Decrease) Interest income $ 68,517 $ 38,566 $ 29,951 Interest expense 32,086 8,566 23,520 Net interest income 36,431 30,000 6,431 Provision for credit losses 10,445 (700) 11,145 Noninterest income 49,755 31,550 18,205 Noninterest expens
Slide 14: Q4 2023 Key Ratios
14 Q4 2023 As of and For the Three Months Ended As of and For the Year Ended 12/31/2023 9/30/2023 12/31/2022 12/31/2023 12/31/2022 Return on average assets(1) 0.60 % 0.71 % 0.57 % 0.54 % (0.04) % Return on average common equity(1) 6.37 % 8.46 % 5.56 % 5.87 % (1.43) % Tangible book value per common s
Slide 15: Organic Growth
15 $82 $81 $81 $83 $85 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $20 $40 $60 $80 $100 $120 Strong balance sheet on track for continued organic growth ORGANIC GROWTH Total Assets excluding PPP Loans ($M) Total Net Loans HFI excluding PPP loans ($M) Total Deposits ($M) Tangible Common Equity ($M) $920 $
Slide 16: Return to Profitability
16 RETURN TO PROFITABILITY ROAA (%)(1) ROATCE (%)(1) Net Interest Margin (%)(1) Noninterest Income / Total Revenue from Continuing Operations 0.57% 0.30% 0.52% 0.71% 0.60% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.00% 0.50% 1.00% 5.56% 2.69% 5.86% 8.46% 6.37% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023
Slide 17: Shareholder Value Creation
17 SHAREHOLDER VALUE CREATION $11.49 $12.77 $16.02 $21.75 $20.35 $19.70 $19.85 $20.12 $20.60 Tangible Book Value Per Share 2018Y 2019Y 2020Y 2021Y 2022Y Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $5 $10 $15 $20 $25 CECL adoption decreased equity by $2.5M in Q1 ‘23Record earnings fro m residential m ortgage
Slide 18: Government guaranteed lending production
18 $109 $122 $125 $156 $145 539 563 676 729 849 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 $0 $25 $50 $75 $100 $125 $150 $175 500 600 700 800 900 1,000 • Nationally ranked #5 in total SBA dollars and #2 in units for the quarter ended December 31, 2023 • Strategic initiative to expand USDA business and
Slide 19: CreditBench (SBA/USDA Loans)
19 $961 $1,044 $1,122 $1,199 $1,252 $300 $350 $364 $373 $396 $661 $694 $758 $826 $856 HFI Government Guaranteed Loans (1) Government Guaranteed Loans Serviced for Others 12/31/2022 3/31/2023 6/30/2023 9/30/2023 12/31/2023 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 CREDITBENCH (SBA/USDA LOANS) Guara
Slide 20: Government Guaranteed Loan Production
20 Quarter Ended Year Ended ($000s) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2023 Core 7(a) $ 19,998 $ 29,638 $ 28,758 $ 26,132 $ 104,526 Core 504 16,022 — 14,571 482 31,075 Core USDA 13,625 5,525 19,800 9,080 48,030 Bolt 58,633 74,785 84,905 102,264 320,587 FlashCap 13,834 14,557 7,877 6,983
Slide 21: Asset Quality
21 ASSET QUALITY Strong reserve well-positioned to withstand volatility in economic conditions 0.82% 1.08% 1.18% 1.15% 1.29% Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 0.0% 0.5% 1.0% 1.5% Net charge-offs/Total average loans HFI at amortized cost, excluding PPP loans ACL/Total loans held for investment
Slide 22: Upgrade Consumer Loans
22 Quarter ended Year End ($000s) 3/31/2023 6/30/2023 9/30/2023 12/31/2023 12/31/2023 Ending balance $ 26,521 $ 23,255 $ 20,006 $ 17,027 $ 17,027 31-90 days past due 604 700 852 1,021 1,021 90+ days past due 142 220 351 258 258 Net charge-offs 567 601 755 896 2,819 Net charge-offs to average loans (
Slide 23: Community Banking Performance
23 COMMUNITY BANKING PERFORMANCE Q4 2023 Loan Production Summary: ▪ Loan production during the quarter was $57.2 million(1) ▪ Loans held for investment, including government guaranteed loans, increased by a net $49.3 million QoQ Q4 2023 Deposit Summary: ▪ Deposit balances decreased $32.7 million QoQ
Slide 24: Appendix
APPENDIX
Slide 25: Bolt Single Loan Earnings Example
25 BOLT SINGLE LOAN EARNINGS EXAMPLE Immediate One-Time Impact Loan amount (Average amount of a Bolt loan) $ 130,000 Guaranteed amount (85% of total loan) 110,500 Unguaranteed amount (15% of total loan, retained by BayFirst) 19,500 Premium earned on sale of guaranteed amount 10,166 (The gross premiu
Slide 26: Ownership Overview
26 OWNERSHIP OVERVIEW Total Common Stock Ownership Mix Note: Ownership information based on most recently disclosed common shares outstanding of 4,110,650 as of 1/19/24 Source: S&P Capital IQ Pro Vanguard Group Inc., 3.34% First Manhattan Co., 3.38% 1st & Main Growth Partners, 3.25% All Other Instit
Slide 27: Deposits in Tampa Bay/Sarasota Region
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Slide 28: Liquidity Sources
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Slide 29: Experienced Leadership Team
29 EXPERIENCED LEADERSHIP TEAM • Joined BayFirst as CFO in Q2 2018; Prior to joining BayFirst, Controller of Central Bank & Trust Co., a $2.5 billion privately held financial institution in Lexington, Kentucky, from May 2014 to June 2018 • Approximately 16 years with Crowe LLP as an auditor in the f
Slide 30: Experienced Leadership Team
30 EXPERIENCED LEADERSHIP TEAM • Joined BayFirst in Q4 2017; Prior to joining BayFirst, over fifteen years of Mortgage Banking administration experience as well as Human Resources experience supporting mid-size financial institutions • B.B.S from The University of Florida and M.B.A from The Universi