Glossary of Acronyms and Abbreviations
The acronyms and abbreviations identified below may be used throughout this Report on Form 10-K or in our other SEC filings. You may find it helpful to refer back to this page while reading this report.
AOCI: Accumulated Other Comprehensive Income
BHCA: Bank Holding Company Act of 1956, as amended
CET1: Common Equity Tier 1 Capital
OTTI: Other-Than-Temporary Impairment
Part I - Financial Information
Item 1. Business
BayFirst Financial Corp.
BayFirst Financial Corp. (“BayFirst” or the “Company”) is a bank holding company that operates through its wholly owned subsidiary, First Home Bank (the “Bank”). BayFirst commenced its bank holding company operations on September 1, 2000, by acquiring all shares of the Bank. BayFirst’s primary source of income is from the Bank, which serves a broad spectrum of individuals, families, and small businesses in Tampa Bay, supported by national business lines in residential and SBA lending and technology platform. As of December 31, 2021, BayFirst had consolidated total assets of $917.10 million, total loans of $583.95 million, total deposits of $721.69 million, and total shareholders’ equity of $96.29 million. BayFirst’s corporate offices are located at the First Home Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701.
The Bank commenced operations on February 12, 1999, as a Florida state-chartered commercial bank. On January 3, 2022, the Bank filed an application with the Office of the Comptroller of the Currency to convert its charter to that of a national bank. The Bank currently operates out of its main office and six additional banking centers located in the Tampa Bay area, and 23 residential mortgage loan production offices throughout the United States. The Bank’s main office is located at the First Home Executive Center. The Bank does not engage in any foreign business activities. The Bank offers its products and services through its Community Banking Division and its Residential Mortgage Division. The Bank, through its separately branded loan origination platform, CreditBench, is a prolific government guaranteed lender with specific expertise in originating Small Business Administration (“SBA”) 7(a) loans throughout the nation. The Bank has recently developed an advanced technology platform that has positioned it to be able to utilize, partner, and support technology-enabled banking products and services as well as various financial technology applications.
The Bank has structured its community banking services and charges for such services in a manner designed to attract consumers, small and medium sized businesses, and professionals located primarily in Pinellas, Hillsborough, Sarasota, Manatee, and Pasco Counties. The Bank focuses on customers that are seeking the flexibility and personalized relationships that a community bank can provide. The Bank offers specialized business and personal checking accounts, internet banking and online bill payment, remote capture and deposit, cash management, wire transfers, safety deposit boxes, courier services, retail investment services, and ACH originations, among other services.
The Bank also offers customary community bank deposit products, including interest-bearing and noninterest-bearing checking accounts, MMDAs, savings accounts, time deposits and IRAs. The consumer product offering also includes unique programs, including, among others: 1) the NuStart checking that assists customers in rebuilding their access to the banking system, 2) the TrendSetters Club which offers special benefits for those customers age 50+ years, and 3) the Cash Kids’ Club savings account that offers those age 12 and under special rates while teaching children basic financial skills through interactive and mobile application tools. The Bank’s business deposit products and related services include free and interest-bearing checking accounts, savings accounts, money market accounts, and access to business mobile and online banking, treasury management, cash management, merchant processing services, remote deposit capture, and nightdepository.
A wide range of loans are also offered, including commercial, consumer, and real estate loans. Our commercial lending efforts are directed principally toward businesses and professionals who otherwise do business with us, and include commercial real estate mortgages, construction and development loans, working capital loans, and business expansion loans. We offer personal lines of credit, auto, boat, and recreational vehicle loans, residential mortgages, and home equity lines of credit. We have been particularly successful in penetrating the small business community. We participate in interbank credit arrangements to permit us to take part in corporate or other business entity loans for amounts which are greater than our lending limits.
The Community Banking Division operates from our seven banking offices in the Tampa Bay area: five in Pinellas County, one in Hillsborough County, and one in Sarasota County. Additionally, we have purchased properties in Sarasota County, Manatee County, and Hillsborough County where we intend to open additional full-service banking centers.
The Bank’s staff maintains personalized customer contacts and relationships, which enable us to provide excellent customer service. While we offer banking services that we believe to be profitable, we offer competitive rates for such services, thereby, we believe, motivating the businesses in our service area to avail themselves of our credit and non-credit
services. On limited occasions, we may offer services that may not be profitable, but only if the account relationship provides earnings or other benefits sufficient to offset the cost of the services provided.
The Bank, through its separately branded loan origination platform CreditBench, originates government guaranteed loans on a nationwide basis, with a particular emphasis on SBA 7(a) loans. CreditBench originates loans through two distinct channels. One is its team of SBA lenders, known as the Core SBA Team. The other is through financial technology platforms, collectively known and branded as FlashCap. CreditBench’s Core SBA Team makes government guaranteed loans throughout the U.S., with a particular emphasis on business acquisition financing. The Core SBA Team is concentrated in the Tampa Bay area with an expanding national sales team. FlashCap employs an internal sales team and uses referral partners and financial technology companies to originate SBA loans nationwide. CreditBench also originates a significant volume of loans in the SBA 7(a) Small Loan Program. Underwriting, quality control, and technology are centralized and scalable for potential increases in loan volume.