BayFirst Financial Corp. Reports Earnings of $1.28 Million, or $0.26 Per Diluted Share, in 3Q21; Results Highlighted by Strong Loan Production and Book Value per Share Increasing 46% to $21.30 YOY
BayFirst Financial Corp. (FHBI) reported third-quarter 2021 earnings of $1.28 million, or $0.26 per diluted share, down from $13.02 million in Q2 2021 and $5.25 million in Q3 2020. The decline was influenced by lower recognition of PPP origination fee income and a significant prior quarter gain on PPP loan sales. However, net income for the first nine months of 2021 tripled to $21.81 million compared to the same period in 2020. The company experienced strong loan growth, with total deposits increasing by 32.32% year-over-year. Tangible book value rose to $21.30 per share.
- Net income for the first nine months of 2021 tripled to $21.81 million compared to $7.10 million in the same period in 2020.
- Total deposits increased by 32.32% year-over-year to $675.03 million.
- Tangible book value increased to $21.30 per share from $14.57 a year ago.
- Q3 2021 net income declined by $4.58 million from the previous quarter.
- Net interest income decreased by 37.88% from Q2 2021 due to reduced PPP origination fee income.
- Noninterest income dropped by 42.45% from Q2 2021, impacting overall profitability.
ST. PETERSBURG, Fla., Oct. 28, 2021 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (f/k/a First Home Bancorp, Inc.) (OTCQX: FHBI) (“BayFirst” or the “Company”), parent company of First Home Bank (“First Home” or the “Bank”) reported earnings for the third quarter of 2021 of
Net income for the first nine months of 2021 more than tripled to
“The third quarter represented a transition for the Company, as we continue to wind down from the extraordinary events of the pandemic, and shift our focus to more normalized banking activities,” stated Anthony N. Leo, Chief Executive Officer. “We booked a credit to our provision for loan losses during the quarter as we move towards a more moderate allowance for loan losses from the higher allowance levels held during the early days of the pandemic. We utilized our strong earnings year to date to focus on improving our balance sheet loan mix by building up a significant amount of SBA guaranteed loan balances to complement our SBA nonguaranteed loan balances. While we will return to selling guaranteed portions in future quarters, similar to how we conducted business before the pandemic, we anticipate keeping the mix on our balance sheet more evenly distributed in the future.”
“The highly successful PPP lending program sponsored by the SBA has helped thousands of businesses in the Tampa Bay region, which is our home market. We are proud to have been active participants in PPP, and our lending team clearly responded to the needs of businesses in our marketplace and throughout the country, with over
Third Quarter 2021 Highlights:
- The Residential Mortgage Division originated
$506.67 million in loans during the third quarter of 2021 compared to$522.10 million during the second quarter of 2021 and$598.39 million of loans produced during the third quarter of 2020. - Loans held for investment, excluding PPP loans, increased by
7.56% or$35.18 million during the third quarter of 2021 and by29.28% or$113.40 million over the past year to$500.65 million , due to increases in both conventional community bank loans and SBA loans. - During the prior quarter, BayFirst sold
$326.3 million in PPP loans originated in 2021 to a third party. No PPP loans were sold during the third quarter of 2021. However, the Company sold$5.03 million in nonguaranteed SBA loans during the quarter at a net9% discount, representing the first time since Q2 2019 that the Company successfully sold nonguaranteed loans. The Company expects to resume guaranteed SBA loan sales depending on market conditions, and it will continue efforts to shed nonguaranteed loans if the pricing of such loans remains favorable. - Deposits increased by
6.75% or$42.71 million during the third quarter of 2021, and by32.32% or$164.89 million during the past year, to$675.03 million at September 30, 2021, with the majority of the 12-month increase coming from increases in transaction accounts and savings deposits, partially offset by declines in time deposit balances. - Tangible book value per common share increased to
$21.30 at the end of the third quarter from$21.14 at the end of the preceding quarter and$14.57 a year ago. - The Company paid a quarterly cash dividend of seven cents per common share, on September 15, 2021, to shareholders of record as of August 15, 2021. The cash dividend marked the 21st consecutive quarter in which BayFirst paid a cash dividend.
Results of Operations
Net Income and Performance Ratios
Net income was
BayFirst’s return on average common equity and return on average assets returned to more realistic levels in the third quarter as the contributions from the PPP loan program tapered off. Return on average common equity was
Net Interest Income and Net Interest Margin
Net interest income was
Net interest margin was
Noninterest Income
Noninterest income was
Noninterest Expense
Noninterest expense was
Balance Sheet
Assets
Total assets decreased by
Loans
Loans held for investment, excluding PPP loans, increased by
Deposits
Deposits increased by
Asset Quality
BayFirst recorded a credit to the provision for loan losses of
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
Net charge-offs for the third quarter of 2021 were
The ratio of the allowance for loan losses to total loans, excluding government guaranteed loans, residential loans held for sale, and loans carried at fair value, was
In addition to the above metrics, the Company also began to experience past due PPP loans during the third quarter of 2021 as certain PPP loan customers did not apply for forgiveness nor make required payments. As such, as of September 30, 2021, the Company reported
Capital Strength
The Bank’s Tier 1 leverage ratio increased to
During the third quarter of 2021, no shares of Series B Preferred Stock were issued, 270 shares of Series B Preferred Stock were converted to common shares, and
Recent Events
On May 3, 2021, the Company announced the name change from First Home Bancorp, Inc. to BayFirst Financial Corp. The name of the Company’s banking subsidiary, First Home Bank, and the ticker symbol “FHBI” remained unchanged.
On May 5, 2021, the Company announced a 3 for 2 common stock split, which took effect on May 10, 2021. Pursuant to the split, common shareholders received three common shares of the Company’s common stock for every two shares owned as of the record date.
On May 11, 2021, the Company filed a registration statement and on August 31, 2021 and October 1, 2021, the Company filed S-1 Amendments with the SEC.
About BayFirst Financial Corp.
BayFirst Financial Corp. (f/k/a First Home Bancorp, Inc.) is a registered bank holding company which commenced operations on September 1, 2000. Its primary source of income is from its wholly owned subsidiary, First Home Bank, which commenced business operations on February 12, 1999. First Home Bank is a Federal Reserve member and a state-chartered banking institution. The Bank operates six full-service office locations, 24 mortgage loan production offices, and is in the top 45 by dollar volume and top 20 by number of units, of nation-wide SBA lenders.
BayFirst Financial Corp., through the bank, offers a broad range of commercial and consumer banking services including various types of deposit accounts and loans for businesses and individuals. As of September 30, 2021, BayFirst Financial Corp. had
Forward Looking Statements
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “is confident that” and similar expressions are intended to identify these forward-looking statements. These forward-looking statements involve risk and uncertainty and a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in these forward-looking statements. BayFirst Financial Corp. does not have a policy of updating or revising forward-looking statements except as otherwise required by law, and silence by management over time should not be construed to mean that actual events are occurring as estimated in such forward-looking statements.
| Contacts: | |
| Anthony N. Leo | Jeffrey M. Hunt |
| Chief Executive Officer | Chief Strategy Officer |
| 727.399.5678 | 727.399.5687 |
| BayFirst Financial Corp. | ||||||||||||||
| Consolidated Statements of Income (Unaudited) | ||||||||||||||
| Dollars in Thousands | ||||||||||||||
| For the Quarter Ended | Year-to-Date | |||||||||||||
| 9/30/2021 | 6/30/2021 | 9/30/2020 | 9/30/2021 | 9/30/2020 | ||||||||||
| Interest income: | ||||||||||||||
| Loans, other than PPP | $ | 7,009 | $ | 6,752 | $ | 5,980 | $ | 20,361 | $ | 17,631 | ||||
| PPP loan interest income | 692 | 1,859 | 2,268 | 4,751 | 3,441 | |||||||||
| PPP origination fee income | 1,656 | 6,235 | 4,302 | 13,902 | 8,175 | |||||||||
| Interest-bearing deposits in banks and other | 188 | 151 | 72 | 420 | 571 | |||||||||
| Total interest income | 9,545 | 14,997 | 12,622 | 39,434 | 29,818 | |||||||||
| Interest expense: | ||||||||||||||
| Deposits | 1,152 | 1,194 | 1,540 | 3,666 | 6,111 | |||||||||
| PPPLF borrowings | 278 | 654 | 793 | 1,699 | 1,185 | |||||||||
| Other | 99 | 245 | 205 | 519 | 642 | |||||||||
| Total interest expense | 1,529 | 2,093 | 2,538 | 5,884 | 7,938 | |||||||||
| - | - | |||||||||||||
| Net interest income | 8,016 | 12,904 | 10,084 | 33,550 | 21,880 | |||||||||
| - | ||||||||||||||
| Provision for loan losses | (3,000 | ) | - | 7,000 | (1,000 | ) | 11,900 | |||||||
| - | - | |||||||||||||
| Net interest income after provision for loan losses | 11,016 | 12,904 | 3,084 | 34,550 | 9,980 | |||||||||
| Noninterest income: | ||||||||||||||
| Service charges and fees | 261 | 259 | 222 | 730 | 664 | |||||||||
| Bank Owned Life Insurance income | 82 | 84 | 81 | 250 | 99 | |||||||||
| Residential loan fee income | 21,323 | 23,352 | 31,226 | 76,704 | 61,888 | |||||||||
| Gain (loss) on sale of SBA loans | (438 | ) | 13,798 | - | 13,360 | 1,202 | ||||||||
| SBA loan servicing right gain | 100 | - | - | 100 | 530 | |||||||||
| Mortgage loan servicing right gain | 42 | 197 | - | 238 | - | |||||||||
| SBA and mortgage servicing income, net | 417 | 325 | 565 | 1,446 | 1,753 | |||||||||
| Other noninterest income | 205 | 197 | 98 | 535 | 182 | |||||||||
| Total noninterest income | 21,992 | 38,212 | 32,192 | 93,363 | 66,318 | |||||||||
| Noninterest Expense: | ||||||||||||||
| Salaries and benefits | 12,851 | 12,948 | 8,876 | 38,966 | 24,497 | |||||||||
| Commissions | 7,490 | 7,640 | 9,726 | 25,450 | 19,411 | |||||||||
| Bonus and incentives | 1,047 | 1,578 | 2,193 | 4,177 | 4,476 | |||||||||
| Occupancy and equipment expense | 1,278 | 1,297 | 1,182 | 3,907 | 3,314 | |||||||||
| Data processing | 1,347 | 2,593 | 1,163 | 5,209 | 3,086 | |||||||||
| Professional services | 1,428 | 843 | 878 | 3,195 | 2,343 | |||||||||
| Mortgage lead generation | 595 | 598 | 379 | 1,957 | 1,242 | |||||||||
| Marketing and business development | 1,323 | 1,280 | 337 | 3,482 | 1,008 | |||||||||
| Mortgage banking expense | 1,440 | 1,572 | 1,620 | 4,707 | 3,645 | |||||||||
| Regulatory assessments | 138 | 100 | 145 | 340 | 418 | |||||||||
| ATM and interchange expense | 71 | 93 | 43 | 241 | 194 | |||||||||
| Telecommunications expense | 156 | 137 | 135 | 432 | 427 | |||||||||
| Employee recruiting and development | 809 | 1,008 | 245 | 2,431 | 1,135 | |||||||||
| Loan origination and collection | 683 | 1,105 | 908 | 2,284 | 1,771 | |||||||||
| Other expenses | 573 | 876 | 378 | 1,840 | 1,028 | |||||||||
| Total noninterest expense | 31,229 | 33,668 | 28,208 | 98,618 | 67,995 | |||||||||
| - | - | |||||||||||||
| Income before taxes | 1,779 | 17,448 | 7,068 | 29,295 | 8,303 | |||||||||
| Income tax expense | 499 | 4,432 | 1,815 | 7,488 | 1,206 | |||||||||
| Net income | $ | 1,280 | $ | 13,016 | $ | 5,253 | $ | 21,807 | $ | 7,097 | ||||
| Preferred dividends | 230 | 235 | 202 | 797 | 557 | |||||||||
| Net income available to common shareholders | $ | 1,050 | $ | 12,781 | $ | 5,051 | $ | 21,010 | $ | 6,540 | ||||
| BAYFIRST FINANCIAL CORP. | |||||||||||
| CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||||||
| Dollars in Thousands | |||||||||||
| Assets | 9/30/2021 | 6/30/2021 | 9/30/2020 | ||||||||
| Cash and due from banks | $ | 2,715 | $ | 2,896 | $ | 2,707 | |||||
| Interest-bearing deposits in banks | 104,382 | 102,441 | 31,770 | ||||||||
| Cash and cash equivalents | 107,097 | 105,337 | 34,477 | ||||||||
| Certificates of deposit | 2,381 | 2,381 | 2,381 | ||||||||
| Securities HTM and restricted equity securities | 2,830 | 2,826 | 2,751 | ||||||||
| Securities AFS | 32,535 | 22,674 | - | ||||||||
| Residential loans held for sale | 91,243 | 126,479 | 149,407 | ||||||||
| PPP loans, net of deferred fees and costs | 155,646 | 429,724 | 879,509 | ||||||||
| Community bank loans | 180,703 | 169,449 | 138,053 | ||||||||
| SBA loans, excluding PPP | 319,945 | 296,021 | 249,191 | ||||||||
| Total loans held for investment | 656,294 | 895,194 | 1,266,753 | ||||||||
| Allowance for loan losses | (16,616 | ) | (20,797 | ) | (18,913 | ) | |||||
| Loans, net | 639,678 | 874,397 | 1,247,840 | ||||||||
| Accrued interest receivable | 4,292 | 7,039 | 5,262 | ||||||||
| Premises and equipment, net | 24,622 | 21,076 | 16,881 | ||||||||
| Loan servicing rights | 6,155 | 6,805 | 9,169 | ||||||||
| Bank owned life insurance | 12,434 | 12,351 | 12,099 | ||||||||
| Other assets | 20,476 | 16,864 | 21,249 | ||||||||
| Total assets | $ | 943,743 | $ | 1,198,229 | $ | 1,501,516 | |||||
| Liabilities | |||||||||||
| Noninterest-bearing transaction accounts | $ | 87,625 | $ | 81,150 | $ | 70,115 | |||||
| Interest-bearing transaction accounts | 157,304 | 143,046 | 112,902 | ||||||||
| Savings and money market deposits | 377,452 | 355,045 | 247,708 | ||||||||
| Time deposits | 52,653 | 53,081 | 79,417 | ||||||||
| Total deposits | 675,034 | 632,322 | 510,142 | ||||||||
| Federal Home Loan Bank advances | - | - | 10,000 | ||||||||
| Subordinated debentures | 5,983 | 5,982 | 6,943 | ||||||||
| Notes payable | 3,413 | 3,527 | 3,868 | ||||||||
| PPP Liquidity Facility | 144,601 | 443,906 | 889,770 | ||||||||
| Accrued expenses and other liabilities | 20,414 | 19,679 | 18,639 | ||||||||
| Total liabilities | 849,445 | 1,105,416 | 1,439,362 | ||||||||
| Stockholders' equity | |||||||||||
| Preferred stock, Series A | 6,161 | 6,161 | 7,661 | ||||||||
| Preferred stock, Series B | 4,193 | 4,456 | 3,723 | ||||||||
| Common stock and additional paid-in capital | 50,546 | 49,501 | 42,496 | ||||||||
| Accumulated other comprehensive income (loss), net of taxes | (201 | ) | (122 | ) | - | ||||||
| Deferred compensation - restricted stock | (23 | ) | (29 | ) | (47 | ) | |||||
| Retained earnings | 33,622 | 32,846 | 8,321 | ||||||||
| Total stockholders' equity | 94,298 | 92,813 | 62,154 | ||||||||
| Total liabilities and stockholders' equity | $ | 943,743 | $ | 1,198,229 | $ | 1,501,516 | |||||
| BayFirst Financial Corp. | ||||||||||||||||
| Selected Financial Data (Unaudited) | ||||||||||||||||
| Dollars in Thousands, Except Share Data | ||||||||||||||||
| At or for the Quarter Ended | At or for the Nine Months Ended | |||||||||||||||
| Selected income statement data: | 9/30/2021 | 6/30/2021 | 9/30/2020 | 9/30/2021 | 9/30/2020 | |||||||||||
| Interest income | $ | 9,545 | $ | 14,997 | $ | 12,622 | $ | 39,434 | $ | 29,818 | ||||||
| Interest expense | 1,529 | 2,093 | 2,538 | 5,884 | 7,938 | |||||||||||
| Net interest income | 8,016 | 12,904 | 10,084 | 33,550 | 21,880 | |||||||||||
| Provision for loan losses | (3,000 | ) | - | 7,000 | (1,000 | ) | 11,900 | |||||||||
| Noninterest income | 21,992 | 38,212 | 32,192 | 93,363 | 66,318 | |||||||||||
| Noninterest expense | 31,229 | 33,668 | 28,208 | 98,618 | 67,995 | |||||||||||
| Income tax expense | 499 | 4,432 | 1,815 | 7,488 | 1,206 | |||||||||||
| Net income | $ | 1,280 | $ | 13,016 | $ | 5,253 | $ | 21,807 | $ | 7,097 | ||||||
| Preferred dividends | 230 | 235 | 202 | 797 | 557 | |||||||||||
| Net income available to common shareholders | $ | 1,050 | $ | 12,781 | $ | 5,051 | $ | 21,010 | $ | 6,540 | ||||||
| Balance sheet data: | ||||||||||||||||
| Average loans | $ | 850,501 | $ | 1,275,082 | $ | 1,317,735 | $ | 1,196,120 | $ | 881,379 | ||||||
| Average loans, excluding PPP loans | $ | 562,095 | $ | 585,753 | $ | 457,950 | $ | 582,352 | $ | 500,233 | ||||||
| Average loans, excluding LHFS | $ | 755,689 | $ | 1,170,753 | $ | 1,226,808 | $ | 1,070,879 | $ | 804,909 | ||||||
| Average assets | $ | 1,086,377 | $ | 1,541,287 | $ | 1,457,998 | $ | 1,419,264 | $ | 1,092,193 | ||||||
| Average total equity | $ | 92,829 | $ | 80,700 | $ | 53,076 | $ | 82,245 | $ | 49,914 | ||||||
| Average common equity | $ | 81,989 | $ | 68,525 | $ | 46,741 | $ | 69,574 | $ | 38,199 | ||||||
| Total loans, period end | $ | 747,537 | $ | 1,021,673 | $ | 1,416,160 | $ | 747,537 | $ | 1,416,160 | ||||||
| Total loans, excluding PPP | $ | 591,891 | $ | 591,949 | $ | 536,651 | $ | 591,891 | $ | 536,651 | ||||||
| Total loans, excluding PPP and LHFS | $ | 500,648 | $ | 465,470 | $ | 387,243 | $ | 500,648 | $ | 387,243 | ||||||
| Loans where the Fair Value Option (FVO) was elected | $ | 9,805 | $ | 10,070 | $ | 9,554 | $ | 9,805 | $ | 9,554 | ||||||
| Total loans, excl guaranteed loans, LHFS, and FVO loans | $ | 306,724 | $ | 304,364 | $ | 275,786 | $ | 306,724 | $ | 275,786 | ||||||
| ALLL, period end | $ | 16,616 | $ | 20,797 | $ | 18,913 | $ | 16,616 | $ | 18,913 | ||||||
| Total assets, at period end | $ | 943,743 | $ | 1,198,229 | $ | 1,501,516 | $ | 943,743 | $ | 1,501,516 | ||||||
| Share data: (*) | ||||||||||||||||
| Basic earnings per share | $ | 0.27 | $ | 3.34 | $ | 1.47 | $ | 5.60 | $ | 1.91 | ||||||
| Diluted earnings per share | $ | 0.26 | $ | 2.98 | $ | 1.37 | $ | 5.13 | $ | 1.78 | ||||||
| Tangible book value per common share (at period end) | $ | 21.30 | $ | 21.14 | $ | 14.57 | $ | 21.30 | $ | 14.57 | ||||||
| Shares of common stock outstanding | 3,919,977 | 3,867,414 | 3,455,190 | 3,919,977 | 3,455,190 | |||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic | 3,913,523 | 3,821,993 | 3,443,999 | 3,749,692 | 3,419,617 | |||||||||||
| Diluted | 4,406,339 | 4,315,022 | 3,706,242 | 4,169,266 | 3,681,859 | |||||||||||
| Performance ratios: | ||||||||||||||||
| Return on average assets | 0.47 | % | 3.38 | % | 1.44 | % | 2.05 | % | 0.87 | % | ||||||
| Return on average common equity | 5.12 | % | 74.61 | % | 43.23 | % | 40.26 | % | 22.83 | % | ||||||
| Yield on average earning assets | 3.62 | % | 4.03 | % | 3.55 | % | 3.83 | % | 3.77 | % | ||||||
| Cost of average interest bearing liabilities | 0.68 | % | 0.61 | % | 0.72 | % | 0.63 | % | 1.10 | % | ||||||
| Net interest margin | 3.04 | % | 3.46 | % | 2.88 | % | 3.26 | % | 2.77 | % | ||||||
| Asset quality ratios: | ||||||||||||||||
| Net charge-offs | $ | 1,108 | $ | 1,221 | $ | 967 | $ | 3,546 | $ | 3,729 | ||||||
| Net charge-offs/avg loans excl PPP, annualized | 0.79 | % | 0.83 | % | 0.84 | % | 0.81 | % | 0.99 | % | ||||||
| Non-performing loans (including gov't gtd loans), at period end | $ | 10,495 | $ | 9,884 | $ | 13,836 | $ | 10,495 | $ | 13,836 | ||||||
| Non-performing assets (including gov't gtd loans), at period end | $ | 10,498 | $ | 9,884 | $ | 13,836 | $ | 10,498 | $ | 13,836 | ||||||
| Non-performing loans (excluding gov't gtd loans), at period end | $ | 3,756 | $ | 3,576 | $ | 4,057 | $ | 3,756 | $ | 4,057 | ||||||
| Non-performing assets (excluding gov't gtd loans), at period end | $ | 3,759 | $ | 3,576 | $ | 4,057 | $ | 3,759 | $ | 4,057 | ||||||
| Non-performing loans (including gov't gtd loans)/total loans | 1.40 | % | 0.97 | % | 0.98 | % | 1.40 | % | 0.98 | % | ||||||
| Non-performing assets (including gov't gtd loans)/total assets | 1.11 | % | 0.82 | % | 0.92 | % | 1.11 | % | 0.92 | % | ||||||
| Non-performing loans (excluding gov't gtd loans)/total loans | 0.50 | % | 0.35 | % | 0.29 | % | 0.50 | % | 0.29 | % | ||||||
| Non-performing assets (excluding gov't gtd loans)/total assets | 0.40 | % | 0.30 | % | 0.27 | % | 0.40 | % | 0.27 | % | ||||||
| ALLL/Total loans | 2.22 | % | 2.04 | % | 1.34 | % | 2.22 | % | 1.34 | % | ||||||
| ALLL/Total loans, excl PPP loans | 2.81 | % | 3.51 | % | 3.52 | % | 2.81 | % | 3.52 | % | ||||||
| ALLL/Total loans, excl guaranteed loans, LHFS, and FVO loans | 5.42 | % | 6.83 | % | 6.86 | % | 5.42 | % | 6.86 | % | ||||||
| Other company information: | ||||||||||||||||
| FTEs | 651 | 671 | 545 | 651 | 545 | |||||||||||
| Community banking center offices | 6 | 6 | 6 | 6 | 6 | |||||||||||
| Loan production offices | 22 | 26 | 23 | 22 | 23 | |||||||||||
| (*) Adjusted for the three-for-two stock split, effective May 10, 2021. | ||||||||||||||||
FAQ
What were BayFirst Financial Corp.'s earnings for Q3 2021?
How did BayFirst's net income for the first nine months of 2021 compare to 2020?
What is the current tangible book value per share for BayFirst Financial Corp.?
How have BayFirst's total deposits changed over the past year?
How did the PPP loan program impact BayFirst's financial results?
