Breaking Down BayFirst Financial Corp. (BAFN) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments? BayFirst Financial Corp. (BAFN) recently reported its 2024 financial results, and the numbers tell an interesting story. Net income for 2024 reached $12.6 million, a notable increase from $5.7 million the previous year. But how did they achieve this, and what does it mean for investors like you? Did you know that loans held for investment increased by $150.8 million, reaching $1.07 billion? Or that deposits also saw a significant rise of $158.1 million, totaling $1.14 billion? Let's dive into the key insights to help you make informed decisions.

BayFirst Financial Corp. (BAFN) Revenue Analysis

Understanding where BayFirst Financial Corp. (BAFN) generates its revenue is crucial for investors. A detailed look into its revenue streams offers insights into the company's stability and growth potential.

Here's a breakdown of what to consider:

• Primary Revenue Sources: Identifying whether revenue comes predominantly from loans, services, or specific regional operations helps in understanding the core business model.
• Year-over-Year Revenue Growth Rate: Examining historical trends in revenue growth, including percentage increases or decreases, provides a view of the company's performance over time.
• Contribution of Business Segments: Understanding which segments contribute the most to overall revenue is essential for assessing the balance and diversification of income sources.
• Significant Changes in Revenue Streams: Analyzing any notable shifts in revenue streams can highlight strategic changes or market impacts affecting the company.

As of the fiscal year 2024, BayFirst Financial Corp. (BAFN) reported a net interest income of $44.7 million, which is a critical component of its revenue. However, non-interest income showed a slight decrease, moving from $7.998 million in 2023 to $7.479 million in 2024. These figures are essential for investors to consider when evaluating the financial health of the company.

To provide a clearer picture, here’s a summary of the changes in net interest income and non-interest income:

Analyzing these figures helps stakeholders understand how BayFirst Financial Corp. (BAFN) is performing and where its financial strengths and areas for improvement lie.

Learn more about the investors of BayFirst Financial Corp. (BAFN): Exploring BayFirst Financial Corp. (BAFN) Investor Profile: Who’s Buying and Why?

BayFirst Financial Corp. (BAFN) Profitability Metrics

Analyzing BayFirst Financial Corp. (BAFN)'s profitability involves examining several key metrics, including gross profit, operating profit, and net profit margins. These figures provide insights into the company's efficiency in generating earnings relative to its revenue and costs. Trends in these profitability metrics over time can reveal whether the company is improving its financial performance or facing challenges.

Here's a detailed look into BayFirst Financial Corp.'s profitability, based on available information:

• Net Interest Margin (NIM): BayFirst Financial Corp. reported a NIM of 3.12% for the year 2023.

To provide a more detailed analysis, a comparison of BayFirst Financial Corp.'s profitability ratios with industry averages and an analysis of its operational efficiency are essential. However, specific figures for gross profit, operating profit, and net profit margins, along with detailed trend analysis and industry comparisons, require up-to-date financial data which may be available from sources providing comprehensive financial analysis.

Here is a general overview of what these metrics entail:

• Gross Profit: The revenue left over after deducting the cost of goods sold (COGS). It indicates how efficiently a company manages its production costs.
• Operating Profit: Calculated by deducting operating expenses from gross profit, this metric reflects the profit earned from the company's core business operations before interest and taxes.
• Net Profit: The profit remaining after all expenses, including interest and taxes, have been deducted from total revenue. It represents the actual profit available to the company's owners.

To fully assess BayFirst Financial Corp.'s financial health, investors should consult the latest financial reports and consider these profitability metrics in the context of the broader financial landscape.

Further insights and analysis can be found at: Breaking Down BayFirst Financial Corp. (BAFN) Financial Health: Key Insights for Investors

BayFirst Financial Corp. (BAFN) Debt vs. Equity Structure

Understanding how BayFirst Financial Corp. (BAFN) finances its growth involves analyzing its debt and equity structure. This includes examining debt levels, the debt-to-equity ratio, and any recent financing activities.

As of December 31, 2024, BayFirst Financial Corp. had consolidated total assets of $1.29 billion, total loans held for investment of $1.07 billion, total deposits of $1.14 billion, and total shareholders' equity of $110.9 million.

Here's a breakdown of BayFirst Financial Corp.'s debt and equity components:

• Debt-to-Equity Ratio: For the quarter ending September 30, 2024, BayFirst Financial Corp.'s debt-to-equity ratio was 0.18. For the year ended December 31, 2024, the debt-to-equity ratio was 0.07.
• Leverage Ratios: Further solvency metrics for December 2024 include a debt-to-assets ratio of less than 0.01, and a debt-to-capital ratio of 0.07. The long-term debt-to-capital ratio was also 0.07.

A lower debt-to-equity ratio generally indicates that the company relies more on equity than debt to finance its assets, suggesting a more conservative financial structure.

Details regarding BayFirst Financial Corp.'s borrowings as of December 31, 2024:

In December 2024, BayFirst entered into a sale-leaseback agreement for two branch office properties, generating a pre-tax gain of $11.6 million and an after-tax gain of $8.7 million. The company continues to lease these properties, ensuring no disruption to its branch network.

For more insights into BayFirst Financial Corp.'s financial health, check out: Breaking Down BayFirst Financial Corp. (BAFN) Financial Health: Key Insights for Investors

BayFirst Financial Corp. (BAFN) Liquidity and Solvency

Analyzing BayFirst Financial Corp.'s (BAFN) financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Here’s an overview of key metrics and trends for 2024:

Assessing BayFirst Financial Corp.'s Liquidity

Several key ratios and financial statements help in assessing BayFirst Financial Corp.'s liquidity:

• Current and Quick Ratios:

The current and quick ratios are fundamental indicators of a company's ability to cover its short-term liabilities with its short-term assets. For BayFirst Financial Corp., these ratios present a mixed picture.

According to available data, the current ratio for December 2024 is 0.04. Historically, the current ratio was 5.92 in December 2023, 17.68 in December 2022, and significantly higher in prior years (449.59 in December 2021 and 32.55 in December 2020). Similarly, the quick ratio for December 2024 is also 0.04, with past values of 5.92 in 2023, 17.68 in 2022, 804.31 in 2021, and 65.10 in 2020.

Such a drastic decrease in these ratios indicates potential liquidity challenges. A current ratio of less than 1 suggests that the company's current liabilities exceed its current assets, which could lead to difficulties in meeting short-term obligations.

• Analysis of Working Capital Trends:

Working capital, which is the difference between a company's current assets and current liabilities, is another critical measure of liquidity. A positive working capital balance indicates that a company has enough short-term assets to cover its short-term liabilities.

BayFirst Financial Corp.'s net current asset value for December 2024 is reported as $ -1.18B. This is a decrease compared to previous years: $ -958.67M in 2023, $ -734.16M in 2022, $ -674.24M in 2021, and $ -1.41B in 2020. The negative working capital further supports the concern about the company's ability to meet its short-term obligations.

• Cash Flow Statements Overview:

An overview of cash flow statements provides insights into the company's ability to generate cash from its operations, investments, and financing activities.

For the 2024 fiscal year, BayFirst Financial Corp.'s free cash flow for Q4 2024 was $1.00 million. For the 2024 fiscal year, BAFN's free cash flow was decreased by $ and operating cash flow was $1.08 million. The components of cash flow include:

• Cash from Operating Activities: $97.46 million for the last twelve months (LTM) ending December 31, 2024, compared to $391 million for the year ending December 31, 2023.
• Cash from Investing Activities: A net cash used in investing activities was ($515.93 million) for the year ended December 31, 2024.
• Cash from Financing Activities.

The cash flow from operating activities decreased from $391 million to $97.46 million year-over-year. The company generated $12.6 million net income for the year ended December 31, 2024.

A decrease in operating cash flow could signal potential issues with the company's core business operations, which in turn, could affect its liquidity position.

• Potential Liquidity Concerns and Strengths:

Based on the ratios and trends, BayFirst Financial Corp. faces potential liquidity concerns. The low current and quick ratios, negative working capital, and decreased operating cash flow suggest the company might struggle to meet its short-term obligations. Additionally, the on-balance sheet liquidity ratio at September 30, 2024, was 8.62%, compared to 9.33% at December 31, 2023.

However, the company has certain strengths. BayFirst Financial Corp. has access to secured borrowings from the Federal Home Loan Bank, the Federal Reserve, and lines of credit with other financial institutions. As of December 31, 2024, the bank had no borrowings from the FHLB, the FRB, or other financial institutions. The bank announced a new $2.0 million share repurchase program and declared a Q1 2025 cash dividend of $0.08 per common share.

Solvency Analysis

While liquidity focuses on short-term financial health, solvency assesses the long-term financial stability of the company. Key metrics for solvency include:

• Leverage Ratios:

Leverage ratios indicate the extent to which a company is using debt to finance its assets. Key leverage ratios for BayFirst Financial Corp. include:

These ratios suggest that BayFirst Financial Corp. has a relatively low level of debt compared to its assets and equity. The debt-to-assets ratio being less than 0.01 in 2024 indicates that the company finances a small portion of its assets with debt. Similarly, the low debt-to-equity and debt-to-capital ratios suggest a conservative capital structure.

• Capital Adequacy:

Capital adequacy ratios measure a bank's ability to absorb losses and protect depositors. These ratios are crucial for assessing the solvency of financial institutions.

BayFirst Financial Corp.'s capital ratios as of December 31, 2024, compared to previous periods are:

The Tier 1 leverage ratio was 8.82% as of December 31, 2024, compared to 8.41% as of September 30, 2024, and 9.38% as of December 31, 2023. The CET 1 and Tier 1 capital ratio to risk-weighted assets were 10.89% as of December 31, 2024, compared to 10.14% as of September 30, 2024, and 11.77% as of December 31, 2023. The total capital to risk-weighted assets ratio was 12.14% as of December 31, 2024, compared to 11.39% as of September 30, 2024, and 13.03% as of December 31, 2023.

These ratios indicate that BayFirst Financial Corp. maintains a solid capital position, although there has been a slight decrease in some ratios compared to the previous year.

• Profitability:

Profitability is a critical component of solvency as it reflects the company's ability to generate earnings and sustain its operations over the long term. BayFirst Financial Corp. reported a net income of $12.6 million for the year ended December 31, 2024, compared to $5.7 million for the year ended December 31, 2023.

Net interest income from continuing operations was $38.0 million for the year ended December 31, 2024, an increase from $36.4 million for the year ended December 31, 2023. Noninterest income from continuing operations was $60.5 million for the year ended 2024, which was an increase from $49.8 million for the year ended 2023.

The increase in net income and interest income suggests improved profitability, which supports the company's long-term solvency.

Conclusion

In summary, while BayFirst Financial Corp. exhibits potential liquidity concerns based on its current and quick ratios, working capital trends, and cash flow from operations, its solvency position appears relatively stable. The company maintains low leverage ratios, solid capital adequacy, and improved profitability. Investors should closely monitor the company's liquidity metrics and cash flow generation to ensure it can meet its short-term obligations while capitalizing on its long-term financial stability.

For further insights into the company's strategic direction, see Mission Statement, Vision, & Core Values of BayFirst Financial Corp. (BAFN).

BayFirst Financial Corp. (BAFN) Valuation Analysis

Determining whether BayFirst Financial Corp. (BAFN) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance, and analyst sentiment.

Here's a breakdown:

• Exploring BayFirst Financial Corp. (BAFN) Investor Profile: Who’s Buying and Why?

Key Valuation Ratios:

• Price-to-Earnings (P/E) Ratio: As of April 2025, BAFN's P/E ratio is around 5.04 to 5.48. This is lower than the industry median, suggesting it could be undervalued compared to its peers.
• Price-to-Book (P/B) Ratio: The P/B ratio for BAFN is approximately 0.57. A P/B ratio below 1 can indicate that the stock is undervalued, as it suggests the market price is less than the company's book value.
• Enterprise Value-to-EBITDA (EV/EBITDA): While specific EV/EBITDA data for 2024 is limited in the search results, this ratio is a useful measure of valuation, especially for comparing companies with different capital structures.

Stock Price Trends:

• Recent Performance: As of April 17, 2025, the stock price was around $14.10.
• 52-Week Range: The stock has traded between $10.40 and $19.75 over the past 52 weeks.
• Volatility: BAFN stock is 8.45% volatile and has a beta coefficient of 0.61.

Dividend Information:

• Dividend Yield: BAFN pays dividends quarterly, with a current dividend yield of approximately 2.41%.
• Payout Ratio: The payout ratio for 2024 was around 13.27%, indicating that the dividend payments are well-covered by earnings.

Analyst Consensus:

• Rating: Zacks Investment Research initiated coverage of BayFirst Financial Corp. with an 'Outperform' recommendation.
• Valuation: According to Wall Street analysts, BayFirst Financial Corp.'s price is currently considered overvalued.

Additional Factors:

Several factors could influence BayFirst Financial Corp.'s valuation:

Profitability: Net income for the year ended December 31, 2024, was $12.6 million, or $2.68 per common share.

Asset Quality: Net charge-offs remain elevated, with nonperforming loans rising to 1.35% of total loans.

Growth Initiatives: BayFirst is expanding its SBA and USDA lending platform and leveraging technology to automate lending workflows.

Market Position: The company was recognized as Florida's Best Bank in 2024 and is the second-largest community bank by local deposits in the Tampa Bay-Sarasota region.

Here is a table summarizing some key financial data:

Based on a discounted cash flow analysis, the fair value is estimated at $16.55, suggesting it may be undervalued by 14.8%.

BayFirst Financial Corp. (BAFN) Risk Factors

BayFirst Financial Corp. (BAFN) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, market conditions, and specific operational and strategic challenges.

Industry Competition: The financial services industry is intensely competitive. BayFirst Financial Corp. (BAFN) competes with other banks, credit unions, and non-bank financial institutions, some of which may have greater resources or a broader range of services. Increased competition could lead to lower interest rates, reduced fee income, and a loss of market share.

Regulatory Changes: Banks are subject to extensive regulation at both the federal and state levels. Changes in regulations, such as those related to capital requirements, lending practices, or consumer protection, could increase compliance costs, restrict business activities, and adversely affect profitability. BayFirst Financial Corp. (BAFN) must continually adapt to these changes, which can be unpredictable and costly.

Market Conditions: Economic downturns, changes in interest rates, and fluctuations in real estate values can all impact BayFirst Financial Corp. (BAFN)'s financial performance. For example, rising interest rates could reduce demand for loans, while declining real estate values could increase the risk of loan defaults. These market factors are largely outside of the company's control but can have a significant effect on its financial stability.

Operational Risks: These include risks related to internal processes, systems, and people. Failures in these areas, such as cybersecurity breaches, fraud, or errors in loan processing, could lead to financial losses, reputational damage, and regulatory penalties.

Financial Risks: These encompass credit risk (the risk of borrowers defaulting on loans), liquidity risk (the risk of not having enough cash to meet obligations), and interest rate risk (the risk of earnings being negatively affected by changes in interest rates). Effective management of these risks is crucial for maintaining financial stability.

Strategic Risks: Strategic risks involve decisions related to the company's business model, growth plans, and competitive positioning. Poor strategic decisions, such as entering new markets without adequate preparation or failing to adapt to changing customer preferences, could harm the company's long-term prospects.

Some of the key strategic, operational, and financial risks can be seen in BayFirst Financial Corp. (BAFN)’s approach to growth and market positioning. These are highlighted in Mission Statement, Vision, & Core Values of BayFirst Financial Corp. (BAFN).

BayFirst Financial Corp. (BAFN) Growth Opportunities

BayFirst Financial Corp. (BAFN) is poised for future growth through several key strategies and market dynamics. Understanding these drivers, projections, and advantages is crucial for investors.

Key growth drivers for BayFirst Financial Corp. (BAFN) include:

• Market Expansion: BayFirst's expansion into new markets, such as its focus on the Southeast region, presents substantial growth opportunities.
• Strategic Acquisitions: The company's history of successful acquisitions, like that of First Home Bank, demonstrates a capability to integrate and leverage new assets for increased profitability.
• Product Innovation: Continuously updating and diversifying its range of financial products and services to meet the evolving needs of its customer base.
• Government Guaranteed Lending: Specializing in government-guaranteed lending programs, particularly SBA lending, allows BayFirst to tap into a less cyclical and often more secure segment of the market.

While specific future revenue growth projections and earnings estimates for BayFirst Financial Corp. (BAFN) can fluctuate based on economic conditions and internal strategies, several factors suggest a positive outlook.

• Analysts' Estimates: Investors should refer to recent analysts' reports for detailed revenue growth projections and earnings estimates. These reports often provide a range of scenarios based on different economic forecasts.
• Historical Performance: Examining BayFirst's past financial performance, especially in periods of expansion and acquisition, can provide insights into potential future growth rates.

Strategic initiatives and partnerships that could drive future growth include:

• Fintech Integration: Leveraging technology to enhance customer experience and streamline operations.
• Community Engagement: Strengthening ties with local communities to foster customer loyalty and support local economic development.
• Strategic Partnerships: Collaborating with other financial institutions or service providers to expand its service offerings and market reach.

BayFirst Financial Corp. (BAFN) holds several competitive advantages that position it favorably for growth:

• SBA Lending Expertise: BayFirst has a strong track record and expertise in originating and servicing SBA loans, giving it a competitive edge in this specialized market.
• Strong Capital Position: Maintaining a robust capital base allows BayFirst to pursue growth opportunities while mitigating risks.
• Experienced Management Team: A skilled and experienced management team is crucial for navigating the complexities of the financial industry and executing growth strategies effectively.

For more insights into BayFirst Financial Corp. (BAFN)'s financial health, you can read: Breaking Down BayFirst Financial Corp. (BAFN) Financial Health: Key Insights for Investors