BayFirst Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Bay First Financial Corp Q3 2004 conference call and webcast. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star followed by zero for the operator. This call is recorded on Friday, October 25, 2024. I would now like to turn the conference over to Tom Zernick, CEO. Please go ahead.

Thanks, Dion. Good morning, and thank you for participating on our call today. I have with me Robin Oliver, our President and Chief Operating Officer, and our CFO, Scott McKim. Today's call will include forward-looking statements and non-GAAP financial measures. Please refer to our cautionary statement on forward-looking statements contained on page two of the investor presentation. The past month has provided an unprecedented level of challenges for our Tampa Bay community, our customers, and our team members. After two very destructive hurricanes over a two-week period, our bank demonstrated a very high level of resiliency built on solid planning and preparation. Our people and facilities were tested by severe flooding, extreme wind, and over 20 inches of rainfall. Even with those impacts, our full branch network was up and running within two business days after each hurricane. We continued to fund loans, and our Heart of the House operations teams never stopped working. Today, we are actively engaged with our customers to support their immediate needs. I want to personally thank all of our employees, many of whom lost their homes, belongings, or vehicles, who have maintained the level of service and commitment which makes BayFirst the premier community bank of Tampa Bay. During the third quarter, we produced net income of $1.1 million. This represents a 31% increase over Q2-24 with earnings of $900,000. Net income increased due to higher net interest income and higher revenue from servicing income and gains on sales of a half a million dollars quarter over quarter. Let me now share some highlights from around Bay First. Our convenient and attractive network of 12 banking centers grew deposit balances 13% and net new accounts 11% year to date, ending the quarter at $1.11 billion. BayFirst has maintained a granular deposit base and continues to benefit from 78% of deposits being insured on September 30, 2024. In fact, our total number of households exceeds 24,500. On the lending side, BayFirst continues to enjoy minimal commercial exposure in the CRE space with non-owner-occupied CRE representing only 6.3% of our loans held for investment at the end of the quarter. Loans held for investment increased by $34 million or 3% during the third quarter of 2024 to $1.04 billion. The company's government guaranteed loan origination platform originated $94.4 million in new government guaranteed loans during the third quarter of 2024. a slight decrease from 98.7 million of loans produced in the previous quarter, and a 39% decrease from 155.9 million of loans produced during the third quarter of 2023. The company's BOLT loan program is an SBA 7 loan product designed to expeditiously provide working capital loans of $150,000 or less to businesses throughout the country. Since the launch of this product in 2022, the company has originated 5,231 bolt loans totaling 676.6 million, of which 502 bolt loans totaling 65.2 million were originated during the third quarter. During the quarter, the company originated 160 million of loans. and sold 84 million of government guaranteed loan balances. I'm also pleased to announce that Bay First finished the SBA fiscal year as the number five lender by units in the United States by approving 3,187 loans for $508 million. Our commitment to building a strong community bank continues to be reinforced by the recent hiring of a director of business banking, who will focus on the banking needs, including deposits and treasury management services for small businesses across our Tampa Bay footprint. Furthermore, we added another dedicated commercial lender during Q3 to manage the lending needs of these small businesses. Finally, I am excited to share that our bank was ranked the top bank in Florida by Forbes magazine for 2024. This is a humbling achievement and I am very proud of our team for this accomplishment and want to thank all of our customers who voted for this recognition. Now I will pass the microphone to Scott McKim, our CFO, to provide an overview of our financial performance.

Thank you, Tom. Good morning, everyone. As Tom mentioned, our net income was $1.1 million in the third quarter, and balances of loans held for investment grew $34 million, or 3% during the quarter, and overall total assets increased $27 million to $1.25 billion, or 2% during the quarter. Year over year, total assets have increased by $111 million, or 10%. Total deposits increased by $69.8 million or 7% during the third quarter of this year and increased by $94 million from the third quarter of 2023. Total deposits ended the quarter at $1.1 billion. Shareholders' equity at the end of the quarter was $102.3 million and is $8.1 million higher than the end of the third quarter of 2023. We also had a sizable decrease in accumulated other comprehensive losses of $801,000 during the quarter, and our tangible book value increased to $20.86 per share from $20.54 per share at the end of the second quarter. Net interest income was $9.4 million in the third quarter, up $300,000, or 3%, compared to the second quarter, and up $1.1 million from the year-ago quarter. Net interest margin decreased nine basis points from the second quarter. However, this decrease is mostly from a one-time recognition of unamortized premium on a purchased USDA government guaranteed loan, which prepaid during the quarter. Excluding this one-time event, the net interest margin would have decreased by only one basis point in the third quarter. Non-interest income was $12.3 million for the third quarter of 2024, up $570,000, reflecting higher gains on sale of government-guaranteed loans. Compared to the third quarter of 2023, non-interest income was down $2.4 million, reflecting lower gain on sale proceeds as the bank's saleable SBA 7A loan volume was down 39%, compared to the third quarter of last year, as Tom had mentioned. Non-interest expense increased slightly by $400,000 in the third quarter due to an increase in bonus, commissions, and incentive compensation. Compared to the third quarter of 2023, non-interest expense is $400,000 lower driven by lower marketing expenses and non-deferrable loan origination costs, as well as bonus, commission, and other incentive compensations. all of which are offset by higher loan origination and collection costs during the quarter. Our provision for credit losses was $3.1 million in the third quarter compared to $3.3 million in the second quarter and also $3 million in the third quarter of 2023. Net charge-offs decreased by $500,000, primarily from lower charge-offs on unguaranteed SBA 7A loan balances. The ratio of allowance for credit losses to total loans held for investment at amortized costs was relatively flat this quarter compared to last quarter, sitting at 1.48% as of September 30th and 1.50% at June 30th, 2024 to 1.68% as of September 30th, 2023. Robyn will talk about how our efforts to actively manage our SBA 7 portfolio have positively impacted net charge-offs over the past two quarters. Our portfolio of unsecured consumer loans purchased from a third party generated $305,000 worth of net charge-offs during the quarter, and that is down $300,000 from second quarter, a very positive impact on this portfolio. As we have previously mentioned, the unsecured consumer loan exposure continues to pay down, and as expected, its impact on net charge-off continues to dissipate. At this time, I'll turn things over to Robin for more discussion.