BayFirst Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Bay First Financial Corporation Q4 2024 conference call and webcast. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question and answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded on Friday, January 31st, 2025. And I would like to turn the conference over to Mr. Tom Cernich, Chief Executive Officer. Please go ahead, sir.

Thank you, Sylvie. 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 deck. It was a busy quarter for Bay First as our business returned to normal after the autumn hurricanes. We also completed some initiatives to position the bank to success in 2025 and continue to grow earnings and improve performance. We completed a sale-leaseback transaction with two of our banking offices, which generated a gain and improvement and the bank's capital position, which we leverage for future growth of loans and also deploy with a share repurchase program. More details on that shortly. Let me now share some highlights from around Bay first. Fourth quarter net income was $9.8 million. Excluding the gain from the sale leaseback, earnings were $1.1 million, essentially flat to the third quarter of this year. Our net interest margin improved 26 basis points to 3.6% in the fourth quarter. We also suspended the practice of measuring newly originated government-guaranteed loans at fair value. Instead, we will measure loans held for investment at amortized costs, which will align gain on sale timing, origination costs, and provision expense to when the loan is originated and sold. While this resulted in lower net income during the fourth quarter due to timing, we took the opportunity from the gain from the sale leaseback to adjust our strategy, and our financial reporting will be more consistent with the industry going forward. Our convenient and attractive network of 12 banking centers across Tampa Bay grew deposit balances 16.5% and net new accounts 9% year-to-date, ending the fourth quarter at $1.14 billion. BayFirst has maintained a granular deposit base and continues to benefit from 74% of deposits being insured on December 31st, 2024. On the lending side, we deployed a major upgrade to our PowerLOS commercial loan operating system with significant user interface improvements and faster application decisioning. Bay First continues to enjoy minimal commercial exposure in the CRE space with non-owner occupied CRE representing only 6% of our loans held for investment at the end of the quarter. Loans held for investment increased by 24.1 million or 2.3% during the fourth quarter of 2024 to 1.07 billion. The company's government-guaranteed loan origination platform originated $107.8 million in new government-guaranteed loans during the fourth quarter of 2024, an increase from $94.4 million of loans produced in the previous quarter and a decrease from $144.9 million of loans produced during the fourth quarter of 2023. The company's BOLT loan program which is an SBA 7A loan product designed to expeditiously provide working capital loans of $150,000 or less for businesses throughout the country. Since the launch in 2022, the company has originated 5,726 bolt loans totaling $741.5 million, of which 495 bolt loans totaling $64.8 million were originated during the fourth quarter. In total, the company originated 158.7 million of loans and sold 94.5 million of government-guaranteed loan balances during the quarter. For the full year, the company originated 431.5 million of government-guaranteed loans and our community bank originated 276.5 million of conventional owner-occupied CRE, CNI, home equity lines and loans, consumer loan, term loans, and first mortgage loans. Net of sold government guaranteed loan balances, total loan balances grew 150.8 million or 16.5%. Our commitment to building the premier community bank of Tampa Bay is reinforced by the recent hiring of our business banking team. who will focus on the banking needs, including deposits and treasury management, for small businesses across our retail footprint. This follows the creation of our healthcare platform earlier in the year. These added production machines solidify BayFirst for success in 2025. Finally, I want to remind everyone that our bank was ranked the top bank in Florida by Forbes Magazine for 2024. 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 from continuing operations was $9.8 million in the fourth quarter. Excluding the sale-leaseback gain, fourth quarter net income was $1.1 million. For the full year, total net income was $12.6 million and $4.0 million, excluding the sale-leaseback gain. During the fourth quarter, balances of loans held for investment grew $24.1 million, or 2.3%. During the quarter and overall, total assets grew $43.2 million to end at $1.29 billion. or 3.5% during the quarter. Since the end of 2023, total assets have increased $170.5 million, or 15.3%. Total deposits increased $31 million, or 2.8% during the fourth quarter of this year, and increased $158.1 million from December 31, 2023. Total deposits ended the year at $1.14 billion. Shareholders' equity at quarter end was $110.9 million and is 10.2 million higher than the end of 2023. Net accumulated other comprehensive loss increased slightly by $644,000 during the quarter, ending the year at just under $3 million. This is flat to our measurement at December 31st, 2023. Tangible book value increased this quarter to $22.95 per share, from $20.86 per share at the end of the third quarter. Also, as Tom mentioned, our net interest margin improved 26 basis points to 3.60% in the fourth quarter. Net interest income was $10.7 million in the fourth quarter, up $1.2 million, or 13%, compared to the third quarter, and up $1.8 million from the year-ago quarter. Much of this improvement is due to lower interest expense on deposits of $900,000 in the fourth quarter compared to the third quarter. This was generated by the migration of promotional price CDs, which matured during the quarter and migrated to lower rate CDs and money market accounts. Non-interest income excluding the $11.6 million gain from the sale leaseback was $10.6 million for the fourth quarter of 2024. That was down 1.6 million from the prior quarter. Also, as Tom noted, we suspended the use of fair value measurements on newly originated government guaranteed loans during the quarter. By comparison, the use of fair value accounting provided $3.5 million in gain revenue in the third quarter. This change is a timing variance which will not occur in future periods. Compared to the third quarter of 2023, gain on sale of government guaranteed loans was $1.5 million higher and government guaranteed loan servicing rate gains were $734,000 higher in the fourth quarter. For the full year and excluding the sale leaseback gain, non-interest income was $883,000 lower than 2023. This variance is related to overall lower gains from the sale of government guaranteed loans in 2024 versus 2023. Notably, in 2023, the company sold 451.6 million of government-guaranteed loan balances versus 385.3 million in 2024. Non-interest expense decreased by $1.9 million in the fourth quarter, and $900,000 of this decrease is from $0 of third-party non-deferrable origination expense compared to the third quarter. This is also related to suspending the fair value measurements. Lower compensation costs and incentives reflect lower loan originations in the fourth quarter, combined as more origination costs were deferred versus costs recognized on loans measured at fair value during the third quarter. Also, marketing, recruiting and development, and collection costs were also lower in the fourth quarter compared to the third quarter of 2024. For the full year of 2024, total non-interest expense was $1.2 million lower than 2023. Commissions, incentives, and bonus expenses were $1.3 million lower, marketing expenses were $1.3 million lower, and third-party non-deferrable origination expenses were $1.6 million lower. Offsetting all these lower expenses, were higher data processing costs of $1.1 million, reflecting our investment in technology to support loan originations, as well as higher collection costs of $600,000 and then other expenses of $400,000. Provision for credit losses was $4.5 million in the fourth quarter compared to $3.1 million in the third quarter and $2.7 million in the fourth quarter of 2023. Net charge-offs increased by $0.8 million, primarily from higher charge-offs and unguaranteed SBA 7 loan balances. For the year, total provision for credit losses was $14.7 million, which was $4.3 million higher than it was in 2023. Total net charge-offs in 2024 were $13 million, which Whereas the provision expense was $1.7 million higher at $14.7 million. The ratio of allowance to credit losses to total loans held for investment and amortized costs was relatively flat this quarter compared to last quarter at 1.54% on December 31st, 2024. That compares to 1.48% as of September 30th, 2024 and 1.64% as of December 31st, 2023. Our portfolio of unsecured consumer loans purchased from a third party generated over $395,000 in net charge-offs during the quarter, which is comparable to Q3. At this time, I'll turn the call over to Robin to make some additional comments.