BayFirst Financial Corp. (NASDAQ: BAFN)

BayFirst Financial Corp., known by its stock symbol BAFN, is a bank holding company that operates in the financial industry. Its primary business is conducted through its subsidiary, BayFirst National Bank, with operations in the Tampa Bay region and beyond. The company has two main divisions: Community Banking and CreditBench.

The Community Banking Division offers a variety of products and services, including deposit accounts, loans, and cash management services for individuals and businesses. With 11 banking centers in the Tampa Bay area, this division provides a range of deposit products such as checking and savings accounts, certificates of deposit, and individual retirement accounts.

CreditBench, on the other hand, is a government guaranteed lender that originates SBA 7(a) loans and USDA loans throughout the nation. This division leverages advanced technology platforms to support technology-enabled banking products and services, as well as financial technology applications. As of December 31, 2023, CreditBench had originated 3,408 Bolt loans totaling $441.8 million.

In the competitive financial industry, BayFirst Financial Corp. stands out due to its ability to offer personalized relationships and flexible loan products, with a particular focus on serving the small business community. The company competes with national, super-regional, and regional financial institutions, as well as non-bank government guaranteed lenders, finance companies, investment banking and brokerage firms, and insurance companies.

BayFirst Financial Corp.'s customers include individuals and businesses in the Tampa Bay region, as well as government agencies and other financial institutions. The company's lending philosophy centers around making sound, high-quality loans while acknowledging the inherent risk in lending. This philosophy is reflected in the company's loan approval process, which is characterized by centralized authority supported by a risk control environment that ensures thorough underwriting.

Regarding its risk management practices, the company has implemented measures to identify, measure, monitor, evaluate, and manage risks associated with banking activities. The Board of Directors oversees these risk management processes, while the senior management team is responsible for implementing and reporting on them.

In terms of information technology systems, BayFirst Financial Corp. has made significant investments in systems and staff to support banking activities. The company uses nationally recognized software vendors and their cloud/hosted models, which allow for data processing outsourcing. Internal networks and email systems are administered by a managed service provider specializing in financial institutions, with production infrastructure maintained in a data center facility near Tampa, Florida.

Data privacy and cybersecurity are of utmost importance to BayFirst Financial Corp. A comprehensive information security program is in place to ensure the security and confidentiality of client records and personal information. The company is subject to various regulations and laws related to data privacy and cybersecurity, including the Gramm-Leach-Bliley Act, the Fair Credit Reporting Act, and the Federal Trade Commission Act.

As a bank holding company, BayFirst Financial Corp. is subject to the supervision of the Federal Reserve and must file annual reports and other information with the Federal Reserve regarding the company's business operations and those of its subsidiary. The company is also subject to the regulations of the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).