As filed with the Securities and Exchange Commission on April 30, 2026

Registration No. 333-[______]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM S-1REGISTRATION STATEMENT ~~UNDER THE SECURITIES ACT OF 1933~~

UNDER THE SECURITIES ACT OF 1933

BAYFIRST FINANCIAL CORP.

(Exact name of registrant as specified in its charter)


Florida	6022	59-3665079
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)

700 Central Avenue
St. Petersburg, Florida 33701

700 Central AvenueSt. Petersburg, Florida 33701

(727) 440-6848

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

~~including~~Scott ~~area~~J. ~~code, of registrant’s principal executive offices)~~McKim

~~Anthony~~Chief N.Financial ~~Leo~~Officer

Chief Executive Officer

BayFirst Financial Corp.

700 Central ~~AvenueSt. Petersburg, Florida 33701~~Avenue

~~(727)~~St. ~~440-6848~~Petersburg, Florida 33701

(Name, address, including zip code, and telephone number, including area code of agent for service)

~~including~~Copies ~~area~~of ~~code~~all communications, including copies of all communications sent to agent for service), should be sent to:

~~Copies~~Richard ofPearlman, ~~all~~Esq. ~~communications~~Igler and Pearlman, ~~including~~P.A.3122 ~~copies~~Mahan ofDriveSuite ~~all~~801-180Tallahassee, ~~communicationssent~~Florida to32308 ~~agent~~Mark ~~for~~C. ~~service~~Kanaly, ~~should~~Esq.Willliam beW. ~~sent~~Hooper, ~~to:~~Esq.Alston & Bird LLP1201 West Peachtree StreetAtlanta, GA 30309

Richard Pearlman, Esq.Igler and Pearlman, P.A.2457 Care Drive, Suite 203Tallahassee, Florida 32308

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ■

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: □

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: □

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer x Smaller reporting company x Emerging growth company x

~~Non-accelerated~~If ~~filer Smaller~~an ~~reporting~~emerging growth company , indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. □

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered			Amount to be Registered			Proposed MaximumAggregate OfferingPrice Per Share*			Proposed Maximum Aggregate Offering Price*			Amount ofRegistration Fee
Common Stock			100,000			$22.37			$2,237,000.00			$207.37

*Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) of the Securities Act. The registrant calculates the proposed maximum aggregate offering price in accordance with Rule 457(c), based on the average of the high and low trading prices on Nasdaq on January 14, 2022.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. The securities may not be sold until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to Completion, dated ~~January~~April 2030, ~~2022~~2026

BayFirst Financial Corp.

~~100~~Up to 4,~~000~~108,072 Shares of Common Stock

We are offering, ~~through~~to our ~~Dividend~~shareholders ~~Reinvestment~~of ~~and~~record ~~Stock~~as ~~Purchase~~of ~~Plan~~May 12, 2026, up to ~~all~~4,108,072 ~~holders~~shares of our common stock, ~~the~~at ~~opportunity~~a toprice ~~automatically~~of ~~reinvest~~$3.50 ~~their~~per ~~cash~~share. ~~dividends~~On inApril ~~shares~~28, of2026, ~~our~~we ~~common~~sold $80,000,000 in convertible preferred stock ~~and~~at toan ~~make~~effective ~~optional~~$3.50 ~~cash~~per ~~purchases~~share of common stock. ~~from~~You ~~$250~~may tosubmit ~~$75,000~~a ~~per~~subscription ~~quarter.~~for ~~The~~one ~~terms~~share ~~and~~for ~~provisions~~each share you owned as of May 12, 2026. However, if you purchased shares in the ~~plan~~private placement, you may not participate in this offering. If all shares are ~~set~~purchased, ~~forth~~the total purchase price of the shares offered in this ~~prospectus~~offering and gross proceeds we receive, before expenses, would be $14.38 million.

~~The~~We ~~prices~~must toreceive beyour ~~paid~~subscription ~~for~~by ~~shares~~5:00 ofp.m., ~~common~~Eastern ~~stock~~time, ~~purchased~~on ~~through~~__, 2026. However, we have the ~~Dividend~~option ~~Reinvestment~~to extend the offering and ~~Stock~~the ~~Purchase~~period ~~Plan~~for submitting your subscription for a period not to exceed 30 days, although we do not presently intend to do so. Pending closing of this offering, subscription funds will be ~~100%~~held in escrow by an escrow agent. You should carefully consider whether to submit a subscription prior to the expiration of the ~~market~~offering. ~~price~~All subscriptions are irrevocable, ~~determined~~even asif ~~provided~~the inoffering is extended by our Board of Directors. However, if we amend the ~~plan~~offering to allow for an extension of the offering for a period longer than 30 days or make a fundamental change to the terms set forth in this prospectus, you may cancel your subscription and receive a refund of your subscription funds, without interest or deduction.

~~This~~We ~~prospectus~~have ~~relates~~engaged toHovde ~~100~~Group,~~000~~ ~~shares~~LLC ofto ~~common~~act ~~stock~~as ~~registered~~our ~~for~~sales ~~purchase~~agent ~~under~~in ~~the~~this ~~plan~~offering. ~~Shares~~The ~~issued~~sales ~~under~~agent ~~the~~will ~~plan~~act ~~will~~on bea ~~either~~“best ~~newly~~efforts” ~~issued~~basis. ~~shares~~Therefore, they are not required to sell any specific number or ~~shares~~dollar ~~purchased~~amount ~~for~~of ~~plan~~securities ~~participants~~but inwill use their best efforts to sell the ~~open~~securities ~~market~~offered. ~~Our~~Because ~~common~~the ~~stock~~offering is ~~traded~~not underwritten by a broker-dealer on ~~the~~a ~~Nasdaq~~firm ~~Capital~~commitment ~~Market~~basis, ~~under~~there ~~the~~can ~~symbol~~be ~~“BAFN~~no assurance that any shares of common stock we are offering will be sold.” ~~The~~We ~~last~~will ~~reported~~pay the sales ~~price~~agent ofa ~~our~~commission ~~common~~equal ~~stock~~to on2% ~~January~~of ~~14,~~the ~~2022~~gross ~~was~~proceeds ~~$22~~of this offering.~~50.~~

The plan does not represent a change in the dividend policy of BayFirst Financial Corp. Our dividend policy will continue to depend on our earnings, financial requirements, and other factors. Shareholders who do not wish to participate in the plan will continue to receive cash dividends, if and when declared, in the usual manner.


	Per share	Total(2)
Public offering price	$3.50	$14,378,252
Sales agent fees(1)	$0.07	$287,565
Proceeds to us, before expenses	$3.43	$14,090,687

We(1) ~~are~~In anconnection ~~“emerging~~with ~~growth company” as defined under~~ the ~~federal securities laws and~~offering, ~~as such,~~ we have ~~elected~~agreed to ~~comply~~pay ~~with~~Hovde ~~reduced~~Group, ~~reporting~~LLC ~~requirements~~as ~~for~~sales ~~this~~manager ~~prospectus~~a ~~and~~commission ~~may~~equal ~~elect~~ to do2% soof inthe ~~future~~gross ~~filings.~~proceeds of this offering. See “~~Implications~~Plan of ~~Being an Emerging Growth Company.~~Distribution”.

~~Investing~~(2) inAssumes ~~our~~the ~~common~~offering ~~stock~~is ~~involves~~fully ~~a high degree of risk~~subscribed. ~~See “Risk Factors” beginning on page 5.~~

Neither the Securities and Exchange Commission nor any state securities regulator have approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.1

~~January~~Our 20Board of Directors makes no recommendation regarding your investment in this offering. Your ability to submit a subscription may not be sold, ~~2022~~transferred, or assigned and will not be listed for trading on any stock exchange or market, specifically including the Nasdaq Capital Market.

iOur Board of Directors may cancel the offering at any time prior to its expiration for any reason. In the event the offering is cancelled, all subscription payments received by the escrow agent will be returned, without interest or deduction, as soon as practicable.

Shares of our common stock are traded on the Nasdaq Capital Market under the symbol “BAFN.” On April 29, 2026, the closing sales price for our common stock was $8.00 per share. The shares of common stock issued in this offering will also trade on the Nasdaq Capital Market under the same symbol.

Investing in our common stock involves a high degree of risk. See “Risk Factors” beginning on page 18, as well as the other information relating to risks in documents we incorporate by reference into this prospectus to read about important factors you should consider before investing in our common stock.

Neither the Securities and Exchange Commission, or SEC, nor any state securities regulator have approved or disapproved these securities, or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

As permitted under the rules of the SEC, this prospectus incorporates important business information about BayFirst Financial Corp. that is contained in documents that we file with the SEC, but that are not included in or delivered with this prospectus. You may obtain copies of these documents, without charge, from the website maintained by the SEC at www.sec.gov, as well as other sources. See “Where You Can Find Additional Information” in this prospectus.

Sales Manager

HOVDE GROUP, LLC

The date of this prospectus is _____________, 2026

TABLE OF CONTENTS


			Page
About This Prospectus			4
Cautionary Note Regarding Forward-Looking Statements			4
Incorporation of Certain Information By Reference			5
Implications of Being an Emerging Growth Company			5
Prospectus Summary			6
Summary of the Offering			10
Questions and Answers Relating to the Offering			14
Risk Factors			18
The Offering			21
Plan of Distribution			28
Use of Proceeds			29
Market Price, Dividends, and Related Stockholder Matters			29
Description of Our Securities			30
Material U.S. Federal Income Tax Considerations			36
Indemnification			35
Legal Matters			39
Experts			39
Where You Can Find Additional Information			40

ABOUT THIS PROSPECTUS

This prospectus is a part of a registration statement on Form S-1 that we filed with the SEC using a continuous offering process. Under this process, during the offering period, we may sell the common stock covered by this prospectus in the manner described in the section titled “Plan of Distribution.” Additionally, we may provide a prospectus supplement to add information to, or update or change information contained in, this prospectus, including the section titled “Plan of Distribution.” You may obtain this information without charge by following the instructions under the section titled “Where You Can Find Additional Information” appearing elsewhere in this prospectus. You should read this prospectus and any prospectus supplement before deciding to invest in our common stock.

The information contained in this prospectus, or any free writing prospectus prepared by us or on our behalf or to which we refer you, is accurate only as of its date, regardless of the time of delivery of this prospectus or of any sale of our common stock. Our assets, business, cash flows, financial condition, liquidity, prospects or results of operations may have changed since that date.

You should not interpret the contents of this prospectus, or any free writing prospectus prepared by us or on our behalf or to which we refer you, to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.

We have not authorized anyone to provide any information to you other than that contained in this prospectus or in any free writing prospectus prepared by us or on our behalf to which we refer you. We take no responsibility for, nor provide any assurance as to the reliability of, any other information that others may give you. Information contained on, or accessible through, our website is not part of this prospectus.

No action is being taken in any jurisdiction outside the United States to permit a public offering of our securities or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions as to the offering and the distribution of this prospectus applicable to those jurisdictions. We are not making an offer of these securities in any jurisdiction where such offer is not permitted.

observe, any restrictions as to the offering and the distribution of this prospectus applicable to those jurisdictions. We are not making an offer of these securities in any jurisdiction where such offer is not permitted.

As used in this prospectus, “BayFirst,” the “Company,” “we,” “us” and “our” refer to BayFirst Financial Corp., and the “Bank” refers to BayFirst National Bank, unless stated otherwise or the context requires otherwise.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains forward-looking statements. Words such as “may,” “could,” “should,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “is confident that” and similar expressions constitute “forward-looking statements.” Forward-looking statements involve risk and uncertainty and a variety of factors that could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed or implied in these forward-looking statements. We do not have a policy of updating or revising forward-looking statements except as 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.

Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Factors that could have a material adverse effect on our operations and the operations of our subsidiary, ~~First~~BayFirst ~~Home~~National Bank, include, but are not limited to, changes in:

•market interest rates and general economic conditions,

•legislative/regulatory changes,

•monetary and fiscal policies of the U.S. Government,

•the quality and composition of the loan or investment portfolios,

•demand for loan and deposit products,

~~•competition, including competition for talent,~~4

•competition,

•demand for financial services in our primary trade area,

•litigation, tax and other regulatory matters,

•accounting principles and guidelines, and

•other economic, competitive, governmental, regulatory and technological factors affecting our operations, pricing and services.

~~INDUSTRY~~INCORPORATION ~~AND~~OF ~~MARKET~~CERTAIN ~~DATA~~INFORMATION BY REFERENCE

~~Industry~~The ~~and~~SEC’s ~~market~~rules ~~data~~allow ~~used~~us into ~~this~~“incorporate ~~prospectus~~by ~~has~~reference” ~~been~~into ~~obtained~~this ~~from~~prospectus ~~independent~~certain ~~industry~~information ~~sources~~that ~~and~~we ~~publications~~file ~~available~~with to the ~~public, sometimes with a subscription fee, as well as from research reports prepared for other purposes~~SEC. WeThis ~~did~~means ~~not~~that ~~commission~~we ~~the~~can ~~preparation~~include ~~of any of the sources or publications referred to~~ in this prospectus. ~~Industry publications and surveys and forecasts generally state that the~~ information ~~contained~~by ~~therein~~referring ~~has~~you ~~been obtained from sources believed~~ to beanother ~~reliable.~~document Wealready ~~have~~on ~~not~~file ~~independently~~with ~~verified~~ the ~~data~~SEC ~~obtained~~that ~~from~~contains ~~these~~that ~~sources~~information. ~~Forward-looking~~Any information ~~obtained~~incorporated ~~from~~by ~~these~~reference ~~sources~~into ~~is subject to the same qualifications and the additional uncertainties regarding the other forward-looking statements in~~ this prospectus. ~~Trademarks~~is ~~used~~considered into ~~this~~be ~~prospectus~~part ~~are the property~~ of ~~their~~this ~~respective owners, although for presentational convenience we may not use the ® or the ™ symbols to identify such trademarks~~prospectus.

We incorporate by reference the following documents filed with the SEC:

•Our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed on March 27, 2026;

•Our Current Reports on Form 8-K filed on January 6, 2026, February 13, 2026, March 31, 2026, and April 30, 2026.

In addition, all documents subsequently filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of the offering shall be deemed to be incorporated by reference into this prospectus.

We will provide to each person, including any beneficial owner of shares of our common stock, to whom a prospectus is delivered, a copy of any or all of the reports or documents that have been incorporated by reference in the prospectus contained in the registration statement but not delivered with the prospectus. We will provide such reports or documents upon written or oral request, at no cost to the requester. Requests for such items should be made to Chief Financial Officer, Scott J. McKim, at (727) 440-6848.

You may also access these documents at our website, www.bayfirstfinancial.com.

IMPLICATIONS OF BEING AN EMERGING GROWTH COMPANY

The Jumpstart Our Business Startups Act (the “JOBS Act”), was enacted in April 2012 with the intention of encouraging capital formation in the United States and reducing the regulatory burden on newly-public companies that qualify as “emerging growth companies.” We are an “emerging growth company” within the meaning of the JOBS Act. As an emerging growth company, we intend to take advantage of certain exemptions from various public reporting requirements, including the requirement that our internal control over financial reporting be audited by our independent registered public accounting firm pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), certain requirements related to the disclosure of executive compensation in this prospectus and in our periodic reports and proxy statements, and the requirement that we hold a non-binding advisory vote on executive compensation and any golden parachute payments. We may take advantage of these exemptions until we are no longer an emerging growth company.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. We intend to avail ourselves of this exemption from new or revised accounting standards. Accordingly, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We will remain an emerging growth company until the earliest to occur of: (i) the last day of the fiscal year in which we have more than $1.07 billion in annual revenue; (ii) the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates; (iii) the date on which we have issued, in any three-~~year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of the listing of our common stock on Nasdaq.~~

For certain risks related to our status as an emerging growth company, see the, sections titled “Risk Factors,” “Risks Related to Our Securities,” and “We are an emerging growth company, and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.”5

~~iii~~year period, more than $1.0 billion in non-convertible debt securities; and (iv) the last day of the fiscal year ending after the fifth anniversary of the listing of our common stock on Nasdaq.

For certain risks related to our status as an emerging growth company, see the sections titled “Risk Factors,” and “We are an emerging growth company, as well as the other information relating to risks in documents we incorporate by reference into this prospectus and the reduced disclosure requirements applicable to emerging growth companies may make our common stock less attractive to investors.”

PROSPECTUS SUMMARY

This summary highlights information contained ~~elsewhere~~ in or incorporated by reference into this prospectus. This summary ~~does~~may not contain all of the information that you should consider inbefore ~~making~~deciding ~~your~~whether ~~investment~~or ~~decision.~~not ~~You~~you should ~~carefully~~submit ~~read~~a ~~the~~subscription. ~~following~~You ~~summary~~should ~~together~~read ~~with~~this ~~the~~ entire prospectus carefully, including the ~~sections entitled~~ “Risk Factors,” ~~“Management’s~~contained ~~Discussion~~in ~~and~~this ~~Analysis~~prospectus, ofthe ~~Financial~~“Risk ~~Condition~~Factors” ~~and~~contained ~~Results~~in ofthe ~~Operations”~~documents incorporated by reference herein, and our consolidated financial statements and the related notes, ~~before~~and ~~deciding~~the toother ~~invest~~documents inincorporated ~~our~~by ~~Common~~reference ~~Stock~~herein, before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements. See “Cautionary Note Regarding Forward-Looking Information.”

Throughout this prospectus the terms the “BayFirst,” “Company,” “we,” “our,” and “us” have been used. Unless otherwise indicated or unless the context requires otherwise, such references are meant to denote BayFirst Financial Corp. and our subsidiary, First Home Bank, on a consolidated basis.

Dividend Reinvestment and Stock Purchase Plan

This prospectus relates to the Company’s Dividend Reinvestment and Stock Purchase Plan (the “Plan”). Under the Plan, Company shareholders may reinvest their cash dividends into shares of Company common stock and make voluntary purchases of additional shares. Shares purchased by shareholders under the Plan may be purchased on Nasdaq or issued from the Company’s authorized but unissued shares.

BayFirst Financial Corp.

BayFirst ~~was~~Financial ~~incorporated~~Corp. onis ~~June~~a ~~23,~~bank ~~2000~~holding company that operates through its wholly owned subsidiary, ~~and~~BayFirst ~~commenced~~National ~~operations~~Bank. asBayFirst acommenced ~~registered~~its bank holding company operations on September 1, 2000, by acquiring all shares of the Bank. BayFirst’s primary source of income is from the Bank, which serves a broad spectrum of consumers and small businesses in the Tampa Bay/Sarasota region. BayFirst strives to be a progressive institution in its products and services, technology, design, and social responsibility. As of December 31, 2025, BayFirst had consolidated total assets of $1.30 billion, total loans held for investment of $963.9 million, total deposits of $1.18 billion, and total shareholders’ equity of $87.6 million.

OnBayFirst’s ~~April~~corporate 22office is located at the BayFirst Executive Center, ~~2021~~700 Central Avenue, weSt. ~~changed~~Petersburg, Florida 33701, and our ~~name~~telephone ~~from~~number ~~First~~is ~~Home~~(727) ~~Bancorp,~~440-6848. ~~Inc~~We maintain a website at www.bayfirstfinancial.com. This reference to ~~BayFirst~~our ~~Financial~~website ~~Corp.~~is included for the convenience of investors only and our website and the information contained therein or limited thereto is not incorporated into this prospectus or the registration statement.

~~Our~~BayFirst ~~corporate~~National ~~offices are located at the First Home Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701. Our primary source of income is from our wholly-owned subsidiary, First Home~~ Bank ~~(the “Bank”).~~

~~Stock~~The ~~Split~~Bank commenced operations on February 12, 1999, as a Florida state-chartered commercial bank. In 2022, the Bank converted its charter to a national banking association. The Bank currently operates out of its main office and eleven additional banking centers located in the Tampa Bay/Sarasota area. The Bank’s main office is located at the BayFirst Executive Center. The Bank does not engage in any foreign business activities. The Bank offers its products and services through its community banking centers. In the third quarter of 2025, the Bank discontinued its Small Business Administration ("SBA") 7(a) lending division.

~~Effective~~Community ~~May 10, 2021, BayFirst effected a three-for-two stock split. All share amounts and per share financial data contained in this prospectus have been adjusted for the split.~~Banking

NoThe ~~Recommendation~~Bank has structured its community banking services and charges for such services in a manner designed to attract consumers, small and medium sized businesses, and professionals located primarily in Pinellas, Hillsborough, Sarasota, Manatee, and Pasco Counties. The Bank focuses on customers that are seeking the flexibility and personalized relationships that a community bank can provide. The Bank offers specialized business and personal checking accounts, internet banking and online bill payment, lock box services, remote capture and deposit, cash management, wire transfers, safety deposit boxes, courier services, and Automatic Clearing House originations, among other services.

~~This~~The ~~prospectus~~Bank ~~should~~also ~~not~~offers becustomary ~~considered~~community asbank ~~our~~deposit ~~recommendation~~products, orincluding ~~advice~~interest-bearing ~~concerning~~and annoninterest-bearing ~~investment~~checking inaccounts, ~~BayFirst~~money market deposit accounts ("MMDA"), savings accounts, certificates of deposit and Individual Retirement Accounts. NoThe ~~recommendation~~consumer isproduct ~~being~~offering ~~made~~also byincludes ~~BayFirst~~unique asprograms, toincluding, ~~whether~~among ~~you~~others: ~~should~~1) ~~purchase~~the ~~shares~~Essential ofchecking ~~our~~that ~~common~~assists ~~stock.~~customers in rebuilding their access to the banking system, 2) the

First Home Bank

The Bank commenced business operations on February 12, 1999, and operates as a Florida state-chartered commercial bank and a member of the Federal Reserve System (“Federal Reserve”). On January 3, 2022, we filed an application with the Office of the Comptroller of the Currency to convert the Bank’s charter to that of a national bank.

The Bank’s main office is located at the First Home Executive Center. The Bank’s telephone number is (727) 440-6848, and the Bank’s website address is www.firsthomebank.com.

We have structured the Bank into three Divisions: the Community Banking Division, CreditBench, and the Residential Mortgage Division. Together, we expect this structure to result in a high-performing institution, producing balance sheet and revenue growth, funded primarily by a local, growing deposit base.

The Community Banking Division has seven full-service banking centers in the Tampa Bay area: five in Pinellas County, one in Hillsborough County, and one in Sarasota County. Additionally, we have purchased properties in Sarasota, Bradenton, and Tampa where we intend to open additional full-service banking centers. The Community Banking Division was established to generate core deposits and loans from businesses, professionals, and consumers located within our primary service area.

We have branded our SBA Lending Division as CreditBench. CreditBench has a nationwide government guaranteed lending platform and operates as a preferred lender under the Small Business Administration’s (“SBA”) 7(a) Loan Program. In addition to SBA guaranteed loan programs, the Bank’s CreditBench lends under the United States Department of Agriculture’s (“USDA”) Business and Industry Loan Program (“B&I”). CreditBench has also been an active lender in the Paycheck Protection Program (“PPP”), and the Bank has used the Federal Reserve’s PPP Lending Facility (“PPPLF”) to fund a material portion of the PPP loans.

CreditBench’s lending efforts are targeted to a broad range of SBA and USDA eligible industries and geographies, with a focus on building holistic banking relationships with borrowers.

The Residential Mortgage Division operates from our seven full-service banking centers and 23 loan production offices. The Residential Mortgage Division provides revenue diversification, without requiring significant capital. The Residential Mortgage Division formally began operations at the beginning of 2017.

Risk Factor Summary

Prospective investors should consider all of the information discussed under “Risk Factors” beginning on page 8 before making a decision to purchase shares of our common stock. Those Risk Factors relate to:

•Our ability to grow the size and geographic scope of our loan generation, loan sale, and deposit gathering business, and the infrastructure needed to support it;

•Possible loan defaults, devaluation of collateral, adverse economic events, and competition;

•Interest rates and available sources of liquidity;

•Our ability to raise capital and the effects of doing so on our shareholders;

•The potential that we are subject to fraud, incorrect judgments, or other bad acts of third parties;

•Laws, regulations, rules, and standards to which we are subject and the government agencies with which we interact;

•Retention and development of our key executives and other employees;

•Dividend and other restrictions placed on us by our outstanding preferred stock, restrictions that may be imposed by future issuances of preferred stock, and our pledging of the stock in the Bank to secure a loan;

•Rapidly developing technology;

•Estimates used in certain valuations, including our allowance for loan losses (“ALLL”); and

•Features of our stock, such as liquidity, dilution, the lack of preemptive rights, and the concentration of ownership among our insiders.

Our Corporate Information

Our principal executive offices are located at First Home Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701 and our telephone number is (727) 440-6848. The Bank’s website address is www.firsthomebank.com. The information contained on or accessible from our website does not constitute a part of this prospectus and is not incorporated by reference herein.

SUMMARY FINANCIAL DATA

The following tables summarize our financial data. The financial data has been derived from our unaudited consolidated financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read the following summary consolidated financial data and other data below in conjunction with the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes included elsewhere in this prospectus. The summary financial data is not all-inclusive and does not purport to contain all of the financial information that you may desire, or should consider, in determining whether to make an investment in BayFirst. BayFirst’s historical results are not necessarily indicative of results to be expected in future periods (Dollars in thousands, except per share amounts).

	At or For the Nine Months Ended September 30,						At or For the YearsEnded December 31,
	2021			2020			2020			2019
Balance Sheet Data:
Total assets	$	943,743		$	1,501,516		$	1,544,691		$	531,240
Loans held for sale	91,243			149,407			208,704			76,645
Total loans held for investment, net	639,678			1,247,840			1,207,160			303,192
Total deposits	675,034			510,142			558,784			448,594
Total shareholders’ equity	94,298			62,154			71,069			51,332
Common shareholders’ equity	83,593			50,439			55,914			43,437
Income Statement Data:
Net interest income	$	33,550		$	21,880		$	33,452		$	17,434
Provision for loan losses	(1,000)			11,900			16,900			8,869
Non-interest income	93,363			66,318			97,695			53,124
Non-interest expense	98,618			67,995			98,469			55,392
Income tax expense	7,488			1,206			3,075			1,813
Net income	21,807			7,097			12,703			4,484
Preferred stock dividends	797			557			863			463
Net income available to common shareholders	$	21,010		$	6,540		$	11,840		$	4,021
Per Share Data: (2)
Basic earnings per common share	$	5.60		$	1.91		$	3.45		$	1.27
Diluted earnings per common share	$	5.13		$	1.78		$	3.01		$	1.27
Dividends per common share	$	0.207		$	0.201		$	0.268		$	0.268
Book value per common share	$	21.32		$	14.60		$	16.04		$	12.80
Tangible book value per common share(1)	$	21.30		$	14.57		$	16.02		$	12.77
Common shares outstanding	3,919,977			3,455,190			3,485,018			3,393,788
Weighted average common shares outstanding, basic	3,749,692			3,419,617			3,430,716			3,171,061
Weighted average common shares outstanding, diluted	4,169,266			3,681,860			4,001,323			3,172,186
Performance Ratios:
Return on average assets	2.05		%	0.87		%	1.06		%	0.99		%
Return on average common equity	40.26		%	21.40		%	25.50		%	10.55		%
Net interest margin	3.26		%	2.76		%	2.88		%	4.08		%
Dividend payout ratio	3.69		%	10.51		%	7.20		%	21.05		%
Asset Quality Ratios:
ALLL to total loans held for investment	2.53		%	1.49		%	1.72		%	3.42		%
ALLL to nonperforming loans	158.32		%	136.68		%	220.76		%	127.52		%
ALLL to nonperforming loans (excluding government guaranteed balances)	442.39		%	466.18		%	636.07		%	242.10		%
Nonperforming loans to total loans held for investment	1.60		%	1.09		%	0.78		%	2.68		%

	At or For the Nine Months Ended September 30,				At or For the YearsEnded December 31,
	2021		2020		2020		2019
Nonperforming loans to total loans held for investment (excluding government guaranteed balances)	0.57	%	0.32	%	0.27	%	1.41	%
Nonperforming assets to total assets	1.11	%	0.92	%	0.62	%	1.59	%
Nonperforming assets to total assets (excluding government guaranteed balances)	0.40	%	0.27	%	0.22	%	0.84	%
Net charge-offs to average loans held for investment, annualized	0.44	%	0.62	%	0.70	%	1.44	%
Capital Ratios:
Total risk-based capital ratio (Bank)	22.50	%	16.75	%	17.02	%	17.84%
Tier 1 risk-based capital ratio (Bank)	21.21	%	15.33	%	15.72	%	16.26%
Tier 1 leverage capital ratio (Bank)	12.64	%	10.85	%	11.75	%	10.49%
Common equity Tier 1 capital ratio (Bank)	21.21	%	15.33	%	15.72	%	16.26%
Other Data:
Number of full-time equivalent employees	651		545		596		423
Number of full-service banking centers	6		6		6		5
Number of loan production offices	22		23		29		21
(1) Non-GAAP financial measure calculated as total shareholders’ equity minus preferred stock liquidation preference minus goodwill, divided by common shares outstanding.
(2) Adjusted for the three-for-two stock split, effective May 10, 2021.

RISK FACTORS

Investing in our securities involves significant risks, including the risks described below. You should carefully consider the following information about these risks, together with the other information contained in this prospectus before investing in this offering. The risks that we have highlighted here are not the only ones that we face. Additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. In addition, there are risks beyond our control. If any of these risks actually occur, our business, financial condition or results of operations could be negatively affected, and you could lose part or all of your investment.

Risk Factors Related to Our Business

We may be unable to continue to produce the volume of loans necessary to support our SBA and other government guaranteed lending business.

Our business strategy places a significant emphasis on SBA and other government guaranteed lending. In order to successfully implement this strategy, we must originate and fund a substantial dollar amount of loans. To do so, we must identify qualified and interested borrowers and have sufficient capital and liquidity to support and fund such loans. If we are not successful in implementing this strategy, our income and results of operations will be adversely affected.

The Bank’s PPP loans carry litigation risk, possible undesirable interest rate impact, and possible credit risk.

Through our online banking platform, we received a significant amount of PPP loan applications. For reasons such as our inability to determine an applicant’s eligibility, our suspicion of fraud, or other negative application characteristics, we declined to make certain PPP loans. Some of those applicants may pursue claims against the Bank based on fair lending, unfair and deceptive trade practices, or other grounds. In addition, we do not know how the SBA will manage borrowers’ forgiveness requests or our claims on SBA guarantees of PPP loans. If the SBA declines forgiveness requests or dishonors its guarantees of our PPP loans for any reason, we may suffer loan losses. In addition, litigation can be costly, regardless of outcome. Any financial liability, litigation costs or reputational damage caused by PPP related litigation could have a material adverse impact on our business, financial condition and results of operations.

In addition, PPP loans are fixed, low interest rate loans that are guaranteed by the SBA and subject to numerous other regulatory requirements, and a borrower may apply to have all or a portion of the loan forgiven. If PPP borrowers fail to apply or qualify for loan forgiveness, the Bank faces a heightened risk of holding these loans at unfavorable interest rates for an extended period of time. While the PPP loans are guaranteed by the SBA, various regulatory requirements will apply to the Bank’s ability to seek recourse under the guarantees, and related procedures are currently subject to uncertainty.

The Bank also has credit risk on PPP loans if a loan is not forgiven and the SBA determines that the Bank did not originate, close, or service a loan in accordance with legal standards. In the event the SBA dishonors its guarantee for one of those reasons, the Bank may be forced to hold the loan and may incur a loss if the borrower does not perform as agreed.

We depend on the sale of both the guaranteed and unguaranteed portions of our government guaranteed loans, but also face risks relating to the retained portions of unguaranteed loans.

Our strategy historically has been, and may continue to be, to sell both the guaranteed balances of SBA and other government guaranteed loans, as well as a percentage of the unguaranteed portions of such loans, within legally allowable limits. A material portion of our net income and profitability depended, and may continue to depend, on gains on sales of the guaranteed portions of the government guaranteed loans that we originate. We also from time to time pursue the sales of unguaranteed portions of such loans, which provide us with additional liquidity and capital capacity to permit us to make additional loans when needed. Our ability to sell both the guaranteed and unguaranteed portions of these loans is dependent upon our ability to identify purchasers with the demand and capacity to buy them, the attractiveness of the loans, our underwriting quality, and other factors. Our business strategy pertaining to SBA and other government guaranteed loans changed in late 2018, when we

started to transition to holding an increased amount of the guaranteed portions of these loans. Our ability to continue to make new loans and hold them in our loan portfolio will be limited by our current capital and liquidity positions, and due to our change in business model, our income and results of operations may be adversely affected in the immediate near term. To the extent we retain the unguaranteed portion of these loans in our portfolio, we may be required to make significant provisions to our ALLL.

Our loan origination processes present heightened opportunities for borrower or referral fraud.

The loans we originate through our technology partners and referral sources are obtained primarily through an online application process. We do not generally meet with the borrowers in person. Our referral sources also are involved in assisting the borrowers’ with completing their loan applications. Therefore, it is difficult for us to definitively ascertain or confirm a borrower’s identity, structure, creditworthiness, or veracity in completing the loan application process. If a borrower or a referral source intentionally, or unintentionally, provides us with incorrect information that we rely on in underwriting a loan, we will be subject to increased credit risk for that loan. Such increased risk could result in increased loan losses or heightened provisions to our ALLL, either of which would adversely affect our credit quality and net income. We may also become subject to heightened regulatory scrutiny for making loans to such borrowers and may be required to dedicate time and other resources to addressing regulatory concerns.

Our loan referral sources operate independently from us and may take actions for which we may be held responsible.

Our referral sources for SBA and other government guaranteed loans operate independently from us and have the initial interactions with many loan applicants and borrowers. As part of those interactions, our referral sources may take actions which violate laws, regulations, or our policies. These may include, among other things, charging impermissible fees, failing to provide or properly complete required documentation or disclosures, making false or misleading statements, or encouraging an applicant to make misrepresentations. In certain instances, the Bank may be held responsible by an applicant or a government agency for such actions. If that were to happen, the Bank may be required to pay restitution or fines, be subject to regulatory enforcement actions, or lose certain statuses with the SBA or other government agencies.

We heavily rely on technology partners and other referral sources in our SBA loan origination process.

As part of our SBA lending strategy, we use the services of technology partners and other referral sources. These arrangements allow us to originate loans throughout the U.S. via the internet. We do not have an exclusivity arrangement with any referral source. Therefore, we cannot be assured that we will be able to originate and close or maintain any specific level of SBA loans through such sources in the future. In addition, our technology partners are subject to online commerce risks generally, including hacking and use of the site by persons using fraudulent credentials. Should we not continue to generate a substantial volume of loan business through our use of referral sources, or if they experience operational interruptions, or direct loans to other lenders, our SBA lending will be materially reduced, which would reduce our net income and our asset growth.

Our operations are growing at a rapid pace and our training programs and operational protocols may lag behind our growth.

Our branch network and mortgage and SBA lending operations are expanding at a rapid pace. As a result, we may not be able to provide comprehensive or timely training to new staff or employees who are promoted.

We may also not develop appropriate operational protocols as quickly as we expand our products and services. If we fail to do so, our employees may not have a set of standards and expectations pursuant to which they perform their assigned duties. If we are not able to fully and promptly provide training to our employees, or develop appropriate protocols, our employees may be susceptible to mistakes, fail to recognize fraud or other weaknesses in our operations, or fail to recognize or mitigate other risks.

~~The~~TrendSetters ~~COVID-19~~Club ~~pandemic~~which ~~may~~offers ~~adversely~~special ~~impact~~benefits ~~our~~for ~~business~~those ~~and~~customers ~~financial~~age ~~results~~50+ years, and 3) the ~~ultimate~~Cash ~~impact~~Kids’ ~~will~~Club ~~depend~~savings onaccount ~~future~~that ~~developments,~~offers ~~which~~those ~~are~~age ~~highly~~12 ~~uncertain~~and under special rates while teaching children basic financial skills through interactive and ~~cannot~~mobile beapplication ~~predicted~~tools. The Bank’s business deposit products and related services include free checking accounts, ~~including~~interest-bearing ~~the~~checking ~~scope~~accounts, savings accounts, MMDA, and ~~duration~~access ofto ~~the~~business ~~pandemic~~mobile and ~~actions~~online ~~taken~~banking, bytreasury ~~governmental~~management, ~~authorities~~cash inmanagement, ~~response~~merchant toprocessing ~~the~~services, ~~pandemic~~lock box services, remote deposit capture, and night depository.

~~The~~A ~~COVID-19~~wide ~~pandemic~~range ~~has~~of ~~negatively~~loans ~~impacted~~are ~~the~~also ~~global economy~~offered, ~~disrupted~~including ~~global supply chains~~commercial, ~~created significant volatility and disruption in financial markets~~consumer, and ~~increased~~real ~~unemployment~~estate ~~levels~~loans. InThe ~~addition,~~commercial ~~the~~lending ~~pandemic~~efforts ~~has~~are ~~resulted~~directed inprincipally ~~closures~~toward ~~of many~~ businesses and ~~the~~professionals ~~institution~~who ofotherwise ~~social~~do ~~distancing~~business ~~requirements~~with ~~in many states and communities. As a result~~us, ~~the demand for our products~~ and ~~services~~include ~~may~~commercial bereal ~~significantly~~estate ~~impacted~~mortgages, ~~which~~construction ~~could adversely affect the implementation of our growth strategy. Furthermore, the pandemic could cause the recognition of loan losses or other impairments in our loan portfolios~~ and ~~increases~~development ~~in our allowance for credit losses~~loans, ~~particularly~~working ifcapital ~~businesses remain closed~~loans, ~~the~~and ~~impact~~business onexpansion ~~the global economy worsens, or more clients draw on their lines of credit or seek additional~~ loans ~~to help finance their businesses~~. ~~Similarly,~~BayFirst ~~because~~focuses ~~of changing economic and market conditions affecting issuers, we may be required to recognize further impairments~~ on providing the ~~investment~~customer ~~securities~~quick ~~we hold as well as reductions in other comprehensive income. Our business operations may also be disrupted if significant portions of our workforce are unable to work effectively~~turnaround, ~~because~~competitive ~~of illness~~rates, ~~quarantines,~~and ~~government~~an ~~actions,~~easy orapplication ~~other restrictions in connection with the pandemic~~process. The ~~extent~~Bank tooffers ~~which~~personal ~~the~~lines ~~COVID-19~~of ~~pandemic impacts our business~~credit, ~~results of operations~~auto, ~~and financial condition~~boat, ~~as well as our regulatory capital~~ and ~~liquidity~~recreational ~~ratios~~vehicle loans, ~~will~~residential ~~depend on future developments~~mortgages, ~~which are highly uncertain~~ and ~~cannot~~home beequity ~~predicted,~~lines ~~including the scope and duration~~ of ~~the~~credit. ~~pandemic~~The ~~and~~Bank ~~actions~~has ~~taken~~been byparticularly ~~governmental~~successful ~~authorities and other third parties~~ in ~~response~~penetrating to the ~~pandemic~~small business community.

~~The~~As ~~effects~~ of ~~future~~December ~~widespread~~31, ~~public~~2025, ~~health~~the ~~emergencies~~Bank ~~may~~operated ~~negatively~~from ~~affect~~twelve ~~our~~banking ~~local~~centers ~~economies~~in orthe ~~disrupt~~Tampa ~~our~~Bay ~~operations~~area: five in Pinellas County, ~~which~~two ~~would~~in ~~have~~Hillsborough anCounty, ~~adverse~~one ~~effect~~in onManatee ~~our~~County, ~~business~~and orfour ~~results~~in ofSarasota ~~operations~~County.

~~Widespread~~Recent health emergencies, such as the global COVID-19 pandemic, can disrupt our operations through their impact on our employees, clients and their businesses, and the communities in which we operate. Disruptions to our clients could result in increased risk of delinquencies, defaults, foreclosures and losses on our loans, negatively impact regional economic conditions, result in a decline in local loan demand, loan originations and deposit availability and negatively impact the implementation of our growth strategy. Any one or more of these developments could have a material adverse effect on our business, financial condition and results of operations.Developments

APrivate ~~shutdown of the Federal government would likely result in us being temporarily unable to make SBA and other government guaranteed loans.~~Placement

IfOn April 28, 2026, the ~~Federal~~Company ~~government~~entered ~~experiences~~into a ~~shutdown,~~Securities itPurchase isAgreement ~~likely~~with ~~that~~Kenneth ~~the~~R. ~~SBA,~~Lehman and other ~~agencies~~investors ~~which~~(each, ~~guaranty~~a ~~the~~“Purchaser” ~~types~~and ~~of loans we make~~collectively, ~~will~~the ~~be unable to process those loans~~“Purchasers”). AsPursuant ~~a result, our ability~~ to ~~make~~the ~~those~~Securities ~~loans~~Purchase ~~would be delayed. During such a delay~~Agreement, iton ~~is possible~~ that ~~prospective~~same ~~borrowers~~date, ~~could~~the ~~obtain~~Company ~~financing~~issued ~~from~~and ~~other~~sold ~~sources or elect not~~ to ~~borrow. Any delay in closing these types of loans, or losing~~ the ~~opportunity to make them~~Purchasers, ~~could result~~ in ~~decreased~~the ~~fee~~aggregate: ~~and interest income and adversely affect our financial performance.~~

~~The~~(i) 4,000 ~~continued~~shares ~~development~~(the “Series D Shares”) of ~~our~~the ~~mortgage~~Company’s ~~lending~~Mandatorily ~~business~~Convertible ~~will~~Cumulative ~~depend~~Perpetual onPreferred ~~our~~Stock, ~~ability~~Series toD, ~~attract~~no ~~and~~par ~~retain~~value ~~effective~~(the ~~loan~~“Series ~~origination~~D ~~officers~~Preferred ~~and~~Stock”), ~~other~~at ~~sources~~a purchase price of ~~mortgage~~$10,000 ~~loan~~per ~~referrals.~~Series D Share; and

~~The~~(ii) 4,000 ~~mortgage~~shares ~~lending business is highly dependent on being able to successfully originate a consistent volume of loans. The primary ways we do this is through~~ (the ~~personal~~“Series ~~sales~~E ~~efforts~~Shares” ~~of our mortgage lending officers~~ and ~~our~~together ~~development~~with ofthe ~~loan~~Series ~~referral~~D ~~sources~~Shares, ~~such~~the as“Preferred ~~real~~Shares”) ~~estate brokers. If we are unable to attract and retain a productive team~~ of ~~such~~the ~~officers~~Company’s orMandatorily ~~develop~~Convertible anCumulative ~~effective~~Perpetual ~~network~~Preferred ofStock, ~~referral~~Series ~~sources~~E, weno ~~will~~par ~~likely~~value, beat ~~unable to generate~~ a ~~volume~~purchase ofprice ~~mortgage loans to produce sufficient revenue for this line~~ of ~~business to be profitable. If we cannot operate this line of business in a profitable manner~~$10,000 weper ~~will~~Series ~~likely~~E ~~incur significant losses due to expenses associated with establishing the line of business.~~Share,

~~Changes~~ in ~~interest~~a ~~rates~~private ~~can~~placement ~~impact~~ (the ~~value~~“Private ofPlacement”), ~~our~~for ~~mortgage~~gross ~~servicing~~proceeds ~~rights~~of ~~and can result in revenue volatility~~$80, ~~which can reduce earnings~~000,000.

~~The~~Subject ~~Bank~~to ~~began~~certain ~~selling~~ownership ~~residential~~limitations, ~~mortgage~~the ~~loans~~Preferred ~~originated~~Shares are convertible (or, in the ~~Tampa~~case ~~Bay~~of ~~market~~Mr. ~~with~~Lehman, ~~servicing~~as ~~retained~~provided inpursuant ~~April~~to ~~2021~~the ~~and~~Exchange ~~thus,~~Agreement ~~has~~described ~~begun~~herein toexchangeable) ~~build~~into ashares ~~portfolio~~of Common Stock (the “Underlying Preferred Shares”) at the initial conversion rate of ~~mortgage~~2,857 ~~servicing~~shares ~~rights~~of Common Stock per Preferred Share, which ~~are~~conversion ~~the~~rate ~~right~~is tobased ~~service~~on aan ~~mortgage~~initial ~~loan~~conversion ~~for~~price aof ~~fee,~~$3.50 byper ~~collecting~~share ~~principal,~~of ~~interest,~~Common Stock and ~~escrow~~is ~~payments.~~subject ~~The~~to ~~Bank~~certain ~~initially~~adjustments ~~carries~~(the ~~such~~“Conversion Rate”).

Pursuant to the terms of the Securities Purchase Agreement, Mr. Lehman is entitled to designate one individual to be appointed to the Company’s and the Bank’s boards of directors, subject to any required regulatory approvals, waivers, or non-objections. Mr. Lehman has also been granted gross-up rights to acquire from the Company any equity or equity-linked securities (with certain exceptions) offered by the Company in order to enable him to maintain his proportionate ownership interest in the Company as immediately prior to such issuance.

The Bank and Mr. Lehman will work together to identify specific work-out assets and develop and adopt a mutually agreeable asset resolution plan pursuant to which the Bank will accelerate its work-out strategy with respect to those identified assets.

Shareholder Approvals

The Company will use its reasonable best efforts to hold a shareholder meeting in July 2026, to obtain shareholder approval of:

~~rights~~(i) an ~~using~~amendment ato ~~fair value measurement of~~ the ~~present~~Company’s ~~value~~articles of ~~the~~incorporation ~~estimated~~to ~~future~~increase ~~net servicing income, which includes assumptions about~~ the ~~likelihood~~number of ~~prepayment~~authorized byshares ~~borrowers.~~of ~~Changes~~Common inStock ~~interest rates can affect prepayment assumptions and thus fair value. When interest rates fall, prepayments tend~~ to ~~increase~~at asleast ~~borrowers refinance~~100,000,000 ~~and~~shares (the ~~fair~~“Articles ~~value~~Amendment ofApproval”); ~~mortgage servicing rights can decrease, which in turn reduces our earnings.~~and

~~Changes~~(ii) the inissuance of the ~~laws~~Underlying orPreferred ~~regulations~~Shares ~~governing~~pursuant ~~our~~to ~~SBA~~applicable ~~and~~listing ~~other~~standards ~~government~~of ~~guaranteed~~the ~~lending~~The ~~activities~~Nasdaq ~~and~~Stock ~~our~~Market ~~mortgage~~LLC ~~lending~~(the ~~business~~“Issuance ~~may~~Approval” ~~adversely~~and ~~affect~~together ~~our~~with ~~ability~~the toArticles ~~operate~~Amendment ~~them~~Approval, ~~profitably~~the “Stockholder Approvals”).

~~Our~~If ~~SBA~~either ~~and~~of ~~other~~the ~~government~~Stockholder ~~lending~~Approvals ~~programs~~are ~~and~~not ~~our~~obtained ~~mortgage~~at ~~lending~~the ~~activities~~initial ~~are~~shareholder ~~subject~~meeting tocalled ~~laws and regulations administered~~ by ~~government agencies such as~~ the ~~SBA~~Company, then the ~~United~~Company ~~States~~will ~~Department~~include ofproposals ~~Housing~~to ~~and~~approve ~~Urban~~such ~~Development,~~Stockholder ~~and~~Approvals ~~the~~at ~~United~~a ~~States~~meeting ~~Department~~ of ~~Agriculture.~~its Ifshareholders ~~any~~no ofless ~~these~~than ~~laws~~once orin ~~regulations~~each ~~change,~~subsequent orthree-month ~~the~~period ~~policies~~beginning ~~and~~on ~~practices~~the date of ~~these agencies change,~~ such ~~changes~~previous ~~may~~shareholder ~~impact~~meeting ~~our~~until ~~ability to offer~~ such ~~products~~approval inis aobtained. ~~profitable~~If ~~manner,~~the orCompany atdoes ~~all.~~not Ifobtain wethe ~~are~~Stockholder ~~unable~~Approvals toby ~~profitably~~December ~~offer~~15, ~~these products~~2026, ~~our~~it ~~net income~~ will ~~likely~~be ~~decrease~~obligated ~~and~~to ~~our~~pay ~~financial~~an ~~condition~~11% ~~and~~cumulative ~~performance~~dividend ~~will~~on ~~likely~~the ~~deteriorate~~Preferred Shares.

WeIn ~~may~~the event that the Company has obtained the Issuance Approval but the Company’s shareholders have not beapproved ~~able~~the Articles Amendment Approval, the Company will effect a “Partial Conversion” of the Series D Preferred Stock, whereby outstanding shares of Series D Preferred Stock will automatically convert into shares of Common Stock, but only to ~~retain~~the orextent ~~grow~~of ~~our~~the ~~core~~total ~~deposit~~number ~~base~~of shares of Common Stock available for issuance by the Company pursuant to its then effective articles of incorporation (taking into consideration any shares previously reserved for issuance), ~~which~~allocated ~~could~~pro ~~adversely~~rata ~~impact~~among ~~our~~the ~~funding~~holders ~~costs~~of the Series D Preferred Stock and the Series E Preferred Stock.

WeRegistration ~~rely~~Rights on client deposits as our primary source of funding for our lending activities. Our future growth will largely depend on our ability to retain and grow our core deposit base. Our retention and acquisition of customer deposits are subject to potentially dramatic fluctuations in availability or price due to certain factors outside of our control, such as increasing competitive pressures for deposits, changes in interest rates and returns on other investment classes, client perceptions of our financial health and general reputation, or a loss of confidence by clients in us or the banking sector generally. Such factors could result in significant outflows of deposits within short periods of time or significant changes in pricing necessary to maintain current client deposits or attract additional deposits. Additionally, any such loss of funds could result in lower loan originations, which could have a material adverse effect on our business, financial condition and results of operations.Agreement

WeSimultaneous ~~have~~with ~~expanded~~entering into ~~new~~the ~~markets~~Securities ~~with~~Purchase ~~which~~Agreement, wethe ~~have~~Company ~~less~~and ~~familiarity~~the ~~with~~Purchasers ~~than~~entered ~~our~~into ~~historic~~a ~~markets~~Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company will register for resale the Common Shares and the Underlying Preferred Shares (collectively, the “Registrable Securities”). The Company has agreed to file with the Securities and Exchange Commission (the “SEC”) a registration statement registering the Registrable Securities for resale by the Purchasers by the earliest of:

We(i) 30 ~~currently~~days ~~operate~~after ~~residential mortgage loan production offices in a number of states. We intend to continue to expand~~ the ~~geographic~~Stockholder scope of our loan origination efforts when we identify attractive opportunities. Our senior management and Board of Directors have less familiarity with these markets than they do with our Florida markets. We are dependent on the expertise and actions of the bankers we have hired in those markets for us to be successful there. We are also subject to risks associated with home values and the economic conditions in those markets. If our bankers are not effective at implementing our business strategy, leave the Bank, or are otherwise not successful, or if economic conditions and home values deteriorate, we will likely incur losses as a result of expansion into their markets.Approvals;

We(ii) 30 ~~are~~days ~~dependent~~after onthe ~~our~~Partial ~~management~~Conversion; ~~team~~ and ~~any of their departure or subsequent employment with a competitor could adversely affect our operations.~~

~~Our~~(iii) ~~growth~~December ~~and~~15, ~~development are particularly dependent upon the personal efforts and abilities of our executive officers and other qualified personnel~~2026. The loss or unavailability of such officers or employees could have a material adverse effect on our operations and prospects. Such adverse effect may be magnified if any such officer or employee were to become employed with a competitor of ours.

WeThe ~~have~~Company ~~pledged~~shall ~~the~~use ~~outstanding~~its ~~shares~~commercially ofreasonable ~~the~~efforts ~~Bank~~ to ~~secure~~cause asuch ~~loan,~~registration ~~and~~statement ifto webe ~~cannot~~declared ~~repay~~effective ~~the~~by ~~loan when due,~~ the ~~lender~~SEC ~~may~~and ~~foreclose~~to onkeep ~~the~~such ~~loan~~registration ~~and~~statement ~~take~~effective ~~ownership~~until of the ~~Bank.~~earlier of:

We(i) such ~~have~~time ~~pledged~~as ~~100%~~all of the ~~outstanding~~Registrable ~~shares~~Securities ofcovered ~~the~~by ~~Bank’s~~such ~~capital~~registration ~~stock~~statement ~~to secure a term loan with another financial institution with a balance of $3.3 million as of December 31, 2021. If we do not~~ have ~~cash~~been ~~available~~publicly atsold ~~BayFirst~~by ~~or we are unable to fund dividends from~~ the ~~Bank~~holders tothereof; ~~BayFirst, we may not be able to make principal or interest payments due on the loan. If we cannot repay or refinance the loan on or prior to maturity, the lender may foreclose on the pledged stock~~ and ~~take ownership of the Bank. In which case, we may not have any source of revenue and it would be unlikely that we would continue to operate. The loan currently matures on March 10, 2029.~~

(ii) the date on which all Common Shares and Underlying Preferred Shares cease to be Registrable Securities.

If the Company fails to file the registration statement or have it declared effective by certain deadlines, if the registration statement ceases to remain effective, subject to specified grace periods, or if the Company fails to satisfy the current public information requirement of Rule 144(c)(1) under the Securities Act of 1933, as amended (the “Securities Act”), then the Company will pay monthly liquidated damages to the holders of Registrable Securities in an amount 1.0% of the aggregate purchase price paid by such Purchaser pursuant to the Securities Purchase Agreement for any unregistered Registrable Securities then held by such Holder, subject to certain caps and limitations. The Company will pay all fees and expenses incident to the Company’s performance of its obligations under the Registration Rights Agreement, excluding (with certain exceptions) any underwriting discounts, selling commissions, fees of underwriters, selling brokers, dealer managers or similar securities industry professionals and all legal fees and expenses of legal counsel for any holder of Registrable Securities. The Company and the Purchasers agreed to provide each other with certain indemnification and contribution rights.

Exchange Agreement

Simultaneous with entering into the Securities Purchase Agreement, the Company and Mr. Lehman entered into an Exchange Agreement, whereby the Company agreed under certain conditions to issue shares of Common Stock in exchange for Series E Shares held by Mr. Lehman. Each exchange is subject to the Stockholder Approvals and

WeMr. ~~engage~~Lehman inobtaining ~~transactions~~the ~~with~~necessary ~~our~~approvals ~~directors~~and authorizations of, filings and ~~their~~registrations ~~related~~with, ~~interests~~notifications to, ~~which~~or ~~creates~~expiration or termination of any applicable waiting period under, the ~~potential~~Change ~~for~~in ~~conflicts~~Bank ofControl ~~interest~~Act.

WeThe ~~lease~~representations, warranties, and covenants of the ~~office~~Company set forth in the Securities Purchase Agreement and ~~branch~~the ~~space~~Exchange atAgreement ~~our~~have ~~headquarters~~been ~~from~~made aonly ~~corporation~~for purposes of, ~~which~~and ~~our~~were ~~director~~and ~~George~~are ~~Apostolou~~solely isfor anthe ~~officer~~benefit ~~and~~of ~~director.~~the Inparties ~~addition~~to, ~~directors~~the ~~Mark~~Securities S.Purchase ~~Berset~~Agreement and ~~Derek~~the S.Exchange ~~Berset~~Agreement, ~~are~~may ~~owners~~be ofsubject anto ~~insurance~~limitations ~~agency~~agreed ~~from~~upon ~~which~~by the ~~Bank~~contracting ~~purchases~~parties ~~insurance.~~and ~~From~~standards ~~time~~of tomateriality ~~time~~applicable to the ~~Bank~~contracting ~~makes~~parties ~~loans~~that differ from those applicable to investors. Accordingly, the representations and ~~accepts~~warranties ~~deposits~~may ~~from,~~not ~~officers~~describe ~~and~~the ~~directors~~actual state of affairs at the date they were made or at any other time, and ~~their~~investors ~~affiliates~~should not rely on them as statements of fact. ~~Further~~In addition, ~~from~~such ~~time~~representations toand ~~time~~warranties, inunless ~~the~~otherwise ~~ordinary~~specified ~~course~~therein, were made only as of ~~business,~~the date of the ~~Company~~Securities ~~has~~Purchase ~~entered~~Agreement ~~into~~and ~~transactions~~the ~~with~~Exchange ~~certain~~Agreement, ~~members~~and information concerning the subject matter of ~~its~~the ~~Board~~representations and warranties may change after the date of ~~Directors~~the ~~for~~Securities ~~various~~Purchase ~~professional~~Agreement ~~services~~and the Exchange Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

~~Such insider transactions present reputational and corporate governance risks to BayFirst and the~~ Bank. ~~Insider~~Chief ~~transactions~~Executive ~~often~~Officer ~~draw the scrutiny of regulators~~ and shareholders. If they were to identify terms of the transactions, or aspects of the process through which we entered into them, that they deemed to be inappropriately unfavorable to BayFirst or the Bank, such regulators or shareholders might take enforcement or legal action against us. Similarly, insider transactions may present an opportunity for taking advantage of BayFirst or the Bank. If any such events were to occur, BayFirst and the Bank may incur expenses or become engaged in time consuming enforcement or legal processes that could negatively affect our performance.President

WeOn ~~may~~April ~~not~~28, be2026, ~~able~~the Bank appointed Alfred T. (“Al”) Rogers, Jr. to ~~collect~~serve onas its President and Chief Executive Officer, and as a member of its board of directors. Subject to the ~~guarantees~~non-objection of ~~our~~the ~~SBA~~Federal orReserve ~~other~~Bank ~~government~~of ~~guaranteed~~Atlanta, ~~loans~~the ifCompany ~~borrowers~~intends ~~default~~to appoint Mr. Rogers to serve as its President and Chief Executive Officer, and as a member of its board of directors.

InMr. ~~order~~Rogers, toage ~~collect~~61, onand ~~their~~began ~~guarantees~~his banking career at First Union National Bank. Upon completion of that bank’s training program, wehe ~~must~~served ~~strictly~~as ~~comply~~a ~~with~~Commercial Banker in the ~~standards~~Tampa, ~~set~~Lakeland, byand ~~the~~Nashville ~~SBA~~markets orfrom ~~other~~1987 ~~government~~to ~~agencies~~1997. IfIn ~~our~~1997, ~~government~~Mr. ~~guaranteed~~Rogers ~~loans~~joined orManufacturers ~~our~~Bank ~~servicing~~of Florida in Tampa, where he served as Chief Executive Officer and ~~administration~~a member of ~~them~~its doboard ~~not~~of ~~comply~~directors. ~~with~~During ~~such~~this ~~standards~~time, wehe ~~may~~was ~~not~~involved bein ~~able~~all toaspects ~~collect~~of onexpanding ~~their~~the ~~guarantees~~bank inthrough organic growth as well as the ~~event~~acquisition of ~~default~~Partners Savings Bank of Tampa. In ~~such~~2001, ~~case~~Mr. Rogers was instrumental in selling Manufacturers Bank of Florida to Colonial Bank and began serving Colonial Bank as President and Senior Lender of the Tampa Bay market. Mr. Rogers joined USAmeriBank in 2007 as its Executive Lending Officer. Under his leadership, ~~our~~that ~~asset~~bank ~~quality~~grew from its 2007 de novo status to the Tampa Bay area’s largest independent community bank, ~~earnings~~with assets of more than $4.6 billion. Upon the acquisition of USAmeriBank by Valley National Bank in January 2018, Mr. Rogers serves as Valley National Bank’s Executive Vice President and ~~growth~~Chief ~~prospects~~Lending ~~will~~Officer befor ~~adversely~~Florida ~~affected~~and Alabama until August of 2022, when he retired from those positions.

~~Our~~Also ~~Internet~~effective on April 28, 2026, the Company, the Bank, and Mr. Rogers entered into an Employment Agreement. The Employment Agreement’s initial term will expire on May 1, 2029. On May 1, 2027, and each subsequent May 1st, the Employment Agreement shall automatically be extended for an additional one-~~based~~year ~~systems~~period unless any party provides notice of non-renewal. Mr. Rogers will receive a minimum annual salary of $450,000. He will also receive an automobile allowance, reimbursement for country club memberships, and ~~online~~a ~~commerce~~term ~~activities~~life ~~are~~insurance ~~subject~~policy. He is also eligible to ~~security~~participate ~~threats~~in ~~that~~any ~~could~~of ~~adversely~~the ~~affect~~Bank’s ~~our~~or ~~business~~the Company’s employee benefit plans and programs. He is also entitled to receive specific stock and cash incentive payments based on his and the Bank’s performance.

~~Third~~The ~~party,~~Employment orAgreement ~~internal,~~subjects ~~systems and networks may fail to operate properly or become disabled due to deliberate attacks or unintentional events~~Mr. ~~Our~~Rogers ~~operations are vulnerable~~ to ~~disruptions from human error~~two-year, ~~natural disasters~~post-termination, ~~power~~customer ~~loss, computer viruses, spam attacks, denial of service attacks, unauthorized access,~~ and ~~other~~employee ~~unforeseen~~non-solicitation ~~events~~obligations. ~~Undiscovered~~Upon ~~data~~a ~~corruption~~“change ~~could~~in ~~render our customer information inaccurate. These events may obstruct our ability to provide services~~control,” ~~underwrite loans, and process transactions~~Mr. ~~Any~~Rogers ~~such~~will ~~incident~~be ~~could~~entitled ~~put customer confidential information at risk, which may result in significant liability~~ to ~~us,~~receive ~~subject us to additional regulatory scrutiny, damage our reputation, result in~~ a ~~loss~~cash ofpayment ~~customers,~~equal ~~cause us~~ to ~~incur~~2.99 ~~significant~~times ~~expense~~his tothen ~~remediate~~current ~~any~~base ~~damage~~salary and ~~inhibit~~target ~~current~~bonus ~~and~~for ~~potential~~that ~~customers from using our online banking services, any or all of which could have a material adverse effect on our results of operations and financial condition~~year.

~~The~~[Remainder ~~valuation~~ of ~~our~~this ~~SBA~~page ~~and~~intentionally ~~USDA~~left ~~related servicing rights is based on estimates and subject to fluctuation based on market conditions and other factors that are beyond our control.~~blank]

The fair value of our SBA and USDA servicing rights is estimated by a third party based upon projections of expected future cash flows generated by the loans we service, historical prepayment rates, future prepayment estimates, portfolio characteristics, interest rates based on interest rate yield curves, volatility, market demand for servicing rights, and other factors. While this evaluation process uses historical and other objective information, the valuation of our servicing rights is ultimately an estimate based on our experience, judgment, and expectations regarding our servicing portfolio and the broader market. This is an inherently uncertain process and the value of our servicing rights may be adversely impacted by factors that are beyond our control, which may in turn cause us to record valuation allowances which could have a material adverse effect on our business, results of operations, and financial condition.

Changes in business and economic conditions, in particular those of the Florida markets in which we operate, could lead to lower asset quality and decreased earnings.

Unlike larger national or regional banks that are more geographically diversified, our business and earnings are closely tied to general business and economic conditions in our market area. The local economy is heavily influenced by tourism, real estate, and other service-based industries. Factors that could affect the local

~~economy~~SUMMARY ~~include~~OF ~~declines~~THE in tourism, higher energy costs, reduced consumer or corporate spending, natural disasters or adverse weather and a significant decline in real estate values. A sustained economic downturn could adversely affect the quality of our assets, credit losses, and the demand for our products and services, which could lead to lower revenue and lower earnings.OFFERING

~~Our~~The ~~credit~~following ~~quality~~summary ~~may~~describes the principal terms of this offering, but is not intended to be ~~less~~complete. ~~favorable~~See ~~than~~the ~~reported~~information ~~because~~under ofthe ~~loan~~heading ~~payment~~“The ~~deferrals~~Offering” ~~and~~in ~~certain~~this ~~loan~~prospectus ~~payments~~for ~~made~~a bymore detailed description of the ~~SBA~~terms and conditions of this offering.

~~The~~Securities ~~majority~~Offered ofWe ~~our~~are ~~loan~~offering ~~portfolio~~up ~~consists~~to ~~of SBA loans~~4, ~~most of which received from the SBA principal and interest payments under the CARES Act during 2020 and have received from the SBA at least three months of payments in 2021. In addition~~108,072 weshares ~~have granted many borrowers payment deferrals and may continue to do so. Because~~ of ~~these actions,~~ our ~~asset~~common ~~quality trends may appear more favorable than they otherwise would without such payments or deferrals~~stock. If our borrowers are unable to make their loan payments after the expiration of the SBA’s payment support or our deferrals, we may experience loan defaults or other deterioration in our credit quality. This may result in higher provisions to our loan loss reserve or loan defaults. Such events could lead to lower earnings or losses.

~~Most~~Subscription ~~expansion~~Privilege ~~activities~~You ~~require~~may ~~approval~~submit ofa ~~our~~subscription ~~regulators,~~for ~~which~~one weshare ~~may~~for ~~not~~each beshare ~~able~~you toowned ~~obtain~~as of the record date. However, orif ~~that~~you ~~may~~purchased ~~impose~~shares ~~conditions~~in ~~that~~our werecent ~~find~~private toplacement, beyou ~~unacceptable~~may not participate in this offering.

~~Branch~~Record ~~openings,~~Date ~~and~~5:00 ~~other expansion activities, generally require the approval of our regulators~~p. ~~We may not be able to obtain such approvals if our regulators do not believe we are financially or managerially strong enough to integrate or manage such activities~~m. ~~In addition~~, ~~our~~Eastern ~~regulators consider our capital~~time, ~~liquidity,~~on ~~profitability,~~May ~~regulatory compliance~~12, ~~including with the Community Reinvestment Act and the Bank Secrecy Act, and levels of goodwill and intangibles when considering acquisition and expansion proposals~~2026. Our regulators may also impose conditions in approvals that we find to be unacceptable, prohibitive, or otherwise undesirable. In any of those instances, we may be unable or unwilling to consummate a transaction or undertake an expansionary activity.

WeExpiration ~~are~~of ~~subject~~the toOffering ~~numerous~~5:00 ~~laws designed to protect consumers~~p.m., ~~including~~Eastern ~~the Community Reinvestment Act and fair lending laws~~time, ~~and failure to comply with these laws could lead to material penalties and have negative effects~~ on ~~our~~___, ~~business~~2026.

~~The~~Subscription ~~Community~~Price ~~Reinvestment~~$3.50 ~~Act,~~per ~~the Equal Credit Opportunity Act~~share, ~~the~~payable ~~Fair~~in ~~Housing Act, and other fair lending laws and regulations impose obligations and nondiscriminatory lending requirements on financial institutions~~cash. ~~The~~To ~~banking~~be ~~regulators~~effective, ~~and~~any ~~the~~payment ~~U.S.~~related ~~Department~~to ofa ~~Justice~~subscription ~~are~~must ~~responsible~~clear ~~for~~prior ~~enforcing these laws and regulations. A successful regulatory challenge~~ to ~~an institution’s performance under~~ the ~~Community~~expiration ~~Reinvestment Act or fair lending laws and regulations could result in a wide variety~~ of sanctions, including damages and civil money penalties, injunctive relief, restrictions on branch expansion, merger and acquisition activity, and restrictions on entering new business lines. Private parties may also have the ~~ability to challenge our performance under fair lending laws in private class action litigation~~offering. ~~Such actions could have a material adverse effect on our business, financial condition, results of operations, and future prospects.~~

Use of Proceeds We ~~may~~estimate bethat ~~required~~the tonet ~~make~~proceeds ~~increases~~that inwe ~~our~~will ~~ALLL~~receive from this offering, after deducting sales agent commissions and the estimated offering expenses payable by us, will be approximately $13.8 million. We intend to ~~charge~~use ~~off~~the ~~loans~~net inproceeds to improve the ~~future~~capital levels of the Company and the Bank, ~~which~~fund ~~could~~incremental ~~adversely~~allowance ~~affect~~for ~~our~~credit ~~results~~losses, and to support the continued growth of ~~operations~~the Bank and return it to profitability.

~~The~~Non-Transferability ~~determination~~ of ~~the~~Subscription ~~appropriate~~Privilege ~~level~~The ofability ~~the ALLL involves a high degree of subjectivity and judgment and requires us~~ to ~~make~~subscribe ~~significant estimates of current credit risks, which~~ may ~~undergo~~not ~~material~~be ~~changes. Changes in economic conditions affecting borrowers~~sold, ~~new~~transferred ~~information~~or ~~regarding~~assigned ~~existing loans, identification of additional problem loans~~ and ~~other~~will ~~factors~~not ~~within~~be ~~and~~listed ~~outside of our control, may require an increase in the ALLL. In addition, our regulators periodically review our ALLL and may request an increase in the provision~~ for ~~loan~~trading ~~losses or the recognition of loan charge-offs, based~~ on ~~judgments~~any ~~different~~stock ~~than~~exchange ~~those~~or ~~of management. Furthermore~~market, ~~the~~including ~~Financial Accounting Standards Board has issued a current expected credit loss rule, which will change our accounting for losses by requiring us to record, at~~ the ~~time~~Nasdaq ofCapital origination, credit losses expected throughout the life of loans, held-to-maturity investment securities, and certain other assets and off-balance sheet credit exposures as opposed to the current practice of recording losses when it is probable that a loss event has occurredMarket. ~~We expect this new standard to be implemented on January 1, 2023, when we will recognize a one-time adjustment to the allowance. We have not yet determined the magnitude of such adjustment or the~~


Material U.S. Federal Income Tax Consequences			For U.S. federal income tax purposes, we do not believe you should recognize income or loss upon submission of a subscription, but that conclusion may be unclear in certain respects. You should consult your own tax advisor as to the tax consequences of this offering. See “Material U.S. Federal Income Tax Consequences.”


No Board Recommendation			Our Board of Directors is making no recommendation regarding your submission of a subscription. You are urged to make your decision based on your own assessment of our business and this offering. Please see “Risk Factors” for a discussion of some of the risks involved in investing in our common stock.

~~overall~~No ~~impact~~Revocation onAll ~~financial~~subscriptions ~~results.~~are ~~Also~~irrevocable, even if ~~charge-offs~~you inlater ~~future~~learn ~~periods~~information ~~exceed~~that you consider to be unfavorable to the ~~allowance~~submission of your subscription and even if this offering is extended by our Board of Directors. However, if we ~~will~~amend ~~need~~the ~~additional~~offering ~~provisions~~ to ~~increase~~allow ~~the~~for ~~allowance,~~an ~~which~~extension ~~would~~of ~~result~~this inoffering for a ~~decrease~~period inof ~~net~~more ~~income~~than ~~and~~30 ~~capital~~days or make a fundamental change to the terms set forth in this prospectus, you may cancel your subscription and ~~could~~receive a refund of any money you have advanced, without interest or deduction. You should not submit a ~~material~~subscription ~~adverse~~unless ~~effect~~you onare certain that you wish to purchase additional shares of our ~~financial~~common ~~condition~~stock ~~and~~at ~~results~~a price of ~~operations~~$3.50 per share.

Extension, Cancellation and Amendment We have the option to extend this offering and the period for submitting subscriptions for a period not to exceed 30 days, although we do not presently intend to do so. If ~~real~~we ~~estate~~elect ~~values~~to inextend ~~our~~the ~~markets~~expiration ~~decline~~of this offering, we ~~could~~will ~~experience~~issue ~~losses~~a ~~upon~~press ~~foreclosure~~release announcing such extension no later than 9:00 a.m., Eastern time, on the next business day after the most recently announced expiration of this offering. We will extend the ~~loan~~duration of this offering as required by applicable law or ~~sale~~regulation and may choose to extend it if we decide to give investors more time to submit subscriptions. If we elect to extend this offering for more than 30 days, then subscribers may cancel their subscriptions and receive a refund of ~~the~~their ~~real~~subscription ~~estate~~funds, without interest or deduction.

AOur ~~material~~Board ~~portion~~ of ~~our~~Directors ~~loan~~may ~~portfolio~~cancel ~~consists~~this ofoffering ~~mortgages~~at ~~secured~~any bytime ~~real~~prior ~~estate~~to ~~located~~its inexpiration ~~Pinellas,~~for ~~Hillsborough,~~any ~~Manatee, and Sarasota Counties, Florida~~reason. ~~Real~~If ~~estate~~this ~~values~~offering inis ~~our market may decline due to changes in national~~cancelled, ~~regional~~we orwill ~~local~~issue ~~economic~~a ~~conditions;~~press ~~fluctuations~~release innotifying ~~interest~~shareholders ~~rates and the availability~~ of ~~loans to potential purchasers; changes in~~ the ~~tax~~cancellation ~~laws~~ and ~~other~~all ~~governmental~~subscription ~~statutes,~~payments ~~regulations~~received ~~and~~by ~~policies; and acts of nature. If real estate values decline in our market,~~ the ~~value~~escrow ofagent ~~the real estate collateral securing our loans~~ will ~~likely~~ be ~~reduced.~~returned, ~~Any~~without ~~reduction~~interest inor ~~the~~deduction, ~~value~~as ofsoon ~~the~~as ~~collateral securing our loans could reduce the amount of money we could realize on the sale of any collateral and thereby adversely affect our financial performance~~practicable.

Hurricanes or other adverse weather events, as well as climate change, could negatively affect our local economies or disrupt our operations, which would have an adverse effect on our business and results of operations.

Our market areas in Florida are susceptible to hurricanes, tropical storms, and related flooding and wind damage. Such weather events can disrupt operations, result in damage to properties and negatively affect the local economies in the markets where we operate. Such weather events could result in a decline in loan originations, a decline in the value, or destruction of properties securing our loans and an increase in delinquencies, foreclosures, or loan losses. Our business and results of operations may be adversely affected by these and other negative effects of future hurricanes, tropical storms, related flooding and wind damage and other similar weather events. Climate change may be increasing the severity and frequency of adverse weather conditions, making the impact from these types of natural disasters on us or customers worse.

Further, concerns over the long-term impacts of climate change have led and may continue to lead to governmental efforts around the world to mitigate those impacts. Investors, consumers, and businesses also may change their behavior on their own as a result of these concerns. The State of Florida could be disproportionately impacted by long-term climate changes. We and our customers may face cost increases, asset value reductions, and changes in demand for products and services resulting from new laws, regulations, and changing consumer and investor preferences regarding responses to climate change.

Our loan portfolio includes a material amount of commercial real estate and commercial and industrial loans.

The credit risk associated with commercial real estate loans and commercial and industrial (“C&I”) loans is a result of several factors, including the concentration of principal in a limited number of loans and to borrowers in similar lines of business, the size of loan balances, the effects of general economic conditions on the demand for C&I products and services and income-producing properties, and the increased difficulty of evaluating and monitoring these types of loans. Repayment of commercial real estate and C&I loans in some cases is dependent upon the successful operation of the related business or the development or sale of the related real estate. If the actual or potential cash flow from a business or property is reduced, the borrower’s ability to repay the loan may be impaired. As a result, repayment of these loans may, to a greater extent than other types of loans, be subject to adverse conditions in the real estate market or economy. In addition, if the Bank forecloses on the collateral securing C&I loans, the potential market for selling such collateral may be limited to persons already engaged in a similar business. That may result in the Bank recovering an amount for such collateral less than the amount of the loan or taking an extended time to liquidate such collateral.

Our use of appraisals in deciding whether to make a loan secured by real property or how to value the loan in the future may not accurately describe the net value of the collateral that we can realize.

In considering whether to make a loan secured by real property, we generally require an appraisal of the property. However, an appraisal is only an estimate of the value of the property at the time the appraisal is

~~made,~~Our ~~and,~~Board asof ~~real~~Directors ~~estate~~also ~~values~~reserves ~~may~~the ~~fluctuate~~right ~~over~~to ~~relatively~~amend ~~short~~or ~~periods~~modify the terms of ~~time,~~this ~~especially~~offering. inIf ~~times~~we ofmake ~~heightened~~any ~~economic~~fundamental ~~uncertainty,~~changes ~~this~~to ~~estimate~~the ~~might~~terms ~~not~~set ~~accurately~~forth ~~describe~~in ~~the~~this ~~net~~prospectus, ~~value~~we ofwill ~~the~~file ~~collateral~~a ~~after~~post-effective amendment to the ~~loan~~registration ~~has~~statement ~~been~~in ~~closed.~~which Ifthis ~~the~~prospectus ~~appraisal~~is ~~does~~included, ~~not~~offer ~~reflect~~subscribers the ~~amount~~opportunity ~~that~~to ~~may~~cancel betheir ~~obtained~~subscriptions ~~upon~~and ~~any~~issue ~~sale~~a orrefund ~~foreclosure~~ of ~~the~~any ~~property~~money advanced by such shareholder, wewithout ~~may~~interest ~~not~~or ~~realize~~deduction, and recirculate an ~~amount~~updated ~~equal~~prospectus toafter the ~~indebtedness~~post-effective ~~secured~~amendment is declared effective by the ~~property~~SEC. In addition, upon such event, we ~~rely~~may onextend ~~appraisals~~the ~~and~~expiration ~~other~~date ~~valuations~~of this offering to ~~establish~~allow ~~the~~shareholders ~~value~~ample oftime ~~foreclosed~~to ~~real~~make ~~estate~~new investment decisions and tofor ~~determine~~us ~~certain~~to ~~loan~~recirculate ~~impairments~~updated documentation. IfPromptly following any ofsuch ~~these~~occurrence, ~~valuations~~we ~~are~~will ~~inaccurate,~~issue ~~our~~a ~~consolidated~~press ~~financial~~release ~~statements~~announcing ~~may~~any ~~not~~changes ~~reflect~~with respect to this offering and the ~~correct~~new ~~value~~expiration date. The terms of ~~our~~the ~~foreclosed~~offering ~~upon~~cannot ~~real~~be ~~estate,~~modified ~~and~~or ~~our~~amended ~~ALLL~~after ~~may~~the expiration of the offering. Although we do not ~~accurately~~intend ~~reflect~~to ~~loan~~do ~~impairments.~~so, ~~Inaccurate~~we ~~valuations~~may choose to amend or modify the terms of ~~properties~~the ~~could~~offering ~~materially~~for ~~adversely~~any ~~affect~~reason, ~~our~~including, ~~business~~without limitation, ~~results~~in oforder ~~operations~~to ~~and~~increase ~~financial~~participation ~~condition~~in the offering. Such amendments or modifications may include a change in the subscription price although no such change is presently contemplated.

WeProcedures ~~operate~~for inSubscribing To submit a ~~highly~~subscription, ~~competitive~~you ~~industry~~must complete the subscription forms and ~~market~~deliver ~~area~~them to the escrow agent, Wilmington Trust, NA., together with full payment for all the shares you subscribe for. You may deliver the documents and payments by mail or commercial carrier. If regular mail is used for this purpose, we recommend using registered mail, properly insured, with return receipt requested.

WeSales ~~face~~Agent ~~substantial~~Hovde ~~competition in all areas of our operations from a variety of different competitors~~Group, ~~many~~LLC of("Hovde") ~~which~~will ~~are~~serve ~~larger~~as ~~and~~our ~~may~~sales ~~have~~agent ~~more~~in ~~financial~~this ~~resources~~offering ~~than~~on wea ~~do.~~best ~~Such~~efforts ~~competitors primarily include Internet banks and national, regional and community banks within the various markets we serve~~basis. We ~~also~~will ~~face~~pay ~~competition~~them from many other types of financial institutions, including, without limitation, savings and loan institutions, credit unions, mortgage companies, other finance companies, brokerage firms, insurance companies, factoring companies and other financial intermediaries. The financial services industry could become even more competitive as a ~~result of legislative, regulatory and technological changes, as well as continued consolidation~~2.0% ~~Many~~commission ~~of our competitors have fewer regulatory constraints and may have lower cost structures. Our success depends~~ on ~~our~~all ~~ability~~shares tosold ~~compete successfully~~ in ~~our~~the ~~market area, and there is no guarantee that we will be able to do so~~offering.

~~Liquidity~~Backstop ~~risk~~Purchaser ~~could~~In ~~impair~~the ~~our~~event ~~ability~~this offering is not fully subscribed for, the Company will offer to ~~fund~~sell ~~operations~~to Kenneth R. Lehman, at the offering price, any and ~~jeopardize~~all ~~our~~shares ~~financial~~otherwise ~~condition~~unsold in this offering.

~~Liquidity~~Shares isOutstanding ~~essential~~Before tothis ~~our~~Offering ~~business. Actions by the Federal Home Loan Bank of Atlanta or the Board of Governors of the Federal Reserve System may reduce our borrowing capacity. Additionally~~4, ~~we may not be able to attract deposits at competitive rates. Our inability to raise funds through traditional deposits~~108,072 ~~brokered~~shares ~~deposits, borrowings, the sale~~ of ~~investment securities or loans, and other sources could negatively affect~~ our ~~liquidity~~common orstock ~~result~~were inoutstanding ~~increased~~as ~~funding costs. Liquidity may also be adversely impacted by bank supervisory and regulatory authorities mandating changes in the composition~~ of ~~our~~April ~~balance~~28, ~~sheet to asset classes that are less liquid~~2026.

~~Changes~~Shares Outstanding After Completion ofthis Offering We expect to issue up to 4,108,072 shares of our common stock in ~~interest~~this ~~rates~~offering. ~~affect~~We anticipate that we will have 8,216,144 shares of our ~~profitability~~common ~~and~~stock ~~assets~~outstanding immediately after completion of the offering.

~~Our~~Fees ~~profitability~~and ~~depends~~Expenses toWe awill ~~large~~pay ~~extent on~~ the ~~Bank’s~~fees ~~net interest income, which is the difference between income on interest-earning assets, such as loans~~ and ~~investment securities, and~~ expenses onrelated ~~interest- bearing liabilities, such as deposits and borrowings. We are unable~~ to ~~predict~~this changes in market interest rates, which are affected by many factors beyond our control including inflation, economic recession, unemployment, money supply, domestic and international events, and changes in the United States and other financial marketsoffering.

At December 31, 2021, our one-year interest rate sensitivity position was asset sensitive, such that a gradual increase in interest rates during the next twelve months would have a positive impact on our net interest income. Our results of operations are affected by changes in interest rates and our ability to manage this risk. The difference between interest rates charged on interest-earning assets and interest rates paid on interest-bearing liabilities may be affected by changes in market interest rates, changes in relationships between interest rate indices, and changes in the relationships between long-term and short-term market interest rates. Our net interest income may be reduced if: (i) more interest-earning assets than interest-bearing liabilities reprice or mature during a time when interest rates are declining; or (ii) more interest-bearing liabilities than interest-earning assets reprice or mature during a time when interest rates are rising. In addition, the mix of assets and liabilities could change as varying levels of market interest rates might present our customer base with more attractive options.

WeNasdaq ~~face~~Capital ~~additional~~Market ~~risks~~Trading ~~due~~Symbol toShares of our ~~increased~~common ~~mortgage~~stock ~~banking~~are ~~activities~~traded ~~that~~on ~~could~~the ~~negatively~~Nasdaq ~~impact~~Capital ~~our~~Market ~~net~~under ~~income~~the ~~and~~symbol ~~profitability~~“BAFN.”

WeQuestions ~~sell~~If ayou ~~substantial~~have ~~portion~~any ofquestions ~~the~~about ~~mortgage~~this loans that we originate. The sale of these loans generates noninterest income and can be a source of liquidity for the Bank. Disruption in the secondary market for residential mortgage loans could result in our inability to sell mortgage loansoffering, ~~which~~including ~~could~~questions ~~negatively~~about ~~impact~~subscription ~~our~~procedures ~~liquidity position~~ and ~~earnings.~~requests ~~In addition, declines in real estate values or increases in interest rates could reduce the potential~~ for ~~robust~~additional ~~mortgage~~copies ~~originations, which also could negatively impact our earnings. As we do sell mortgage loans, we also face the risk that such loans may have been made in breach~~ of ~~our~~this ~~representations~~prospectus ~~and~~or ~~warranties~~other ~~to the buyers~~documents, ~~and~~please wecontact ~~could~~Hovde beat ~~forced~~(833) to587-4159 ~~repurchase such loans~~ or ~~pay~~by ~~other~~email ~~damages~~to prospectus@hovdegroup.com.

WeRisk ~~may~~Factors ~~face~~Before you invest in this offering, you should be aware that there are risks associated with ~~respect~~your investment, including the risks described in the section entitled “Risk Factors” beginning on page 18 of this prospectus. You should carefully read and consider these risk factors together with all of the other information included in or incorporated by reference into this prospectus before you decide to ~~future~~subscribe ~~expansion~~to purchase shares of our common stock.

We[Remainder ~~may consider and enter into new lines~~ of ~~business~~this orpage ~~offer~~intentionally ~~new~~left products or services. We may acquire all or parts of other institutions and we may engage in additional de novo branch expansion. Expansion involves a number of risks, including the costs associated with identifying and evaluating potential acquisitions and merger partners, inaccurate estimates and judgments regarding credit, operations, management and market risks of the target institution, our ability to finance expansion and possible dilution to our existing shareholders, the diversion of our management’s attention to the negotiation of a transaction, the integration of the operations and personnel of combining businesses, and the possibility of unknown or contingent liabilities.blank]

We may need additional capital in the future, but such capital may not be available when needed or at all.

We may need to obtain additional debt or equity financing to fund future growth and meet our capital needs. We cannot guarantee that such financing will be available to us on acceptable terms or at all. If our financial performance is unsatisfactory or if negative economic events or disruptions in the capital markets occur, it may not be possible for us to find sources of sufficient capital for our business operations. If we are unable to obtain future financing, we may not have the resources available to fund our planned growth.

We are subject to government regulation and monetary policy that could constrain our growth and profitability.

We are subject to extensive federal government supervision and regulations that impose substantial limitations with respect to lending activities, purchases of investment securities, the payment of dividends, and many other aspects of our business. Many of these regulations are intended to protect depositors, the public, and the FDIC, but not our shareholders. The banking industry is heavily regulated. We are subject to examinations, supervision and comprehensive regulation by various federal and state agencies. Our compliance with these regulations is costly and restricts certain of our activities. Banking regulations are primarily intended to protect the federal deposit insurance fund and depositors, not shareholders. The burden imposed by federal and state regulations puts banks at a competitive disadvantage compared to less regulated competitors such as finance companies, mortgage banking companies, and leasing companies. Federal economic and monetary policy may also affect our ability to attract deposits, make loans, and achieve our planned operating results.

Legislation and regulatory proposals enacted in response to market and economic conditions may materially adversely affect our business and results of operations.

Changes in the laws, regulations, and regulatory practices affecting the banking industry may increase our costs of doing business or otherwise adversely affect us and create competitive advantages for our competitors. For example, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) in particular represented a significant overhaul of many aspects of the regulation of the financial services industry, some of which have yet to be implemented. In addition, because regulation of financial institutions changes regularly and is the subject of constant legislative debate, we cannot forecast how federal or state regulation of financial institutions may change in the future and impact our operations. Recent and forthcoming changes to banking regulations may impact the profitability of our business activities, require changes to some of our business practices, or otherwise adversely affect our business. These changes may also require us to invest significant management attention and resources to evaluate and make any changes necessary to comply with

~~new~~QUESTIONS ~~statutory~~AND ~~and~~ANSWERS ~~regulatory~~RELATING ~~requirements.~~TO ItTHE may also require us to hold higher levels of regulatory capital and/or liquidity and it may cause us to adjust our business strategy and limit our future business opportunities. We cannot predict the effects of future legislation and new or revised regulations on us, our competitors, or on the financial markets and economy, although they may significantly increase costs and impede the efficiency of our internal business processes.OFFERING

~~Technological~~What ~~changes,~~is ~~including~~being ~~online and mobile banking, have the potential of disrupting our business model, and we may have fewer resources than many competitors to invest in technological improvements.~~offered?

~~The~~We ~~financial~~are ~~services~~offering ~~industry~~for ~~continues~~sale up to ~~undergo~~4,108,072 ~~rapid~~shares ~~technological changes with frequent introductions~~ of ~~new~~our ~~technology-driven~~common ~~products~~stock ~~and~~at ~~services,~~a ~~including~~price ~~mobile~~of ~~and~~$3.50 ~~online~~per ~~banking services~~share. ~~Changes~~Holders inof ~~customer behaviors have increased the need to offer these options to~~ our ~~customers.~~common Instock ~~addition~~as toof ~~serving clients better,~~ the ~~effective~~record ~~use~~date of ~~technology~~5:00 ~~may increase efficiency and may enable financial institutions to reduce costs~~p.m., ~~Our~~Eastern ~~future~~time, ~~success~~on ~~will~~May ~~depend~~12, ~~in part~~2026, ~~upon~~may ~~our~~subscribe ~~ability~~ to ~~invest~~purchase inone ~~and~~share ~~use~~of ~~technology~~common tostock ~~provide~~they ~~products~~owned ~~and~~as ~~services~~of ~~that~~the ~~provide~~record ~~convenience to customers and to create additional efficiencies in our operations~~date. WeYou may ~~need~~subscribe tofor ~~make~~any ~~significant~~number ~~additional~~of ~~capital~~shares ~~investments~~up into ~~technology~~that ~~in the future~~amount, ~~and~~or ~~we may~~ not besubscribe ~~able~~ to ~~effectively~~purchase ~~implement~~any ~~new~~shares. ~~technology-driven~~However, ~~products~~if ~~and~~you ~~services~~purchased inshares ~~a timely manner~~ in ~~response~~our torecent ~~changes~~private ~~in customer behaviors~~placement, ~~thus~~you ~~adversely impacting our operations. Many of our competitors have substantially greater resources to invest in technological improvements and banking regulators~~ may ~~permit~~not ~~emerging~~participate ~~technology companies to engage~~ in ~~activities~~this ~~previously reserved to traditional commercial banks~~offering. ~~Such competition could adversely affect our performance and results of operations.~~

~~Changes~~If you hold your shares in ~~accounting~~the ~~standards~~name ~~may~~of ~~affect~~a ~~our~~broker, ~~performance~~custodian bank, dealer or other nominee who uses the services of the Depository Trust Company, or DTC, DTC will permit you to submit subscriptions through DTC.

~~Our~~The ~~accounting~~ability ~~policies and methods are fundamental~~ to ~~how~~subscribe wemay ~~record~~not ~~and~~be ~~report our financial condition and results of operations. From time to time~~sold, ~~there~~transferred ~~are~~or ~~changes~~assigned ~~in the financial accounting~~ and ~~reporting~~will ~~standards~~not ~~that govern the preparation of our financial statements. These changes can~~ be ~~difficult~~listed tofor ~~predict~~trading ~~and~~on ~~can~~any ~~materially~~stock ~~impact~~exchange ~~how we record and report our financial condition and statements of operations. Future changes in financial accounting and reporting standards could require us to apply a new~~ or ~~revised standard retroactively~~market, ~~which~~including ~~could~~the ~~result~~Nasdaq inCapital ~~a material adverse effect on our financial condition or could even require us to restate prior period financial statements~~Market.

WeAre ~~face~~there ~~risks~~any ~~related~~limits toon ~~our~~the ~~operational,~~number ~~technological,~~of ~~and~~shares ~~organizational~~I ~~infrastructure.~~may purchase in this offering?

~~Our ability to grow and compete is dependent on our ability to build or acquire the necessary operational and technological infrastructure and to manage the cost of that infrastructure while we expand~~Yes. ~~Similar~~Any topurchases ~~other financial institutions, our operational risk can manifest itself~~ in ~~many~~the ~~ways,~~offering ~~such~~are asinherently ~~errors~~limited ~~related to failed or inadequate processes, faulty or disabled computer systems, fraud~~ by ~~employees or outside persons, and exposure to external events. We are dependent on our operational infrastructure to help manage these risks. In addition, we are heavily dependent on~~ the ~~strength~~terms ~~and~~as ~~capability of our technology systems, which we use both to interface with our customers and to manage our internal financial and other systems~~described. ~~Our ability to develop and deliver new products that meet the needs of our existing customers and attract new ones depends on the functionality of our technology systems.~~

~~Risks~~Why ~~Related~~is tothe ~~Our~~Company ~~Securities~~conducting this offering?

AOn ~~vibrant~~April ~~public~~28, ~~trading~~2026, ~~market~~we ~~for~~sold ~~our~~$80,000,000 ~~common~~in ~~stock~~convertible ~~has~~preferred ~~not~~stock ~~and~~at ~~may~~a ~~not~~price ~~develop~~equivalent to, ~~which~~the ~~may~~$3.50 ~~hinder~~per ~~your~~share ~~ability~~offering price. We are conducting this offering to ~~sell~~afford our current shareholders the ~~common~~ability to also acquire stock at the same price. We intend to use the net proceeds to improve the capital levels of the Company and ~~may~~the ~~lower~~Bank, fund incremental allowance for credit losses, and to support the ~~market~~continued ~~price~~growth of the ~~stock~~Bank and return it to profitability.

~~Our~~How ~~common~~was ~~stock is quoted and traded on Nasdaq under~~ the ~~symbol “BAFN~~$3.”50 weper doshare ~~not~~subscription ~~expect~~price a substantially liquid market for our common stock to develop for an uncertain period of time, if at all. Accordingly, potential investors should consider the potential illiquid and long-term nature of an investment in our common stock. You may, therefore, be required to bear the risks of this investment for an indefinite period of time. determined?

~~Investors~~In ~~may~~determining ~~face~~the ~~dilution~~$3.50 ~~resulting~~per share subscription price, our Board of Directors considered factors including, but not limited to, our recent and current financial performance, potential losses in our loan portfolio, the likely cost of capital from other sources, the ~~issuance~~price at which new investors and current shareholders might be willing to purchase stock, our need for capital, and the desire to provide an opportunity to our shareholders to participate in the offering on the same terms as investors in our recent private placement. The subscription price is not necessarily related to our book value, net worth or any other established criteria of value and may or may not be considered the fair value of our common stock to be offered in this offering. We cannot give any assurance that our common stock will trade at or above the ~~future~~subscription price in any given time period.

WeHow ~~may~~soon ~~issue~~must ~~common~~I ~~stock~~submit ~~without shareholder approval, up to the number of authorized shares set forth in our Articles of Incorporation. Our Board may determine, from time to time,~~ a ~~need to obtain additional capital~~ subscription?

Subscriptions may be submitted at any time beginning on the date of this prospectus and prior to the expiration of this offering, which is __, 2026, at 5:00 p.m., Eastern time. If you elect to subscribe, the escrow agent must actually receive all required documents and payments from you prior to the expiration of the offering. Although we have the option of extending the expiration of this offering for a period not to exceed 30 days, we currently do not intend to do so.

May I transfer my ability to subscribe?

No. You may not sell or transfer the ability to subscribe to anyone.

Are we requiring a minimum subscription to complete the offering?

No.

~~through~~Are ~~the~~there ~~issuance~~any ofconditions ~~additional shares of common stock or other securities. There can be no assurance that such shares will be issued at prices or on terms better than or equal~~ to ~~the~~completing ~~price or terms in this offering. The issuance of any additional shares of common stock by us in~~ the future may result in a reduction of the book value or market price, if any, of the then-outstanding common stock. Issuance of additional shares of common stock will reduce the proportionate ownership and voting power of our existing shareholders.offering?

~~The price of our common stock could be volatile~~No.

~~The~~Can ~~market price of~~ our ~~common~~Board ~~stock may be volatile and could be subject to wide fluctuations in price in response to various factors, some~~ of ~~which~~Directors ~~are beyond our control. These factors include~~extend, ~~among~~cancel other things: variations in our quarterly results of operations; recommendations by securities analysts; performance of other companies that investors deem comparable to us; economic factors unrelated to our performance; general market conditions; and changes in government regulations. In addition, if the market for stocks in our industry, or ~~the~~amend ~~stock~~this market in general, experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition, or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.offering?

AnYes. ~~investment~~We inhave ~~our~~the ~~common~~option ~~stock~~to isextend this offering and the period for submitting subscription for a period not anto ~~insured~~exceed ~~deposit~~30 days, although we do not presently intend to do so. If we elect to extend the expiration of the offering, we will issue a press release announcing such extension no later than 9:00 a.m., Eastern time, on the next business day after the most recently announced expiration of the offering. We will extend the duration of the offering as required by applicable law or regulation and may choose to extend it if we decide to give shareholders more time to subscribe. If we elect to extend the offering for a period of more than 30 days, then subscribers may cancel their subscriptions and receive a refund of their subscription funds, without interest or deduction.

AnOur ~~investment~~Board inof ~~our~~Directors ~~common~~may ~~stock~~cancel isthis ~~not~~offering aat ~~bank~~any ~~deposit~~time ~~and,~~prior ~~therefore,~~to isthe ~~not~~expiration ~~insured~~of ~~against~~the ~~loss~~offering byfor ~~the~~any ~~FDIC~~reason. ~~Investment~~If inthe ~~our~~offering ~~common stock~~ is ~~inherently risky for the reasons described herein~~cancelled, ~~and~~we iswill ~~subject~~issue toa ~~the~~press ~~same~~release ~~market~~notifying ~~forces~~shareholders ~~that~~of ~~affect~~ the ~~price~~cancellation ofand ~~common~~all ~~stock~~subscription inpayments ~~any~~received ~~company.~~by Asthe aescrow ~~result,~~agent ifwill ~~you~~be ~~acquire our common stock~~returned, ~~you~~without ~~could~~interest ~~lose some~~ or ~~all~~deduction, ofas ~~your~~soon ~~investment~~as practicable.

~~Owning~~Our ~~our~~Board ~~stock~~of ~~will~~Directors ~~not~~also ~~give~~reserves ~~you~~ the right to ~~participate~~amend or modify the terms of this offering. If we should make any fundamental changes to the terms set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer subscribers the opportunity to cancel their subscriptions and issue a refund of any ~~future~~money ~~offerings~~advanced by such shareholder and recirculate an updated prospectus after the post-effective amendment is declared effective by the SEC. In addition, upon such event, we may extend the expiration date of ~~our~~this ~~capital~~offering ~~stock~~to allow shareholders ample time to make new investment decisions and ~~your~~for ~~ownership~~us ~~could~~to recirculate updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect to this offering and the new expiration date. The terms of the offering cannot be ~~diluted~~modified or amended after the expiration date of the offering. Although we do not presently intend to do so, we may choose to amend or modify the terms of this offering for any reason, including, without limitation, in order to increase participation in the offering. Such amendments or modifications may include a change in the subscription price although no such change is presently contemplated.

AsHas athe ~~shareholder,~~Board ~~you~~of ~~are~~Directors ~~not~~made ~~automatically~~a ~~entitled~~recommendation to ~~purchase additional shares of common stock in future issuances of~~ our ~~common~~shareholders ~~stock;~~regarding ~~therefore,~~the ~~you may not be able to maintain your current percentage of ownership in BayFirst. If we decide to issue additional shares of common stock or conduct an additional~~ offering ~~of stock, your ownership in BayFirst could be diluted and your potential share of future profits may be reduced.~~?

~~Management~~The ~~has~~Board ~~broad~~of ~~discretion~~Directors ~~concerning~~does not make any recommendation to shareholders regarding subscribing for shares in this offering. You should make an independent investment decision about whether or not to subscribe for shares. Shareholders who subscribe for shares risk investment loss on new money invested. We cannot assure you that the ~~use~~market price for our common stock will remain above the subscription price or that anyone purchasing shares at the subscription price will be able to sell those shares in the future at the same price or a higher price. Please see “Risk Factors” for a discussion of some of the risks involved in investing in our ~~capital~~common stock.

WeWhat ~~use~~will ~~our~~happen ~~capital~~if toI ~~maintain~~choose ~~liquidity~~not ~~and~~ to ~~continue~~exercise tosubscribe ~~support~~for the growth of the Bank. This growth may include the opening of branch offices, increasing the size and volume of loans, or other such activities that may require additional capital. The additional capital may also be used to service our outstanding debt. Our management may determine that it is in the best interest of the Company or the Bank to apply our capital in a manner that is inconsistent with a shareholder’s wishes. Failure to use such funds effectively might harm your investment.shares?

If ~~equity~~you ~~research analysts~~ do not ~~publish~~subscribe ~~research~~for orshares, ~~reports~~the ~~about~~number of shares of our ~~business,~~common orstock ifyou ~~they~~own dowill ~~publish~~not ~~such~~change. ~~reports~~However, ~~but~~due ~~issue~~to ~~unfavorable~~the ~~commentary~~fact orthat ~~downgrade~~shares ~~our~~will ~~common~~be ~~stock~~purchased by other shareholders in this offering, ~~the~~your ~~price~~percentage ~~and~~ownership ~~trading~~after ~~volume~~the completion of ~~our~~the ~~common~~offering ~~stock~~will ~~could~~be ~~decline~~diluted.

~~The~~How ~~trading~~do ~~market~~I ~~for~~submit ~~our~~a ~~common~~subscription? ~~stock~~What ~~could~~forms beand ~~affected~~payment byare ~~whether~~required ~~and~~ to ~~what~~purchase extent equity research analysts publish research or reports about us and our business. We cannot predict at this time whether any research analysts will cover us and our common stock or whether they will publish research and reports on us. The price of our stock could decline if one or more securities analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease publishing reports about us. If any of the ~~analysts~~shares ~~who elect to cover us downgrade their recommendation with respect to our common stock, our stock price could decline rapidly. If any~~ of ~~these analysts ceases coverage of us, we could lose visibility in the market, which in turn could cause~~ our common stock ~~price or trading volume to decline and our common stock to be less liquid.~~?

If you wish to participate in this offering, you must take the following steps:


			•						deliver payment to the escrow agent using the methods outlined in this prospectus before 5:00 p.m., Eastern time, on __, 2026; and

~~Our~~• ~~Board~~deliver ~~of Directors owns~~ a ~~significant~~properly ~~percentage~~completed ofsubscription ~~our~~form ~~shares~~to ~~and~~the ~~will~~escrow beagent ~~able~~before to5:00 ~~make~~p.m., ~~decisions~~Eastern totime, ~~which~~on ~~you~~___, ~~may be opposed~~2026.

AsIf ofyou ~~December~~send ~~31, 2021, BayFirst’s directors and named executive officers as~~ a ~~group~~payment ~~owned~~that ~~approximately~~is ~~17.41%~~insufficient ofto ~~our~~purchase ~~outstanding common stock. In addition,~~ the ~~directors~~number ~~and~~of ~~named executive officers have stock options and warrants to acquire~~ shares ofyou ~~common~~subscribed ~~stock~~for, ~~which,~~or if ~~fully~~the ~~exercised~~number ~~within sixty days~~ of ~~December~~shares ~~31,~~you ~~2021,~~requested ~~would~~is ~~have~~not ~~resulted~~specified in ~~them~~the ~~owning~~forms, ~~approximately~~the ~~21.14%~~payment ofreceived ~~our~~will ~~outstanding~~be ~~common~~applied ~~stock. Our directors and executive officers are expected~~ to ~~exert a significant influence on~~ the ~~election~~full ofextent ~~Board~~possible ~~members~~based ~~and~~ on the ~~direction~~amount of the ~~Company.~~payment ~~This~~received, ~~influence~~subject ~~could~~to ~~negatively affect~~ the ~~price~~elimination of ~~our~~fractional shares ~~or be inconsistent with other shareholders’ desires~~.

WeWhen ~~have~~will ~~outstanding~~I ~~preferred~~receive ~~stock~~my ~~and~~new ~~our Board may authorize the issuance of additional series of preferred stock.~~shares?

WeIf ~~have~~you ~~1,000,000~~purchase shares ofthrough ~~authorized~~this ~~preferred stock~~offering, noyou ~~par~~will ~~value.~~receive Ofyour ~~those,~~new ~~10,000~~ shares ~~have been designated~~ as ~~Series~~soon ~~A Preferred Stock, of which 6,395 shares were outstanding~~ as ofpracticable ~~December~~after ~~31, 2021, with a $1,000 liquidation preference and a 9% (subject to increase to 11% if we have not redeemed~~ the ~~shares~~closing ~~by the tenth anniversary~~ of their issuance) per annum quarterly dividend. We also have 20,000 authorized shares of Series B Convertible Preferred Stock, of which 3,210 shares were outstanding as of December 31, 2021, with a $1,000 liquidation preference and an 8% per annum dividend (subject to increase to 9% if we have not redeemed the ~~shares by the tenth anniversary of their issuance), which is otherwise on a parity with our Series A Preferred Stock as to priority of dividends and liquidation preference~~offering. Additionally, our Articles of Incorporation provide that our Board of Directors may authorize additional series of preferred stock without shareholder approval. Accordingly, the issuance of new shares of preferred stock may adversely affect the rights of the holders of shares of our common stock.

~~BayFirst~~After ~~has~~I ~~outstanding~~send ~~debt~~in ~~and~~my ~~either~~payment, ~~BayFirst or the Bank~~ may ~~incur~~I ~~additional~~cancel ~~debt.~~my subscription?

~~BayFirst~~No. ~~has~~All ~~outstanding~~subscriptions ~~debt~~are ~~and~~irrevocable, ~~either~~even ~~BayFirst~~if oryou ~~the~~later ~~Bank~~learn ~~may~~information ~~incur~~that ~~additional~~you ~~debt.~~consider Atto ~~December~~be ~~31,~~unfavorable ~~2021,~~to ~~BayFirst~~your ~~had~~investment adecision ~~$3.3~~and ~~million~~even ~~term~~if ~~loan~~the ~~and~~offering ~~$5.99~~is ~~million~~extended inby ~~subordinated~~our ~~debt~~Board of Directors. ~~BayFirst’s~~However, ~~obligation~~if towe ~~make~~amend ~~payments~~the onoffering ~~its~~to ~~debt~~allow ~~will~~for ~~reduce~~an extension of the ~~amount~~offering for a period of ~~cash~~more ~~available~~than to30 ~~BayFirst~~days or make a fundamental change to ~~pay~~the ~~dividends~~terms onset ~~its~~forth ~~common~~in ~~stock.~~this ~~Either~~prospectus, oryou ~~both~~may cancel your subscription and receive a refund of ~~BayFirst~~any ormoney ~~the~~you ~~Bank~~have ~~may~~advanced, ~~issue~~without ~~additional~~interest ~~debt~~or deduction. ~~Payments~~You ~~due~~should onnot ~~such~~submit ~~debt~~a ~~will~~subscription ~~further~~unless ~~reduce~~you ~~the~~are ~~amount~~certain ofthat ~~money~~you ~~available~~wish to ~~BayFirst~~purchase toadditional ~~pay~~shares ~~dividends~~of onour ~~its~~ common stock at a price of $3.50 per share.

WeWhat ~~are~~should ~~restricted~~I bydo ~~law~~if ~~and~~I ~~government~~want ~~policy~~to participate in ~~our~~this ~~ability~~offering tobut ~~pay~~my ~~dividends~~shares toare ~~our~~held ~~shareholders.~~in the name of my broker, dealer, custodian bank or other nominee?

~~Holders~~If ofyou ~~shares~~hold ofyour ~~our~~shares ~~capital stock are only entitled to receive such dividends as our Board may declare out~~ of ~~funds legally available for such payments. Although we have recently declared cash dividends on~~ our common stock, ~~we are not required to do so and may reduce or eliminate our common stock dividend~~ in the ~~future.~~name ~~This could adversely affect the market price~~ of ~~our~~a ~~common~~broker, ~~stock. Furthermore~~dealer, ~~the~~custodian ~~terms~~bank ~~of our subordinated debt and the preferred stock will prohibit us from declaring~~ or ~~paying~~other ~~any dividends on any junior series of our capital stock~~nominee, ~~including~~then ~~our~~your ~~common stock~~broker, ~~or from repurchasing~~dealer, ~~redeeming~~custodian bank or ~~acquiring~~other ~~such~~nominee ~~junior~~is ~~stock, unless we have declared and paid full dividends on our outstanding preferred stock for~~ the ~~most~~record ~~recently~~holder ~~completed dividend period. The holders~~ of ~~our outstanding Series A Preferred Stock are entitled to receive quarterly cash dividends at 9% per annum (subject to increase to 11% if we have not redeemed~~ the shares byyou the tenth anniversary of their issuance) and the holders of our Series B Convertible Preferred Stock are entitled to receive quarterly cash dividends at 8% per annum (subject to increase to 9% if we have not redeemed the shares by the tenth anniversary of their issuance)own. Additionally, our Articles of Incorporation provide that our Board of Directors may authorize and issue additional series of preferred stock without shareholder approval. Any preferred shares issued in the future may further restrict our ability to declare or pay dividends on any junior stock, including the common stock.

WeThe ~~are~~record ~~also~~holder ~~subject~~must tosubscribe ~~state~~on ~~and~~your ~~federal~~behalf ~~statutory~~for ~~and~~the ~~regulatory~~shares ~~limitations~~of on our ~~ability~~common tostock ~~pay~~you ~~dividends~~wish onto ~~our~~purchase. ~~capital~~If ~~stock.~~you ~~For~~wish ~~example,~~to itparticipate isin the ~~policy~~offering and purchase shares of ~~the~~our ~~Federal~~common ~~Reserve~~stock, ~~that~~please ~~bank~~promptly ~~holding~~contact ~~companies~~the ~~should~~record ~~generally~~holder ~~pay~~of ~~dividends~~your onshares. ~~common~~We ~~stock~~will ~~only~~ask ~~out~~your ofbroker, ~~earnings~~dealer, ~~and~~custodian ~~only~~bank ifor ~~prospective~~other ~~earnings~~nominee ~~retention~~to isnotify ~~consistent~~you ~~with~~of the ~~organization’s~~offering. ~~expected~~You ~~future~~should ~~needs,~~receive ~~asset~~an ~~quality~~appropriate ~~and~~form ~~financial~~from ~~condition.~~your ~~Moreover,~~record holder with the other offering materials.

How many shares of our common stock will be outstanding after this offering?

As of April 28, 2026, we had 4,108,072 of our common stock issued and outstanding and options and warrants to purchase 334,663 shares of our common stock outstanding. We expect to issue a maximum of 4,108,072 shares of our common stock in this offering. Assuming no options or warrants are exercised prior to the expiration of the offering, we anticipate that we will have 8,216,144 shares of our common stock outstanding immediately after completion of this offering.

What happens if the offering is not fully subscribed by our shareholders?

In the event this offering is not fully subscribed for, the Company will offer to sell to Kenneth R. Lehman, at the offering price, any and all shares otherwise unsold in this offering.

How much money will the Company receive from this offering?

Assuming all the shares of common stock offered are sold, the gross proceeds from the rights offering, before expenses, will be $14.38 million. Please see “Use of Proceeds.”

Are there risks in subscribing for shares?

Yes, subscribing for shares involves risks. Subscribing involves the purchase of additional shares of our common stock and should be considered as carefully as you would consider any other equity investment. Among other things, you should carefully consider the risks described under the headings “Risk Factors” in this prospectus.

~~Federal~~ If ~~Reserve will closely scrutinize any dividend payout ratio exceeding 30% of after-tax net income. You should not purchase common stock in~~ the offering ifis ~~you~~not completed, will ~~need~~my orsubscription ~~expect~~payment anbe ~~investment~~refunded ~~that~~to ~~pays dividends.~~me?

WeYes. ~~are~~The escrow agent will hold all funds it receives in a segregated bank account until completion of this offering, pursuant to an ~~emerging~~escrow ~~growth~~agreement ~~company~~between Wilmington Trust, N.A., us, and Hovde. If the ~~reduced~~offering ~~disclosure~~is ~~requirements~~not ~~applicable~~completed, toall ~~emerging~~subscription ~~growth~~payments, ~~companies~~without ~~may~~interest, ~~make~~as ~~our~~soon ~~common~~as ~~stock~~practicable. ~~less~~If ~~attractive~~you own shares in “street name,” it may take longer for you to ~~investors~~receive payment because the escrow agent will return payments through the record holder of the shares.

WeWill ~~are an emerging growth company, as defined in~~ the ~~JOBS~~subscription ~~Act,~~privileges ~~and~~listed we intend to take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies. These include not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may take advantage of these exemptions until we are no longer an emerging growth company, which could be as long as five full fiscal years following the initial listing of our common stock on Nasdaq. We cannot predict if investors will find our common stock less attractive because we will rely on these exemptions. If some investors find our common stock less attractive as a ~~result, there may be a less active trading market for our common~~ stock ~~and~~exchange ~~the~~or ~~price~~national ~~of our common stock may be more volatile.~~market?

~~Further,~~The ~~the~~ability ~~JOBS Act exempts emerging growth companies from being required~~ to ~~comply~~subscribe ~~with~~in ~~new~~this oroffering ~~revised~~may ~~financial~~not ~~accounting~~be ~~standards~~sold, ~~until~~transferred ~~private companies are required to comply with the new~~ or ~~revised~~assigned ~~financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period~~ and ~~comply~~will ~~with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have~~ not ~~opted~~be ~~out~~listed ~~of such extended transition period. This means that when a standard is issued~~ or ~~revised~~quoted ~~and~~for ittrading ~~has~~on ~~different~~any ~~application~~stock ~~dates~~exchange ~~for public~~ or ~~private companies~~market, ~~we,~~including ~~as an emerging growth company, can adopt~~ the ~~new~~Nasdaq orCapital ~~revised standard at the time private companies do so~~Market. This may make our financial statements not comparable with those of public companies which are neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period because of the potential differences in accounting standards used.

WeHow ~~are~~do aI ~~smaller~~subscribe ~~reporting~~if ~~company~~I ~~and~~live ~~will~~outside bethe ~~exempt~~United ~~from certain disclosure requirements, which could make our common stock less attractive to potential investors.~~States?

We ~~are a smaller reporting company, as defined under the Exchange Act, and may continue to be so after we no longer qualify as an emerging growth company. As a smaller reporting company, we~~ will: ~~(i)~~ not bemail ~~required~~this ~~and~~prospectus ~~may not include a Compensation Discussion and Analysis section in our proxy statements, (ii) provide only two years of financial statements; and (iii) not need~~ to ~~provide~~shareholders awhose ~~table~~addresses ofare ~~selected~~outside ~~financial~~the ~~data.~~United WeStates ~~also~~or ~~will~~who have ~~other~~an ~~scaled~~army ~~disclosure~~post ~~requirements~~office ~~that~~or ~~are~~foreign ~~less~~post ~~comprehensive~~office ~~than issuers that are not smaller reporting companies which could make our common stock less attractive to potential investors~~address. WeThe ~~cannot~~escrow ~~predict~~agent ~~if investors~~ will ~~find~~accept ~~our~~their ~~common~~subscriptions ~~stock less attractive as a result of our reliance on these exemptions~~directly. IfTo ~~some~~submit ~~investors find our common stock less attractive as a result~~subscriptions, ~~there~~foreign ~~may~~shareholders bemust anotify ~~less~~the ~~active~~escrow ~~trading~~agent ~~market for our common stock~~ and ~~the~~also ~~price~~timely offollow ~~our~~required ~~common stock may be more volatile~~procedures.

~~Certain~~To ~~provisions~~whom ofshould ~~Florida~~I ~~and~~send ~~federal~~my ~~law~~forms ~~may discourage or prevent a takeover of BayFirst~~ and ~~result in a lower market price for our common stock.~~payment?

~~Florida~~If ~~and~~your ~~federal~~shares ~~law~~are ~~contain~~held ~~anti-takeover~~in ~~provisions~~the ~~that~~name ~~apply~~of toa ~~us.~~broker, ~~These~~dealer ~~provisions~~or ~~could~~other ~~discourage~~nominee, ~~potential~~then ~~buyers~~you ~~from~~should ~~seeking~~send toyour ~~acquire~~subscription usdocuments inand ~~the~~subscription ~~future,~~payment ~~even if the proposed transaction would allow shareholders~~ to ~~realize~~that arecord ~~premium~~holder. ~~for~~If ~~their~~you ~~shares~~are ~~and~~the ~~even~~record ifholder, athen ~~majority~~you ofshould ~~our~~send ~~shareholders~~your ~~wish~~subscription todocuments ~~participate~~and insubscription ~~such~~payment aby ~~transaction.~~hand ~~As a result~~delivery, ~~these~~first ~~provisions~~class ~~could~~mail ~~also~~or ~~adversely~~overnight ~~affect~~courier ~~the~~service ~~market price of our common stock.~~to:

~~Our~~Wilmington ~~fractional~~Trust, ~~shares may be difficult to sell and you may be required to indefinitely hold a fractional share~~N.A.

We1100 ~~have~~North ~~issued,~~Market and may continue to issue, fractional shares of our common stock. Although the owner of a fractional share will have all the rights of a shareholder, it may be difficult to sell a fractional share of BayFirst common stock. Established trading markets and exchanges, such as Nasdaq, do not permit the trading of fractional shares. Certain brokers do facilitate the trading of fractional shares, but we can offer no assurances as Street

Wilmington, DE 19890

Attn: Workflow Management

You are solely responsible for completing delivery to the escrow agent of your subscription documents and payment. We urge you to allow sufficient time for delivery of your subscription materials to the escrow agent.

Whom should I contact if I have other questions?

If you have other questions or need assistance, please contact Hovde at (833) 587-4159 or by email to prospectus @hovdegroup.com.

[Remainder of this page intentionally left blank]

toRISK whether any specific broker does. If you want to sell a fractional share and cannot identify a broker to facilitate such a trade, you will have to hold that fractional share until you identify a private buyer for it. If you cannot locate a private buyer, you will have to hold that fractional share indefinitely.FACTORS

~~PLAN~~Investing OFin ~~DISTRIBUTION~~our ~~AND~~securities ~~PLAN~~involves ~~INFORMATION~~significant risks, including the risks described below. You should carefully consider the following information about these risks, together with the other information contained in this prospectus before investing in this offering. The risks that we have highlighted here are not the only ones that we face. Additional risks presently unknown to us or that we currently consider immaterial or unlikely to occur could also impair our operations. In addition, there are risks beyond our control. If any of these risks actually occur, our business, financial condition or results of operations could be negatively affected, and you could lose part or all of your investment.

~~Description~~Risks ofRelated ~~the~~to ~~Plan~~Our Business and Risks Related to Our Securities

~~The~~Our ~~Plan~~business ~~was~~and ~~adopted~~securities onrelated ~~December~~risks ~~30,~~are ~~2021.~~described ~~The~~in ~~Plan~~detail ~~will be~~ in ~~effect~~our ~~until~~Annual ~~amended,~~Report ~~altered,~~on orForm ~~terminated.~~10-K Wefor ~~have~~the ~~reserved~~fiscal ~~100,000~~year ~~shares~~ended ofDecember ~~our~~31, ~~common~~2025, ~~stock~~filed ~~for~~with ~~issuance and sale under~~ the ~~Plan~~SEC ~~pursuant~~on toMarch ~~this~~27, ~~prospectus~~2026. ~~Details~~The ~~about~~following ~~the~~risk ~~Plan~~factors ~~are~~supplement ~~set~~those ~~forth~~risk ~~below as a series of questions and answers explaining its significant aspects~~factors.

~~Purpose~~Risks ~~and~~Related ~~Advantages~~to this Offering

~~1. What~~The market price of our common stock is ~~the~~volatile ~~purpose~~and ofmay decline before or after the ~~Plan?~~offering.

The ~~purpose~~trading price of ~~the~~our ~~Plan~~common stock is tohighly ~~provide~~volatile ~~participants~~and ~~with~~could abe ~~simple~~subject ~~and~~to ~~convenient~~wide ~~method~~fluctuations ofin ~~reinvesting~~response ~~cash~~to ~~dividends~~various ~~paid~~factors, onsome ~~shares~~ of ~~our~~which ~~common~~are ~~stock~~beyond our control and ~~buying~~may ~~additional~~not ~~shares~~be ofrelated to our ~~common~~operating ~~stock~~performance. ~~without~~These ~~paying~~fluctuations ~~brokerage~~could ~~commissions.~~be ~~Also,~~significant ~~the~~and ~~Plan~~could ~~provides~~cause usa ~~with~~loss ain ~~source~~the ofamount ~~funds~~invested ~~when~~in our shares of common stock ~~are bought directly from us~~.

~~2. What~~In ~~are~~addition, the ~~advantages~~stock market in general, and the market for banks and bank holding companies in particular, has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. At times, securities class action litigation has been instituted against companies following periods of volatility in the ~~Plan?~~overall market and in the market price of a company’s securities. This litigation, if instituted against us, could result in substantial costs, divert our management’s attention and resources, and harm our business, operating results, and financial condition.

~~The~~We ~~Plan~~cannot ~~provides~~assure ~~participants~~you ~~with~~that the ~~opportunity~~market toprice ~~reinvest~~of ~~cash~~our ~~dividends~~common ~~paid~~stock onwill ~~their~~not decline after you subscribe for the shares. If that occurs, you may have committed to buy shares of our common stock in ~~additional~~the offering at a price greater than the prevailing market price, and could have an immediate unrealized loss. Moreover, we cannot assure you that following the offering you will be able to sell your common stock at a price equal to or greater than the subscription price. Until shares are delivered upon expiration of the offering, you will not be able to sell the shares of our common stock ~~(see~~that ~~Question~~you ~~14)~~purchase in this offering. InA ~~addition,~~direct ~~the~~registration ~~Plan~~account ~~provides~~statement from our transfer agent reflecting ownership of such shares will be delivered as soon as practicable after expiration of this offering. We will not pay you interest on subscription funds delivered to the ~~following~~escrow ~~advantages:~~agent.

~~•The~~If ~~Plan~~you ~~provides~~do ~~eligible~~not ~~participants~~subscribe ~~with~~for the ~~opportunity~~maximum toamount ~~make~~of ~~quarterly~~shares ~~investments~~you ofmay ~~optional~~subscribe ~~cash amounts~~for, ~~subject~~or toif ~~minimum~~the ~~and~~offering ~~maximum~~is ~~amounts,~~oversubscribed ~~for~~and ~~the~~we ~~purchase~~reduce ofyour ~~additional~~subscription, ~~shares~~your ofownership ~~our~~interest ~~common~~will ~~stock~~be ~~(see Questions 9-11)~~diluted.

~~•No~~This ~~brokerage~~offering ~~commissions~~may ~~are~~result ~~paid~~in byour ~~participants~~issuance inof ~~connection~~up ~~with~~to ~~any~~4,108,072 ~~purchase~~additional shares of our common stock. If you choose not subscribe for the maximum amount of shares ~~made~~you ~~under~~may subscribe for, or if the ~~Plan~~offering is oversubscribed and we reduce your subscription, your relative ownership interest in us will be diluted to the extent shares are purchased by other shareholders in this offering.

~~•Cash~~The ~~dividends~~ability ~~paid on participants’ shares can be fully invested in additional shares of our common stock because the Plan permits fractional shares~~ to besubscribe ~~credited~~is tonot ~~Plan accounts~~transferable. ~~Dividends on such fractional shares, as well as on whole shares, also will be reinvested in additional shares, which will be credited to Plan accounts.~~

~~•Periodic~~You ~~statements~~may ~~reflecting~~not ~~all~~sell, ~~current~~transfer ~~activity~~or assign your ability to subscribe for shares in this offering. Therefore, ~~including~~there ~~share~~is ~~purchases~~no market or other means for you to directly realize any value associated with your ability to subscribe. You must submit a subscription and ~~latest~~purchase ~~Plan~~shares ~~account~~of ~~balance,~~our ~~simplify~~common ~~participants’~~stock ~~record~~to ~~keeping~~realize any value that may be embedded in the your ability to subscribe for shares.

•The Plan Administrator provides for the safekeeping of stock certificates for shares credited to each Plan account.

Plan Administration

3. Who Administers the Plan?

Continental Stock Transfer and Trust, our stock transfer agent (the “Plan Administrator”), administers the Plan by maintaining records, sending account statements to participants, and performing other duties relating to the Plan. Shares of common stock purchased under the Plan are registered in the name of the Plan Administrator’s nominee and are credited to the accounts of the participants in the Plan. The Plan Administrator acts in the capacity as agent for participants in the Plan. We may replace the Plan Administrator at any time within our sole discretion.

The Plan Administrator can be contacted at Continental Stock Transfer and Trust Company, One State Street Plaza, 30th Floor, New York, NY 10004, online at www.continentalstock.com, by email at drp@continentalstock.com, or by calling (212) 509-4000.

~~Participation~~The subscription price determined for this offering is not an indication of the fair value of our common stock.

4In determining the subscription price for this offering, our Board of Directors considered the price paid in our recent private placement, which was based on factors including, but not limited to, our recent and current financial performance, potential losses in our loan portfolio, the likely cost of capital from other sources, the price at which new investors and current shareholders might be willing to purchase stock, our need for capital, and the desire to provide an opportunity to our shareholders to participate in the offering on the same terms as investors in our recent private placement. ~~Who~~ The subscription price is ~~eligible~~not necessarily related to ~~participate?~~our book value, net worth or any other established criteria of value and may or may not be considered the fair value of our common stock to be offered in the offering. We cannot give you any assurance that our common stock will trade at or above the subscription price in any given time period. After the date of this prospectus, our common stock may trade at prices above or below the subscription price.

~~All~~Because ~~holders~~our ofmanagement ~~record~~will ofhave ~~Company~~broad ~~common~~discretion ~~stock~~over ~~are eligible to participate in~~ the ~~Plan.~~use ~~Beneficial owners~~ of shares of common stock whose shares are registered in names other than their own name may participate by requesting their broker or nominee to transfer their shares into their own name or requesting that the ~~broker~~proceeds ~~or nominee enroll in the Plan on their behalf. The right to participate in the Plan is not transferable to another person apart~~ from athis ~~transfer~~offering, ofyou amay ~~Participant’s shares of common stock. Shareholders who reside in jurisdictions in which it is unlawful for a shareholder to participate in the Plan are~~ not ~~eligible~~agree towith ~~participate~~how inwe ~~the~~use ~~Plan. Beneficial owners whose shares are registered in names other than their own (for example, in~~ the ~~name of a broker~~proceeds, ~~bank or other nominee)~~ and ~~who~~we ~~wish~~may tonot ~~participate~~invest in the ~~optional~~proceeds ~~cash purchase feature of the Plan must become owners of record of at least one (1) share of Bayfirst Financial Corp~~successfully. ~~common stock.~~

5We are conducting this offering to improve the capital levels of the Company and the Bank, fund incremental allowance for credit losses, and to support the continued growth of the Bank and return it to profitability. ~~How~~ In addition, market factors may require our management to allocate portions of the proceeds for other purposes. Accordingly, you will be relying on the judgment of our management regarding the use of the proceeds from this offering, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. It is possible that the proceeds will be invested in a way that does annot ~~eligible~~yield ~~shareholder~~a ~~participate?~~favorable, or any, return for us.

ToWe ~~participate~~may incancel ~~the~~this ~~Plan,~~offering aat ~~shareholder~~any oftime ~~record~~prior ~~must~~to ~~complete~~its anexpiration, ~~Enrollment Form~~ and ~~return~~neither itwe tonor the ~~Plan~~escrow ~~Administrator.~~agent ~~Copies~~will ofhave ~~the Enrollment Form may be obtained at~~ any ~~time~~obligation byto ~~request~~you except to ~~the~~return ~~Plan~~your ~~Administrator~~subscription funds.

~~6. When~~We may, anin ~~eligible~~our ~~shareholder~~sole ~~join~~discretion, decide not to continue with this offering or cancel it prior to its expiration. If we do cancel this offering, we will issue a press release notifying shareholders of the ~~Plan?~~cancellation and all subscription payments received by the escrow agent will be returned, without interest or deduction, as soon as practicable.

AnWe ~~eligible~~may ~~shareholder~~amend ofor ~~record~~modify ~~may~~the ~~enroll~~terms inof ~~the~~this ~~Plan~~offering at any time. Ifprior ~~the Enrollment Form is received by the Plan Administrator on or before the record date for a dividend payment, and the participant elects~~ to ~~reinvest~~its ~~the~~expiration ~~dividends~~ in ~~shares of~~ our ~~common~~sole ~~stock, such reinvestment of dividends will begin with that dividend payment~~discretion. ~~Please note that the Plan does not represent any change in our dividend policy or a guarantee of the payment of any future dividends.~~

7Our Board of Directors reserves the right to amend or modify the terms of this offering in its sole discretion. ~~What~~ ~~does~~Although we presently do not intend to do so, we may choose to amend or modify the ~~Enrollment~~terms ~~Form~~of ~~provide?~~this offering for any reason. Such amendments or modifications may include a change in the subscription price although no such change is presently contemplated. If we should make any fundamental changes to the terms set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer subscribers the opportunity to cancel their subscriptions and issue a refund of any money advanced by them, and recirculate an updated prospectus after the post-effective amendment is declared effective by the SEC. In addition, upon such event, we may extend the expiration date of this offering to allow shareholders ample time to make new investment decisions and for us to recirculate updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect to this offering and the new expiration date. The terms of this offering cannot be modified or amended after its expiration date.

~~The~~You ~~Enrollment~~may ~~Form~~not ~~allows~~revoke ~~participants~~your tosubscription ~~direct~~exercise, ~~the~~even ~~reinvestment~~if ofthis ~~all~~offering ofis ~~their~~extended ~~cash~~by ~~dividends~~our onBoard ~~all shares~~ of ~~our common stock then or subsequently owned by participants~~Directors, and ~~also~~you ~~permits~~could ~~eligible~~be ~~participants~~committed to ~~make~~buying ~~optional~~shares ~~cash~~above ~~payments for~~ the ~~purchase~~prevailing ofmarket ~~additional shares of our common stock in accordance with the Plan~~price.

~~The~~Once ~~Enrollment~~you ~~Form~~submit ~~also~~a ~~appoints~~subscription, ~~the~~you ~~Plan~~may ~~Administrator~~not asrevoke ~~agent~~it. ~~for~~If ~~each~~our ~~participant~~Board ~~and~~of ~~directs~~Directors ~~the~~decides ~~Plan~~to ~~Administrator~~exercise its option to ~~apply~~extend ~~cash~~this ~~dividends~~offering, ~~and~~you ~~any~~still ~~optional~~may ~~cash~~not ~~payments~~revoke your subscription. However, if we amend this offering to allow for an ~~eligible~~extension ~~participant~~of ~~might~~this offering for a period of more than 30 days or make a fundamental change to the ~~purchase~~terms set forth in this prospectus, you may cancel your subscription and receive a refund of ~~shares~~any money you advanced. The public trading market price of our common stock may decline before we issue shares in ~~accordance~~this ~~with~~offering. If you subscribe for shares and, afterwards, the ~~terms~~public trading market price of our common stock decreases below the ~~Plan.~~subscription price,

8. May a shareholder have dividends reinvested under the Plan with respect to less than all of the shares of common stock registered in the shareholder’s name?

No. Participants must reinvest all cash dividends as to all of their of the shares of our common stock registered in that shareholder’s name.

Optional Cash Payments

9. How do optional cash payments work?

In order to be eligible to participate in the optional cash purchase feature of the Plan, a shareholder must be an owner of record of at least one share of Company common stock and the shareholder must participate in the dividend reinvestment feature of the Plan. If an eligible shareholder participant chooses to participate by optional cash payments, the Plan Administrator will apply any optional cash payment received by the Plan Administrator from the participant to the purchase of shares of our common stock for the participant’s account. Dividends payable on shares of our common stock purchased with optional cash payments will be automatically reinvested in shares of our common stock.

10you will have committed to buying shares of our common stock at a price above the prevailing market price. ~~How~~ ~~are~~Following ~~optional~~this ~~cash~~offering, ~~payments~~you ~~made?~~may be unable to sell your shares of our common stock at a price equal to or greater than the price you paid, and you may lose all or part of your investment.

AnIf ~~initial~~you ~~cash~~do ~~payment may be made by eligible participants when enrolling by enclosing a check for~~ not ~~less~~act ~~than~~promptly ~~$250~~and ~~nor~~follow ~~more than $75,000 with~~ the ~~Enrollment~~subscription ~~Form. Optional cash payments may be made by sending a personal check payable to the Plan Administrator and drawn on a U.S. bank in U.S. currency. Thereafter~~instructions, ~~optional~~your ~~cash~~subscription ~~payments~~will ~~may~~ be made each quarter by sending to the Plan Administrator the participant’s check for not less than $250 nor more than $75,000, together with the account identification stub furnished by the Plan Administratorrejected.

~~The~~Shareholders ~~election~~that desire to ~~make~~purchase ~~optional~~shares ~~cash~~in ~~payments~~this isoffering ~~available~~must toact ~~each~~promptly ~~eligible~~to ~~participant~~ensure atthat ~~any~~all ~~time.~~required ~~Optional~~forms ~~cash~~and payments are actually received by ~~eligible~~the ~~participants~~escrow agent prior to the expiration of the offering. If you are a beneficial owner of shares, you must beact atpromptly ~~least~~to ~~$250~~ensure ~~per~~that ~~calendar~~your ~~quarter~~broker, dealer, custodian bank or other nominee acts for you and ~~cannot~~that ~~exceed~~all arequired ~~total~~forms and payments are actually received by the escrow agent prior to the expiration of ~~$75~~this offering. We are not responsible if your broker,~~000~~ incustodian ~~any~~or ~~quarter~~nominee fails to ensure that all required forms and payments are actually received by the escrow agent prior to the expiration of the offering. ~~The~~If ~~same~~you fail to complete and sign the required subscription forms, send an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your subscription prior to the expiration of ~~money~~the ~~need~~offering, ~~not~~the beescrow ~~sent~~agent ~~each~~will ~~quarter~~reject ~~and~~your ~~there~~subscription isor noaccept ~~obligation~~it only to ~~make~~the extent of the payment received. Neither we nor our sales agent nor the escrow agent undertakes to contact you concerning an ~~optional~~incomplete ~~cash~~or incorrect subscription form or payment, atnor are we under any ~~time~~obligation to correct such forms or payment. We have the sole discretion to determine whether a subscription exercise properly complies with the subscription procedures.

~~11. When~~This ~~will~~offering ~~optional~~may ~~cash~~cause ~~payments~~the ~~received~~price byof ~~the~~our ~~Plan~~common ~~Administrator~~stock beto ~~invested?~~decrease.

~~Optional~~The ~~cash~~announcement ~~payments~~of ~~will~~this beoffering ~~invested~~and onits terms, including the ~~Investment~~subscription ~~Date~~price, astogether ~~defined~~with the number of shares of common stock we could issue if the offering is completed, may result in ~~Question~~an 12immediate ~~below.~~decrease ~~Since~~in nothe ~~interest~~trading ~~will~~price beof ~~paid~~our bycommon usstock. orThis decrease may continue after the ~~Plan~~completion ~~Administrator~~of onthe ~~optional~~offering. ~~cash~~If ~~payments~~that occurs, ~~participants~~your ~~are~~purchase ~~urged~~of toshares ~~make~~of ~~optional~~our ~~cash~~common ~~payments~~stock ~~shortly~~in ~~before~~this offering may be at a price greater than the ~~Investment~~prevailing ~~Date~~trading price. ~~Optional~~Further, ~~cash~~if ~~payments~~a ~~must~~substantial benumber ~~received~~of atshares ~~least~~are ~~three~~sold ~~business~~in ~~days~~the ~~before~~offering ~~the~~and ~~Investment~~their ~~Date.~~holders ~~Late~~sell ~~arriving~~some ~~funds~~or ~~will~~all beof ~~returned~~their toshares, the ~~shareholder~~resulting sales could depress the market price of our common stock.

~~Optional~~You ~~cash~~will ~~payments do~~ not ~~constitute~~receive ~~deposits~~interest oron ~~savings~~subscription ~~accounts and are not insured by the Federal Deposit Insurance Corporation~~funds, ~~the~~including ~~Deposit~~any ~~Insurance~~funds ~~Fund~~ultimately orreturned ~~any~~to ~~other government agency~~you.

~~Purchases~~You will not earn any interest on your subscription funds while they are being held by the escrow agent pending the closing of this offering.

~~12. How~~[Remainder ~~will~~of ~~purchases~~this bepage ~~made?~~intentionally left blank]

Shares of common stock needed to fund the Plan may be:

acquired by the Plan Administrator on the open market;

issued directly by the Company from authorized but unissued shares; or

through a combination of the above, at the Company’s discretion.

Open market purchases under the Plan will be made during each calendar quarter on each “Investment Date,” which will be the same business day following a dividend payment date or as soon as practicable thereafter. Purchases of shares of common stock will be made at the direction of the Plan Administrator or its selected broker-dealer. Such purchases will be made in accordance with applicable state and federal securities laws and regulations. No interest or earnings will be paid by the Plan Administrator on dividend payments pending their investment in shares of our common stock.

To the extent we fund the Plan with shares of our common stock issued directly by us from authorized but unissued shares, the dividends payable to participants will be retained by us as a consideration for such shares.

In the event applicable law or the closing of securities markets requires temporary curtailment or suspension of open market purchases of the shares of our common stock, the Plan Administrator is not accountable for its inability to make purchases at such time.

13. How many shares of common stock will be purchased for participants?

The number of shares that will be purchased for each participant on any dividend payment date will depend on the amount of the participant’s cash dividend (and any optional cash payment) and the purchase price of shares of our common stock. Each participant’s account will be credited with that number of shares (including fractional shares computed to five (5) decimal places) equal to the total amount to be invested, divided by the applicable purchase price (computed to two (2) decimal places).

~~14. What~~THE ~~will~~OFFERING ~~be the price of shares of common stock purchased under the Plan?~~

InSubscriptions making purchases of shares of our common stock for a participant’s account associated with each Investment Date, the Plan Administrator will commingle the participant’s funds with those of other participants under the Plan. With respect to shares purchased on the open market, the prices of shares of our common stock purchased for participants under the Plan for each Investment Date will be equal to the average price of all shares of the common stock purchased on the Investment Date by the Plan Administrator on behalf of the Plan. With respect to shares purchased directly from the Company, the price of such shares will be the weighted average price paid for shares on the open market in such transaction. If no shares are acquired on the on market, the purchase price shall be the closing price on the open market on the day immediately preceding the date of issuance. The Plan Administrator shall have no responsibility with respect to the market value of the shares of our common stock acquired under the Plan for participant accounts. The Company will bear all costs of administering the Plan, except as described under Question 16 below.

15Record holders of our common stock as of the record date have the non-transferable ability to subscribe to purchase shares of our common stock. ~~How~~ ~~are~~The ~~dividends~~subscription price of $3.50 per share was determined by our Board of Directors based on ~~shares~~factors ~~purchased~~including, ~~through~~but not limited to, our recent and current financial performance, potential losses in our loan portfolio, the ~~Plan~~likely ~~applied?~~cost of capital from other sources, the price at which new investors and current shareholders might be willing to purchase stock, our need for capital, and the desire to provide an opportunity to our shareholders to participate in the offering on the same terms as investors in our recent private placement.

~~The~~You ~~purpose~~may ofsubmit ~~the~~a ~~Plan~~subscription isfor toone ~~provide~~share ~~the~~for ~~participant~~each ~~with~~share ayou ~~convenient~~owned ~~method~~as of ~~purchasing~~the ~~shares~~record ofdate. ~~common~~However, ~~stock~~if ~~and~~you topurchased ~~have~~shares ~~the~~in ~~dividends~~our onrecent ~~those~~private ~~shares reinvested. Accordingly~~placement, ~~dividends~~you ~~paid~~may onnot ~~shares~~participate ~~held~~ in ~~the~~this ~~Plan~~offering. ~~will~~If beall ~~automatically~~shares ~~reinvested~~are inpurchased, ~~additional~~the ~~shares~~total purchase price of ~~common~~the ~~stock~~shares ~~unless~~offered ~~and~~in ~~until~~this ~~the~~offering ~~participant~~and ~~elects~~gross inproceeds ~~writing~~we toreceive, ~~terminate~~before ~~participation~~expenses, inwould ~~the~~be ~~Plan~~$14.38 million.

~~Cost~~If you are a holder of record, a direct registration account statement from our transfer agent reflecting ownership of such shares of our common stock purchased in this offering will be delivered to ~~Participants~~you as soon as practicable after the offering has expired. If you hold your shares in the name of a bank, broker, dealer or other nominee, DTC will credit your nominee with the securities you purchased in this offering.

~~16. Are~~Reasons ~~there~~for ~~any expenses to participants in connection with purchases under~~ the ~~Plan?~~Offering

~~No.~~On ~~Participants~~April ~~will~~28, ~~make~~2026, ~~purchases~~we ofclosed ~~shares~~a private placement of ~~common~~convertible preferred stock ~~under~~at ~~the~~an ~~Plan~~effective ~~without~~conversion ~~the~~price ~~payment~~ of ~~brokerage~~$3.50 ~~commissions,~~per ~~and~~share wecommon ~~will~~stock. ~~pay~~We ~~all~~are ~~fees~~conducting inthis ~~connection~~offering ~~with~~to ~~purchases~~permit ~~of shares of~~ our ~~common~~current ~~stock~~shareholders ~~under~~to ~~the~~also ~~Plan,~~purchase ~~except~~shares ~~for~~at ~~costs associated with~~ the ~~actual~~same ~~purchase~~ price. ofWe ~~shares~~intend ofto ~~common~~use ~~stock~~the ~~purchased~~net onproceeds ~~the~~to ~~Investment~~improve ~~Date.~~the ~~There~~capital ~~are~~levels noof ~~service~~the ~~charges~~Company toand ~~participants~~the inBank, ~~connection~~fund ~~with~~incremental ~~purchases~~allowance offor ~~shares~~credit oflosses, ~~common~~and ~~stock~~to ~~under~~support the ~~Plan.~~continued ~~All~~growth ~~costs~~ of ~~administration of~~ the ~~Plan~~Bank ~~are~~and ~~paid~~return byit usto profitability.

~~Reports~~Method toof ~~Participants~~Submitting Subscriptions

~~17. How~~The ~~will~~submission ~~participants~~of a subscription is irrevocable and may not be ~~advised~~cancelled or modified, even if the offering is extended by our Board of ~~their~~Directors. ~~purchases~~However, if we amend the offering to allow for an extension of ~~shares~~the offering for a period of ~~common~~more ~~stock?~~than 30 days or make a fundamental change to the terms set forth in this prospectus, you may cancel your subscription and receive a refund of any money you have advanced, without interest or deduction

~~Each~~Subscription ~~quarter,~~by ~~each~~Registered ~~participant~~Holders will receive an account statement from the Plan Administrator. These statements are the participant’s continuing record of the purchase price of the shares of our common stock acquired and the number of shares acquired, and should be retained for tax purposes. Participants also will receive, from time to time, communications sent to all record holders of shares of our common stock.

~~Dividends~~You may submit a subscription by properly completing and executing the subscription form together with any required signature guarantees and forwarding it, together with your full subscription payment, to the escrow agent at the address set forth below prior to the expiration of the offering.

~~18. Will~~Subscription ~~participants~~by beDTC ~~credited~~Participants ~~with dividends on shares held in their account under the Plan?~~

~~Yes.~~We ~~The~~expect ~~participant’s~~that ~~account~~subscriptions ~~will~~may be ~~credited~~submitted ~~with~~through ~~dividends~~the ~~paid~~facilities onof ~~whole~~DTC. If your shares ~~and~~are ~~fractional~~held ~~shares~~of ~~credited~~record through DTC, you may submit a subscription by instructing DTC, or having your broker instruct DTC, to ~~the~~forward ~~participant’s~~your ~~account.~~subscription ~~The~~information ~~Plan~~from ~~Administrator~~your ~~will~~account ~~automatically~~to ~~reinvest~~the account of the ~~cash~~escrow ~~dividends~~agent, ~~received~~together ~~for~~with confirmation of the ~~purchase~~number of ~~additional~~ shares of our common stock you are subscribing for, and payment of your full subscription payment.

~~Stock~~Subscription ~~Ownership~~by ~~Records~~Beneficial Owners

~~19. How~~If ~~will~~you ~~the~~are ~~Plan~~a ~~Administrator~~beneficial ~~keep~~owner ~~records~~ of shares of our common stock ~~purchased?~~that are registered in the name of a broker, custodian bank or other nominee, or if you hold our common stock certificates and would prefer to have an institution conduct the transaction on your behalf, you should instruct your broker, custodian bank or other nominee or institution to submit your subscription and deliver all documents and payment on your behalf prior to 5:00 p.m.,

The Plan Administrator will hold all shares of common stock purchased under the Plan in the name of its nominee. Certificates for shares of our common stock purchased under the Plan will not be issued to participants. The number of shares credited to an account under the Plan will be shown on the participant’s account statement.

~~The~~Eastern ~~participant~~time, ~~may~~on __, ~~receive~~2026, ~~certificates~~which ~~for~~is ~~whole shares accumulated in his or her account under~~ the ~~Plan~~expiration byof ~~sending~~this ~~a written request to the Plan Administrator~~offering. ~~Participants~~Your ~~may~~subscription ~~request~~will ~~periodic~~not ~~issuance~~be ofconsidered ~~certificates~~submitted ~~for~~unless ~~all full shares in~~ the ~~account.~~escrow ~~When~~agent ~~certificates~~receives ~~are~~from ~~issued~~you, toyour ~~the participant~~broker, ~~future~~custodian ~~dividends~~bank, onnominee ~~such~~or ~~shares~~institution, ~~will~~all beof ~~reinvested~~the inrequired ~~additional~~documents ~~shares~~and ofyour ~~common~~full ~~stock.~~subscription ~~Any~~payment ~~undistributed~~prior ~~shares will continue~~ to be5:00 ~~reflected in the participant’s account~~p.m., NoEastern ~~certificates~~time, ~~representing~~on ~~fractional~~__, ~~shares will be issued~~2026.

~~The~~Payment ~~participant’s~~Method rights under the Plan and shares credited to the account of the participant under the Plan may not be pledged. A participant who wishes to pledge such shares must request that certificates for such shares be issued in his or her name.

~~Accounts~~Your ~~under~~payment of the ~~Plan~~subscription ~~are~~price ~~maintained~~must be made in United States dollars for the ~~names~~full innumber ~~which~~of ~~certificates~~shares of ~~participants~~common ~~were~~stock ~~registered~~for which you are subscribing by cashier’s or certified check or wire transfer drawn upon a U.S. bank payable to “Wilmington Trust, N.A., as Escrow Agent for BayFirst 4-26 Public Escrow Account” at the ~~time~~address ~~they~~set ~~entered~~forth ~~the~~below. ~~Plan~~The escrow agent will not accept non-certified checks or payment by any other means. ~~Additional~~Payment ~~certificates~~received ~~for~~after ~~whole~~the ~~shares~~expiration of the offering will not be ~~similarly~~honored, ~~registered~~and ~~when~~the ~~issued~~sales agent will return your payment to you, without interest or deduction, as soon as practicable.

~~Sale~~Your ofpayment ~~Shares~~will ~~from~~only be considered received by the ~~Plan~~escrow agent upon receipt by the escrow agent of any;

~~20. How~~•Cashiers ~~does~~or certified checks drawn against a ~~participant~~U.S. ~~sell~~bank ~~shares~~payable ~~from~~to ~~the~~“WILMINGTON ~~Plan?~~TRUST, N.A. as Escrow Agent for “BayFirst 4-26 Public Escrow Account”, mailed to

AWilmington ~~participant may sell some or all of the shares held in the Plan by submitting sale instructions in writing to the Plan Administrator either by fax~~Trust, ~~mail, or scanned email~~N. ~~The Plan Administrator will, within five (5) business days of receiving such instructions, sell such shares and deliver the proceeds, less any brokerage commissions and any other cost of sale~~A. Any full shares and fractional interests in shares may be aggregated and sold with those of other participants who have submitted a sale instruction; provided, that each sale instruction will be processed no later than five (5) business days after the date on which such sale instruction is received by the Plan Administrator. All sale instructions are final when the Plan Administrator receives them; sale instructions cannot be stopped or cancelled. There is a $15.00 fee to process all sale instructions.

~~Shares~~1100 ~~are~~North ~~purchased~~Market and sold for the Plan on specified dates or during specified periods. As a result, participants have no control over the price at which shares are purchased or sold and participants may pay a higher purchase price or receive a lower sales price then if a participant had purchased or sold the shares outside of the Plan. Participants bear the risk of fluctuations in the price of shares.Street

~~Withdrawals~~Wilmington, ~~From~~DE ~~the Plan~~19890

~~21. How~~Attn: ~~does~~Workflow ~~a participant withdraw from the Plan?~~Management

A•Wire ~~participant~~transfer ~~may~~of ~~withdraw~~immediately ~~from~~available ~~the~~funds ~~Plan~~directly ~~at any time by sending a written withdrawal notice~~ to the ~~Plan~~account ~~Administrator~~maintained ~~(see~~by ~~Question~~Wilmington 3Trust, ~~for full name and address of Plan Administrator)~~N. ~~Notice received after a particular dividend record date will be effective following the payment date of such dividend~~A., ~~When~~as aescrow ~~participant~~agent ~~withdraws from the Plan, certificates~~ for ~~whole~~purposes ~~shares~~of ~~credited~~accepting tosubscriptions ~~the~~in ~~participant’s~~this ~~account~~offering ~~under the Plan will be issued and a cash payment will be made for any fraction of a share.~~at:

~~22. What~~Wilmington ~~happens~~Trust, toNational aAssociation ~~fraction of a share when a participant withdraws from the Plan?~~

~~When~~ABA a#: participant withdraws from the Plan, a cash adjustment representing the value of any fraction of a share then credited to the participant’s account will be mailed by check directly to the participant. The cash adjustment will be based on the closing price of the shares of common stock on the date on which the termination is processed by the Plan Administrator. In no case will certificates representing a fractional share interest be issued.031100092

~~Other~~A/C ~~Information~~#: 184604-000

~~23. What~~A/C ~~happens~~Name: ~~when~~BayFirst a4-26 ~~participant~~Public ~~ceases~~Escrow ~~to be a record owner of shares of common stock as of a dividend record date?~~Account

IfAttn: aAmy participant ceases to be a registered owner of at least one (1) share of Company common stock (including shares credited under the Plan), participation in the Plan terminates and optional cash purchases are not Kohr

Your payments must be accompanied by properly completed subscription forms, and, if you pay by wire transfer, you should include sufficient information with the wire transfer to identify yourself, and ensure that your subscription form is also delivered to the escrow agent.

You should read the instruction letter for this offering carefully and strictly follow it. DO NOT SEND FORMS OR PAYMENTS TO US. We will not consider your subscription received until the escrow agent has received delivery of a properly completed and duly executed subscription forms and payment of the full subscription amount. The risk of delivery of all documents and payments is borne by you or your nominee, not by the escrow agent or us.

The method of delivery of subscription forms and payment of the subscription amount to the escrow agent will be at the risk of subscribing shareholders. If sent by mail, we recommend that you send those documents and payments by overnight courier or by registered mail, properly insured, with return receipt requested, and that a sufficient number of days be allowed to ensure delivery to the escrow agent and clearance of payment prior to the expiration of the offering.

Unless your subscription documents provide that the shares of our common stock are to be delivered to the record holder or such certificate is submitted for the account of a bank or a broker, signatures must be guaranteed by an “eligible guarantor institution,” as such term is defined in Rule 17Ad-15 of the Exchange Act, subject to any standards and procedures adopted by the escrow agent.

~~permitted. A~~Missing ~~cash~~or ~~payment~~Incomplete ~~will~~Subscription beInformation ~~made to the participant for any fractional shares and for any uninvested cash balance in the account, and the account will be terminated.~~

~~24. What~~If ~~happens~~you ifdo not indicate the ~~Company~~number ~~issues~~of ashares ~~stock~~being ~~dividend~~subscribed for, ~~declares~~or athe escrow agent does not receive the full subscription payment for the number of shares you indicate you are subscribing for, then you will be deemed to have subscribed for the maximum number of shares that may be purchased with the aggregate subscription payment you delivered to the escrow agent. If we do not apply your full subscription payment to your purchase of shares of our common stock, ~~split~~any excess subscription payment received by the escrow agent will be returned, without interest or ~~conducts~~deduction, aas ~~rights~~soon ~~offering?~~as practicable.

~~Any~~Expiration ~~shares~~Date representing stock dividends or stock splits will be added to each participant’s account. In the event the Company conducts a rights offering to holders of common stock, participants in the Plan will be notified in advance of the commencement of the offering and ~~shall~~Amendments ~~be permitted to participate in any such offering.~~

25The subscription period, expires at 5:00 p. ~~How~~m., Eastern time, on __, 2026, which is the expiration of the offering. If you do not submit a subscription prior to that time, your ability to subscribe will ~~participant’s~~expire. We will not be required to issue shares ~~held~~of ~~under~~our common stock to you if the ~~Plan~~escrow beagent ~~voted~~receives atyour ~~meetings~~subscription forms or your subscription payment after that time, regardless of ~~shareholders?~~when the documents and subscription payment were sent. We may extend the expiration of this offering for a period not to exceed 30 days by giving oral or written notice to the escrow agent prior to the expiration of the offering, although we presently do not intend to do so. If we elect to extend the expiration of the offering, we will issue a press release announcing such extension no later than 9:00 a.m., Eastern time, on the next business day after the most recently announced expiration of the offering. We will extend the duration of the offering as required by applicable law or regulation and may choose to extend it if we decide to give investors more time to submit subscriptions. If we elect to extend the offering for a period of more than 30 days, then holders who have subscribed for shares may cancel their subscriptions and receive a refund of all money advanced, without interest or deduction.

~~The~~Our ~~Plan~~Board ~~Administrator~~of ~~will~~Directors ~~forward~~also reserves the right to amend or modify the terms of this offering. If we should make any ~~proxy~~fundamental ~~solicitation~~changes ~~materials~~to ~~relating~~the terms set forth in this prospectus, we will file a post-effective amendment to the ~~shares~~registration statement in which this prospectus is included, offer subscribers the opportunity to cancel their subscriptions and issue a refund of ~~common~~any ~~stock~~money ~~held~~advanced by such shareholders, without interest or deduction, and recirculate an updated prospectus after the ~~Plan~~post-effective toamendment is declared effective by the ~~participating~~SEC. ~~shareholder~~In addition, upon such event, we may extend the expiration date of this offering to allow shareholders ample time to make new investment decisions and for us to recirculate updated documentation. ~~Where~~Promptly nofollowing ~~instructions~~any ~~are~~such ~~received~~occurrence, ~~from~~we will issue a ~~participant~~press release announcing any changes with respect to athis ~~participant’s~~offering ~~shares~~and ~~held~~the ~~under~~new expiration date. The terms of the ~~Plan~~offering cannot be modified or amended after the expiration date of the offering. Although we do not presently intend to do so, we may choose to amend or ~~otherwise~~modify the terms of this offering for any reason, ~~such~~including, ~~shares~~without ~~shall~~limitation, ~~not~~in beorder ~~voted~~to ~~unless~~increase participation in the ~~participant~~offering. ~~votes~~Such ~~such~~amendments ~~shares~~or modifications may include a change in ~~person~~the subscription price although no such change is presently contemplated.

~~26. What~~Subscription ~~are~~Price ~~the income tax consequences of participation in the Plan?~~

In ~~general,~~determining ~~a participant in~~ the ~~Plan~~subscription ~~has~~price, ~~the~~our ~~same~~Board ~~Federal~~of ~~and~~Directors ~~state~~considered ~~income~~the ~~tax~~price ~~obligations~~paid ~~with~~in ~~respect~~our torecent ~~dividends~~private ~~credited~~placement, towhich ~~his~~was orbased ~~her~~on ~~account~~factors ~~under~~including, ~~the~~but ~~Plan~~not aslimited ~~other holders of shares of common stock who elect~~ to, ~~receive~~our ~~cash~~recent ~~dividends~~and ~~directly.~~current Afinancial ~~participant is treated for income tax purposes as having received~~performance, onpotential ~~the~~losses ~~dividend date, a dividend~~ in ~~the~~our ~~amount~~loan ~~equal~~portfolio, to the ~~fair~~likely ~~market~~cost ~~value~~ of ~~the~~capital ~~shares~~from ofother ~~common~~sources, ~~stock credited to his or her account under~~ the ~~Plan,~~price ~~even~~at ~~though~~which ~~that~~new ~~amount~~investors ~~was~~and ~~not~~current ~~actually~~shareholders ~~received~~might bybe ~~the~~willing ~~participant in cash, but, instead, was applied~~ to ~~the~~ purchase ofstock, ~~additional~~our ~~shares~~need for ~~his or her account. In addition~~capital, ~~any brokerage commissions~~ and ~~service charges paid by~~ the ~~Company~~desire onto ~~behalf~~provide ofan ~~the~~opportunity ~~participant~~to ~~are~~our ~~deemed~~shareholders to ~~constitute~~participate ~~dividend~~in ~~income by~~ the ~~Internal~~offering ~~Revenue Service. Such amounts, if any, will be included~~ on ~~any annual information return filed with~~ the ~~Internal~~same ~~Revenue~~terms ~~Service,~~as ainvestors ~~copy~~in ofour ~~which~~recent ~~will~~private ~~be sent to the participant~~placement.

The ~~cost~~subscription ~~basis~~price was established at a price of ~~each~~$3.50 per share. ofThe ~~common~~subscription ~~stock~~price ~~credited~~is not necessarily related to aour ~~participant’s~~book ~~account~~value, ~~pursuant~~net toworth ~~the~~or ~~dividend~~any ~~reinvestment~~other ~~aspect~~established criteria of ~~the~~value ~~Plan~~and ismay ~~the~~or ~~fair~~may ~~market~~not ~~value~~be ofconsidered the ~~shares~~fair value of our common stock onto ~~the~~be ~~Investment~~offered ~~Date,~~in ~~and~~this ~~the~~offering. ~~holding~~We ~~period~~cannot ~~for~~assure ~~such~~you ~~shares~~that ~~begins on~~ the ~~day~~market ~~following~~price ~~the~~of ~~Investment~~our ~~Date.~~common ~~Withdrawal~~stock ~~from the Plan~~ will not ~~result~~decline induring ~~the~~or ~~recognition~~after ofthe ~~taxable income~~offering. AWe ~~participant~~also ~~will~~cannot ~~recognize~~assure ayou ~~gain~~that oryou awill ~~loss~~be ~~when~~able to sell shares ~~are~~of ~~sold~~our oncommon ~~behalf~~stock ofpurchased during the ~~participant~~offering ~~upon~~at ~~withdrawal~~a ~~from~~price ~~the~~equal ~~Plan~~to or ~~when~~greater than the ~~participant~~subscription ~~sells~~price. ~~shares~~We ~~after~~urge ~~the~~you ~~participant’s~~to ~~withdrawal~~obtain ~~from~~a ~~the~~current ~~Plan~~quote for our common stock before submitting a subscription.

All participants are advised to consult with their own tax advisors to determine the particular tax consequences that may result from their participation in the Plan and the subsequent sale by them of shares purchased pursuant to the Plan.

27. What are the responsibilities of the Company under the Plan?

The Company and the Plan Administrator shall not be liable for any act, or any omission to act, in connection with the operation of the Plan including, without limitation, any claims for liability:

a.relating to the determination from time to time of the price and the times purchases of shares are made;

b.resulting from changes in the market price of shares or the prices at which Plan transactions are effected, including, but not limited to those occurring between a dividend reinvestment or optional cash purchase or a termination and a sale of shares held under the Plan

c.arising from a decision to participate in the Plan;

d.arising in connection with income taxes (together with any applicable interest and/or penalties) payable by Participants in connection with their participation in the Plan; or

e.arising out of actions taken as a result of inaccurate or incomplete information or instructions.

Participants should recognize that neither the Company nor the Plan Administrator can assure a profit or protection against a loss on the shares purchased under the Plan.

~~28. Who~~Withdrawal ~~bears~~and ~~the risk of market price fluctuations in the shares of common stock?~~Termination

AWe ~~participant’s~~reserve ~~investment~~the inright ~~shares~~to ~~acquired~~withdraw ~~under~~ the ~~Plan~~offering isprior noto ~~different~~its ~~from~~expiration ~~direct~~for ~~investment~~any ~~in shares of our common stock~~reason. ~~The~~We ~~participant~~may ~~bears~~terminate the ~~risk~~offering, ofin ~~loss~~whole ~~and~~or ~~realizes~~in ~~the~~part, ~~benefits~~if ofat any ~~gain~~time ~~from~~before ~~market~~completion ~~price~~of ~~changes~~the ~~with~~offering ~~respect~~if tothere ~~all~~is ~~such~~any ~~shares~~judgment, ~~held~~order, indecree, ~~the~~injunction, ~~Plan~~statute, law or ~~otherwise.~~regulation ~~Neither~~entered, ~~the~~enacted, ~~Company~~amended ~~nor~~or ~~the~~held ~~Plan~~to ~~Administrator~~be ~~makes~~applicable ~~any~~to ~~representations~~the ~~with~~offering ~~respect~~that toin the ~~future~~sole ~~value~~judgment of ~~the~~our ~~shares~~Board of ~~our~~Directors ~~common~~would ~~stock~~or ~~purchased~~might ~~under~~make the ~~Plan.~~offering ~~The~~or ~~participant~~its ~~should~~completion, ~~recognize~~whether ~~that~~in ~~the~~whole ~~Company,~~or ~~the~~in ~~Plan Administrator~~part, ~~and~~illegal ~~related~~or ~~parties~~otherwise ~~cannot~~restrict ~~assure~~or ~~the~~prohibit ~~participant~~completion of ~~realizing~~the ~~any~~offering. ~~profits~~We ormay ~~protect~~waive ~~the~~any ~~participant~~of ~~against~~these aconditions ~~loss~~and ~~related~~choose to ~~investment~~proceed inwith the ~~shares~~offering even if one or more of ~~our~~these ~~common~~events ~~stock~~occur. ~~purchased~~If orwe ~~sold~~terminate, ~~under~~cancel or withdraw the ~~Plan.~~offering, ~~The~~in ~~shares~~whole ofor ~~common~~in ~~stock~~part, ~~purchased~~we inwill ~~accordance~~issue ~~with~~a ~~the~~press ~~Plan~~release donotifying ~~not~~the ~~constitute~~shareholders ~~savings~~of ~~accounts~~such orevent, ~~deposits~~all ~~issued~~affected bysubscriptions awill ~~bank~~expire, and ~~are~~all ~~not~~excess ~~insured~~subscription payments received by the ~~Federal~~escrow ~~Deposit~~agent ~~Insurance~~will ~~Corporation~~be returned, without interest or ~~any~~deduction, ~~other~~as ~~governmental~~soon ~~agency~~as practicable following such termination, cancellation or withdrawal.

~~29. May~~Sales ~~the~~Agent ~~Plan be changed or discontinued?~~

The ~~Company~~sales ~~reserves~~agent ~~the~~for ~~right~~this tooffering ~~amend,~~is ~~suspend,~~Hovde ~~or terminate the Plan at any time~~Group, ~~but such action shall have no retroactive effect that would prejudice the interest of the participants~~LLC. InThe ~~the~~sales ~~event~~agent ~~of suspension or termination of the Plan by the Company, no investment~~ will be ~~made~~available ~~by the Plan Administrator on the dividend payment date immediately following the effective date of such suspension or termination. Any dividend subject~~ to ~~the~~answer ~~Plan and paid after the effective date of~~ any ~~such~~questions ~~suspension~~you ~~or termination will be remitted by the Company to the participants in cash only, in the usual manner. The Company~~ may ~~remove~~have ~~the~~about ~~Plan Administrator at any time on not less than ninety (90) days prior notice to~~ the ~~Plan~~offering ~~Administrator,~~by ~~and~~phone ~~appoint another Plan Administrator. Similarly, the Plan Administrator may resign~~ at ~~any time on not less than ninety~~ (90833) ~~days~~587-4159 ~~prior~~or ~~notice~~by toemail ~~the Company and upon delivery~~ to ~~the Company of all property and records held in connection with the Plan~~prospectus@hovdegroup.com.

~~USE~~Escrow ~~OF PROCEEDS~~Agent

WeThe ~~will~~escrow ~~use~~agent ~~any~~for ~~proceeds~~the ~~from~~offering ~~the~~is ~~issuance~~Wilmington ~~and~~Trust, ~~sale~~N.A.. ofThe ~~shares~~address ~~under~~at ~~the~~which ~~Plan~~subscription topayments ~~pay~~and ~~our~~subscription ~~operating~~forms ~~expenses~~should orbe tomailed ~~contribute~~or asdelivered ~~capital~~by tohand ~~support~~delivery, ~~the~~first ~~growth~~class ~~and~~mail ~~operations~~or ofovernight ~~the~~courier ~~Bank.~~service is:

~~SECURITIES~~Wilmington ~~AUTHORIZED~~Trust, ~~FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS~~N.A.

~~The~~1100 ~~following~~North ~~table~~Market ~~provides information as of December 31, 2021, with respect to shares of common stock that may be issued under our equity compensation plans.~~Street

	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted averageexercise price ofoutstanding options, warrants and rights(b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders	450,758	$	15.64	104,731
Equity compensation plans not approved by security holders	—	—		—
Total	—	$	—	—

Wilmington, DE 19890

Attn: Workflow Management

You must ensure that your payments are accompanied by accurately completed subscription forms, so that your payment can be properly attributed to you.

Fees and Expenses

We will pay all fees charged by the escrow agent and the escrow agent. You are responsible for paying any other commissions, fees, taxes or other expenses incurred in connection with your subscription.

No Fractional Shares

We will not issue fractional shares or cash in lieu of fractional shares. Fractional shares of our common stock which may otherwise be issued will be eliminated by rounding down to the nearest whole share, with the total subscription payment being adjusted accordingly. Any excess subscription payments received by the escrow agent will be returned, without interest or deduction, as soon as practicable.

Notice to Nominees

If you are a broker, custodian bank or other nominee holder that holds shares of our common stock for the account of others on the record date, you should notify the beneficial owners of the shares for whom you are the nominee of this offering as soon as possible to learn their intentions with respect to submitting subscriptions. You should obtain instructions from the beneficial owner, as set forth in the instructions we have provided to you for your distribution to beneficial owners. If the beneficial owner instructs, you should complete the appropriate documents and submit them to the escrow agent with the proper subscription payment. If you hold shares of our common stock for the account(s) of more than one beneficial owner, you may submit subscriptions for all such beneficial owners in the aggregate who otherwise would have been entitled to, had they been direct holders of our common stock on the record date, provided that you, as a nominee record holder, make a proper showing to the escrow agent by submitting the appropriate form which is provided with your offering materials. If you did not receive this form, you should contact the sales agent to request a copy.

~~DIVIDENDS~~Beneficial Owners

~~Since~~If ~~2016~~you are a beneficial owner of shares of our common stock or otherwise hold shares through a broker, custodian bank or other nominee, we will ask your broker, custodian bank or other nominee to notify you of the offering. If you wish to submit a subscription, you will need to have ~~paid~~your ~~quarterly~~broker, ~~cash~~custodian ~~dividends~~bank onor other nominee act for you. If you hold certificates of our common stock. ~~The~~directly ~~following~~and ~~table~~would ~~reflects~~prefer ~~dividends~~to ~~paid~~have inyour ~~2019~~broker, ~~2020~~custodian bank or other nominee act for you, you should contact your nominee and ~~2021~~request ~~(as~~it ~~adjusted~~to ~~for~~effect the ~~three-~~transactions for~~-two~~ ~~stock~~you. ~~split~~To ~~effective~~indicate ~~May~~your 10decision with respect to your subscription, ~~2021)~~you should complete and return to your broker, custodian bank or other nominee the appropriate form. You should receive this form from your broker, custodian bank or other nominee with the other offering materials. You should contact your broker, custodian bank or other nominee if you do not receive this form, but you believe you are entitled to participate in the offering. We are not responsible if you do not receive the form from your broker, custodian bank or nominee or if you receive it without sufficient time to respond.

Date Dividend Paid	Dividend Amount per Share
March 15, 2019	$	0.067
June 15, 2019	$	0.067
September 15, 2019	$	0.067
December 15, 2019	$	0.067
March 15, 2020	$	0.067
June 15, 2020	$	0.067
September 30, 2020	$	0.067
December 31, 2020	$	0.067
March 15, 2021	$	0.067
June 15, 2021	$	0.070
September 15, 2021	$	0.070
December 15, 2021	$	0.070

Transferability of Subscription Privileges

~~Prior~~The ability to ~~paying~~subscribe ~~any~~is ~~dividends~~non-transferable onand, ~~our common stock~~therefore, weyou ~~must~~may benot ~~current~~sell, intransfer ~~the~~or ~~payment~~assign ofyour ~~dividends~~subscription ~~due~~privileges onto ~~our Series A Preferred Stockand Series B Convertible Preferred Stock~~anyone.

~~Holders~~Validity of ~~our~~Subscriptions outstanding Series A Preferred Stock are entitled to receive quarterly cash dividends at 9% per annum (unless we have not redeemed the shares by the tenth anniversary of their issuance, in which event the rate is subject to be increased to 11%). Holders of our outstanding Series B Convertible Preferred Stock are entitled to receive quarterly cash dividends at 8% per annum (unless we have not redeemed the shares by the tenth anniversary of their issuance, in which event the rate is subject to be increased to 9%).

~~Additionally~~We will resolve all questions regarding the validity and form of the subscriptions, ~~our~~including ~~Articles~~time of ~~Incorporation~~receipt ~~provide~~and eligibility to participate in this offering. In resolving all such questions, we will review the relevant facts, consult with our legal advisors and we may request input from the relevant parties. Our determination will be final and binding. Once made, subscriptions and directions are irrevocable, even if you later learn information that you consider to be unfavorable to the submission of your subscription and even if the offering is extended by our Board of Directors, and we will not accept any alternative, conditional or contingent subscriptions or directions. However, if we amend the offering to allow for an extension of the offering for a period of more than 30 days or make a fundamental change to the terms set forth in this prospectus, you may ~~authorize~~cancel your subscription and ~~issue~~receive ~~additional~~a ~~series~~refund of ~~preferred~~any ~~stock~~money you have advanced, without ~~shareholder~~interest ~~approval~~or deduction. ~~Any~~We ~~preferred~~reserve ~~shares~~the ~~issued~~absolute right to reject any subscriptions or directions not properly submitted or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the ~~future~~subscription ~~may~~period ~~further~~expires, ~~restrict~~unless waived by us in our ~~ability~~sole discretion. Neither we nor the escrow agent shall be under any duty to ~~declare~~notify you or ~~pay~~your ~~dividends~~representative onof ~~any~~defects ~~junior~~in ~~stock~~your subscriptions. A subscription will be considered accepted, ~~including~~subject to our right to withdraw or terminate the ~~common~~offering, ~~stock~~only when properly completed and duly subscription forms and any other required documents and the full subscription payment have been received by the escrow agent. Our interpretations of the terms and conditions of the offering will be final and binding.

~~Future~~Escrow ~~dividends~~Arrangements; ~~may~~Return ~~be declared subject to the discretion~~ of ~~the~~Funds Board. Our Board may consider, among other factors, debt service requirements of our debt both at the Bank and parent company levels, the dividend requirements of our outstanding preferred stock, our projected earnings, financial condition, and regulatory capital requirements, including applicable statutory and regulatory restrictions on the payment of dividends, in determining whether or not to declare a dividend.

~~BayFirst’s~~The ~~ability~~escrow toagent ~~pay~~will ~~dividends~~hold ~~may~~funds ~~also~~received bein ~~dependent~~payment ~~upon~~for ~~the~~shares ~~Bank’s~~of ~~ability~~our tocommon ~~pay~~stock ~~dividends~~in toa ~~BayFirst~~segregated account pending completion of the offering. The ~~Bank~~escrow isagent ~~restricted~~will hold this money in ~~its~~escrow ~~ability~~until tothe ~~pay~~offering ~~dividends~~is ~~under~~completed ~~Florida~~or ~~law~~is withdrawn and bycanceled. If the ~~regulations~~offering ~~promulgated~~is canceled for any reason, all subscription payments received by the ~~Florida~~escrow ~~Office~~agent ofwill ~~Financial~~be ~~Regulation~~returned, ~~(“OFR”)~~without interest or deduction, as soon as practicable. In ~~particular~~addition, ~~under~~all ~~Section~~subscription ~~658.37~~payments received by the escrow agent will be returned, ~~Florida~~without ~~Statutes~~interest or deduction, as soon as practicable, if subscribers decide to cancel their subscriptions in the event that we extend the offering for a ~~Florida~~period ~~state-chartered~~of ~~bank~~more ~~may~~than ~~not~~30 ~~pay~~days ~~dividends~~after ~~from~~the ~~its~~expiration ~~capital,~~date ~~but~~or ~~may~~if ~~only~~there ~~pay~~is ~~dividends~~a ~~from~~fundamental ~~its~~change ~~earnings~~to the offering.

Shareholder Rights

You will have no rights as a holder of the shares of our common stock you purchase in the offering, if any, until such shares are issued in uncertificated, book-entry form, which means that you will receive a direct

~~BUSINESS~~registration account statement from our transfer agent reflecting ownership of such shares if you are a holder of record. If you hold your shares in the name of a bank, broker, dealer or other nominee, DTC will credit your nominee with the shares you purchased in this offering. You will have no right to revoke your subscription after you deliver your completed subscription forms, the full subscription payment and any other required documents to the escrow agent, unless we amend or modify the terms of the offering.

~~BayFirst~~Foreign ~~Financial~~Shareholders ~~Corp.~~

~~BayFirst~~We ~~commenced~~will ~~its~~not ~~bank~~mail ~~holding~~this ~~company~~prospectus ~~operations~~or onsubscription ~~September~~forms 1,to ~~2000,~~shareholders bywith ~~acquiring~~addresses ~~all~~that ofare outside the ~~shares~~United ofStates ~~the~~or ~~Bank~~that have an army post office or foreign post office address. ~~BayFirst’s~~The ~~primary~~escrow ~~source~~agent ofwill ~~income~~hold isthese ~~from~~items ~~its~~for ~~wholly-owned~~their ~~subsidiary~~account. To submit subscriptions, our foreign shareholders must notify the ~~Bank.~~escrow ~~BayFirst’s~~agent ~~corporate~~prior ~~offices~~to ~~are~~11:00 ~~located~~a.m., Eastern time, at least three business days prior to the ~~First~~expiration ~~Home~~of ~~Executive~~the ~~Center,~~offering ~~700~~and ~~Central~~demonstrate ~~Avenue,~~to ~~St.~~the ~~Petersburg,~~satisfaction ~~Florida~~of ~~33701~~the escrow agent that the submission of such subscription does not violate the laws of the jurisdiction of such shareholder.

~~First~~No ~~Home~~Revocation ~~Bank~~or Change

~~The~~Once ~~Bank~~you ~~commenced~~submit ~~operations~~subscription ondocuments ~~February~~and 12payment, ~~1999,~~you asare not allowed to revoke or change the exercise or request a ~~Florida~~refund ~~state-chartered~~of ~~commercial~~monies ~~bank~~paid. OnAll ~~January~~subscriptions 3,are ~~2022~~irrevocable, weeven ~~filed~~if anyou ~~application~~later ~~with~~learn ~~the~~information ~~Office~~that ofyou ~~the~~consider ~~Comptroller~~to ofbe ~~the~~unfavorable ~~Currency~~ to ~~convert~~your subscription and even if the ~~Bank’s~~offering ~~charter~~is toextended ~~that~~by ofour aBoard ~~national~~of ~~bank~~Directors. ~~The~~However, ~~Bank~~if ~~currently~~we ~~operates~~amend ~~out~~the ofoffering ~~its~~to ~~main~~allow ~~office,~~for ~~six~~an ~~branch~~extension ~~offices,~~of ~~and~~the 23offering ~~residential~~for ~~mortgage~~a ~~loan~~period ~~production~~of ~~offices.~~more ~~The~~than ~~Bank’s~~30 ~~main~~days ~~office~~or ismake ~~located~~a atfundamental change to the ~~First~~terms ~~Home~~set ~~Executive~~forth ~~Center.~~in Wethis doprospectus, ~~not~~you ~~engage~~may incancel your subscription and receive a refund of any ~~foreign~~money ~~business~~you ~~activities~~have advanced, without interest or deduction. WeYou ~~have~~should ~~divided~~not ~~our~~submit ~~banking~~a ~~operations~~subscription ~~into~~unless ~~three~~you ~~Divisions:~~are ~~the~~certain ~~Community~~that ~~Banking~~you ~~Division,~~wish ~~the~~to ~~SBA~~purchase ~~Lending~~additional ~~Division,~~shares orof ~~CreditBench,~~our ~~and~~common ~~the~~stock ~~Residential~~at ~~Mortgage~~the ~~Division~~subscription price.

~~Community~~Regulatory ~~Banking~~Limitation ~~Division~~

We ~~have~~will ~~structured~~not ~~our~~be ~~community~~required ~~banking~~to ~~services~~issue ~~and~~to ~~charges~~you ~~for~~shares ~~such~~of ~~services~~our incommon astock ~~manner~~in ~~designed~~this tooffering ~~attract consumers~~if, ~~small~~in ~~and~~our ~~medium sized businesses~~opinion, ~~and~~you ~~professionals~~are ~~located~~required ~~primarily~~to inobtain ~~Pinellas,~~prior ~~Hillsborough,~~clearance ~~Sarasota,~~or ~~Manatee,~~approval ~~and~~from ~~Pasco~~any ~~Counties.~~state Weor ~~focus~~federal onregulatory ~~customers~~authorities ~~that~~to ~~are~~own ~~seeking~~or ~~the~~control ~~flexibility~~such shares and ~~personalized~~if, ~~relationships~~at ~~that~~the atime ~~community~~the ~~bank~~offering ~~can~~expires, ~~provide.~~you ~~The~~have ~~Bank~~not ~~offers~~obtained ~~specialized~~such ~~services~~clearance ~~such~~or ~~as:~~approval.

~~specialized~~No ~~business~~Recommendation and personal checking accounts internet banking and online bill payment remote capture and deposit cash management wire transfers safety deposit boxes courier services retail investment services ACH Originations

~~The~~Our ~~Bank~~Board ~~also~~of ~~offers~~Directors ~~traditional~~is ~~commercial~~making ~~banking~~no ~~services~~recommendation ~~such~~regarding aswhether ~~the~~you ~~acceptance~~should ofsubscribe ~~time,~~to ~~demand~~purchase ~~and~~shares. ~~savings~~You ~~deposits,~~are ~~including~~urged ~~NOW~~to ~~accounts~~make ~~and~~your ~~money~~decision ~~market~~based ~~accounts,~~on ~~savings~~your ~~accounts,~~own assessment of our business and ~~fixed-rate~~this ~~certificates~~offering. Please see “Risk Factors” for a discussion of ~~deposits~~some of the risks involved in investing in our common stock.

AListing wide range of loans are also offered, including commercial, consumer installment, and real estate loans. Our commercial lending efforts are directed principally toward businesses and professionals who otherwise do business with us, and include commercial real estate mortgages, construction and development loans, working capital loans, and business expansion loans. We offer personal lines of credit, auto, boat, and recreational vehicle loans, residential mortgages, and home equity lines of credit. We have been particularly successful in penetrating the small business community. We participate in interbank credit arrangements to permit us to take part in corporate or other business entity loans for amounts which are in excess of our lending limits.

The ~~Community~~ability ~~Banking~~to ~~Division~~subscribe ~~has~~will ~~seven~~not ~~banking~~be ~~offices~~listed inor ~~the~~quoted ~~Tampa~~for ~~Bay~~trading ~~area:~~on ~~five~~any instock ~~Pinellas~~exchange ~~County~~or market, ~~one~~nor inon ~~Hillsborough~~the ~~County,~~Nasdaq ~~and~~Capital ~~one~~Market. inThe ~~Sarasota~~shares ~~County.~~of ~~Additionally,~~our wecommon ~~have~~stock ~~purchased~~issuable ~~properties~~ in ~~Sarasota,~~this ~~Bradenton,~~offering ~~and~~will ~~Tampa~~be ~~where~~available wefor ~~intend~~trading toon ~~open~~the ~~additional~~Nasdaq ~~full-service~~Capital ~~banking~~Market ~~centers~~under the symbol “BAFN.”

~~The~~Shares Bank’s staff maintains personalized customer contacts and relationships, which enable us to provide excellent customer service. While we only offer banking services that we believe to be profitable, we offer competitive rates for such services, thereby, we believe, motivating the businesses in our service area to avail themselves of ~~our~~Our ~~credit~~Common ~~and~~Stock ~~non-credit~~Outstanding ~~services.~~After Onthis ~~limited~~Offering ~~occasions, we may offer services that may not be as profitable, but only if the account relationship provides earnings or other benefits sufficient to offset the cost of the services provided.~~

Assuming no outstanding and vested stock options or warrants are exercised prior to the expiration of the offering, we expect that there will be 8,216,144 shares of our common stock outstanding immediately after completion of the offering.

Other Matters

We are not making this offering in any state or other jurisdiction in which it is unlawful to do so, nor are we distributing or accepting any offers to purchase any shares of our common stock from shareholders who are residents of those states or other jurisdictions or who are otherwise prohibited by federal or state laws or regulations from submitting subscriptions. We may delay the commencement of the offering in those states or other

~~CreditBench~~jurisdictions, or change the terms of the offering, in whole or in part, in order to comply with the securities laws or other legal requirements of those states or other jurisdictions. Subject to state securities laws and regulations, we also have the discretion to delay allocation and distribution of any shares you may subscribe to purchase in order to comply with state securities laws. We may decline to make modifications to the terms of the offering requested by those states or other jurisdictions, in which case, if you are a resident in those states or jurisdictions or if you are otherwise prohibited by federal or state laws or regulations from subscribing you will not be eligible to participate in this offering. However, we are not currently aware of any states or jurisdictions that would preclude participation in this offering.

In[Remainder ~~early 2020, the Bank’s SBA Lending Division rebranded as CreditBench. CreditBench originates SBA loans through two distinct channels. One is its team~~ of ~~SBA~~this ~~lenders,~~page ~~known~~intentionally asleft the Core SBA Team. The other is through financial technology platforms, collectively known as FlashCap. CreditBench’s Core SBA Team makes government guaranteed loans throughout the U.S., with a particular emphasis on business acquisition financing. FlashCap employs an internal sales team and also uses national referral partners and financial technology companies to originate SBA loans. CreditBench also originates a significant volume of loans in the SBA 7(a) Small Loan Program. CreditBench’s loans are typically originated through an on-line application process and made throughout the U.S., with a heightened focus on originating loans in First Home’s primary and secondary market areas. Underwriting, quality control, and technology are centralized and scalable for potential increases in loan volume.blank]

This Division’s lending efforts are targeted to a broad range of industries and geographies, with a focus on building relationships with borrowers. This diversification is intended to mitigate the Bank’s credit risk. Borrowers are also targeted for establishing deposit relationships.

Government guaranteed loans are designed to assist small businesses in obtaining financing. Such loans primarily finance working capital for the borrowers. CreditBench also offers USDA Business and Industry (“B&I”) loans to businesses that are located in qualifying areas. The federal government guarantees 75% to 90% of SBA loan balances and up to 80% of USDA B&I loan balances as an incentive for financial institutions to make loans to small businesses. Eligible uses of SBA and USDA B&I loans are for working capital, equipment financing, debt refinancing, purchase of inventory, new construction, building acquisitions, business acquisitions, and startup expenses. The program maximum limit for SBA loans is $5.0 million, and the program limit for USDA loans is $25.0 million. Both can be priced competitively relative to conventional financing.

In 2020, the SBA initiated the PPP. The Bank made the strategic decision to become an active PPP lender, using local marketing efforts and a nationwide, on-line application platform. The Bank used the Federal Reserve’s PPPLF to fund a significant portion of these loans.

The Bank manages its government guaranteed lending program through a staff experienced in business development, loan documentation and monitoring, and accounting. Emphasis is placed on proper loan documentation to ensure full guarantee repurchase in the event of defaults.

CreditBench’s revenues are primarily derived from three sources: interest income, loan servicing, and premiums from the sale of loans. The Bank may elect to hold the government guaranteed portion of a loan on its balance sheet to increase interest income. Alternatively, the Bank may sell that portion to realize a premium on the sale.

When the Bank sells the guaranteed portion of a government guaranteed loan, the premium is typically in excess of 10% of the principal. In addition, the Bank may also sell the unguaranteed portion of certain government guaranteed loans, depending on a loan’s terms, the offer price, the Bank’s liquidity and capital positions, and the perceived credit risk. Beginning in the third quarter of 2018, the Bank has initiated a gradual transition to retaining a larger portion of its government guaranteed loans in an effort to grow its assets and increase long term and more predictable earnings. By retaining a greater amount of such loans, the Bank is expected to become less dependent on gains on sales and more reliant upon interest income. This should permit the Bank to become better able to withstand the effects of a government shutdown and less subject to secondary market fluctuations. These factors result in the Bank having a more predictable income stream from its government guaranteed lending activities. The Bank’s participation in the PPP resulted in significant processing revenue, allowing the Bank to retain the majority of the guaranteed loan production in 2020, advancing our strategy of relying less on gain-on-sale income and becoming more reliant on interest income.

Residential Mortgage Division

Our Residential Mortgage Division operates from our seven banking centers in the Tampa Bay area and 23 loan production offices. It offers fixed and variable rate home mortgages for the purchase and refinance of residential properties. Since the inception of the Residential Mortgage Division in January 2017, the Bank has made

~~significant~~PLAN ~~investments~~OF in infrastructure and technology resulting in the efficient and profitable platform currently in place. We expect to continue to expand the geographic scope of the Bank’s residential loan origination efforts when we identify attractive opportunities.DISTRIBUTION

WeAs ~~originate~~soon ~~loans~~as ~~primarily~~practicable ~~for~~after ~~sale~~the ~~into~~commencement ~~the~~of ~~secondary~~this ~~market.~~offering, ~~From~~we ~~time~~will todistribute ~~time,~~subscription weforms ~~also~~to ~~originate~~individuals ~~residential~~who ~~mortgage~~owned ~~loans~~shares ~~for~~of ~~the~~our ~~Bank’s~~common ~~loan~~stock ~~portfolio~~at 5:00 p.m., ~~These~~Eastern ~~are~~time, ~~generally~~on ~~high~~May ~~quality~~12, ~~adjustable rate~~2026, ~~non-conforming~~the ~~mortgages~~record ~~located~~date infor ~~our~~this ~~primary~~offering. ~~service~~If ~~area~~you ~~where~~wish ~~there~~to issubmit a ~~greater~~subscription ~~opportunity~~and topurchase ~~cross-sell~~shares ~~other~~of ~~Bank~~our ~~products~~common ~~and~~stock, ~~services.~~you ~~The~~should ~~ability~~complete tothe ~~fund~~subscription ~~such~~forms ~~non-conforming~~and ~~loans~~return ~~provides~~them with payment for the ~~Bank~~shares aby ~~competitive~~hand ~~advantage~~delivery, ~~compared~~first class mail or overnight courier service to ~~non-bank~~the ~~mortgage~~escrow ~~lenders.~~agent:

~~Our~~Wilmington ~~residential mortgages are originated~~Trust, ~~processed, underwritten, and closed to secondary market standards or Bank policy by the staff of the Residential Mortgage Division~~N. The Bank does not currently fund loans originated by outside brokers, but may do so in the future. In connection with the origination of mortgage loans intended for sale, the Bank enters into loan commitments for fixed rate mortgage loans, generally lasting 30 to 45 days and at market rates when initiated. A ~~commitment to fund a mortgage loan (i~~.e., an interest rate lock) to be sold into the secondary market or for the future delivery of a mortgage loan is accounted for as a free-standing derivative. The fair value of an interest rate lock is recorded at the time the commitment to fund the mortgage loan is executed and is adjusted for the expected exercise of the commitment before the loan is funded. To deliver loans to the secondary market and to moderate the Bank’s interest rate risk prior to sale, the Bank typically enters into non-exchange traded mandatory delivery forward sales contracts and best efforts forward sales contracts, which are also considered derivative instruments. These contracts are entered into for amounts and terms offsetting the interest rate risk of loan commitment derivatives and loans held for sale, and both are carried at their fair value with changes included in earnings. The Bank considers the best efforts forward sales contracts that meet the net settlement requirement to be derivatives, as there are penalties to the Bank if it does not deliver the loan to the investor once the loan closes with the borrower.

~~The~~1100 ~~Bank~~North ~~engages~~Market a sub-servicer for residential mortgage loans that is currently servicing certain portfolio residential mortgage loans. The sub-servicer relationship also allows the Bank to retain servicing for loans to be sold in bulk, if we chose to do so. In April 2021, the Bank began selling loans with servicing retained in the Tampa Bay area in order to better take advantage of cross-selling opportunities with those loan customers.Street

~~Competition~~Wilmington, DE 19890

~~All~~Attn: ~~phases~~Workflow of our operations are highly competitive. Many of our commercial bank and thrift competitors have assets, capital, lending limits, and name recognition that are materially larger than ours. We compete with other financial service providers for loans and deposits. These competitors include:Management

~~•large~~See ~~national~~“The ~~and~~Offering—Method ~~super-regional~~of ~~financial~~Submitting ~~institutions~~Subscriptions.” ~~that~~If you have ~~well-established~~any ~~branches~~questions, ~~and~~you ~~significant~~should ~~market~~contact ~~share~~Hovde inat ~~the~~(833) ~~communities~~587-4159 weor ~~serve;~~by email to prospectus@hovdegroup.com.

~~•non~~We have engaged Hovde to act as our sales agent in this offering, pursuant to a Placement Agency Agreement dated __________, 2026. The sales agent will act on a “best efforts” basis. Therefore, they are not required to sell any specific number or dollar amount of securities but will use their best efforts to sell the securities offered. Because the offering is not underwritten by a broker-~~bank~~dealer ~~SBA~~on ~~lenders;~~a firm commitment basis, there can be no assurance that any shares of common stock we are offering will be sold.

~~•finance~~Fees ~~companies, investment banking~~ and ~~brokerage firms, and insurance companies that offer bank-like products;~~Expenses

~~•credit~~We ~~unions,~~will ~~which~~pay ~~can~~the ~~offer~~sales ~~highly~~agent ~~competitive~~a ~~rates~~commission onequal ~~loans~~to 2% of the gross proceeds of this offering. The following table shows the per share and ~~deposits~~total ~~because~~cash ~~they~~sales ~~receive~~agent’s ~~tax~~fees ~~advantages~~we ~~not~~will ~~available~~pay to ~~commercial~~the ~~banks;~~sales agent in connection with the sale of securities offered pursuant to this prospectus assuming the purchase of all of the shares of common stock offered hereby:

•other community banks that compete with us for clients desiring a high level of service;


	Per share	Total
Public offering price	$3.50	$14,378,252
Sales agent fees	$0.07	$287,565
Proceeds to us, before expenses	$3.43	$14,090,687

~~•technology-based~~Some ~~financial~~of ~~institutions,~~our ~~including~~employees ~~large~~may ~~national~~solicit ~~and~~responses ~~super-regional~~from ~~banks~~you, ~~offering~~but ~~on-line~~we ~~deposit,~~will ~~bill~~not ~~payment~~pay ~~and~~our ~~mortgage~~employees ~~loan~~any ~~application~~commissions or compensation for these services; ~~and~~other than their normal employment compensation.

~~•both~~We ~~local~~estimate ~~and~~that ~~out-~~our total expenses, including commissions, in connection with this offering will be approximately $580,000. Other than as described herein, we do not know of~~-state~~ ~~trust~~any ~~companies~~existing ~~and~~agreements ~~trust~~between ~~service~~or ~~offices~~among any shareholder, broker, dealer, underwriter or agent relating to the sale or distribution of the underlying common stock.

~~Some of the non-traditional financial institution competitors are not subject to the same degree of regulatory oversight to which the Bank is subject.~~Indemnification

~~Among~~ We ~~the advantages that our larger competitors~~ have ~~over~~agreed ~~the Bank are their ability~~ to ~~finance~~indemnify ~~wide- ranging advertising campaigns and to allocate their investment assets to products with~~ the ~~highest~~sales ~~yields~~agent ~~and~~against ~~demands. A number of our competitors offer~~ certain ~~services~~liabilities, ~~such~~including asliabilities ~~trust~~under ~~departments,~~the ~~that~~Securities ~~we do not offer. By virtue of their greater total capital~~Act, ~~these~~and ~~financial~~to ~~service~~contribute ~~providers have substantially higher loan-~~to~~-one~~ ~~borrower~~payments ~~limits~~that ~~than~~the ussales ~~(loans-to-one~~agent ~~borrower~~may ~~limits~~be ~~apply~~required to anmake ~~individual~~in ~~customer’s~~respect ~~total extension~~ of ~~credit~~such asliabilities. ~~a percentage~~

Lock-Up Agreements

In connection with the Private Placement, certain of our executive officers and directors agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of any common stock or other securities convertible into or exercisable or exchangeable for our common stock for a period of 30 days.

ofRegulation ~~a bank’s total capital accounts). These competitors may intensify their advertising and marketing activities to counter any efforts by us to attract new business.~~M

ToThe ~~compete~~sales ~~with~~agent ~~the~~may ~~financial~~be ~~institutions~~deemed into ~~our~~be ~~primary~~an ~~service~~underwriter ~~area,~~within ~~we capitalize upon~~ the ~~flexibility~~meaning ~~that~~of ~~our~~Section ~~independent~~2(a)(11) ~~status~~of ~~allows,~~the ~~including~~Securities ~~making decisions locally. This includes solicitation of business~~Act, ~~professional,~~ and ~~personal~~any ~~accounts~~commissions ~~through~~received ~~the~~by ~~personal~~it ~~efforts of our directors~~ and ~~officers.~~any Weprofit ~~believe~~realized ~~that~~on athe ~~locally-based~~resale ~~bank~~of isthe ~~often~~securities ~~perceived~~sold by ~~the~~it ~~local~~while ~~business~~acting ~~community~~ as ~~possessing~~principal amight ~~clearer~~be ~~understanding~~deemed ofto ~~local~~be ~~commerce~~underwriting ~~and~~discounts ~~the~~or ~~needs~~commissions ofunder the ~~community~~Securities Act. ~~Consequently,~~As ~~our~~an ~~customers~~underwriter, ~~expect~~the ~~that~~sales weagent ~~will~~would be ~~able~~required to ~~make~~comply ~~prudent~~with ~~lending~~the ~~decisions~~requirements ~~quicker~~of ~~and~~the ~~more~~Securities ~~equitably~~Act ~~than~~and ~~larger~~the ~~competitors.~~Exchange WeAct, ~~focus~~including, onwithout ~~the~~limitation, ~~smaller~~Rule ~~commercial~~10b-5 ~~customer~~and ~~because~~Regulation ~~this~~M ~~segment~~under ~~offers~~ the ~~greatest~~Exchange ~~concentration~~Act. ofThese ~~potential~~rules ~~business~~ and ~~historically~~regulations ~~has~~may ~~tended~~limit tothe ~~demonstrate~~timing aof ~~higher~~purchases ~~degree~~and sales of ~~loyalty~~our insecurities ~~their~~by ~~banking~~the ~~relationships.~~sales Weagent ~~are~~acting ~~able~~as toprincipal. ~~respond~~Under ~~quickly~~these torules ~~changes~~and inregulations, the ~~interest~~sales ~~rates~~agent ~~paid~~(i) onmay ~~time~~not ~~and~~engage ~~savings~~in ~~deposits~~any ~~and~~stabilization ~~charged~~activity onin ~~loans,~~connection ~~and~~with toour ~~charges~~securities ~~imposed~~and on(ii) ~~depository~~may ~~accounts,~~not sobid asfor toor ~~remain~~purchase ~~competitive~~any inof ~~the~~our ~~marketplace.~~securities Ifor ~~there~~attempt ~~are~~to ~~customers~~induce ~~whose~~any ~~loan~~person ~~demands~~to ~~exceed~~purchase ~~our~~any ~~loan~~of ~~limits~~our securities, weother ~~have~~than ~~the~~as ~~ability~~permitted tounder ~~arrange~~the ~~for~~Exchange ~~such~~Act, ~~loans~~until onit ahas ~~participation~~completed ~~basis~~its ~~with~~participation ~~other~~in ~~financial~~the ~~institutions~~distribution.

~~Various~~Certain legislative actions in recent years have led to increased competition among financial institutions. With the enactment of various laws and regulations affecting interstate banking expansion, it is easier for financial institutions located outside of Florida to enter the Florida market, including our target markets. In addition, recent legislative and regulatory changes and technological advances have enabled customers to conduct banking activities without regard to geographic barriers, through internet and telephone-based banking and similar services. There can be no assurance that the United States Congress, the Florida Legislature, or the applicable bank regulatory agencies will not enact legislation or promulgate laws and regulations that may further increase competitive pressures on the Bank.Relationships

~~Loan~~ Hovde ~~Underwriting~~also ~~and~~acted ~~Approval~~as placement agent in the Private Placement.

~~Historically,~~Exchange we believe we have made sound, high quality loans while recognizing that lending involves a degree of risk. Our centralized credit approval process and loan policies are designed to assist us in managing this risk. Our policies provide a general framework for loan origination, monitoring, and funding. The Bank’s loan approval process is characterized by centralized authority supported by a risk control environment that provides for prompt and thorough underwriting of loans. Our loan approval process begins with obtaining detailed financial and other information from our borrowers. We also rely on our loan and executive officers’ in-depth knowledge of our markets and borrowers.Listing

~~For~~ The ~~all~~shares ~~loan requests, excluding residential loans originated for sale into the secondary market, the Bank’s Board~~ of ~~Directors~~common ~~has~~stock ~~established~~issued ain ~~Dual~~this ~~Signature~~offering ~~Credit~~will ~~Authority~~be ~~Matrix,~~listed ason ~~well as two committees: (i)~~ the ~~Officer~~Nasdaq ~~Loan~~Capital ~~Committee~~Market ~~(the~~under ~~“OLC”); and (ii)~~ the ~~Directors’~~symbol ~~Credit and Loan Committee (the~~ “~~DCLC”), which have individual and aggregated credit limits~~BAFN. The Board of Directors has delegated to the OLC lending authority up to $2.00 million per lending relationship. The Board has also delegated to the DCLC lending authority up to $20.00 million per lending relationship.”

AsUSE ~~part~~OF of the underwriting and approval process, the Bank’s Credit Underwriting Department prepares a credit memo and submits it for review and approval to officers on the Dual Signature Credit Authority Matrix, the OLC, or the DCLC, depending on the size of the loan request.PROCEEDS

~~Regardless~~We ofestimate that the ~~loan~~net ~~type~~proceeds orthat ~~amount~~we will receive from this offering, noafter ~~single~~deducting ~~individual~~sales ~~has~~agent ~~sole~~commissions ~~loan~~and ~~approval~~the ~~authority.~~estimated ~~The~~offering ~~objective~~expenses ofpayable ~~our~~by ~~loan~~us, ~~approval~~will ~~processes~~be approximately $13.8 million. However, this offering is tobeing ~~provide~~conducted on a ~~disciplined,~~“best-efforts” ~~consistent~~basis, ~~predictable,~~so ~~and~~the ~~collaborative~~sales ~~approach~~agent is not required to ~~larger~~sell ~~credits,~~any ~~while~~specific ~~maintaining~~number ~~responsiveness~~or dollar amount of securities but will use their best efforts to ~~client~~sell ~~needs~~the securities offered. ~~Commercial~~Because ~~loan~~the ~~decisions~~offering is not underwritten by a broker-dealer on a firm commitment basis, there can be no assurance that any shares of common stock we are ~~documented~~offering will be sold. Accordingly, the net proceeds, if any, that we may receive as a result of the subscription may be substantially less than as described above. We intend to use the ~~borrower’s~~net ~~business~~proceeds, ~~loan~~including ~~purpose~~commissions, ~~our~~to ~~evaluation~~improve the capital levels of the ~~repayment~~Company ~~source~~ and ~~associated~~the ~~risks~~Bank, ~~our~~fund incremental allowance for credit losses, and to support the continued growth of the Bank and return it to profitability.

~~evaluation~~MARKET ~~of collateral~~PRICE, ~~loan covenants~~DIVIDENDS, ~~loan~~AND ~~monitoring~~RELATED ~~requirements,~~STOCKHOLDER ~~and the risk rating rationale. Our strategy for approving or disapproving loans is to follow conservative loan policies and consistent underwriting practices which include:~~MATTERS

~~• Granting~~As ~~credit~~of onApril a28, ~~sound~~2026, ~~basis~~we ~~with~~had ~~full~~approximately ~~knowledge~~533 record holders of our common stock. Our common stock is listed on the ~~purpose~~Nasdaq ~~and~~Capital ~~source~~Market ofunder ~~repayment~~the ~~for~~symbol ~~such~~“BAFN.” ~~credit;~~

29In July 2025, our Board of Directors suspended payments of dividends to common and preferred shareholders. Future dividends may be declared subject to the discretion of the Board. Our Board may consider, among other factors, debt service requirements of our debt both at the Bank and parent company levels, the dividend requirements of any outstanding preferred stock, our projected earnings, financial condition, and regulatory capital requirements, including applicable statutory and regulatory restrictions on the payment of dividends, in determining whether or not to declare a dividend.

• Ensuring that primary and secondary sources of repayment are adequate in relation to the amount of the loan;

• Requiring documentation, including appraisals or valuations, sufficient to enable informed underwriting;

• Developing and adhering to desired levels of diversification for our loan portfolio as a whole and for loans within each category; and

• Ensuring that each loan is properly documented and that any insurance coverage requirements are satisfied.

Our loan policies generally include other underwriting guidelines for loans collateralized by real estate. These underwriting standards are designed to determine the maximum loan amount that a borrower has the capacity to repay based, in part, upon the borrower’s cash flow and income. The loan policies include maximum amortization schedules and loan terms for each category of loans. In addition, our loan policies provide guidelines for personal guarantees, appraisals and valuations, loan-to-value ratios, environmental review, loans to employees, executive officers, and directors, problem loan identification, maintenance of an adequate ALLL, and other matters relating to lending practices.

As discussed above, the Bank’s lending products and services are delivered through three divisions: (i) the Community Banking Division; (ii) CreditBench; and (iii) the Residential Mortgage Division:

The Community Banking Division originates both retail and commercial loans. Retail loans include loans to individuals for automobiles, boats, and other major consumer personal, family, or household purposes. They are underwritten on the credit quality of the individual borrower and may be secured or unsecured. Commercial lending products include a wide variety of credit facilities, such as owner occupied and non-owner occupied commercial real estate, multifamily real estate, construction, land acquisition, and commercial and industrial loans. In general, the Bank’s commercial lending strategy focuses on the financial strength and successful track record of commercial loan applicants more than the project or type of property that would serve as collateral for a loan. These loans are underwritten by an independent in-house Credit Underwriting Department in accordance with our credit policy.

CreditBench primarily originates loans through the SBA 7(a) program, and, to a lesser extent, through the USDA’s B&I program. Occasionally, CreditBench originates loans through the SBA’s 504 loan program, the International Trade Loan (“ITL”) loan program, and the SBA Express Loan program. CreditBench originates two distinct types of loans: complex loans and non-complex loans. The non-complex loans are originated pursuant to the SBA 7(a) Small Loan Program up to $350,000 and are underwritten through a streamlined underwriting and packaging process. Although the SBA 7(a) Small Loan Program permits broader underwriting and loan purpose parameters, non-complex CreditBench loans are limited to those underwritten via historical cash flow and exclude start-up and business acquisition financing.

Complex CreditBench loans require projection-based underwriting or have other complex characteristics, such as business acquisition financing, are underwritten subject to SBA or USDA B&I guidelines and contain a thorough underwriting analysis based on the credit quality of any guarantor as well as the historical and projected debt service coverage.

The Residential Mortgage Division underwrites its loans to meet secondary market standards so that it can sell such loans into the secondary market. In some cases, such loans are held for the Bank’s portfolio. Portfolio loans are primarily underwritten on the borrowers’ financial strength and cash flow, with conservative loan-to- value requirements.

Employees

As of December 31, 2021, BayFirst and the Bank had 617 full-time employees and 39 part-time employees. We believe that relations with our employees are good. We do not have a collective bargaining agreement with our employees.

DESCRIPTION OF PROPERTIES

The following table contains information concerning the current and intended locations of our full-service banking centers. We also operate 23 loan production offices.

Location

Use

Own or Lease

Year First Operated

700 Central AvenueSt. Petersburg, FL 33701

Corporate andBank Headquarters

Lease

2017

9190 Seminole BoulevardSeminole, FL 33772

Banking Center

Own

1999

5250 Park BoulevardPinellas Park, FL 33781

Banking Center

Own

2006

2520 Countryside BoulevardClearwater, FL 33763

Banking Center

Own

2018

2033 Main Street, Suite 101Sarasota, FL 34237

Banking Center

Lease

2018

3015 West Columbus DriveTampa, FL 33607

Banking Center

Own

2020

401 N. Indian Rocks RoadBelleair Bluffs, FL 33770

Banking Center

Own

2021

In addition, we have acquired, or have contracted to purchase, the following properties to be used as full-service banking centers.

Location

Ownership Status

Year Acquired

2075 S. Tamiami TrailSarasota, FL 34239

Own

2019

2102 59th Street WestBradenton, FL 34209

Own

2021

16002 N. Dale Mabry HighwayTampa, FL 33618

Own

2021

5600 Bee Ridge RoadSarasota, FL 34233

Own

2021

8704 SR 70 EastBradenton, FL 34202

Own

2021

LEGAL PROCEEDINGS

We are not currently involved in any litigation that we believe may result in a material loss. From time-to-time, we are involved in litigation arising in the ordinary course of our business.

31[Remainder of this page intentionally left blank]

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~ 29

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following discussion and analysis presents our financial condition and results of operations on a consolidated basis. However, because we conduct all of our material business operations through the Bank, the discussion and analysis relates to activities primarily conducted at the subsidiary level. The following discussion should be read in conjunction with our consolidated financial statements.

As a one-bank holding company, we generate most of our revenue from interest on loans and gain-on-sale income derived from the sale of loans into the secondary market. Our primary source of funding for our loans is deposits. Our largest expenses are interest on those deposits and salaries plus related employee benefits. We measure our performance through our net interest income after provision for loan losses, return on average assets, and return on average common equity, while maintaining appropriate regulatory leverage and risk-based capital ratios.

Application of Critical Accounting Policies and Estimates

The preparation of consolidated financial statements in accordance with GAAP requires the Company to make estimates and judgments that affect reported amounts of assets, liabilities, income and expenses and related disclosure of contingent assets and liabilities. The Company bases those estimates on historical experience and on various other assumptions that are believed to be reasonable under current circumstances, results of which form the basis for making judgments about the carrying value of certain assets and liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may differ from these estimates.

Accounting policies, as described in detail in the notes to the Company’s consolidated financial statements, are an integral part of the Company’s consolidated financial statements. A thorough understanding of these accounting policies is essential when reviewing the Company’s reported results of operations and financial position. Management believes that the critical accounting policies and estimates listed below require the Company to make difficult, subjective or complex judgments about matters that are inherently uncertain.

•Determination of the allowance for loan losses;

•Valuation of SBA loan servicing rights; and

•Fair value of residential loans held for sale and residential mortgage derivatives.

Changes in these estimates that are likely to occur from period to period, or the use of different estimates that the Company could have reasonably used in the current period, could have a material impact on the Company’s financial position or results of operation.

Further, the Company is an emerging growth company. The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have not opted out of such extended transition period. This means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies do so. This may make the

Company’s financial statements not comparable with those of public companies which are neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period because of the potential differences in accounting standards used.

Recent Developments

Third Quarter Common Stock Dividend. On October 26, 2021, BayFirst’s Board of Directors declared a third quarter 2021 cash dividend of $0.07 per common share. The dividend was paid on December 15, 2021, to shareholders of record at the close of business on November 15, 2021.

Stock Repurchase Plan. On November 23, 2021, BayFirst’s Board of Directors amended its stock repurchase program to allow the Company to repurchase up to $450,000 of the Company’s issued and outstanding common stock per quarter. The Board of Directors initially authorized the program on January 26, 2021 for the repurchase of up to $100,000 per quarter and amended the program on September 9, 2021 to increase the quarterly purchase limit to $400,000.

The changes to the program were implemented immediately and will continue until the earlier of the date an aggregate of $1,000,000 of common stock has been repurchased, with no more than $450,000 being bought back in one quarter, or October 1, 2022, or termination of the program by the Board of Directors.

Listing on Nasdaq Capital Market. On November 30, 2021, BayFirst began trading on the Nasdaq Capital Market under the symbol “BAFN”.

Application to Convert to a National Bank: On January 3, 2022, BayFirst Financial Corp.’s operating subsidiary, First Home Bank submitted an application to the Office of the Comptroller of the Currency to convert to a national banking association under the name BayFirst National Bank.

Average Balance Sheet and Analysis of Net Interest Income

The following tables set forth, for the periods indicated, information regarding: (i) the total dollar amount of interest and dividend income of BayFirst from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest rate spread; (v) net interest margin; and (vi) ratio of average interest-earning assets to average interest-bearing liabilities (dollars in thousands). Loans in nonaccrual status, for the purposes of the following computations, are included in the average loan balances. FRB, FHLB, and FNBB restricted equity holdings are included in other interest-earning assets. The Company did not have a significant amount of tax-exempt assets.

	Nine Months Ended September 30,
	2021							2020
	Average Balance			Interest		Yield		Average Balance			Interest		Yield
Interest earning-assets:
Investment Securities	$	12,500		$	123	1.32	%	$	43		$	—	—	%
Loans, excluding PPP (1)	582,352			21,243		4.88		428,898			18,329		5.71
PPP loans	613,768			17,771		3.87		452,481			10,918		3.22
Other	166,918			297		0.24		176,201			571		0.43
Total interest-earning assets	1,375,538			39,434		3.83	%	1,057,623			29,818		3.77	%
Non interest-earning assets	43,726							34,672
Total assets	$	1,419,264						$	1,092,295
Interest-bearing liabilities:
NOW, MMDA and savings	$	484,985		$	2,987	0.82	%	$	339,485		$	3,307	1.30	%
Time deposits	82,422			679		1.10		171,516			2,804		2.18
PPPLF advances	648,158			1,699		0.35		432,367			1,185		0.35
Other borrowings	30,692			519		2.26		20,494			642		4.18
Total interest-bearing liabilities	1,246,257			5,884		0.63	%	963,862			7,938		1.10	%
Demand deposits	82,321							70,701
Non interest-bearing liabilities	8,441							5,260
Shareholders’ equity	82,245							52,472
Total liabilities and shareholders’ equity	$	1,419,264						$	1,092,295
Net interest income				$	33,550						$	21,880
Interest rate spread						3.20	%						2.67	%
Net interest margin (2)						3.26	%						2.76	%
Ratio of average interest-earning assets to average interest-bearing liabilities	110.37		%					109.73		%
(1) Includes nonaccrual loans.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.

	Year Ended December 31,
	2020							2019
	Average Balance			Interest		Yield		Average Balance			Interest		Yield
Interest earning-assets:
Loans, excluding PPP (1)	$	449,180		$	24,012	5.35	%	$	368,615		$	24,431	6.63
PPP loans	556,232			19,077		3.43	%	—			—		—
Other	156,347			641		0.41	%	58,200			1,270		2.18	%
Total interest-earning assets	1,161,759			43,730		3.76	%	426,815			25,701		6.02	%
Non interest-earning assets	36,264							24,694
Total assets	$	1,198,023						$	451,509
Interest-bearing liabilities:
NOW, MMDA and savings	$	350,000		$	4,321	1.23	%	$	165,449		$	3,072	1.86	%
Time deposits	147,169			3,169		2.15	%	160,207			4,247		2.65	%
PPPLF advances	546,824			1,968		0.36	%	—			—		—
Other borrowings	20,992			820		3.91	%	18,919			948		5.01	%
Total interest-bearing liabilities	1,064,986			10,278		0.97	%	344,574			8,267		2.40	%
Demand deposits	69,542							56,684
Non interest-bearing liabilities	7,403							7,590
Shareholders’ equity	56,092							42,661
Total liabilities and shareholders’ equity	$	1,198,023						$	561,509
Net interest income				$	33,452						$	17,434
Interest rate spread						2.80	%						3.62	%
Net interest margin (2)						2.88	%						4.08	%
Ratio of average interest-earning assets to average interest-bearing liabilities	109.09		%					123.87		%
(1) Includes nonaccrual loans.
(2) Net interest margin represents net interest income divided by average total interest-earning assets.

Rate/Volume Analysis

The tables below present the effects of volume and rate changes on interest income and expense for the periods indicated. Changes in volume are changes in the average balance multiplied by the previous period’s average rate. Changes in rate are changes in the average rate multiplied by the average balance from the previous period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate (dollars in thousands). Loans in nonaccrual status, for the purposes of the following computations, are included in the average loan balances.

FRB, FHLB, and FNBB restricted equity holdings are included in other interest-earning assets. The Company did not have a significant amount of tax-exempt assets.

	Rate		Volume		Total
Nine Months Ended September 30, 2021 vs. September 30, 2020:
Interest-earning assets:
Investment securities	$	123	$	—	$	123
Loans, excluding PPP	(2,948)		5,862		2,914
PPP loans	2,471		4,382		6,853
Other interest-earning assets	(245)		(29)		(274)
Total interest-earning assets	(599)		10,215		9,616
Interest-bearing liabilities:
NOW, MMDA, and savings	(1,454)		1,134		(320)
Time deposits	(1,038)		(1,087)		(2,125)
PPPLF advances	—		514		514
Other borrowings	(366)		243		(123)
Total interest-bearing liabilities	(3,971)		1,917		(2,054)
Net change in net interest income	$	3,373	$	8,297	$	11,670
Year Ended December 31, 2020 vs. December 31, 2019:
Interest-earning assets:
Loans, excluding PPP	$	(5,210)	$	4,791	$	(419)
PPP loans	—		19,078		19,078
Other interest-earning assets	(1,598)		968		(630)
Total interest-earning assets	(6,808)		24,837		18,029
Interest-bearing liabilities:
NOW, MMDA, and savings	(1,294)		2,544		1,250
Time deposits	(753)		(326)		(1,079)
PPPLF advances	—		1,968		1,968
Other borrowings	(224)		96		(128)
Total interest-bearing liabilities	(2,271)		4,282		2,011
Net change in net interest income	$	(4,537)	$	20,555	$	16,018

Liquidity and Capital Resources

Liquidity management is the process by which we manage the flow of funds necessary to meet our financial commitments on a timely basis and at a reasonable cost and to take advantage of earnings enhancement opportunities. These financial commitments include withdrawals by depositors, credit commitments to borrowers, expenses of our operations, and capital expenditures. The Bank generally maintains a liquidity ratio of liquid assets to total assets, excluding PPP loans pledged to the PPPLF, of at least 7.0%. Liquid assets include cash and due from banks, federal funds sold, interest-bearing deposits with banks and unencumbered investment securities available-for-sale. Our on-balance sheet liquidity ratio at September 30, 2021 was 17.66%, as compared to 8.37% at December 31, 2020.

During the nine months ended September 30, 2021, the Bank purchased investment securities, all of which were classified as investment securities available for sale. The fair value of all of our investment securities available for sale totaled $32.54 million at September 30, 2021.

During each of the three quarters through September 30, 2021, the Bank paid a dividend of $250 thousand to BayFirst. Prior to that, the Bank retained its earnings to support its growth. Therefore, BayFirst’s liquidity had historically been soley dependent on funds received from the issuance and sale of debt and equity securities. BayFirst’s liquidity needs are to make interest payments on its debt obligations, dividends on shares of its Series A Preferred Stock, Series B Convertible Preferred Stock, and common stock, and payment of certain operating expenses. As of September 30, 2021, BayFirst held $3.24 million in cash and cash equivalents.

A description of BayFirst’s and the Bank’s debt obligations is set forth below under the heading “Other Borrowings.”

Investment Securities

The amortized costs, gross unrealized gains and losses, and estimated fair values of investment securities available for sale at September 30, 2021 are summarized as follows:

	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		FairValue
Investment securities:
Asset-backed securities	$	7,630	$	—	$	(24)	$	7,606
Mortgaged-backed securities:
U.S. Government-sponsored enterprises	5,083		—		(44)		$	5,039
Collateralized mortgage obligations:
U.S. Government-sponsored enterprises	20,096		—		(206)		$	19,890
Total investment securities available for sale	$	32,809	$	—	$	(274)	$	32,535

The Company held one security held to maturity at September 30, 2021 and December 31, 2020 which matures in August 2039. The security is a debt security to a government-sponsored enterprise and its amortized cost was $3 and $41, the unrecognized loss was $1 and $2, and the fair value was $2 and $39 at September 30, 2021 and December 31, 2020, respectively.

The security held to maturity had been in an unrealized loss position for longer than 12 months at September 30, 2021 and December 31, 2020. The unrealized loss has not been recognized into income because the issuer is of high credit quality as a government-sponsored enterprise, management does not intend to sell, and it is likely that management will not be required to sell the security prior to its anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuer continues to make timely principal and interest payments and the fair value is expected to recover as the bond approaches maturity.

No securities were pledged as of September 30, 2021 or December 31, 2020, and there were no sales of securities during the nine months ended September 30, 2021 or the year ended December 31, 2020.

All securities have contractual remaining maturities of more than 10 years. The weighted average market yield of all securities was 1.31%.

Loan Portfolio Composition

Through the efforts of our management and loan officers, we have been able to achieve loan growth, by taking advantage of the economic recovery and consolidation in our markets. Senior management and loan officers have continued to develop new sources of loan referrals, particularly among centers of local influence and real estate professionals, and have also enjoyed repeat business from loyal customers in the markets the Bank serves. We have no concentration of credit in any industry that represents 10% or more of our loan portfolio. The following table sets forth the composition of our loan portfolio, including loans held for sale (“LHFS”), as of the dates indicated (dollars in thousands).

	As of September 30,									As of December 31,
		2021				2020				2020					2019
		Amount		% of total loans		Amount		% of total loans			Amount		% of total loans			Amount		% of total loans
Residential real estate, held for sale		$	91,243			$	149,407				$	208,704				$	76,416
SBA guaranteed loans, held for sale		—				—					—					—
SBA loans held for investment, at fair value		9,805				9,554					9,264					10,341
Loans held for investment, at amortized cost
Residential real estate		79,889		12.4	%	65,250		5.1	%		64,724		5.3	%		51,074		16.7%
Commercial real estate		151,122		23.5	%	108,917		8.5	%		114,884		9.3	%		75,550		24.8%
Construction and land		17,848		2.8	%	14,344		1.1	%		15,113		1.2	%		21,603		7.1%
Commercial and industrial		232,416		36.1	%	186,190		14.6	%		193,927		15.8	%		155,744		51.0%
Commercial and industrial – PPP		156,783		24.4	%	899,151		70.5	%		838,847		68.2	%		—		0.0%
Consumer and other		4,910		0.8	%	2,145		0.2	%		2,896		0.2	%		1,120		0.4	%
Loans held for investment, at amortized cost, gross		642,968		100.0	%	1,275,997		100.0	%		1,230,391		100.0	%		305,091		100.0	%
Allowance for loan losses		(16,616)				(18,913)					(21,162)					(10,742)
Discount on retained balances of loans sold		(3,753)				(6,109)					(5,417)					(7,288)
Discount on PPP loans purchased		(24)				(107)					(97)					—
Deferred loan (fees) costs, net		7,298				(12,580)					(5,819)					5,791
Loans held for investment, at amortized cost, net		$	629,873			$	1,238,286				$	1,197,896				$	292,851

In general, construction loans are originated as construction-to-permanent loans. Third party take-out financing, where applicable, is typically in the form of permanent first mortgage conforming loans. The increase in residential lending is primarily due to enhancements in the Bank’s personnel.

During the nine months ended September 30, 2021, we originated approximately $70.65 million in loans through conventional lending channels, $110.19 million in loans through CreditBench (our SBA lending function), exclusive of PPP loans, $329.32 million of PPP loans, and $1.74 billion through the Residential Mortgage Lending Division. During the nine months ended September 30, 2020, we originated approximately $52.14 million in loans through conventional lending channels, $84.42 million through CreditBench, exclusive of PPP loans, $876.60 million of PPP loans, and $1.28 billion through the Residential Mortgage Lending Division.

The decrease in the PPP balances was due to forgiveness of loans by the SBA and the second quarter of 2021 sale of 3,833 PPP loans for consideration equal to the total unpaid principal balance of $326.32 million.

By comparison in 2020, we originated approximately $79.50 million in new loans through conventional lending channels, $101.08 million in loans through CreditBench, exclusive of PPP loans, $876.96 million of PPP loans, and $1.92 billion through the Residential Mortgage Lending Division. In 2019, we originated approximately $35.94 million in new loans through the Community Banking Division, $316.16 million through CreditBench, and $762.80 million through the Residential Mortgage Division.

Loan Maturity/Rate Sensitivity

The following table shows the contractual maturities of our loans at September 30, 2021 (dollars in thousands). Loan balances in this table include loans held for investment at fair value, loans held for investment at amortized cost, discount on retained balances of loans sold, discount on PPP loans purchased, and deferred loan costs, net.

	Due in One Yearor Less		Due After OneYear to FiveYears		Due After FiveYears to 15 Years		Due After 15Years		Total
Real estate:
Residential	$	3,619	$	1,002	$	5,092	$	70,222	$	79,935
Commercial	4,153		2,272		20,644		127,760		154,829
Construction and land	2,722		889		1,620		12,618		17,849
Commercial and industrial	7,051		6,219		217,122		12,729		243,121
Commercial and industrial - PPP	96,064		59,581		—		—		155,645
Consumer and other	2,498		1,139		1,278		—		4,915
Total loans	$	116,107	$	71,102	$	245,756	$	223,329	$	656,294

The following table shows our loans with contractual maturities of greater than one year that have fixed or adjustable interest rates at September 30, 2021 (dollars in thousands).

	FixedInterest Rate		AdjustableInterest Rate
Real estate:
Residential	$	21,636	$	54,680
Commercial	1,202		149,474
Construction and land	5,720		9,407
Commercial and industrial	2,073		233,997
Commercial and industrial - PPP	59,581		—
Consumer and other	2,246		171
Total loans	$	92,458	$	447,729

Credit Risk

The Bank’s primary business is making commercial, consumer, and real estate loans. This activity inevitably has risks for potential loan losses, the magnitude of which depends on a variety of economic factors affecting borrowers, which are beyond our control. We have developed policies and procedures for evaluating the overall quality of our credit portfolio and the timely identification of potential problem loans. Management’s judgment as to the adequacy of the allowance is based upon a number of assumptions about future events that it believes

to be reasonable, but which may or may not prove accurate. Thus, there can be no assurance that charge-offs in future periods will not exceed the ALLL, or that additional increases in the ALLL will not be required.

Allowance for Loan Losses. The Bank must maintain an adequate ALLL based on a comprehensive methodology that assesses the probable losses inherent in our loan portfolio. We maintain an ALLL based on a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans, asset classifications, loan grades, change in volume and mix of loans, collateral value, historical loss experience, size and complexity of individual credits and economic conditions. Provisions for loan losses are provided on both a specific and general basis. Specific allowances are provided for impaired credits for which the expected/anticipated loss is measurable. General valuation allowances are determined by a portfolio segmentation based on collateral type with a further evaluation of various quantitative and qualitative factors noted above.

We periodically review the assumptions and formulate methodologies by which additions are made to the specific and general valuation allowances for loan losses in an effort to refine such allowances in light of the current status of the factors described above. The methodology is presented to and approved by the Bank’s Board of Directors. Future additional provisions to the loan loss reserve may be made as appropriate as new loans are originated or as existing loans may deteriorate.

All adversely classified loans are evaluated for impairment. If a loan is deemed impaired, it is evaluated for potential loss exposure. The evaluation occurs at the time the loan is classified and on a regular basis thereafter (at least quarterly). This evaluation is documented in a status report relating to a specific loan or relationship. Specific allocation of reserves on impaired loans considers the value of the collateral, the financial condition of the borrower, and industry and current economic trends. We review the collateral value, cash flow, and tertiary support on each impaired credit. Any deficiency outlined by a real estate collateral evaluation analysis, or cash flow shortfall, is accounted for through a specific allocation for the loan.

For performing loans which are evaluated collectively, we perform a portfolio segmentation based on collateral type and additionally, for SBA loans, by loan origination year.The government guaranteed loan balances are included in the collectively evaluated for impairment balances. The loss factors for each segment are calculated using actual loan loss history for each segment of loans over the most recent one to three years, depending on the segment and vintage year of the loans in the segment of SBA loans. The Bank’s actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.

These economic factors include consideration of the following: levels of, and trends in delinquencies and impaired loans; levels of, and trends in charge-offs and recoveries; migration of loans to the classification of special mention, substandard, or doubtful; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentration.

While management believes our ALLL is adequate as of September 30, 2021, future adjustments to our allowance may be necessary if economic conditions differ substantially from the assumptions used in making the determination.

Nonperforming Assets. At September 30, 2021, we had $3.76 million in nonperforming assets, excluding government guaranteed loan balances, and our ALLL represented 2.53% of total loans. At September 30, 2020, we had $4.06 million in nonperforming assets, excluding government guaranteed loan balances, and our ALLL represented 1.49% of total loans. Total loans at September 30, 2021 and 2020, include government guaranteed loans, as well as PPP loans which have no reserves allocated to them. ALLL as a percentage of loans, not including residential loans held for sale and government guaranteed loan balances, was 5.25% at September 30, 2021, compared to 6.63% at September 30, 2020.

At December 31, 2020, we had $3.33 million in nonperforming assets, excluding government guaranteed loan balances, and our ALLL represented 1.72% of total loans, including PPP loans. At December 31, 2019, we had $4.44 million in nonperforming assets, excluding government guaranteed loan balances, and our ALLL represented 2.75% of total loans. Total loans at December 31, 2020 and 2019, respectively include government

guaranteed loans which have no reserves allocated to them. ALLL as a percentage of loans, not including residential loans held for sale and government guaranteed loan balances, was 7.24% at December 31, 2020, compared to 4.20% at December 31, 2019.

The following table sets forth certain information on nonaccrual loans and foreclosed assets, the ratio of such loans and foreclosed assets to total assets as of the dates indicated, and certain other related information (dollars in thousands).

	September 30,2021			September 30,2020			December 31,2020			December 31,2019
Nonperforming loans (government guaranteed balances)	$	6,739		$	9,780		$	6,259		$	3,987
Nonperforming loans (unguaranteed balances)	3,756			4,057			3,327			4,437
Total nonperforming loans	10,495			13,837			9,586			8,424
OREO	3			—			—			—
Total nonperforming assets	$	10,498		$	13,837		$	9,586		$	8,424
Nonperforming loans as a percentage of total loans held for investment	1.60		%	1.09		%	0.78		%	2.68		%
Nonperforming loans (excluding government guaranteed balances) to total loans held for investment	0.57		%	0.32		%	0.27		%	1.41		%
Nonperforming assets as a percentage of total assets	1.11		%	0.92		%	0.62		%	1.59		%
Nonperforming assets (excluding government guaranteed balances) to total assets	0.40		%	0.27		%	0.22		%	0.84		%
ALLL to nonperforming loans	158.32		%	136.68		%	220.76		%	127.52		%
ALLL to nonperforming loans (excluding government guaranteed balances)	442.39		%	466.18		%	636.07		%	242.10		%

The following table sets forth information with respect to activity in the ALLL for the periods shown (dollars in thousands):

	At and for the Nine Months Ended September 30,						At and for the Year Ended December 31
	2021			2020			2020			2019
Allowance at beginning of period	$	21,162		$	10,742		$	10,742		$	6,560
Charge-offs:
Residential real estate	—			—			(7)			—
Commercial real estate	(173)			(7)			(427)			(104)
Commercial and industrial	(4,090)			(3,785)			(6,336)			(4,633)
Consumer and other	(48)			(79)			(98)			(85)
Total charge-offs	(4,311)			(3,871)			(6,868)			(4,822)
Recoveries:
Residential real estate	73			—			—			14
Commercial and industrial	688			131			311			116
Consumer and other	4			11			77			5
Total recoveries	765			142			388			135
Net charge-offs	(3,546)			(3,729)			(6,480)			(4,687)
Provision for loan losses	(1,000)			11,900			16,900			8,869
Allowance at end of period	$	16,616		$	18,913		$	21,162		$	10,742
Net charge-offs to average loans held for investment	0.44		%	0.62		%	0.70		%	1.44		%
Allowance as a percent of total loans held for investment	2.53		%	1.49		%	1.72		%	1.49		%
Allowance as a percent of loans held for investment, not including government guaranteed loans	5.25		%	6.63		%	7.24		%	6.63		%
Allowance as a percent of nonperforming loans	158.32		%	136.68		%	220.76		%	136.68		%
Total loans held for investment	$	656,294		$	1,266,753		$	1,228,322		$	314,163
Average loans held for investment	$	1,070,879		$	804,909		$	920,478		$	325,491
Nonperforming loans (including government guaranteed balances)	$	10,495		$	13,837		$	9,586		$	8,424
Nonperforming loans (excluding government guaranteed balances)	$	3,756		$	4,057		$	3,327		$	4,437
Guaranteed balance of all government guaranteed loans	$	339,766		$	981,414		$	935,998		$	58,448
Loans held for sale, residential	$	91,243		$	149,407		$	208,704		$	76,416

We recorded a negative provision for loan losses of $1.00 million during the nine months ended September 30, 2021, compared to a provision of $11.90 million for the same period in 2020. In 2020, the provision for loan losses was $16.90 million, compared to $8.87 million in 2019. During 2020 and the first quarter of 2021, we increased the qualitative factors in the allowance for loan losses calculation for the decline in economic indicators caused by the COVID-19 pandemic resulting in significant provision expense in those periods. As asset quality remained stable during the second and third quarters of 2021 and as many of the Company’s SBA loans were bolstered by additional government support, additional provision for loan losses was not deemed necessary. Since 2016, 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 $350,000 or less and such loans carry an SBA guarantee of 75% to 85% of the loan, depending on the original principal balance. The default rate on loans originated in the SBA 7(a) Small Loan Program is significantly higher than the Bank’s other SBA 7(a) loans, conventional commercial loans, or residential mortgage loans.

Nonperforming assets to total assets, excluding government guaranteed loan balances, were 0.40%, as of September 30, 2021, as compared to 0.27% as of September 30, 2020. This percentage was 0.22% as of December 31, 2020, a significant decrease from 0.84% as of December 31, 2019. Since the majority of the Company’s loan portfolio consisted of SBA loans, most of which received from the SBA principal and interest payments under Section 1112 of the CARES Act during 2020 and 2021, asset quality trends may appear more favorable than they otherwise would without the SBA’s support under the CARES Act.

As of September 30, 2021, a total of 42 loans with principal balances of $3.95 million were under payment deferrals. Of those, 41 were government guaranteed loans with $1.99 million in outstanding unguaranteed balances. As expected, the level of SBA loans on deferral increased with the expiration of the Section 1112 payment support afforded under the CARES Act at which point certain borrowers requested payment deferrals. With the Economic Aid Act signed into law on December 27, 2020, Section 1112 CARES Act payments were extended, with some stipulations, which assisted the majority of our SBA borrowers for three months and, depending on the type of business, up to eight months of additional principal and interest payments with a cap of $9,000 per month per borrower, beginning in February 2021. Although the Company’s asset quality trends indicate minimal stress on the portfolio, management incorporated a qualitative measure in the allowance for loan losses calculation.

SBA and Other Government Guaranteed Loans

The following table sets forth, for the periods indicated, information regarding our SBA and other government guaranteed lending activity, excluding PPP loans (dollars in thousands).

	At and for the Nine Months Ended September 30,				At and for the Year Ended December 31,
Government Guaranteed, Excluding PPP	2021		2020		2020		2019
Number of loans originated	272		264		320		1,287
Amount of loans originated	$	110,185	$	84,420	$	101,076	$	316,157
Average loan size originated	$	405	$	320	$	316	$	246
Government guaranteed loan balances sold	$	—	$	23,669	$	23,713	$	273,189
Government unguaranteed loan balances sold	$	5,034	$	393	$	393	2,000
Total government guaranteed loans	$	314,015	$	248,567	$	253,330	$	201,392
Government guaranteed loan balances	$	184,119	$	101,903	$	110,196	$	58,448
Government unguaranteed loan balances	$	129,896	$	147,258	$	143,134	$	142,944
Government guaranteed loans serviced for others	$	443,764	$	560,154	$	524,910	$	604,572

We make government guaranteed loans throughout the United States. The following table sets forth, at the dates indicated, information regarding the geographic disbursement of our SBA loan portfolio (dollars in thousands). The “All Other” category includes states with less than 5% in any period presented.

	September 30,								December 31,
	2021				2020				2020				2019
	Amount		% of Total		Amount		% of Total		Amount		% of Total		Amount		% of Total
Florida	$	87,563	28	%	$	58,854	24	%	$	60,861	24	%	$	56,831	28	%
California	40,795		13	%	34,654		14	%	32,891		13	%	25,150		12	%
Texas	21,290		7	%	18,290		7	%	17,689		7	%	13,059		7	%
Georgia	14,875		5	%	13,566		5	%	13,936		6	%	10,273		5	%
All Other	149,492		47	%	123,203		50	%	127,953		50	%	96,278		48	%
Total government guaranteed loans, excluding PPP	$	314,015	100	%	$	248,567	100	%	$	253,330	100	%	$	201,591	100	%

As part of the Bank’s strategic decision to be an active local and national PPP lender, the Bank developed and used local marketing efforts and a nationwide, online application platform. As a result of these efforts, the Bank originated $329.32 million in PPP loans during the nine months ended September 30, 2021 and $876.96 million in 2020. The Bank used the Federal Reserve’s PPPLF to match fund the vast majority of those amounts. The following table reflects the Bank’s PPP lending activity for the periods indicated (dollars in thousands).

	At and for the Nine Months Ended September 30,				At and for theyear endedDecember 31,
	2021		2020		2020
Number of loans originated	3,858		8,930		8,948
Amount of loans originated	$	329,315	$	876,603	$	876,960
Average loan size originated	$	85	$	98	$	98
Amount of loans sold	$	326,318	$	—	$	—
Amount of loans purchased	$	—	$	22,404	$	22,404
Loan balance, net of deferred loan costs (fees) and discount on purchased loans	$	155,647	$	879,511	$	825,802
Loan origination fees, net recognized	$	13,909	$	8,175	$	13,419
Deferred loan origination fees, net, at period end	$	1,112	$	19,531	$	12,948

Residential Mortgage Loans

The following table sets forth, for the periods indicated, information regarding our residential mortgage lending activity (dollars in thousands).

	For the Nine Months Ended September 30,				For the YearEnded December 31,
	2021		2020		2020		2019
Number of loans originated	5,745		4,546		6,727		2,617
Amount of loans originated	$	1,744,630	$	1,278,784	$	1,919,862	$	762,794
Average loan size originated	$	304	$	281	$	285	$	291
Loan balances sold	$	1,855,685	$	1,209,063	$	1,787,574	$	710,191

Deposits and Other Sources of Funds

General. In addition to deposits, sources of funds available for lending and for other purposes include loan repayments and proceeds from the sales of loans. Loan repayments are a relatively stable source of funds, while deposit inflows and outflows are influenced significantly by general interest rates and market conditions. Borrowings, as well as available lines of credit, may be used on a short-term basis to compensate for reductions in other sources, such as deposits at less than projected levels.

Deposits. Deposits are attracted principally from within our primary service area of Pinellas, Hillsborough, Manatee, Pasco, and Sarasota Counties, Florida. We offer a wide selection of deposit instruments including demand deposit accounts, NOW accounts, money-market accounts, regular savings accounts, certificate of deposit accounts; and retirement savings plans (such as IRA accounts).

Certificate of deposit rates are set to encourage longer maturities as cost and market conditions will allow. Deposit account terms vary, with the primary differences being the minimum balance required, the time period the funds must remain on deposit and the interest rate. We emphasize commercial banking relationships in an effort to increase demand deposits as a percentage of total deposits. Deposit interest rates are set weekly by management, based on a review of loan demand, deposit flows for the previous week and a survey of rates among competitors and other financial institutions in Florida.

The amounts of each of the following categories of deposits, for the periods indicated, are as follows (dollars in thousands):

Deposit Types	September 30, 2021				September 30, 2020				December 31, 2020				December 31, 2019
Noninterest-bearing deposits	$	87,625	13.0	%	$	70,115	13.7	%	$	62,650	11.2	%	$	51,025	11.4	%
Interest-bearing transaction accounts	157,304		23.3	%	112,902		22.1	%	140,265		25.1	%	71,134		15.9	%
Money market accounts	362,476		53.7	%	235,385		46.1	%	274,421		49.1	%	174,517		38.9	%
Savings	14,976		2.2	%	12,323		2.4	%	12,323		2.2	%	10,875		2.4	%
Subtotal	622,381		92.2	%	430,725		84.3	%	489,659		87.6	%	307,551		68.6	%
Total time deposits	52,653		7.8	%	79,417		15.6	%	69,125		12.4	%	141,043		31.4	%
Total deposits	$	675,034	100.0	%	$	510,142	100.0	%	$	558,784	100.0	%	$	448,594	100.0	%

The following table sets forth the remaining maturities of our time deposits of $100 thousand or greater by category as of September 30, 2021 (dollars in thousands).

Three months or less	$	3,100
Over three months through six months	18,118
Over six months through 12 months	10,267
Over 12 months	6,760
Total	$	38,245

Other Borrowings

In June 2021, the Company issued $6.00 million of Subordinated Debentures (the “Debentures”) that mature June 30, 2031 and are redeemable after five years. The Debentures carry interest at a fixed rate of 4.50% per annum for the initial five years of their term and carry interest at a floating rate for the final five years of their term. Under the terms of the Debentures, the floating rates are based on a SOFR benchmark plus 3.78% per annum. The Debentures were issued to redeem a $6.00 million Subordinated Debenture which was issued in December 2018 and which carried interest at a fixed rate of 6.875% per annum.

The balance of Subordinated Debentures outstanding at the Company, net of offering costs, amounted to $5.98 million and $5.95 million at September 30, 2021 and December 31, 2020, respectively.

In March 2020, the Company renegotiated the terms of its outstanding senior debt and combined its line of credit and term note into one amortizing note with quarterly principal and interest payments with interest at prime (3.25% at September 30, 2021). The new note matures on March 10, 2029 and the balance of the note was $3.41 million and $3.75 million at September 30, 2021 and December 31, 2020, respectively. The note is secured by 100% of the stock of the Bank and requires the Company to comply with certain loan covenants during the term of the note.

In April 2020, the Company entered into the PPPLF. Under the PPPLF, advances must be secured by pledges of loans to small businesses originated by the Company under the PPP. The PPPLF accrues interest at 0.35% per annum and matures at various dates equal to the maturity date of the PPPLF collateral pledged to secure the advance, ranging from April 15, 2022 to August 27, 2025, and will be accelerated on and to the extent of any PPP loan forgiveness reimbursement by the SBA for any PPPLF collateral or the date of purchase by the SBA from the borrower of any PPPLF collateral. On the maturity date of each advance, the Company shall repay the advance plus accrued interest. The balances outstanding on this facility were $144.60 million and $881.26 million at September 30, 2021 and December 31, 2020, respectively.

Regulatory Capital Requirements

The Bank is subject to regulatory capital requirements imposed by various regulatory banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by banking regulators that, if undertaken, could have a direct material effect on BayFirst’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

In 2020, the Federal banking regulatory agencies adopted a rule to simplify the methodology for measuring capital adequacy for smaller, uncomplicated banks. This community bank leverage ratio (“CBLR”) is calculated as the ratio of tangible equity capital divided by average total consolidated assets. CBLR tangible equity is defined as total equity capital, prior to including minority interests, and excluding accumulated other comprehensive income, deferred tax assets arising from net operating loss and tax credit carryforwards, goodwill, and other intangible assets (other than mortgage servicing assets). Under the proposal, a qualifying organization may elect to use the CBLR framework if its CBLR is greater than 9%. The Bank has elected not to use the CBLR framework.

As of the dates indicated, the Bank met all capital adequacy requirements to which it is subject. The Bank’s actual capital amounts and percentages are as shown in the table below (dollars in thousands):

	Actual				Minimum(1)				Well Capitalized(2)
	Amount		Percent		Amount		Percent		Amount		Percent
As of September 30, 2021
Total Capital (to risk-weighted assets)	$	102,678	22.50	%	$	36,514	8.00	%	$	45,643	10.00	%
Tier 1 Capital (to risk-weighted assets)	96,808		21.21	%	27,386		6.00	%	36,514		8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	96,808		21.21	%	20,539		4.50	%	29,668		6.50	%
Tier 1 Capital (to total assets)	96,808		12.64	%	30,643		4.00	%	38,304		5.00	%
As of September 30, 2020
Total Capital (to risk-weighted assets)	$	70,179	16.75	%	$	33,528	8.00	%	$	41,910	10.00	%
Tier 1 Capital (to risk-weighted assets)	64,254		15.33	%	25,146		6.00	%	33,528		8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	64,254		15.33	%	18,860		4.50	%	27,242		6.50	%
Tier 1 Capital (to total assets)	64,254		10.85	%	23,687		4.00	%	29,609		5.00	%
As of December 31, 2020
Total Capital (to risk-weighted assets)	78,824		17.02	%	37,056		8.00	%	46,320		10.00	%
Tier 1 Capital (to risk-weighted assets)	72,825		15.72	%	27,792		6.00	%	37,056		8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	72,825		15.72	%	20,844		4.50	%	30,108		6.50	%
Tier 1 Capital (to total assets)	72,825		11.75	%	24,799		4.00	%	30,998		5.00	%
As of December 31, 2019
Total Capital (to risk-weighted assets)	57,548		17.84	%	25,804		8.00	%	32,256		10.00	%
Tier 1 Capital (to risk-weighted assets)	52,446		16.26	%	19,353		6.00	%	25,805		8.00	%
Common Equity Tier 1 Capital (to risk-weighted assets)	52,446		16.26	%	14,515		4.50	%	20,966		6.50	%
Tier 1 Capital (to total assets)	52,446		10.49	%	19,994		4.00	%	24,992		5.00	%

_________________________

(1) To be considered “adequately capitalized” under the FDIC’s Prompt Corrective Action regulations.

(2) To be considered “well capitalized” under the FDIC’s Prompt Corrective Action regulations.

Off-Balance Sheet Arrangements

The Bank is a party to financial instruments with off-balance sheet risk in the normal course of business. These financial instruments primarily include unfunded loan commitments, undisbursed loans in process, unfunded lines of credit, and standby letters of credit. The Bank uses these financial instruments to meet the financing needs of its customers. These financial instruments involve, to varying degrees, elements of credit, interest rate, and liquidity risk. These do not represent unusual risks and management does not anticipate any accounting losses that would have a material effect on the Bank.

A summary of the amounts of the Bank’s financial instruments, with off-balance sheet risk for the periods indicated, are as follows (in thousands):

	September 30,2021		September 30,2020		December 31,2020		December 31,2019
Unfunded loan commitments	$	57,592	$	27,555	$	34,867	$	37,715
Unused lines of credit	43,263		32,223		34,063		12,611
Standby letters of credit	68		68		68		193
Total	$	100,923	$	59,846	$	68,998	$	50,519

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Management evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained if deemed necessary by the Bank upon extension of credit is based on management’s credit evaluation of the counterparty.

Standby letters-of-credit are conditional lending commitments that we issue to guarantee the performance of a customer to a third party and to support private borrowing arrangements. Essentially, all letters-of-credit issued have expiration dates within one year. The credit risk involved in issuing letters-of-credit is essentially the same as that involved in extending credit. The Bank may hold collateral supporting those commitments. Newly issued or modified guarantees that are not derivative contracts have been recorded on the Bank’s balance sheet at their fair value at inception.

In general, loan commitments and letters of credit are made on the same terms, including with respect to collateral, as outstanding loans. Each customer’s creditworthiness and the collateral required are evaluated on a case-by-case basis.

Market Risk

Market risk is the risk of loss from adverse changes in market prices and rates. Our market risk arises primarily from interest-rate risk inherent in loan and deposit taking activities. To that end, we actively monitor and manage our interest-rate risk exposure. The measurement of market risk associated with financial instruments is meaningful only when all related and offsetting on-and off-balance-sheet transactions are aggregated, and the resulting net positions are identified. Disclosures about the fair value of financial instruments, which reflect changes in market prices and rates, should also be considered.

Our objective in managing interest-rate risk is to minimize the adverse impact of changes in interest rates on our net interest income and capital, while adjusting our asset-liability structure to obtain the maximum yield-cost spread on that structure. We rely primarily on our asset-liability structure to control interest rate risk. However, a sudden or substantial increase in interest rates may adversely impact our earnings, to the extent that the interest rates borne by assets and liabilities do not change at the same rate, to the same extent, or on the same basis.

Asset/Liability Structure

We established a comprehensive interest rate risk management policy which is administered by management’s Asset/Liability Committee (“ALCO”). The policy establishes risk limits, which are quantitative measures of the percentage change in net interest income (net interest income at risk) and the fair value of equity capital (economic value of equity at risk) resulting from a hypothetical change in interest rates for maturities from one day to 30 years. We measure the potential adverse impacts that changing interest rates may have on our short-term earnings, long-term value, and liquidity with computer-generated simulation analysis. The simulation model is designed to capture call features and interest rate caps and floors embedded in investment and loan contracts. As with any method of analyzing interest rate risk, there are certain shortcomings inherent in the interest rate modeling methodology we use. When interest rates change, actual movements in different categories of interest-earning assets and interest-bearing liabilities, loan prepayments, and withdrawals of time and other deposits, may deviate significantly from the assumptions that we use in our modeling. The methodology does not measure the impact that higher rates may have on variable and adjustable-rate loan borrowers’ ability to service their debts, or the impact of rate changes on demand for loan and deposit products.

To minimize the potential for adverse effects of increases in interest rates on the results of our operations, we monitor assets and liabilities to better match the maturities and repricing terms of our interest-earning assets and interest-bearing liabilities. To do this, we (i) emphasize the origination of adjustable-rate and variable-rate loans to be held for investment; (ii) maintaining a stable core deposit base; and (iii) maintaining a significant portion of liquid assets (cash, interest-bearing deposits with other banks, and available-for-sale investment securities).

Results of Operations, Generally

BayFirst’s operating results depend on our net interest income, which is the difference between interest income on interest-earning assets and interest expense on interest-bearing liabilities, consisting primarily of deposits. Net interest income is determined by the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities (“interest rate spread”) and the relative amounts of interest-earning assets and interest-bearing liabilities. Our interest rate spread is affected by regulatory, economic, and competitive factors which influence interest rates, loan demand, and deposit flows. In addition, our operating results can be affected by the level of nonperforming loans, as well as the level of our noninterest income, and our noninterest expenses, such as salaries and employee benefits, occupancy and equipment costs, and income taxes.

We are dependent on noninterest income, which is derived primarily from residential loan fee income and net gain on the sales of the guaranteed portion of government guaranteed loans. We operate residential mortgage loan production offices in a number of states. We sell a substantial portion of the mortgage loans that we originate on the secondary market which generates gains on the sale of these loans. Additionally, while we retained some of our government guaranteed loans on our balance sheet, we sell both the guaranteed balance of our government guaranteed loans, as well as a percentage of the unguaranteed portions of such loans. This activity generates gains on sales on the guaranteed portions of the loans.

Comparison of Results of Operations for the Periods Ended September 30, 2021 and 2020.

Net Income. Net income for the nine months ended September 30, 2021 of $21.81 million, or $5.13 per diluted common share, compared to net income for the nine months ended September 30, 2020 of $7.10 million, or $1.78 per diluted common share. The increase of $14.71 million in net income was due to a $13.80 million gain from the sale of PPP loans in the second quarter of 2021, an increase in residential loan fee income, an increase in PPP loan origination fees recognized, and a decrease in provision for loan loss expense, partially offset by an increase in noninterest expenses, particularly salaries and commission expenses.

Net Interest Income. Net interest income was $33.55 million for the nine months ended September 30, 2021, an increase of $11.67 million or 53.34% compared to net interest income for the nine months ended September 30, 2020 of $21.88 million. This increase was primarily due to an increase of $5.73 million in PPP origination fees

recognized, partially due to the fact that PPP loan funding did not begin until the second quarter of 2020. Additional items that contributed to this increase in net interest income were an increase in PPP interest income, an increase in interest income on other loans, and a decrease in interest expense on deposits, partially offset by an increase in interest expense on PPPLF borrowings. The net interest margin for the nine months ended September 30, 2021 was 3.26% compared to 2.76% for the nine months ended September 30, 2020. This increase was due to the same factors noted above with respect to the increase in net interest income.

Provision for Loan Losses. The provision for loan losses is charged to operations to increase the total allowance to a level deemed appropriate by management and is based upon the volume and type of lending we conduct, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to our market area, and other factors which may affect our ability to collect on the loans in our portfolio. We recorded a negative provision for loan losses for the nine months ended September 30, 2021 of $1.00 million compared to an $11.90 million provision for the nine months ended September 30, 2020. The decrease of $12.90 million in the provision for loan losses was primarily due to the same factors mentioned in the quarterly analysis above. During the nine months ended September 30, 2021, we charged off $3.55 million in loans compared to $3.73 million during the nine months ended September 30, 2020.

Since the majority of the Company’s loan portfolio consisted of SBA loans, most of which received from the SBA principal and interest payments under Section 1112 of the CARES Act during 2020 and 2021, our asset quality trends may appear more favorable than they otherwise would without the CARES Act support. Although the Company’s asset quality trends indicate minimal stress on the portfolio, management believed it was prudent to be proactive in increasing the allowance for loan losses using qualitative measures throughout 2020 and 2021.

Noninterest Income. Noninterest income was $93.36 million during the nine months ended September 30, 2021, an increase of $27.05 million or 40.78% from $66.32 million during the nine months ended September 30, 2020. The increase was primarily due to the $13.80 gain from the sale of PPP loans and an increase in residential loan fee income of $14.82 million or 23.94% primarily due to $646.62 million more loans sold during the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

Noninterest Expense. Noninterest expense was $98.62 million during the nine months ended September 30, 2021, an increase of $30.62 million or 45.04% from $68.00 million during the nine months ended September 30, 2020. The increase was primarily due to increases in salaries and benefits and commissions, marketing and business development expense and data processing expense with the majority of the increase related to the above-mentioned strategic initiatives and planned growth strategy.

Income Taxes. Income tax expense was $7.49 million for the nine months ended September 30, 2021, an increase of $6.28 million over income tax expense of $1.21 million for the nine months ended September 30, 2020. The increase was primarily due to the increase in pre-tax earnings, partially offset by a one-time tax benefit of $969 thousand in the first quarter of 2020 as a result of the CARES Act signed into law in March of 2020. The effective income tax rate was 25.56% for the nine months ended September 30, 2021 and 14.52% for the nine months ended September 30, 2020.

Comparison of Results of Operations for the Years Ended December 31, 2020 and 2019.

Net Income. Net income for the year ended December 31, 2020, was $12.70 million, an increase of $8.22 million or 183.28% over net income for the year-ended December 31, 2019 of $4.48 million. The increase in net income in 2020 over 2019 was primarily due to an increase in residential loan fee income and the addition of PPP loan origination fee and interest income, offset by an increase in noninterest expenses, particularly salaries and commissions expenses, as well as an increase in provision for loan loss expense and a decline in gain on sale of SBA loans as the Company made the decision to hold the majority of guaranteed SBA balances originated in 2020.

Net Interest Income. Net interest income was $33.45 million for the year ended December 31, 2020, an increase of $16.02 million or 91.88% from 2019. The increase was primarily due to net PPP origination fee income of $13.42 million and PPP interest income of $5.68 million recognized in 2020, offset by declines in interest income on loans and interest-bearing deposits in other banks. The net interest margin for the year ended

December 31, 2020 was 2.88%, down substantially from 4.08% realized in 2019. The primary reason for the decline is the significant amount of PPP loan balances during the majority of 2020 at a rate of 1.00%. Although the rate on PPP loans brings down the Company’s net interest margin, because these loans are pledged to the Federal Reserve’s PPPLF at a rate of 0.35%, their balance is allowed to be excluded from the Bank’s regulatory capital ratios and thus the net 65 basis points earned brings significant earnings to the Company without having to allocate capital against those assets.

Provision for Loan Losses. The provision for loan losses is charged to operations to increase the total allowance to a level deemed appropriate by management and is based upon the volume and type of lending we conduct, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to our market area, and other factors which may affect our ability to collect on the loans in our portfolio. We recorded a provision for loan losses for the years ended December 31, 2020, and December 31, 2019 of $16.90 million and $8.87 million, respectively. During 2020, we increased the qualitative factors in the allowance for loan loss calculation for the economic uncertainties caused by the COVID-19 pandemic resulting in the increased provision expense in 2020. In the year ended December 31, 2020, there were $6.48 million of net charge-offs, as compared to $4.69 million in 2019. The ALLL was $21.16 million at December 31, 2020, compared to $10.74 million at December 31, 2019.

Since the majority of the Company’s loan portfolio consists of SBA loans, most of which received from the SBA principal and interest payments under Section 1112 of the CARES Act during 2020 and will receive from the SBA at least three months of payments in 2021, asset quality trends may appear more favorable than they otherwise would without the CARES Act support. Although the Company’s asset quality trends indicate minimal stress on the portfolio, management believed it was prudent to be proactive in increasing the allowance for loan losses using qualitative measures throughout 2020.

Noninterest Income. Noninterest income for the year ended December 31, 2020 was $97.70 million, an increase of $44.57 million or 83.90% from $53.12 million during 2019. The increase was primarily due to an increase in residential loan fee income of $61.40 million or 196.3%, offset by a decline in gain on sale of SBA loans of $18.85 million or $91.94% to $1.65 million for 2020 as the Company made the decision to hold the majority of guaranteed SBA balances originated in 2020.

Noninterest Expense. Noninterest expense was $98.47 million for the year ended December 31, 2020, an increase of $43.08 million or 77.77% from $55.39 million during 2019. The increase was primarily due to increases in salaries and benefits, commissions, and bonuses and incentives as several loan production offices were added which increased the overall count of full-time employees and also increased commissions. In addition, in order to originate and service almost $900 million of PPP loans originated in 2020, significant overtime was incurred and temporary workers were utilized to handle the volume. Data processing costs also increased by $2.68 million during 2020 to $4.42 million for the year ended December 31, 2020, as software was added to originate and service PPP loans. Additionally, data conversion costs were incurred in the first quarter of 2020 with the conversion of the Company’s core processing system. Per loan costs on the residential lending platform also increased based on volume. Mortgage banking expense also increased proportionately with the increase in residential lending volume from $2.40 million during 2019 to $5.29 million during 2020, an increase of $2.89 million or 120.42%.

Income Taxes. Income tax expense was $3.07 million for the year ended December 31, 2020, an increase of $1.26 million or 69.61% from $1.81 million during 2019. The increase was primarily due to the increase in pre-tax earnings; however, the purchase of Bank Owned Life Insurance in June 2020 did add tax free income, and due to the CARES Act signed in March, the Company was able to carry back net operating losses created in 2018 to prior years where tax rates were higher than they were in 2020, which created a one-time tax benefit of $969,000. The effective income tax rate was 19.49% for 2020 compared to 28.79% for 2019 as a result.

MANAGEMENT AND BOARD OF DIRECTORS

The Board of BayFirst is comprised of 13 individuals: George Apostolou, Derek S. Berset, Mark S. Berset, Dennis R. “Rep” DeLoach, III, Alexander Harris, Tarek Helal, Trifon Houvardas, Anthony N. Leo, Christos Politis, M.D., Anthony Saravanos, Bradly W. Spoor, Harold J. Winner, and Barbara Zipperian. Biographical information regarding each director is below.

BayFirst Directors

George Apostolou, age 71, founded the George Apostolou Construction Company in 1983. Since that time, it has built more than 200 commercial buildings, government services buildings, churches, office buildings, and retail centers. In 2009, he founded Global Ground Solutions, a sinkhole mitigation company performing services for several of the major engineering firms in West Central Florida. In addition to contracting, Mr. Apostolou has been involved in the development of many commercial projects and now owns numerous properties in the Tampa Bay area. He also serves on the Board of Directors of HCI Group, Inc., a New York Stock Exchange listed company. Mr. Apostolou joined the Board in 2013. We believe that Mr. Apostolou’s qualifications to serve on our Board include his executive leadership and management experience, public company Board experience, and financial expertise gained from the successful operations of his own businesses.

Derek S. Berset, age 44, is an owner of Comegys Insurance Agency, Inc., a family owned and operated retail insurance agency that has served the west coast of Florida for over 75 years. Mr. Berset is also the President of Franchise Alliance Network LLC, which provides franchises with accounting, insurance, bookkeeping and payroll services, and he serves as Vice President of SAN of Florida Inc., an insurance wholesaler to independent agencies within Florida. He is the Chairman of the Board for Arts Conservatory for Teens (ACT), a nonprofit organization that helps teens excel within the arts. Mr. Berset is a graduate of Florida State University. He joined the Board in 2020 and is the son of BayFirst director Mark S. Berset. We believe that Mr. Berset’s qualifications to serve on our Board include his management and financial experience.

Mark S. Berset, age 74, has served since 1987 as the Chief Executive Officer of Comegys Insurance, a family owned insurance agency located in St. Petersburg, Florida. Mr. Berset is also the founder of Alpha Insurance Management, Satellite Agency Network of Tampa Bay, and Association Insurance Specialists. Mr. Berset also serves as a director of Heritage Insurance Holdings, Inc., a New York Stock Exchange listed company. He is a former director of United Insurance Holdings Corp., former board member of Innovaro, Inc., a past board member of North Star Bank Holding Company, Tampa, Florida, and past President and Board member of Bayfront Hospital Foundation in St. Petersburg, Florida. He received a bachelor’s degree in Business Economics from St. Ambrose University and an MBA from Georgia State University. Mr. Berset joined the Board in 2014 is the father of BayFirst director Derek S. Berset. We believe that Mr. Berset’s qualifications to serve on our Board include his executive leadership and management experience, prior bank and public company Board experience, and financial expertise gained from the successful operations of his own businesses.

Dennis R. “Rep” DeLoach, III, age 47, is a partner at the law firm of DeLoach, Hofstra & Cavonis, P.A. in Seminole, Florida. Mr. DeLoach graduated from Mercer University in 1996 and Mercer University Law School in 1999. He is Board Certified by the Florida Bar in Elder Law. Mr. DeLoach is a frequent speaker on continuing legal education to other Florida attorneys. Mr. DeLoach joined the Board in 2020 and is the son of BayFirst director Dennis R. DeLoach, Jr. We believe that Mr. DeLoach’s qualifications to serve on our Board include his legal experience.

Alexander Harris, age 41, currently serves as Chief Executive Officer of the Arts Conservatory for Teens (“ACT”), a non-profit organization headquartered in St. Petersburg, Florida. He also currently serves as a Senior Executive Consultant and Creative Strategist for Three Oak Doors Enterprises, LLC, and he has previously served as a Lecturer, Creative Strategist, and Consultant for the University of South Florida. Dr. Harris received a Doctor of Education Degree from Nova Southeastern University with an emphasis in organizational leadership and curriculum development. He also received Masters Degrees in both Theological Studies and Social Work from Boston University, and he received a Bachelor of Arts Degree with a triple major in Human Services, Social Work, and Sociology from LaGrange College. Mr. Harris joined the Board in 2021. We believe

that Mr. Harris’s qualifications to serve on our Board include his managerial experience as the Chief Executive Officer of ACT and his knowledge of the underserved portions of the communities we serve.

Tarek Helal, age 42, has served as Senior Vice President, Corporate Risk Management – Products at Raymond James Financial in St. Petersburg, Florida, since 2017. From 2015 to 2017, Mr. Helal was the founder, Chief Executive Officer and Chief Investment Officer of Horus Asset Management located in Tampa, Florida. From 2009 to 2014, Mr. Helal was Vice President of Product Development and Research for Raymond James Financial, leading several departments including Mutual Fund Research & Marketing and the Alternative Investment Group. Prior to joining Raymond James in 2007, Mr. Helal was a Senior Associate at Standard & Poor’s Corporate Value Consulting. He received a B.S. in Business Administration summa cum laude from the University of Florida and an MBA with distinction from the J.L. Kellogg School of Management at Northwestern University. Mr. Helal joined the Board in 2011. We believe that Mr. Helal’s qualifications to serve on our Board include his capital markets, investment banking and other financial experience.

Trifon Houvardas, age 55, has been the principal of Foresight Holding, Inc. and Foresight Property Services, Inc. since 2007. He is a Florida Real Estate Broker/Developer with over 25 years of experience in the real estate industry and has extensive experience in the construction and development of large-scale real estate projects and management of single-tenant, multi-family, residential and commercial properties. He has developed and manages a $25 million portfolio of commercial real estate throughout the state of Florida. He is also a member of the Board of Directors of Heritage Insurance Holdings, Inc., a New York Stock Exchange listed company, and AtlasBanc Holdings, Corp. Mr. Houvardas joined the Board in 2013. We believe that Mr. Houvardas’s qualifications to serve on our Board include his real estate experience and prior public company Board experience.

Anthony N. Leo, age 61, has served as the Chief Executive Officer and a director of BayFirst and the Bank since August 2013. Prior to joining the Bank, Mr. Leo provided management consulting and regulatory advisory services to community banks throughout the state of Florida and served as the interim Chief Executive Officer of three troubled banks between 2009 and 2013. Mr. Leo was the Managing Director and Executive Vice President of Community Banks, Inc. in Harrisburg, PA from 1993 to 2007. He previously served as Vice President and Corporate Counsel for FB&T of Hanover, Pennsylvania, and Vice President and Associate Counsel for the National Bank of Washington, D.C. Mr. Leo also serves on the Board of Directors of Presidential Bank, FSB, in Bethesda, Maryland. Mr. Leo received a B.A. in Political Science from George Washington University and a JD from George Washington University Law School. He is a member of the Bar in the District of Columbia and State of Maryland. We believe that Mr. Leo’s qualifications to serve on our Board include his service as our President and Chief Executive Officer and previous banking and public company experience.

Christos Politis, M.D., age 45, is a principal of Xenia Management, Inc., a real estate development and property management company He is a Board Certified Urologist and was President of St. Pete Urology from 2007 to 2020. He also served as the Chief Medical Officer for Largo Medical Center from 2018 to 2020. Dr. Politis received his Bachelor degree from the University of Florida, his medical degree from the University of South Florida College of Medicine, and a Master of Business Administration from the University of South Florida. Dr. Politis joined the Board in 2017. We believe that Dr. Politis’s qualifications to serve on our Board include his managerial experience as President of St. Pete Urology and Chief Medical Officer for Largo Medical Center.

Anthony Saravanos, age 51, is the Chairman of the Board of BayFirst. Since 2013, Mr. Saravanos has been the President of Greenleaf Capital, a division of the HCI Group, Inc. From 2005 to 2013, Mr. Saravanos was Vice President of The Boardwalk Company, a full-service commercial real estate company located in Palm Harbor, Florida. A licensed real estate broker, Mr. Saravanos is a Certified Commercial Investment Member (CCIM) and has over 12 years of experience in commercial property sales, leasing, project and property management. He graduated from Ursinus College in Pennsylvania with a double major in Economics and Spanish in 1992 and Villanova University with an MBA in 1997. He is also a member of the Board of Directors of the HCI Group, Inc., a New York Stock Exchange traded company. Mr. Saravanos joined the Board in 2011. We believe that Mr. Saravanos’s qualifications to serve on our Board include his investment banking and real estate experience and his previous public company Board services.

Bradly W. Spoor, age 43, has been the Chief Executive Officer of Spoor Street Investments, LLC since 2018. In addition, he has been the principal of Pelican Bay Capital, LLC since 2010. From 2002 to 2013, he was the owner and operator of P&B Capital Group, LLC, which managed customer service and loan recovery specialists. From 2006 to 2011, Mr. Spoor also owned and operated SKW Capital, LLC, a loan collections business. Mr. Spoor maintains certified memberships with the Debt Buyers Association, Credit & Collections Professions, and ACA International LLC. He joined the Board in 2018. We believe that Mr. Spoor’s qualifications to serve on our Board include his experience in the loan recovery and collection industry and his experience in managing his own businesses.

Harold J. Winner, age 72, is a retired banker and the Chairman of the Board of the Bank. Mr. Winner previously served as the Acting Chief Executive Officer of the Bank from 2011 to 2013. Prior to this and until his retirement in 2007, Mr. Winner served as President and Chief Operating Officer of Synovus Bank of Tampa Bay, formerly United Bank, where he had been employed for 19 years. Mr. Winner began his banking career with First National Bank of Atlanta (now Wells Fargo) in 1972. He received his B.S. in Management in 1971 from Florida State University and his MBA from Georgia State University in 1975. Mr. Winner joined the Board in 2011. We believe that Mr. Winner’s qualifications to serve on our Board include his prior service as our President and Chief Executive Officer and other banking experience.

Barbara J. Zipperian, age 64, is a CPA and retired Chief Financial Officer with 38 years of banking experience. She most recently served as Director, Executive Vice President, and Chief Financial Officer of Tennessee Bank & Trust. She has previously been employed as Chief Financial Officer for Avenue Bank and Regional Financial Officer for Regions Bank. Ms. Zipperian received her Bachelor of Science Degree in Accounting from Ball State University. She joined the Board in 2021. We believe that Ms. Zipperian’s qualifications to serve on our Board include her experience as a CPA and as the Chief Financial Officer of banking institutions.

Director Independence

Under Nasdaq rules, independent directors must comprise a majority of our Board within a specified period of time of our initial rules. Those rules, as well as those of the SEC, impose several other requirements with respect to the independence of our directors. Our Board has evaluated the independence of its members based upon Nasdaq and SEC rules. Applying these standards, our Board has affirmatively determined that a majority of the members of the Board are independent directors under the applicable rules. We have determined that Mr. Apostolou and Dr. Politis are not independent directors under the applicable rules because the Bank rents its main office from a company affiliated with Mr. Apostolou and Dr. Politis’s father. Mr. Leo does not qualify as an independent director because he is an executive officer of both the Company and the Bank.

Code of Conduct

In connection with our application to Nasdaq, the Board adopted a new Code of Ethics applicable to directors, officers, and employees on July 27, 2021 which complies with Nasdaq rules and the Sarbanes-Oxley Act.

Board Committees

The Board of Directors is divided into five committees. The following table discloses the membership of each committee.

Name Audit and Risk Management Compensation Environmental, Social, and Governance Executive Nominating George Apostolou Member Derek S. Berset Mark S. Berset Chair Chair Dennis R. DeLoach, III Member Chair Member Alexander Harris Member Tarek Helal Member Member Trifon Houvardas Member Anthony N. Leo Member Member Christos Politis, M.D. Chair Anthony Saravanos Member Member Member Bradly W. Spoor Member Harold J. Winner Member Member Member Barbara J. Zipperian Chair Member

Audit and Risk Management Committee. Our Board has evaluated the independence of each of the members of our Audit and Risk Management Committee and has affirmatively determined that: (i) each of the members of our Audit Committee is an independent director under Nasdaq rules; (ii) each of the members satisfies the additional independence standards under applicable SEC rules for audit committee service; and (iii) each of the members has the ability to read and understand fundamental financial statements. In addition, our Board has determined that Ms. Zipperian has the financial sophistication required by Nasdaq rules due to her experience and background, specifically her prior service as a Chief Financial Officer of other banks, and that she qualifies as a “audit committee financial expert” under the rules and regulations of the SEC.

The Audit and Risk Management Committee assists our Board performing the Board’s oversight responsibilities as they relate to the Company’s accounting and financial reporting practices and audits of the financial statements, internal controls, and legal and regulatory compliance, including, among other things:

•the quality and integrity of the Company’s financial statements;

•the Company’s compliance with applicable laws and regulations;

•the review of the independent auditors’ qualifications and independence;

•the performance of the Company’s internal audit function and the Company’s independent auditors; and

•the application of the Company’s Code of Business Conduct and Ethics as established by management and the Board.

Our Audit and Risk Management Committee has adopted written charters, which sets forth the committee’s duties and responsibilities. The Audit Commitee Charter of the Audit and Risk Management Committee is available on our website at www.firsthomebank.com.

Compensation Committee. Our Board has evaluated the independence of each of the members of our Compensation Committee and has affirmatively determined that each of the members of our Compensation Committee meets the definition of an independent director under Nasdaq rules. Our Board has also determined that each of the members of the Compensation Committee qualifies as a “nonemployee director” within the meaning of Rule 16b-3 under the Exchange Act.

The Compensation Committee assists our Board in its oversight of our overall compensation structure, policies and programs and assessing whether such structure meets our corporate objectives. The Compensation Committee also reviews and oversees the compensation determinations of our named executive officers, as well as the administration of our compensation and benefit plans.

Our Compensation Committee has adopted a written charter, which sets forth the committee’s duties and responsibilities.

Environmental, Social, and Governance Committee. Our Environmental, Social and Governance Committee is responsible for overseeing the Company’s development and implementation of business practices intended to promote the Company’s commitment to environmental, health and safety, corporate social responsibility, corporate governance, sustainability, and other public policy matters relevant to the Company

Executive Committee. Our Executive Committee meets only on an ad hoc basis to address matters that may require immediate or in depth attention which the full Board is unable to provide at such time.

Nominating Committee. Our Board has evaluated the independence of each of the members of our Nominating Committee and has affirmatively determined that each of the members of our Nominating meets the definition of an independent director under Nasdaq rules.

The Nominating Committee assists our Board in its oversight of identifying and recommending persons to be nominated for election as directors and to fill any vacancies on the board of the Company and the Bank, monitoring the composition and functioning of the standing committees of the Board, and developing, reviewing and monitoring the corporate governance policies and practices of the Company.

In carrying out its functions, the Nominating Committee develops, and recommends to the Board for its approval, qualification criteria for all potential nominees for election, including incumbent directors, Board nominees, and shareholder nominees to be included in the Company’s future proxy statements. The Nominating Committee also evaluates potential nominees for our Board to determine if they have any conflicts of interest that may interfere with their ability to serve as effective Board members and to determine whether they are independent in accordance with applicable SEC and Nasdaq rules (to ensure that, at all times, at least a majority of our directors are independent). Although we do not have a separate diversity policy, the Nominating Committee may consider the diversity of the Company’s directors and nominees in terms of knowledge, experience, skills, expertise and other factors that may contribute to the effectiveness of our Board.

Our Nominating Committee has adopted a written charter, which sets forth the committee’s duties and responsibilities.

Bank Directors

The Board of Directors of the Bank is comprised of 12 individuals: Mr. Apostolou, Mr. Derek S. Berset, Mr. DeLoach, III, Mr. Harris, Mr. Helal, Mr. Houvardas, Mr. Leo, Dr. Politis, Mr. Saravanos, Mr. Spoor, Mr. Winner, and Ms. Zipperian.

Non-Director Management

Our executive leadership team is comprised of Mr. Leo, along with the non-director individuals listed below.

Brandi N. Jaber, age 48, has been with the Company since 2017. Since October 2020, she has served as Bay First’s Executive Vice President and the Bank’s President of the Residential Mortgage Division. Ms. Jaber has spent longer than 17 years in various management roles in the residential mortgage industry. She has served as an executive team member for the past 8 years, leading numerous cross-functional initiatives. Prior to October 2020, she served as the Bank’s Chief Administrative Officer. Ms. Jaber received her Bachelor in Finance from the University of Florida and an MBA from the University of Tampa.

Matthew M. Luckey, age 47, has been with the Company since 2015. He currently serves as BayFirst and the Bank’s Executive Vice President and Chief Banking Officer. Prior to joining BayFirst, Mr. Luckey served as

Vice President, Commercial Lending at The Bank of Tampa from 2012 to 2015. Prior to that he served in various banking roles, including management training, branch management, credit underwriting, and commercial lending beginning with SunTrust Bank, followed by United Bank and Synovus Bank. He received his Bachelor of Business Administration from the University of Georgia.

Robin L. Oliver, age 45, has served as BayFirst and the Bank’s Executive Vice President and Chief Financial Officer since June 2018. From 2014 to 2018, Mrs. Oliver served as Controller for Central Bank & Trust Company, Lexington, Kentucky. For the first 16 years of her career, she served multiple financial institution clients in public accounting as an auditor with Crowe Horwath LLP. Mrs. Oliver is a Certified Public Accountant and received her BA in Accounting from the University of Kentucky.

Thomas G. Zernick, age 59, is BayFirst’s Executive Vice President and the Bank’s President of CreditBench. Prior to joining BayFirst, Mr. Zernick served as Florida Market President for Stearns Bank. Mr. Zernick also served as SBA Product Manager for HomeBanc in Tampa. Mr. Zernick also served as a Community Bank President and SBA President for Republic Bank in Michigan. He received his Bachelor in Business Administration from the University of Notre Dame.

EXECUTIVE COMPENSATION

General

The Compensation Committee determines the level of base salary and any incentive bonus for the Chief Executive Officer and other executive officers of BayFirst and the Bank. To accomplish this, the Compensation Committee has retained Pearl Meyer & Partners, LLC (“PM”) to provide independent compensation consulting services. PM periodically attended Compensation Committee meetings, including executive sessions, and provided information and advice independent of management. PM also performed a peer analysis for the Company. The Compensation Committee discussed these items and concluded that the engagement of PM, and the services it provided did not raise any conflict of interest.

In addition to the peer group analysis, actual salary changes and discretionary bonus awards are based upon the Compensation Committee’s evaluation of an individual’s performance and duties and responsibilities, the performance of BayFirst and the Bank, and other relevant factors, as determined solely by the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee of the Board of Directors of BayFirst is comprised of Dennis R. DeLoach, III (Chair), Tarek Helal, Trifon Houvardas, Anthony Saravanos and Harold J. Winner. None of the members of the Compensation Committee have engaged in any transactions which would result in them not being considered “independent” under Nasdaq rules.

Summary Compensation Table

The following table sets forth the compensation paid to Mr. Leo, Mr. Zernick, and Mr. Luckey 2020, 2019, and 2018.

Name and Principal Position	Year	Salary	Bonus	Stock Awards	Option Awards	Nonequity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation (1)	Total
Anthony N. Leo	2020	$281,875	$—	$213,438	$52,874	$426,876	$82,089	$33,268	$1,090,420
CEO	2019	263,542	—	—	59,561	262,665	56,700	30,361	672,829
	2018	250,000	—	66,888	98,225	98,685	53,952	32,489	600,239
Thomas G. Zernick	2020	$240,292	$73,013	$24,340	$20,871	$—	$—	$31,345	$389,861
EVP	2019	153,333	102,500	—	23,825	—	—	25,836	305,494
	2018	156,060	75,000	—	37,887	—	—	25,791	294,738
Matthew M. Luckey	2020	$191,100	$47,273	$15,760	$20,871	$—	$—	$35,867	$310,871
EVP	2019	173,750	55,000	—	23,825	—	—	32,661	285,236
	2018	170,000	45,000	—	37,887	—	—	31,465	284,352
(1) All Other Compensation includes:

Name andPrincipal Position	Year	401(k) Plan Contributions		ESOP Contributions		Medical, Dental, and Vision Benefits		Life Insurance Premiums
Anthony N. Leo	2020	$	8,550	$	5,700	$	16,246	$	2,772
CEO	2019	8,400		5,196		15,034		1,731
	2018	11,375		5,500		13,817		1,806
Thomas G. Zernick	2020	$	8,550	$	5,700	$	15,620	$	1,476
EVP	2019	8,034		5,196		11,271		1,335
	2018	11,661		5,500		7,278		1,352
Matthew M. Luckey	2020	$	7,874	$	5,237	$	22,159	$	597
EVP	2019	6,566		4,212		21,344		539
	2018	6,900		4,607		19,610		348

In 2021, Mr. Leo is receiving a $315,000 base salary, Mr. Zernick is receiving a $295,000 base salary, and Mr. Luckey is receiving a $200,000 base salary.

Agreements with Mr. Leo

We are parties to an employment agreement with our Chief Executive Officer Anthony N. Leo. The agreement had an initial term ending on December 31, 2019, and renews annually for an additional year, so that the then-remaining term of the agreement is three years, unless either party provides notice of non-renewal. Under his agreement, Mr. Leo receives a minimum annual salary of $220,000, which may be increased annually by the Board. He is also eligible to participate in any of our incentive, pension, profit sharing, bonus, life insurance, hospitalization, major medical, and other employee benefit plans and programs. Mr. Leo’s employment agreement also provides that during the term of employment and for a period of 18 months following termination, Mr. Leo may not: (a) compete with us by, directly or indirectly, forming, serving as an organizer, director or officer of, employee or agent, or consultant to, or acquiring or maintaining more than a 1% passive investment in, a depository financial institution or holding company thereof if such depository institution or holding company has one or more offices or branches within a 50 mile radius of any of our offices; (b) solicit our clients with which he had contact in connection with products and services provided by us for the purpose of providing financial services; (c) solicit our employees; or (d) solicit or divert referrals of SBA loans from SmartBiz. If Mr. Leo terminates his employment for “good reason” or the Company terminates his employment without “cause” prior to, or more than 12 months after, a “change in control”, he will be entitled to severance compensation equal to his then current “annual compensation” for a period of 18 months, plus any accrued bonus, and all outstanding stock options and other incentive awards will vest immediately. However, if such a

termination occurs within 12 months following a change in control, Mr. Leo will be entitled to receive severance compensation equal to two-times his then current annual compensation, plus any accrued bonus, and all outstanding equity-based incentive awards will vest immediately.

The Bank has also entered into a salary continuation agreement with Mr. Leo. The salary continuation agreement provides for an annual supplemental retirement benefit to be paid to Mr. Leo in 20 equal annual installments of $25,000 commencing on the first day of the first month immediately after the month in which a “separation from service” occurs and Mr. Leo has attained the “normal retirement age” (as such terms are defined in the salary continuation agreement). Mr. Leo will be entitled to the same benefits if a separation from service occurs after a “change in control” (as defined in the agreement). If Mr. Leo’s employment with the Bank terminates prior to December 31, 2022, he will receive no benefits under the salary continuation agreement. If he experiences a “disability” (as defined in the agreement) prior to normal retirement age, he will receive the accrued balance of the supplemental retirement benefit. If Mr. Leo was to die prior to receiving all of the benefit under the salary continuation agreement, his beneficiaries shall be entitled to receive the present value of the salary continuation benefit, calculated in accordance with the agreement. The salary continuation benefit will also be forfeitable if Mr. Leo violates certain non-competition and non-solicitation covenants.

Annual Incentive Plan

First Home has adopted an Annual Incentive Plan (the “AIP”) providing for short-term cash bonuses and long-term compensation in the form of stock options or restricted stock. The AIP was established by the Compensation Committee in consultation with PM. Annual cash bonuses are determined by a set of objective and subjective criteria established by the Compensation Committee. Under the AIP, if Mr. Leo meets each of the established objectives, he may receive up to 3.0% of First Home’s pre-tax net income in 2021 and 2.75% of pre-tax net income in 2022 and successive years. Mr. Zernick may receive up to 75% of his base salary if he meets each of the established objectives, while Mr. Luckey may receive up to 40% of his base salary. Stock options or restricted stock may be granted at the Compensation Committee’s discretion based on its assessment of the respective executive’s performance. Any equity component of such a plan will be granted pursuant to the 2017 Equity Incentive Plan.

2017 Equity Incentive Plan

In 2018, the Board amended, and BayFirst’s shareholders approved, the BayFirst Financial Corp. Amended and Restated 2017 Equity Incentive Plan (the “EIP”), which provides for the grant of stock options, restricted stock awards, restricted stock unit awards, and other equity awards to officers, employees, directors, advisors, and consultants. The number of shares reserved and available for issuance under the EIP is 15% of the total number of shares of common stock issued and outstanding from time to time, not to exceed 1,500,000 shares.

The following is a summary of the material features of the EIP.

Purpose of the EIP

We believe the ability to offer stock-based compensation will allow us to attract additional personnel and to reward exceptional performance. The Board believes that the EIP provides a means whereby those individuals upon whom the responsibilities of the successful administration and management of BayFirst and the Bank rest, and whose present and potential contributions are of importance, can acquire and maintain stock ownership, thereby strengthening their concern for the welfare of BayFirst. By providing such individuals with additional incentive and reward opportunities, the Board believes that the EIP enhances the profitable growth of BayFirst.

Administration of the EIP

The EIP provides that the Board, its Compensation Committee, or any other committee appointed by the Board has the authority to administer the EIP and to make awards under the EIP. The Board has appointed the Compensation Committee as the administrator of the EIP until further notice.

Awards Under the EIP

The EIP provides for awards of stock options, restricted stock, restricted stock units, and other stock-based awards.

The EIP requires that stock options can only be issued at or above the fair market value per share on the date of grant. Stock options granted to participants under the EIP may be either incentive stock options under the provisions of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or options that are not subject to the provisions of Section 422 of the Code. Stock options entitle the recipient to purchase shares of common stock at the exercise price specified in the award agreement. The administrator determines the number of option shares, the term of the option, the exercise price, the vesting schedule, performance conditions, and any other terms and conditions. In the case of 10% shareholders who receive incentive stock options, the exercise price may not be less than 110% of the fair market value of the common stock on the date of grant.

No option may be exercisable more than 10 years after the date of grant. Payment of the exercise price of any option may be made in cash or cash equivalent, as determined by the administrator, to the extent permitted by law: (i) by means of any cashless exercise; (ii) by delivering shares of common stock already owned by the option holder; (iii) by such other method as the administrator may determine; or (iv) any combination of the foregoing.

Restricted stock consists of shares of common stock which are granted to the participant, subject to certain restrictions against disposition and certain obligations to forfeit such shares to the Corporation under certain circumstances. The restrictions, which may be different for each award, will be determined by the Compensation Committee.

Restricted stock units are similar to restricted stock awards in that the value of a restricted stock unit is denominated in shares of stock. However, unlike a restricted stock award, restricted stock units are a mere promise by the issuer to grant stock at a specified point in the future, and no shares of stock are transferred to the participant until certain requirements or conditions associated with the award are satisfied.

The administrator, in its discretion, may set restrictions on awards based upon the achievement of performance goals based upon any individual participant or Company criteria or metric, including, but not limited to: stock price, earnings, earnings per share, return on equity, return on assets, asset quality, net interest margin, loan portfolio growth, efficiency ratio, or deposit portfolio growth.

The Company and the participants who are granted awards under the EIP will enter into an award agreement setting forth the terms of any award. The terms and provisions of the award agreements need not be identical, and the administrator may, in its sole discretion, amend an outstanding award agreement at any time in any manner that is not inconsistent with the provisions of the EIP.

Amendment and Termination of the EIP

The Board may amend or terminate the EIP, provided that shareholder approval will be required to: (i) increase the total number of shares reserved for issuance under the EIP; or (ii) change the class of recipients eligible to participate in the EIP. No amendment shall adversely affect any of the rights of any holder of any award without the holder’s consent. The administrator may accept surrender of outstanding equity awards under the EIP and grant new awards in substitution for them; provided that the administrator will not exchange underwater stock options without prior shareholder approval. The EIP will terminate five years after its effective date, but outstanding awards continue until they expire in accordance with their terms.

Authorized Shares

The total number of shares reserved and available for issuance under the EIP is 15% of the total number of shares of BayFirst common stock issued and outstanding from time to time; provided the maximum aggregate number of reserved shares shall not exceed 1,500,000 shares. In the event of a stock dividend, stock split, reorganization, merger, recapitalization, or other change affecting the common stock, the administrator will make proportionate adjustments with respect to: (i) the aggregate number and kind of shares that may be issued under the EIP; (ii) the number, kind, and exercise price of shares issuable pursuant to each outstanding award

made under the EIP; and (iii) the maximum number shares that may be subject to awards granted to any one individual under the EIP.

If any award lapses, expires, terminates, or is canceled prior to the issuance of shares thereunder or if shares covered by an award are settled in cash, the shares subject to such awards shall again be available for issuance under the EIP. If any shares subject to an award are not delivered to a participant because the award is exercised through a reduction of shares subject to the award, the number of shares that are not delivered to the participant will no longer be available for issuance under the EIP.

Non-Qualified Stock Purchase Plan

The Company adopted an Employee Stock Purchase Plan for all employees in 2015. During 2020, the ESPP was amended and restated in its entirety and was renamed the Non-Qualified Stock Purchase Plan (“NSPP”). All employees and Directors are eligible to participate in the NSPP. All Bank employees are eligible to purchase shares of BayFirst stock through payroll deduction, subject to a maximum of 10% of their pay through the NSPP. In no instance may the per share purchase price ever be less than the greater of its book value, $13.33, or 10% less than the fair market value of the stock as determined by the Board. Directors may purchase available shares of common stock with post-tax dollars as of the grant date at the price of shares offered under the Dividend Reinvestment and Stock Purchase Plan, with no minimum deduction and a maximum deduction of the Directors’ board fees, but are not eligible for the discount.

401(k) Plan

The Bank has a 401(k) plan that provides for a mandatory matching contribution of 3% of each participating employee’s base salary, as well as a discretionary match and profit sharing component.

Employee Stock Ownership Plan

In 2018, the Company also adopted an Employee Stock Ownership Plan, which permits tax deferral of employees’ salaries for the purchase of shares of BayFirst common stock. The plan also provides for discretionary contributions by the Company, those contributions vest over a five year period.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information regarding stock options and unvested restricted stock held by each of our named executive officers as of December 31, 2021 (giving effect to the three-for-two stock split effective on May 10, 2021).

		Option Awards					Stock Awards
Name	Date of Grant	Number of Securities Underlying Unexercised OptionsExercisable	Number of Securities Underlying Unexercised OptionsUnexercisable	Option Exercise Price		Option Expiration Date		Number of Shares of Stock That Have Not Vested	Market Value of Shares of Stock That Have Not Vested
Anthony N. Leo	4/18/17	—	—	—		—		1,620	$	22,410
	1/31/18	—	—	—		—		2,510	$	34,722
	6/12/18	8,400	12,600	$	17.33	6/12/28		—	—
	3/15/19	3,000	12,000	$	14.67	3/15/29		—	—
	1/15/20	—	14,250	$	15.67	1/15/30		—	—
Thomas G. Zernick	6/12/18	3,240	4,860	$	17.33	6/12/28		—	—
	3/15/19	1,200	4,800	$	14.67	3/15/29		—	—
	1/15/20	—	5,625	$	15.67	1/15/30		—	—
Mathew M. Luckey	6/12/18	3,240	4,860	$	17.33	6/12/28		—	—
	3/15/19	1,200	4,800	$	14.67	3/15/29		—	—
	1/15/20	—	5,625	$	15.67	1/15/30		—	—

DIRECTOR COMPENSATION

BayFirst directors receive cash fees of $1,500 per Board meeting. Bank directors receive cash fees of $1,250 per Board meeting.

We also pay annual retainers to the Chairs of the: (i) Board and the Bank Board ($22,500 each); (ii) Audit and Risk Management Committee and Nominating Committee ($8,750 each); (iii) Bank Asset Liability Committee ($7,500); (iv) Compensation Committee ($5,000); and (v) the Chair of the Environmental, Social, and Governance Committee ($5,000).

In addition, we pay our directors fees of: (i) $500 per Bank Directors Credit and Loan Committee meeting, Audit and Risk Management Committee meeting, Compensation Committee meeting, and Environmental, Social, and Governance Committee Meeting; and (ii) $250 per Bank Asset Liability Committee meeting. If a director attends any meeting by telephone, the director receives half the standard fee.

The following table sets forth the cash compensation and stock option compensation earned during 2020 by each of our directors other than Mr. Leo, whose compensation is described in the “Summary Compensation Table” on page 58.

Name	Cash Fees Earned		Option Awards		Total
George Apostolou	$	19,500	$	14,471	$	33,971
Derek S. Berset	19,750		14,471		34,221
Mark S. Berset	17,000		14,471		31,471
Dennis R. DeLoach, III	17,750		14,471		32,221
Alexander Harris	1,500		—		1,500
Tarek Helal	20,250		14,471		34,721
Trifon Houvardas	23,750		14,471		38,221
Christos Politis, M.D.	12,000		14,471		26,471
Anthony Saravanos	49,500		19,480		68,980
Bradly W. Spoor	23,500		14,471		37,971
Harold J. Winner	48,000		19,480		37,480
Barbara J. Zipperian	1,500		—		1,500

BENEFICIAL OWNERSHIP OF SECURITIES

The percentage and amount of shares beneficially owned by BayFirst’s directors and named executive officers, as well as all directors and executive officers as a group, as of December 31, 2021 (as adjusted for the three-for-two split effective May 10, 2021) is shown in the table below. The mailing address of each director and executive officer is care of First Home Bank, First Home Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701. As of December 31, 2021, we had 766 record holders of our common stock. Other than Mark S. Berset, we are aware of no shareholder who owns 5% or more of our total shares outstanding.

Directors	Number ofShares(1)	Right to Acquire(2)	Percent of BeneficialOwnership(3)
George Apostolou	86,244.46	11,850.00	2.46	%
Derek S. Berset	54,785.98	11,850.00	1.67	%
Mark S. Berset	274,347.78	19,665.00	7.35	%
Dennis R. DeLoach, III	28,480.55	6,450.00	0.88	%
Alexander Harris	205.00	1,250.00	0.04	%
Tarek Helal	20,551.79	11,850.00	0.81	%
Trifon Houvardas	31,241.99	11,850.00	1.08	%
Anthony N. Leo	25,537.69	33,142.00	1.46	%
Christos Politis, M.D.	40,690.00	11,850.00	1.32	%
Anthony Saravanos	47,744.63	16,800.00	1.61	%
Bradly W. Spoor	21,361.63	11,850.00	0.83	%
Harold J. Winner	49,237.03	17,175.00	1.66	%
Barbara J. Zipperian	1,633.00	1,250.00	0.07	%
Named Executive Officers
Thomas G. Zernick	6,379.01	10,635.00	0.43	%
Matthew M. Luckey	4,797.28	10,635.00	0.39	%
All Directors and Named Executive Officers as a Group (15 people)	693,237.82	188,102.00	21.14	%

______________________

(1) Includes shares for which the named person:

•has sole voting and investment power;

•has shared voting and investment power with a spouse, or

•holds in an IRA or other retirement plan program, unless otherwise indicated in these footnotes.

(2) Shares covered by stock options or warrants that are exercisable within sixty (60) days of December 31, 2021.

(3) Based on 3,981,116.68 common shares outstanding and, for each individual, shares that such individual has the right to acquire within sixty (60) days of December 31, 2021.

The following shareholders have been designated as a part of a “Group” for purposes of the Change in Bank Control Act and received approval on March 29, 2013 from the Federal Reserve Bank of Atlanta to aggregately own BayFirst’s common stock: George and Calliope Apostolou, Panagiotis Apostolou, Mark S. and Linda C. Berset, Derek S. Berset, Gary N. and Eileen L. Berset, Kristin M. Berset, Larry C. and Mary S. Cunningham, Dennis R. DeLoach, Jr. as Trustee, Dennis R. DeLoach, Jr. and Faye DeLoach, Dennis R. DeLoach, III, Jeffory H. Forbes Revocable Living Trust, Sherry B. Forbes Revocable Living Trust, Mohamed and Amira Helal, Nadine Helal, Tarek Helal, K&M Insurance Investors, LLC, Trifon Houvardas, Managing Member, The Houvardas Family Revocable Trust U/T/A dated November 12, 2012 by Paul Houvardas and Simone Houvardas, As Trustees, Bruce Lucas, Universal Finance & Investments LC, Sanjay Madhu, Manager, Alex Madhu, Andrew Madhu, Felix Kamal Nematbakhsh Trust U/A 12/17/2008 Mansoor Nematbakhsh Trustee, Fiona Ann Nematbakhsh Trust U/A 12/17/2008 Mansoor Nematbakhsh Trustee, Harish and Khyati Patel, Pareshbhai and Neha Patel, Gregory Politis, Christos and Effice Politis, Peter Politis, Anthony and Maria Z.

Saravanos, Shane R. and Nicole F. Stowell, Shaju and Miriam Vattamattam, Harold J. Winner, and Harold J. Winner and Jacquelyn M. Winner.

We do not believe these individuals are a “group” as that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We reached this conclusion because those individuals have not agreed to act together for the purpose of acquiring, holding, voting, or disposing of our securities. The Federal Reserve reached the conclusion that they were a “Group” for purposes of the Change in Bank Control Act because they each had an affiliation with a different company, HCI Group, Inc.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain of our directors, executive officers, and their immediate family members are also customers of the Bank. We anticipate that these individuals will continue to be customers in the future. All transactions between us and our directors, executive officers, and their immediate family members, and any principal shareholders, have been made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with non-affiliated persons. In the opinion of management, these transactions did not involve more than the normal risk of collectability or present other unfavorable features.

Loans made to directors, executive officers, and their immediate families require the approval of a majority of the disinterested directors reviewing the loan. As of December 31, 2021, loans to directors, executive officers, and their immediate family members represented approximately $9.28 million, or 1.33% of the total loan portfolio, all of which are current and performing.

BayFirst’s corporate offices and the Bank’s main office are located at the First Home Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701. We lease the office and branch space at this location from The Arc Group, Inc. of which our director George Apostolou and his son are officers, directors, and/or equity owners and of which director Christos Politis’ father and siblings are also officers, directors, and/or equity owners. In 2021, we paid this company $538,587, of which Mr. Apostolou’s beneficial interest is $107,717 and Mr. Politis’ family members’ beneficial interest is $177,734.

Mark S. Berset and Derek S. Berset, directors of BayFirst, and members of their immediate family, are also the only equity owners of Comegys Insurance Agency. In 2021, the Company made payments to Comegys Insurance Agency in the amount of $386,405 for the purchase of insurance policies for the Company, of which their and their immediate family’s beneficial interest is $382,541. Such amounts are less than 5% of the gross revenues of Comegys Insurance Agency in each of those years.

DESCRIPTION OF OUR SECURITIES

Common Stock

We have 15,000,000 shares of authorized common stock, no par value. ~~As of December 31, 2021, there were 3,981,116.68 shares of the common stock issued and outstanding.~~ Each share of common stock has the same relative rights and is identical in all respects with every other share of common stock. The holders of common stock are entitled to elect the members of the Board and are entitled to vote as a class on all matters required or permitted to be submitted to the ~~shareholders~~stockholders. Holders of common stock have one vote for each share of common stock owned, and do not have the right to cumulative votes in the election of directors.

Subject to the rights of the holders of our preferred shares, the holders of our common stock are entitled to dividends and other distributions if, as, and when, declared by our Board out of assets legally available for that purpose. Upon the liquidation, dissolution or winding up of BayFirst, the holder of each share of common stock is entitled, subject to the rights of the holders of our preferred shares, to share ratably, based on the number of shares held, in BayFirst’s assets remaining after payment of all of our debts and liabilities. All shares of our common stock currently outstanding are fully paid and non-assessable. Holders of our common stock do not have preemptive, conversion, exchange, or other rights to subscribe for or purchase any additional shares of common stock that we may issue in the future. If additional shares of our common stock are issued, such new shares would have the same voting and other rights and privileges as the currently issued and outstanding shares of common stock, including the right to cast one vote per share on all matters and to participate in dividends when and to the extent declared and paid. There are no redemptive or sinking fund provisions applicable to the common stock.

65The terms our Series A Preferred Stock, Series B Convertible Preferred Stock, Series C Cumulative Convertible Preferred Stock, Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series D, and Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series E, described below, prohibit us from declaring or paying any dividends on our common stock, or from repurchasing, redeeming or acquiring our common stock, unless we have declared and paid full dividends on our outstanding preferred stock for the most recently completed dividend period.

~~the~~Fractional right to cast one vote per share on all matters and to participate in dividends when and to the extent declared and paid. There are no redemptive or sinking fund provisions applicable to the common stock. Shares

~~The~~We ~~terms~~have ~~our~~issued, ~~Series A Preferred Stock~~ and ~~Series~~may Bcontinue ~~Convertible~~to ~~Preferred Stock~~issue, ~~described~~fractional ~~below,~~shares ~~prohibit~~of ~~us from declaring or paying any dividends on~~ our common stock,. orFlorida ~~from~~law ~~repurchasing,~~provides ~~redeeming~~that orthe ~~acquiring~~holder ~~our~~of ~~common~~a ~~stock,~~fractional ~~unless~~share weis ~~have~~entitled ~~declared~~to ~~and~~exercise ~~paid~~the ~~full~~rights ~~dividends~~of ona ~~our~~shareholder. ~~outstanding~~The ~~preferred~~relevant ~~stock~~statute ~~for the most recently completed dividend period.~~ (Section

607.0604, Florida Statutes) enumerates those rights to specifically include the right to vote, the right to receive dividends, and the right to receive distributions upon dissolution. Such rights would be available to, and exercised by, a shareholder in proportion to the amount of shares owned. Without limiting the generality of applicable Florida law, we intend to provide all shareholders, including any owner of a fractional share with all confirmations, proxy statements, and other documents required by law to be, or otherwise, provided to security holders.

BayFirst and our stock transfer agent will accept, process, and recognize trades in fractions of shares. A shareholder’s ownership of any fractional share will be recorded on our stock ledger. A shareholder may engage in private sales or purchases of fractional BayFirst shares.

Nasdaq does not permit the buying or selling of fractional shares. We do not believe other established markets or exchanges permit so either.

However, different brokers and their trading platforms handle fractional shares in different ways. Some facilitate trading fractional shares. Because of our size and relatively inactive market for our stock, a shareholder’s broker may not facilitate the trading of a BayFirst fractional share. Depending on the broker, a shareholder might need to buy or sell a certain dollar amount of fractional stock in order to complete a transaction. We can offer no assurance as to whether any broker or trading platform will permit an investor to purchase or sell a fractional share of BayFirst common stock. If a shareholder wants to buy or sell a fractional share, the shareholder should compare brokerages before signing up to ensure the one the shareholder chooses allows it.

Preferred Stock Generally

We have 1,000,000 shares of authorized preferred stock, no par value. Our ~~Articles~~articles of ~~Incorporation~~incorporation provide that our Board of Directors may authorize and issue series of preferred stock without ~~shareholder~~stockholder approval. Any preferred shares issued in the future may further restrict our ability to declare or pay dividends on any junior stock, including the common stock.

Series A Preferred Stock

Of the 1,000,000 shares of authorized preferred stock, 10,000 shares have been designated as Series A Preferred Stock. ~~As of December 31, 2021, there were 6,395 shares of Series A Preferred Stock issued and outstanding.~~ Each share of Series A Preferred Stock has the same relative rights and is identical in in all respects with every other share of Series A Preferred Stock. The holders of Series A Preferred Stock ~~have~~do nonot have voting rights, except as required by the Florida Business Corporation Act.

Holders of shares of Series A Preferred Stock are entitled to receive quarterly cash dividends at 9% per annum (unless we have not redeemed the shares by the tenth anniversary of their issuance, in which event the rate is subject to be increased to 11%). The terms our Series A Preferred Stock prohibit us from declaring or paying any dividends on any junior series of our capital stock, including our common stock, or from repurchasing, redeeming or acquiring such junior stock, unless we have declared and paid full dividends on our outstanding preferred stock for the most recently completed dividend period.

Upon the dissolution, liquidation or winding up of the affairs of BayFirst, whether voluntary or involuntary, the holders of Series A Preferred Stock then outstanding, together with holders of shares of any preferred shares then outstanding ranking on a parity with the Series A Preferred Stock upon dissolution, liquidation or winding up, shall be entitled to receive and to be paid out of the assets of BayFirst (or the proceeds thereof) available for distribution to the holders of Series A Preferred Stock after satisfaction of claims of creditors of BayFirst and any distribution or payments due to holders of preferred shares higher in priority to the Series A Preferred Stock, but before any distribution or payment shall be made in respect of the common shares or with respect to preferred shares lower in priority to the Series A Preferred Stock, an amount equal to the liquidation preference with respect to such shares. The liquidation preference for Series A Preferred Stock is $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution is made in full.

~~Series~~respect Ato ~~Preferred~~such ~~Stock~~shares. ~~and~~The ~~Series~~liquidation Bpreference ~~Convertible~~for Series A Preferred Stock ~~are~~is ~~parri~~$1,000 ~~passu~~per ~~with~~share ~~respect~~plus ~~to dividend and liquidation preferences.~~an

On the tenth anniversary of the issuance of any Series A Preferred Stock, BayFirst must redeem such shares; provided, however, that BayFirst will not be so obligated if it does not have adequate funds to pay the redemption price or is prohibited by law or otherwise from redeeming the shares. BayFirst may redeem any portion of the outstanding Series A Preferred Stock at any time after the third anniversary of their issuance. The redemption price in either instance will be $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution is made in full.

Series A Preferred Stock, Series B Convertible Preferred Stock, and Series C Cumulative Convertible Preferred Stock are pari passu with respect to dividend and liquidation preferences.

Series B Convertible Preferred Stock

In addition, 20,000 shares of preferred stock have been designated as Series B Convertible Preferred Stock. AsEach share of ~~December~~Series ~~31,~~B ~~2021,~~Convertible ~~there~~Preferred ~~were~~Stock ~~3,210~~has ~~shares~~the ofsame ~~Series~~relative Brights ~~Convertible~~and ~~Preferred~~is ~~Stock~~identical ~~issued~~in ~~and~~all ~~outstanding.~~respects ~~Each~~with every other share of Series B Convertible Preferred Stock. ~~has~~The ~~the~~holders ~~same~~of ~~relative~~Series ~~rights~~B ~~and~~Convertible ~~is identical in in all respects~~ Preferred

66Stock do not have voting rights, except as required by the Florida Business Corporation Act.

~~with~~The ~~every~~holders ~~other~~of ~~share~~shares of Series B Convertible Preferred Stock are entitled to receive quarterly cash dividends at 8% per annum (subject to increase to 9% if we have not redeemed the shares by the tenth anniversary of their issuance). The ~~holders~~terms ofour Series B Convertible Preferred Stock ~~have~~prohibit nous ~~voting~~from ~~rights~~declaring or paying any dividends on any junior series of our capital stock, ~~except~~including asour ~~required~~common bystock, ~~the~~or ~~Florida~~from ~~Business~~repurchasing, ~~Corporation~~redeeming ~~Act.~~or acquiring

The holders of shares of Series B Convertible Preferred Stock are entitled to receive quarterly cash dividends at 8% per annum (unless we have not redeemed the shares by the tenth anniversary of their issuance, in which event the rate is subject to be increased to 9%). The terms our Series B Convertible Preferred Stock prohibit us from declaring or paying any dividends on any junior series of our capital stock, including our common stock, or from repurchasing, redeeming or acquiring such junior stock, unless we have declared and paid full dividends on our outstanding preferred stock for the most recently completed dividend period. 31

~~Upon~~such ~~the~~junior ~~dissolution~~stock, ~~liquidation~~unless orwe ~~winding~~have updeclared of the affairs of BayFirst, whether voluntary or involuntary, the holders of Series B Convertible Preferred Stock then outstanding, together with holders of shares of any preferred shares then outstanding ranking on a parity with the Series A Preferred Stock upon dissolution, liquidation or winding up, shall be entitled to receive and ~~to be~~ paid ~~out~~full ofdividends ~~the~~on ~~assets~~our ofoutstanding BayFirst (or the proceeds thereof) available for distribution to the holders of Series B Convertible Preferred Stock after satisfaction of claims of creditors of BayFirst and any distribution or payments due to holders of preferred ~~shares~~stock higher in priority to the Series B Convertible Preferred Stock, but before any distribution or payment shall be made in respect of the common shares or with respect to preferred shares lower in priority to the Series B Convertible Preferred Stock, an amount equal to the liquidation preference with respect to such shares. The liquidation preference for ~~Series B Convertible Preferred Stock is $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to~~ the ~~date~~most ~~payment~~recently ofcompleted ~~such~~dividend ~~distribution is made in full~~period.

Upon the dissolution, liquidation or winding up of the affairs of BayFirst, whether voluntary or involuntary, the holders of Series AB Convertible Preferred Stock then outstanding, together with holders of shares of any preferred shares then outstanding ranking on a parity with the Series B Preferred Stock upon dissolution, liquidation or winding up, shall be entitled to receive and to be paid out of the assets of BayFirst (or the proceeds thereof) available for distribution to the holders of Series B Convertible Preferred Stock ~~are~~after ~~parri~~satisfaction ~~passu~~of claims of creditors of BayFirst and any distribution or payments due to holders of preferred shares higher in priority to the Series B Convertible Preferred Stock, but before any distribution or payment shall be made in respect of the common shares or with respect to ~~dividend~~preferred ~~and~~shares lower in priority to the Series B Convertible Preferred Stock, an amount equal to the liquidation ~~preferences~~preference with respect to such shares. The liquidation preference for Series B Convertible Preferred Stock is $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution is made in full.

~~The~~Series ~~holders~~A ofPreferred ~~shares~~Stock, of Series B Convertible Preferred Stock, ~~have~~and ~~the~~Series ~~right~~C toCumulative ~~convert~~Convertible ~~such~~Preferred ~~shares~~Stock ~~into~~are ~~shares~~pari ofpassu ~~common~~with ~~stock~~respect ~~at a conversion ratio equal~~ to ~~the~~dividend ~~quotient~~and ~~of: (i) the $1,000~~ liquidation preference; divided by (ii) the tangible book value per share of common stock, calculated on the basis of BayFirst’s financial statements, as of the last day of the calendar quarter occurring prior to the date on which a holder exercises the conversion right; provided, however, that tangible book value shall be adjusted to reflect a subsequent quarter end only on the last day of the month succeeding such quarter endpreferences.

The holders of shares of Series B Convertible Preferred Stock have the right to convert such shares into shares of common stock at a conversion ratio equal to the quotient of: (i) the $1,000 liquidation preference; divided by

(ii) the tangible book value per share of common stock, calculated on the basis of BayFirst’s financial statements, as of the last day of the calendar quarter occurring prior to the date on which a holder exercises the conversion right; provided, however, that tangible book value shall be adjusted to reflect a subsequent quarter end only on the last day of the month succeeding such quarter end.

On the tenth anniversary of the issuance of any Series B Convertible Preferred Stock, BayFirst must redeem such shares; provided, however, that BayFirst will not be so obligated if it does not have adequate funds to pay the redemption price or is prohibited by law or otherwise from redeeming the shares. BayFirst may redeem any portion of the outstanding shares of Series B Convertible Preferred Stock at any time after the earlier of: (i) the third anniversary of their issuance; or (ii) the consummation of the first sale of shares of common stock in a bona fide underwritten public offering that results in aggregate net proceeds of not less than $30.0 million. The redemption price in either instance will be $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution.

~~Warrants~~Series C Cumulative Convertible Preferred Stock

AsAn ofadditional ~~December 31~~10,000 ~~2021,~~shares weof ~~have~~preferred ~~21,496~~stock ~~outstanding~~have ~~warrants~~been todesignated ~~purchase~~as ~~32,244~~Series ~~shares~~C ofCumulative ~~our~~Convertible ~~common~~Preferred ~~stock~~Stock. Each ~~warrant~~share ~~permits~~of ~~its~~Series ~~holder~~C toCumulative ~~purchase~~Convertible ~~one~~Preferred Stock has the same relative rights and ~~one-half~~is ~~shares~~identical ofin ~~common~~all ~~stock~~respects atwith aevery ~~purchase~~other ~~price~~share of ~~$18~~Series C Cumulative Convertible Preferred Stock.~~00.~~ The ~~warrants~~holders ~~have~~of aSeries ~~three-year~~C ~~term~~Convertible ~~and~~Preferred ~~expire~~Stock ~~between~~do ~~October~~not 31have voting rights, ~~2022~~except ~~and~~as ~~December~~required ~~31,~~by ~~2022.~~the Florida Business Corporation Act.

InThe ~~the~~holders ~~event~~ of ashares ~~stock~~of ~~dividend,~~Series ~~stock~~C ~~split,~~Cumulative ~~reverse~~Convertible ~~stock~~Preferred ~~split,~~Stock orare ~~similar~~entitled ~~transaction,~~to ~~the~~receive ~~number~~quarterly ofcash ~~shares~~dividends ~~subject~~at to11% aper ~~warrant~~annum ~~and~~(subject ~~the~~to ~~exercise~~increase ~~price~~to of12% ~~the~~if ~~warrant~~we ~~will~~have benot ~~adjusted~~redeemed ~~proportionally with~~ the ~~effect~~shares ofby the ~~transaction.~~tenth ~~Similarly,~~anniversary ~~upon any reclassification or reorganization~~ of ~~the~~their ~~shares~~issuance). ofThe ~~common~~terms ~~stock~~our orSeries ~~certain~~C ~~business~~Cumulative ~~combination~~Convertible ~~transactions,~~Preferred ~~the~~Stock ~~warrant~~prohibit ~~holders~~us ~~shall~~from ~~have~~declaring ~~the~~or ~~right~~paying toany ~~purchase~~dividends ~~and~~on ~~receive,~~any injunior ~~lieu~~series of ~~shares~~our ofcapital ~~common~~ stock, ~~the~~including ~~kind~~our ~~and~~common ~~amount~~stock, ofor ~~shares~~from ofrepurchasing, ~~stock~~redeeming or ~~other~~acquiring ~~property~~such ~~receivable~~junior ~~upon~~stock, ~~such~~unless awe ~~transaction,~~have ~~that~~declared ~~the~~and ~~warrant~~paid ~~holder~~full ~~would~~dividends ~~have~~on ~~received~~our ~~had~~outstanding ~~the~~preferred ~~holder~~stock ~~exercised~~for the ~~warrant~~most ~~immediately~~recently ~~prior~~completed todividend ~~such transaction~~period.

67Upon the dissolution, liquidation or winding up of the affairs of BayFirst, whether voluntary or involuntary, the holders of Series C Cumulative Convertible Preferred Stock then outstanding, together with holders of shares of any preferred shares then outstanding ranking on a parity with the Series C Preferred Stock upon dissolution, liquidation or winding up, shall be entitled to receive and to be paid out of the assets of BayFirst (or the proceeds thereof) available for distribution to the holders of Series C Cumulative Convertible Preferred Stock after satisfaction of claims of creditors of BayFirst and any distribution or payments due to holders of preferred shares higher in priority

to the Series C Cumulative Convertible Preferred Stock, but before any distribution or payment shall be made in respect of the common shares or with respect to preferred shares lower in priority to the Series C Cumulative Convertible Preferred Stock, an amount equal to the liquidation preference with respect to such shares. The liquidation preference for Series C Cumulative Convertible Preferred Stock is $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution is made in full.

Series A Preferred Stock, Series B Convertible Preferred Stock, and Series C Cumulative Convertible Preferred Stock are pari passu with respect to dividend and liquidation preferences.

The holders of shares of Series C Cumulative Convertible Preferred Stock have the right to convert such shares into shares of common stock at a conversion ratio equal to the quotient of: (i) the $1,000 liquidation preference; divided by (ii) the tangible book value per share of common stock, calculated on the basis of BayFirst’s financial statements, as of the last day of the calendar quarter occurring prior to the date on which a holder exercises the conversion right; provided, however, that tangible book value shall be adjusted to reflect a subsequent quarter end only on the last day of the month succeeding such quarter end.

On the tenth anniversary of the issuance of any Series C Cumulative Convertible Preferred Stock, BayFirst must redeem such shares; provided, however, that BayFirst will not be so obligated if it does not have adequate funds to pay the redemption price or is prohibited by law or otherwise from redeeming the shares. BayFirst may redeem any portion of the outstanding shares of Series C Cumulative Convertible Preferred Stock at any time after the earlier of: (i) the third anniversary of their issuance; or (ii) the consummation of the first sale of shares of common stock in a bona fide underwritten public offering that results in aggregate net proceeds of not less than $30.0 million. The redemption price in either instance will be $1,000 per share plus an amount equal to all accumulated dividends thereon (whether or not earned or declared but without interest) to the date payment of such distribution.

Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series D

Holders of shares of Series D Preferred Stock are entitled to receive, when, as and if declared by the Board out of funds of the Company legally available therefor, pari passu with the shares of Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series E, cumulative dividends in arrears at the rate per annum of 11% per share, payable semi-annually on June 15 and December15 of each year, commencing on December 15, 2026. Dividends may be paid in cash or in kind through the issuance of additional shares of Series D Preferred Stock. To the extent that such dividends are not paid semi-annually, then such unpaid dividends will accrue and compound until paid. The holders of Series D Preferred Stock will not be entitled to receive any dividends on shares of Series D Preferred Stock converted to Common Stock on or prior to December 15, 2026.

The holders of shares of Series D Preferred Stock do not have any voting rights, except for certain protective matters such as amendments to the Company’s articles of incorporation that create any class or series of capital stock of the Company ranking senior to the Series D Preferred Stock.

Whenever dividends payable on the shares of Series D Preferred Stock have not been paid for an aggregate of three or more six-month dividend periods, in each case whether or not consecutive, the authorized number of directors of the Company shall automatically be increased by two and the holders of the Series D Preferred Stock shall have the right to elect two directors to fill such newly created directorships at the Company’s next annual meeting of shareholders (or at a special meeting called for that purpose prior to such next annual meeting) and at each subsequent annual meeting of shareholders until all accrued and unpaid dividends for all past six-month dividend periods, including the latest completed dividend period, on all outstanding shares of Series D Preferred Stock have been declared and paid in full.

Within five business days after the date on which (i) required stockholder approvals have been received, (ii) articles of amendment have been filed with the Florida Department of State to increase the number of authorized shares of common stock to at least 100,000,000 shares and (iii) a certificate of amendment has been issued by the Florida Department of State with respect thereto (the “Conversion Date”), all outstanding shares of Series D Preferred Stock (with certain limitations) shall automatically convert into shares of common stock at the appropriate

conversion rate. If, however, the Company’s shareholders have approved the conversion proposal but not the articles amendment proposal, then a partial conversion shall occur.

Prior to conversion of the Series D Preferred Stock into common stock, no dividend or distribution shall be declared or paid upon any shares of common stock or other class or series of stock junior in priority to the Series D Preferred Stock.

Shares of Series D Preferred Stock duly converted, or otherwise reacquired by the Company, will resume the status of authorized and unissued Preferred Stock, undesignated as to series and available for future issuance (provided that any such cancelled shares of Series D Preferred Stock may be reissued only as shares of any series of preferred stock other than Series D Preferred Stock).

The shares of Series D Preferred Stock are senior to shares of common stock, such that in the event of any liquidation, dissolution or winding up of the Company’s affairs, each holder of shares of Series D Preferred Stock will be entitled to receive for each share of Series D Preferred Stock, out of the assets of the Company or proceeds thereof available for distribution to shareholders of the Company, before any distribution of such assets or proceeds is made to the holders of common stock, pari passu with the Series E Preferred Stock, payment in full in an amount equal to the sum of (i) the liquidation amount (which is initially $10,000.00 per share of Series D Preferred Stock) and (ii) any declared and unpaid dividends on such share. In the case of a merger, sale of substantially all of the Company’s assets or certain other reorganization events, each holder of Series D Preferred Stock will be entitled to receive for each share of Series D Preferred Stock, out of the assets of the Company or proceeds thereof (whether capital or surplus), legally available for distribution to the shareholders of the Company, a preference distribution equal to two times the amount of the liquidation preference.

Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series E

The terms of the Series E Preferred Stock are generally the same as the Series D Preferred Stock, except that the shares of Series E Preferred Stock are not convertible in the hands of the initial holder or any other holder that is not a “Permitted Transferee.” A “Permitted Transferee” is a transferee that is not affiliated with the initial holder and that obtained shares of Series E Preferred Stock through certain permitted transfers or from another transferee that is a Permitted Transferee.

Transfer Agent and Warrant Agent

Continental Stock Transfer & Trust Company serves ~~our~~ as our stock transfer agent and registrar. It also serves as our warrant agent. Its address is 1 State Street, 30th Floor, New York, New York 10004 and its telephone number is (212) 509-4000.

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INDEMNIFICATION

Under Florida law, a corporation may indemnify its directors and officers against liability if the director or officer acted in good faith and with a reasonable belief that his actions were in the best interests of the corporation, or at least not adverse to the corporation’s best interests, and, in a criminal proceeding, if the individual had no reasonable cause to believe that the conduct in question was unlawful. Under Florida law, a corporation may not indemnify an officer or director against liability in connection with a claim by, or in the right of, the corporation in which such officer or director was adjudged liable to the corporation or in connection with any other proceeding in which the officer or director was adjudged liable for receiving an improper personal benefit. However, a corporation may indemnify against the reasonable expenses associated with such proceeding. A corporation may not indemnify against breaches of the duty of loyalty. Florida law provides for mandatory indemnification against all reasonable expenses incurred in the successful defense of any claim made or threatened, regardless of whether such claim was by or in the right of the corporation, unless limited by the corporation’s Articles of Incorporation. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, regardless of whether the director or officer met the good faith and reasonable belief standards of conduct set out in the statute. Unless otherwise stated in the Articles of Incorporation, officers of a corporation are also entitled to the benefit of the above statutory provisions.

~~Consistent~~with any other proceeding in which the officer or director was adjudged liable for receiving an improper personal benefit. However, a corporation may indemnify against the reasonable expenses associated with such proceeding. A corporation may not indemnify against breaches of the duty of loyalty. Florida law provides for mandatory indemnification against all reasonable expenses incurred in the successful defense of any claim made or threatened, ~~both~~regardless ~~BayFirst’s~~of ~~and~~whether such claim was by or in the ~~Bank~~right of the corporation, unless limited by the corporation’s ~~Bylaws~~articles ~~provide~~of ~~for~~incorporation. A court may order indemnification if it determines that the director or officer is fairly and reasonably entitled to indemnification in view of ~~our~~all ~~directors~~the relevant circumstances, regardless of whether the director or ~~officers~~officer tomet the ~~fullest~~good ~~extent~~faith ~~permitted~~and byreasonable ~~applicable~~belief ~~law~~standards of conduct set out in the statute. Unless otherwise stated in the articles of incorporation, officers of a corporation are also entitled to the benefit

of the above statutory provisions.

Consistent with Florida law, both BayFirst’s and the Bank’s bylaws provide for the indemnification of our directors or officers to the fullest extent permitted by applicable law.

Insofar as indemnification for liabilities arising under the Securities Act, may be permitted to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in that Act and is therefore unenforceable.

~~SUPERVISION AND REGULATION~~35

~~General~~MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

AsThe following discussion is a ~~bank~~summary ~~holding~~of ~~company,~~material weU.S. ~~are~~federal ~~subject~~income tax consequences relating to anthe ~~extensive~~ownership ~~body~~and disposition of ~~state~~shares of our common stock purchased in this offering. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations promulgated thereunder, published administrative positions of the IRS and judicial decisions, all as in effect on the date hereof. Those authorities may be changed or subject to new interpretations, possibly with retroactive effect, so as to result in U.S. federal ~~banking~~income ~~laws~~tax consequences different from those summarized below. We have not sought, and ~~regulations~~do not expect to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and there can be no assurance that ~~impose~~the ~~specific~~IRS ~~requirements~~or a court will agree with our statements and ~~restrictions~~conclusions onor ~~virtually~~that ~~all~~a ~~aspects~~court would not sustain any challenge by the IRS in the event of ~~our~~litigation. ~~operations~~Moreover, this summary does not address any U.S. Wefederal ~~are~~non-income ~~affected~~(including byestate ~~government~~or ~~monetary~~gift), ~~policy~~state, ~~and~~local byor ~~regulatory~~non-U.S. ~~measures~~tax ~~affecting~~considerations, the ~~banking~~Medicare ~~industry~~tax inimposed ~~general~~on certain net investment income or considerations under any applicable tax treaty.

~~The~~This ~~following~~summary isapplies aonly ~~brief~~to ~~summary~~holders ofwho ~~some~~purchase shares of our common stock in this offering as “capital assets” within the ~~statutes,~~meaning ~~rules,~~of ~~and~~Section ~~regulations~~1221 ~~that~~of ~~affect~~the ~~our~~Code ~~operations~~(generally, property held for investment). This summary is ~~qualified~~general in ~~its~~nature ~~entirety~~and bydoes ~~reference~~not purport to ~~the~~deal with all aspects of U.S. federal income taxation that may be relevant to particular ~~statutory~~holders ~~and~~in ~~regulatory~~light ~~provision~~of ~~referred~~their personal circumstances or status (for example, U.S. holders subject to ~~below~~the alternative minimum tax) or special rules that may apply to certain holders, ~~and~~including, iswithout ~~not~~limitation, ~~intended~~financial institutions, regulated investment companies, real estate investment trusts, holders who are dealers in securities or foreign currency, traders in securities that elect to beuse ana ~~exhaustive~~mark-to-market ~~description~~method of ~~the~~accounting ~~statutes~~for securities holdings, tax-exempt organizations, insurance companies, S-corporations, persons liable for alternative minimum tax, holders who hold such stock as part of a hedge, straddle, conversion, constructive sale or ~~regulations~~other ~~applicable~~integrated tosecurity ~~our~~transaction, ~~proposed~~holders ~~business~~whose functional currency is not the U.S. ~~Any~~dollar. ~~change~~Additionally, this discussion does not address U.S. holders who beneficially own our shares through either a “foreign financial institution” (as such term is defined in ~~applicable~~Section ~~laws~~1471(d) (4) of the Code) or ~~regulations~~certain ~~may~~other ~~have~~non-U.S. aentities ~~material~~specified ~~adverse~~in ~~effect~~Section on1472 ~~our~~of ~~business~~the Code.

~~BayFirst~~If ~~Financial~~any ~~Corp~~entity or arrangement that is treated as a partnership for U.S. federal income tax purposes is the beneficial owner of shares of our common stock, the U.S. federal income tax treatment of a partner or owner in such partnership generally will depend upon the tax status of the partner and the activities of the partner and the partnership. Holders that are partnerships (and partners or owners in such partnerships) are urged to consult their own tax advisors as to the particular U.S. federal income tax consequences applicable to them.

~~BayFirst~~THE isFOLLOWING aDISCUSSION ~~bank~~IS ~~holding~~FOR ~~company~~INFORMATIONAL ~~within~~PURPOSES ~~the~~ONLY ~~meaning~~AND ofIS ~~the~~NOT ~~Bank~~A ~~Holding~~SUBSTITUTE ~~Company~~FOR ~~Act~~CAREFUL ofTAX ~~1956,~~PLANNING asAND ~~amended (“BHCA”)~~ADVICE. AsHOLDERS ~~such,~~OF weSHARES ~~are~~OF ~~required~~OUR toCOMMON ~~file~~STOCK ~~annual~~ARE ~~reports~~URGED ~~and~~TO ~~other~~CONSULT ~~information~~THEIR ~~with~~OWN ~~the~~TAX ~~Federal~~ADVISORS ~~Reserve~~REGARDING ~~regarding~~THE ~~our~~APPLICATION ~~business~~OF ~~operations~~THE ~~and~~U.S. ~~those~~FEDERAL ofINCOME ~~our~~TAX ~~subsidiary.~~LAWS WeTO ~~are~~THEIR ~~also~~PARTICULAR ~~subject~~SITUATIONS toAND ~~the~~THE ~~supervision~~CONSEQUENCES ofUNDER FEDERAL ESTATE AND GIFT TAX LAWS, ~~and~~FOREIGN, toSTATE ~~periodic~~AND ~~inspections~~LOCAL byLAWS AND TAX TREATIES OF THE ACQUISITION, ~~the~~OWNERSHIP ~~Federal~~AND ~~Reserve~~DISPOSITION OF SHARES OF OUR COMMON STOCK.

68Tax Consequences to U.S. Holders

~~The~~A ~~BHCA~~“U.S. ~~generally~~holder” ~~requires~~means ~~every~~a ~~bank~~beneficial ~~holding~~owner ~~company~~of toshares ~~obtain~~of ~~the~~our ~~prior~~common ~~approval~~stock ofthat ~~the~~is ~~Federal~~or ~~Reserve~~is ~~before~~treated as, for U.S. federal income tax purposes, any of the following:

~~acquiring~~•an ~~all~~individual orwho ~~substantially~~is ~~all~~a ofcitizen ~~the~~or ~~assets~~resident of athe ~~bank;~~United States;

~~acquiring~~•a ~~direct~~corporation created or ~~indirect~~organized ~~ownership~~in or ~~control~~under ofthe 5%laws ~~or more~~ of the ~~voting~~United ~~shares~~States ofor any ~~bank~~state thereof or ~~bank~~the ~~holding~~District ~~company;~~of orColumbia;

~~merging~~•an orestate ~~consolidating~~the ~~with~~income ~~another~~of ~~bank~~which ~~holding~~is ~~company~~subject to U.S. federal income taxation regardless of its source; or

~~The~~•a ~~BHCA~~trust ~~and~~if ~~the~~it ~~Change~~(1) inis ~~Bank~~subject Control Act, together with regulations promulgated by the Federal Reserve, require that, depending on the particular circumstances, either the Federal Reserve’s approval must be obtained or notice must be furnished to the ~~Federal~~primary ~~Reserve~~supervision ~~and not disapproved prior to any person or company, not a bank holding company, acquiring control~~ of a ~~bank~~court ~~holding~~within ~~company,~~the ~~subject~~United toStates ~~certain~~and ~~exemptions.~~one ~~Control is conclusively presumed to exist when an individual~~ or ~~company acquires 25% or~~ more ofUnited ~~any~~States ~~class~~persons, ofas ~~voting~~defined ~~securities~~under ofSection 7701(a)(30) ~~bank~~of ~~holding~~the ~~company.~~Code, ~~Control~~have isthe ~~rebuttably~~authority ~~presumed~~ to ~~exist~~control ifall asubstantial ~~person~~decisions ~~acquires 10% or more, but less than 25%,~~ of ~~any class of voting securities and either~~ the ~~bank~~trust ~~holding~~or ~~company~~(2) has ~~registered~~a ~~securities~~valid ~~under~~election ~~Section~~in 12effect ofunder ~~the~~applicable ~~Exchange~~United ~~Act~~States orTreasury noRegulations ~~other~~to ~~person~~be ~~owns~~treated as a ~~greater~~United ~~percentage~~States ~~of that class of voting securities immediately after the transaction~~person.

Additionally, the BHCA provides that the Federal Reserve may not approve any of these transactions if it would result in or tend to create a monopoly or substantially lessen competition or otherwise function as a restraint of trade, unless the anti-competitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve is also required to consider the financial and managerial resources and future prospects of the bank holding companies and banks concerned and the convenience and needs of the community to be served. The Federal Reserve’s consideration of financial resources generally focuses on capital adequacy, which is discussed below. As a result of the USA PATRIOT Act, which is discussed below, the Federal Reserve is also required to consider the record of a bank holding company and its subsidiary bank(s) in combating money laundering activities in its evaluation of bank holding company merger or acquisition transactions.36

~~Except~~Distributions as authorized by the BHCA and Federal Reserve regulations or order, a bank holding company is generally prohibited from engaging in, or acquiring direct or indirect control of 5% or more of the voting shares of any company engaged in any business other than the business of banking or managing and controlling banks. The primary exception allows the ownership of shares by a bank holding company in any company the activities of which the Federal Reserve has determined to be so closely related to banking or to managing or controlling banks that ownership of shares of that company is appropriate. Activities the Federal Reserve has determined by regulation to be proper incidents to the business of banking, and thus permissible for bank holding companies, include:

~~making~~Distributions with respect to shares of our common stock will be taxable as dividend income when actually or ~~servicing~~constructively ~~loans~~received ~~and~~to ~~certain~~the ~~types~~extent of ~~leases;~~our current or accumulated earnings and profits as determined for U.S. federal income tax purposes.

~~engaging~~Dividend inincome received by certain ~~insurance~~non-corporate U.S. holders with respect to shares of our common stock generally will be “qualified dividends” subject to preferential rates of U.S. federal income tax, under current law, provided that the U.S. holder meets the applicable holding period and ~~discount~~other ~~brokerage~~requirements. ~~activities;~~Dividend income on shares of our common stock paid to U.S. holders that are domestic corporations generally will qualify for the dividends-received deduction if the requisite holding period is satisfied.

~~performing~~To ~~certain~~the ~~data~~extent ~~processing~~that ~~services;~~the amount of a distribution exceeds our current and accumulated earnings and profits, such distribution will be treated first as a tax-free return of capital to the extent of the holder’s adjusted tax basis in such shares of our common stock and thereafter as capital gain. Such capital gain will be long-term capital gain if the holder’s holding period for such shares is more than one year at the time of the applicable distribution. Under current law, long-term capital gain of a non-corporate U.S. holder is generally taxed at preferential rates of U.S. federal income tax.

~~acting~~Sale, inExchange, ~~certain~~Redemption ~~circumstances~~or asOther aTaxable ~~fiduciary~~Disposition orof ~~investment~~Common orStock ~~financial advisor;~~

~~providing~~If ~~management~~a ~~consulting~~U.S. ~~services;~~holder sells or otherwise disposes of shares of our common stock in a taxable transaction, the U.S. holder will generally recognize capital gain or loss equal to the difference between the amount realized and the holder’s adjusted tax basis in the shares. The amount realized is generally the amount of cash received plus the fair market value of any other property received for such shares. Such capital gain or loss will be long-term capital gain or loss if the holder’s holding period for such shares is more than one year at the time of disposition. Under current law, long-term capital gain of a non-corporate U.S. holder is generally taxed at preferential rates of U.S. federal income tax. The deductibility of capital losses is subject to limitations.

~~owning~~Information ~~savings~~Reporting ~~associations;~~ and Backup Withholding

~~making~~A ~~investments~~U.S. inholder ~~corporations~~may be subject to information reporting and/or ~~projects~~backup ~~designed~~withholding ~~primarily~~with respect to ~~promote~~dividend ~~community~~payments ~~welfare~~and the gross proceeds from the disposition of shares of our common stock a. Backup withholding may apply under certain circumstances if the U.S. holder: (i) fails to furnish the holder’s social security or other taxpayer identification number (a “TIN”); (ii) furnishes an incorrect TIN; (iii) fails to report interest or dividends properly; or (iv) fails to provide a certified statement, signed under penalty of perjury, that the TIN provided is correct, that the holder is not subject to backup withholding and that the U.S. holder is a United States person for U.S. federal income tax purposes on IRS Form W-9. Any amount withheld from a payment under the backup withholding rules is allowable as a credit against (and may entitle the holder to a refund with respect to) the holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Certain persons are exempt from information reporting and backup withholding, including corporations and certain financial institutions, provided that they demonstrate their exempt status. U.S. holders are urged to consult their own tax advisors as to their qualification for exemption from backup withholding and the procedure for obtaining such exemption.

InTax ~~accordance~~Consequences ~~with Federal Reserve policy, a bank holding company is expected~~ to ~~act as a source of financial strength to its subsidiary banks~~Non-U. In adhering to the Federal Reserve’s policy, we may be required to provide financial support to our bank at a time when, absent such Federal Reserve policy, it might not be deemed advisable to provide such assistanceS. ~~Under~~Holders the BHCA, the Federal Reserve may also require a bank holding company to terminate any activity or relinquish control of a nonbank subsidiary (other than a nonbank subsidiary of a bank) upon the Federal Reserve’s determination that the activity or control constitutes a serious risk to the financial soundness or stability of any subsidiary depository institution of the bank holding company. Further, federal bank regulatory authorities have additional discretion to require a bank holding company to divest itself of any bank or nonbank subsidiary if the agency determines that divestiture may aid the depository institution’s financial condition. The Dodd-Frank Act codified the Federal Reserve’s policy on serving as a source of financial strength. Such support may be required at times when, absent this Federal Reserve policy, a

69A “non-U.S. holder” means a beneficial owner of shares of our common stock that is, for U.S. federal income tax purposes, an individual, corporation, estate or trust and is not a U.S. holder.

~~holding~~Taxation ~~company may not be inclined to provide it. A bank holding company, in certain circumstances, could be required to guarantee the capital plan~~ of anDistributions ~~undercapitalized~~on ~~banking~~Common ~~subsidiary.~~Stock

~~The~~Any ~~Federal~~distributions ~~Reserve~~of ~~also~~cash ~~has~~or ~~authority~~property to ~~prohibit~~a ~~activities~~non-U.S. ofholder ~~bank~~made ~~holding~~with ~~companies~~respect ~~and~~to ~~their~~our ~~nonbanking~~common ~~subsidiaries~~stock ~~which~~generally ~~represent~~will ~~unsafe~~be ~~and~~subject ~~unsound~~to ~~banking~~withholding ~~practices~~tax orto ~~which~~the ~~constitute~~extent ~~violations~~paid out of ~~laws~~our current or ~~regulations.~~accumulated ~~The~~earnings ~~Federal~~and ~~Reserve~~profits ~~may~~as ~~impose~~determined ~~civil money penalties~~ for ~~activities~~U.S. ~~conducted~~federal byincome atax ~~bank holding company~~purposes, ~~its~~if ~~nonbanking subsidiaries~~any, ~~and~~at ~~officials~~a rate of ~~either~~30% on(or a ~~knowing~~lower ~~and~~rate ~~reckless~~prescribed ~~basis,~~by ifan ~~those~~applicable ~~activities~~income ~~caused~~tax atreaty). ~~substantial~~In ~~loss~~order to obtain a ~~depository~~reduced ~~institution.~~withholding ~~The~~tax ~~penalties~~rate ~~can~~under bea astax ~~high~~treaty, asif ~~$1.0~~applicable, ~~million~~a ~~for each day the activity continues~~non-U.S.

~~Florida-State Chartered Banks~~37

~~Florida~~holder ~~state~~will be required to provide a properly completed IRS Form W-~~chartered~~8BEN ~~banks~~or ~~are~~IRS Form W-8BEN-E, as applicable, certifying the holder’s entitlement to benefits under a treaty. In addition, a non-U.S. holder will not be subject to withholding tax if the ~~supervision~~non-U.S. ~~and~~holder ~~regulation~~provides an IRS Form W-8ECI certifying that the distributions are effectively connected with the holder’s conduct of a trade or business within the ~~OFR~~United States (and, asif an applicable income tax treaty so provides, are attributable to a ~~member~~permanent ofestablishment or fixed base maintained by such non-U.S. holder within the ~~Federal~~United ~~Reserve~~States); ~~System~~instead, the ~~Federal Reserve~~non-U.S. ~~Deposits~~holder ~~are~~generally ~~insured~~will bybe ~~the~~subject ~~FDIC~~to ~~for~~U.S. afederal ~~maximum~~income tax, net of ~~$250~~certain deductions,~~000~~ ~~per~~with ~~account~~respect ~~title~~to such income at the same rates applicable to United States persons. ~~For~~If ~~this~~a ~~protection~~non-U.S. holder is a corporation, ~~banks~~a ~~must~~“Branch ~~pay~~Profits Tax” of 30% (or a ~~semi-annual~~lower ~~statutory~~rate ~~assessment~~prescribed ~~and~~by ~~comply~~an ~~with~~applicable ~~the~~income ~~rules~~tax ~~and~~treaty) ~~regulations~~also ofmay ~~the~~apply ~~FDIC~~to such effectively connected income. Non-U.S. holders may be required to periodically update their IRS Forms W-8. The ~~assessment~~U.S. ~~levied~~federal onincome atax ~~bank~~treatment ~~for~~of ~~deposit~~any ~~insurance~~distribution ~~varies,~~is ~~depending~~also onsubject to the ~~capital~~discussion ~~position~~below ofunder ~~each~~the ~~bank,~~headings “Information Reporting and ~~other~~Backup ~~supervisory~~Withholding” ~~factors.~~and “FATCA.”

~~The~~Sale ~~Federal Deposit Insurance Act provides that, in the event of the “liquidation~~ or ~~other~~Other ~~resolution”~~Disposition of aOur ~~bank,~~Common ~~the~~Stock claims of depositors of the bank, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver will have priority over other general unsecured claims against the bank. If a bank fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors.

~~Areas~~Subject ~~regulated~~to the discussions below regarding backup withholding and ~~monitored~~FATCA, bya ~~the~~non-U.S. ~~bank~~holder ~~regulatory~~generally ~~authorities~~will ~~include~~not be subject to U.S. federal income tax on any gain realized on a sale or other disposition of shares of our common stock unless:

~~security~~•such ~~devices~~gain is effectively connected with the holder’s conduct of a trade or business within the United States (and, ~~procedures;~~if an applicable income tax treaty so provides, is attributable to a permanent establishment or fixed base maintained by such non-U.S. holder in the United States);

~~adequacy~~•such ofnon-U.S. ~~capitalization~~holder is an individual who is present in the United States for 183 days or more during the taxable year in which gain is realized and ~~loss~~certain ~~reserves;~~other conditions are met; or

~~loans;~~•we are or have been a “United States real property holding corporation”, (a “USRPHC”), for U.S. federal income tax purposes during the five-year period preceding such disposition (or the Non-U.S. holder’s holding period, if shorter) unless our Common Stock is regularly traded on an established securities market and the non-U.S. holder held no more than 5% of our outstanding Common Stock, directly or indirectly, actually or constructively, during the shorter of the five-year period ending on the date of the disposition or the period that the non-U.S. holder held our Common Stock.

~~investments;~~Gain that is effectively connected with the Non-U.S. holder’s conduct of a trade or business within the United States (and, if an applicable income tax treaty so provides, is attributable to a permanent establishment or fixed base maintained by such Non-U.S. holder within the United States) generally will be subject to U.S. federal income tax, net of certain deductions, at the same rates applicable to U.S. persons. If a Non-U.S. holder is a corporation, a Branch Profits Tax of 30% (or a lower rate prescribed in an applicable income tax treaty) also may apply to such effectively connected gain.

~~borrowings;~~A domestic corporation is treated as a USRPHC if the fair market value of its United States real property interests equals or exceeds 50% of the sum of (1) the fair market value of its United States real property interests, (2) the fair market value of its non-United States real property interests, and (3) the fair market value of any other of its assets which are used or held for use in a trade or business. Although there can be no assurance, we believe that we are not currently, and we do not anticipate becoming, a USRPHC. In addition, no assurance can be provided that our common stock will be regularly traded on an established securities market. Non-U.S. holders are urged to consult their own tax advisors regarding the U.S. federal income tax considerations that could result if we are, or become, a USRPHC and the exception for 5% or less stockholders.

~~deposits;~~Information Reporting and Backup Withholding

~~mergers;~~Generally, distributions on our common stock and the amount of tax, if any, withheld with respect to such distributions will be reported annually to the IRS and to non-U.S. holders. Copies of the information returns reporting such distributions and withholding may also be made available to the tax authorities in the country in which a non-U.S. holder resides under the provisions of an applicable income tax treaty.

~~issuances of securities;~~38

~~payment~~If a non-U.S. holder complies with certification procedures to establish that the holder is not a United States person, backup withholding generally should not apply to distributions on our common stock and information reporting and backup withholding generally should not apply to the proceeds from a sale or other disposition of ~~dividends;~~shares of our common stock. Generally, a non-U.S. holder will comply with such procedures if it provides a properly executed IRS Form W-8BEN or W-8BEN-E (or other IRS Form W-8), as applicable, or otherwise meets documentary evidence requirements for establishing that it is a not a United States person, or otherwise establishes an exemption. The amount of any backup withholding will generally be allowed as a refund or credit against the non-U.S. holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.

~~establishment~~FATCA ~~of branches;~~

~~corporate~~Provisions ~~reorganizations;~~of the Code commonly referred to as the Foreign Account Tax Compliance Act (“FATCA”), generally impose a 30% withholding tax on dividends on our common stock and gross proceeds from the sale or other disposition of our common stock if paid to a foreign entity unless (1) if the foreign entity is a “foreign financial institution,” the foreign entity undertakes certain due diligence, reporting, withholding, and certification obligations, (2) if the foreign entity is not a “foreign financial institution,” the foreign entity identifies certain of its U.S. investors, or (3) the foreign entity is otherwise exempted under FATCA.

~~transactions~~Withholding ~~with~~under ~~affiliates;~~FATCA generally applies to payments of dividends on our common stock. While withholding under FATCA may apply to payments of gross proceeds from a sale or other disposition of our common stock, under proposed Treasury Regulations, withholding on payments of gross proceeds is not required. Although such regulations are not final, applicable withholding agents may rely on the proposed regulations until final regulations are issued.

~~maintenance~~If withholding under FATCA is required on any payment related to our common stock, holders not otherwise subject to withholding (or that otherwise would be entitled to a reduced rate of ~~books~~withholding) on such payment may be able to seek a refund or credit from the IRS. An intergovernmental agreement between the United States and ~~records;~~an applicable foreign country may modify the requirements described in this section. Non-U.S. holders should consult their own tax advisors regarding the possible implications of FATCA on their investment in our common stock and the entities through which they hold our common stock.

~~adequacy~~THE ofPRECEDING ~~staff~~DISCUSSION ~~training~~OF toMATERIAL ~~carry~~U.S. ~~out~~FEDERAL ~~safe~~INCOME ~~lending~~TAX ~~and~~CONSEQUENCES ~~deposit~~IS ~~gathering~~NOT ~~practices~~TAX ADVICE. HOLDERS OF SHARES OF OUR COMMON STOCK ARE URGED TO CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES OF OUR COMMON STOCK.

Restrictions on Transactions with Affiliates and Loans to Insiders

Sections 23A and 23B of the Federal Reserve Act restrict transactions by banks with their affiliates. An affiliate of a bank is any company or entity which controls, is controlled by or is under common control with the bank. Generally, Sections 23A and 23B: (1) limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of that bank’s capital stock and surplus (i.e., tangible capital); and (2) require that all such transactions be on terms substantially the same, or at least as favorable to the bank or subsidiary, as those provided to a non-affiliate. The term “covered transaction” includes the making of loans, purchase of assets, issuance of a guarantee and other similar types of transactions.

Section 23A also covers investment funds managed by an institution as an affiliate, as well as other procedural and substantive matters. In addition, Sections 23A and 23B include coverage of transactions with insiders relative to credit exposure arising from derivative transactions. An insured depository institution is also prohibited from purchasing or selling an asset to an executive officer, director, or principal shareholder (or any related interest of such a person) unless the transaction is on market terms, and, if the transaction exceeds 10% of the institution’s capital, it is approved in advance by a majority of the disinterested directors.

A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities controlled by such persons, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve. Among other things, these loans must be made on terms substantially the same as those offered to unaffiliated individuals, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

Anti-tying Restrictions

Bank holding companies and affiliates are prohibited from tying the provision of services, such as extensions of credit, to other services offered by a holding company or its affiliates.

Capital Adequacy Requirements

Banks are subject to regulatory capital requirements imposed by the Federal Reserve and the FDIC. Until a bank holding company’s assets reach $3 billion, the risk-based capital and leverage guidelines issued by the Federal Reserve are applied to bank holding companies on a nonconsolidated basis, unless the bank holding company is engaged in nonbank activities involving significant leverage, or it has a significant amount of outstanding debt held by the general public. Instead, a bank holding company with less than $3 billion generally applies the risk-based capital and leverage capital guidelines on a bank only basis and must only meet a debt-to-equity ratio at the holding company level. The Federal Reserve risk-based capital guidelines apply directly to insured state banks, regardless of whether they are subsidiaries of a bank holding company. Both agencies’ requirements, which are substantially similar, establish minimum capital ratios in relation to assets, both on an aggregate basis as adjusted for credit risks and off-balance sheet exposures. The risk weights assigned to assets are based primarily on credit risks. Depending upon the riskiness of a particular asset, it is assigned to a risk category. Under the guidelines, capital is compared to the relative risk related to the balance sheet. To derive the risk included in the balance sheet, risk weights from 0% to 150% are applied to different balance sheet and off-balance sheet assets, primarily based on the relative credit risk of the counterparty. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Capital is then classified into three categories, Common Equity Tier 1, Additional Tier 1, and Tier 2. Common Equity Tier 1 Capital (“CET1”) is the sum of common stock instruments and related surplus net of treasury stock, retained earnings, Accumulated Other Comprehensive Income (“AOCI”), and qualifying minority interests, less applicable regulatory adjustments and deductions that include AOCI (if an irrevocable option to neutralize AOCI is exercised). Mortgage-servicing assets, deferred tax assets, and investments in financial institutions are limited to an aggregate of 15% of CET1 and 10% of CET1 individually. Additional Tier 1 Capital includes noncumulative perpetual preferred stock, Tier 1 minority interests, grandfathered trust preferred securities, and Troubled Asset Relief Program instruments, less applicable regulatory adjustments and deductions. Tier 2 Capital includes subordinated debt and preferred stock, total capital minority interests not included in Tier 1, ALLL not exceeding 1.25% percent of risk-weighted assets, less applicable regulatory adjustments and deductions.

Smaller banks are subject to the following capital level threshold requirements:

PCA Capital Category

Threshold Ratios

TotalRisk-BasedCapital Ratio

Tier 1Risk-BasedCapital Ratio

CET1Risk-BasedCapital Ratio

Tier 1LeverageCapital Ratio

Well capitalized

10.50%

6.5%

Adequately Capitalized

4.5%

Undercapitalized

< 8%

< 6%

< 4.5%

< 4%

Significantly Undercapitalized

< 6%

< 4%

< 3%

Critically Undercapitalized

Tangible Equity/Total Assets ≤ 2%

Community banks are subject to the following minimum capital requirements.

Minimum CET1 ratio						4.5%
Capital conversion buffer						2.50%
Phase-in of deductions from CET1*						100.0%
Minimum tier 1 capital						6.0%
Minimum total capital						8.0%

_______________________

*Including certain threshold deduction items that are over the limits.

Federal banking regulators have adopted regulations revising the risk-based capital guidelines to further ensure that the guidelines take adequate account of interest rate risk. Interest rate risk is the adverse effect that changes in market interest rates may have on a bank’s financial condition and is inherent to the business of banking. Under the regulations, when evaluating a bank’s capital adequacy, the revised capital standards now explicitly include a bank’s exposure to declines in the economic value of its capital due to changes in interest rates. The exposure of a bank’s economic value generally represents the change in the present value of its assets, less the change in the value of its liabilities, plus the change in the value of its interest rate off-balance sheet contracts.

Federal bank regulatory agencies possess broad powers to take prompt corrective action as deemed appropriate for an insured depository institution and its holding company, based on the institution’s capital levels. The extent of these powers depends upon whether the institution in question is considered “well-capitalized,” “adequately capitalized,” “undercapitalized,” “significantly under-capitalized,” or “critically undercapitalized.” Generally, as an institution is deemed to be less well-capitalized, the scope and severity of the agencies’ powers increase, ultimately permitting the agency to appoint a receiver for the institution. Business activities may also be influenced by an institution’s capital classification. For instance, only a “well-capitalized” depository institution may accept brokered deposits without prior regulatory approval and can engage in various expansion activities with prior notice, rather than prior regulatory approval. However, rapid growth, poor loan portfolio performance or poor earnings performance, or a combination of these factors, could change the capital position of the bank in a relatively short period of time. Failure to meet these capital requirements could subject the bank to prompt corrective action provisions of the FDIA, which may include filing with the appropriate bank regulatory authorities a plan describing the means and a schedule for achieving the minimum capital requirements. In addition, we would not be able to receive regulatory approval of any application that required consideration of capital adequacy, such as a branch or merger application, unless we could demonstrate a reasonable plan to meet the capital requirement within an acceptable period of time.

In 2019, the Federal banking regulatory agencies adopted a rule to simplify the methodology for measuring capital adequacy for smaller, uncomplicated banks. The CBLR is calculated as the ratio of tangible equity capital divided by average total consolidated assets. CBLR tangible equity is defined as total equity capital, prior to including minority interests, and excluding accumulated other comprehensive income, deferred tax assets arising from net operating loss and tax credit carryforwards, goodwill, and other intangible assets (other than mortgage servicing assets. Under the proposal, a qualifying organization may elect to use the CBLR framework if its CBLR is greater than 9%.

Branching

National banks and state banks are able to establish branches in any state if that state would permit the establishment of the branch by a state bank chartered in that state. Florida law permits a state bank to establish a branch of the bank anywhere in the state. Accordingly, A bank with its headquarters outside the State of Florida may establish branches anywhere within Florida.

Deposit Insurance Assessments

The deposits of a bank are insured by the FDIC up to the limits under applicable law, which currently is set at $250,000 for accounts under the same name and title. Banks are subject to deposit insurance premium assessments. The FDIC imposes a risk-based deposit premium assessment system. Under this system, the assessment rates for an insured depository institution vary according to the level of risk incurred in its activities. To arrive at an assessment rate for a banking institution, the FDIC places it in one of four risk categories

determined by reference to its capital levels and supervisory ratings. In the case of those institutions in the lowest risk category, the FDIC further determines its assessment rate based on certain specified financial ratios or, if applicable, long-term debt ratings. The assessment rate schedule can change from time to time, at the discretion of the FDIC, subject to certain limits. Under the current system, premiums are assessed quarterly. The FDIC has published guidelines on the adjustment of assessment rates for certain institutions. The assessment base on which a bank’s deposit insurance premiums is paid to the FDIC is now calculated based on its average consolidated total assets less its average equity.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, rule, order or condition imposed by a bank’s federal regulatory agency. Deposits and certain claims for administrative expenses and employee compensation against insured depository institutions are afforded a priority over other general unsecured claims against the institution, including federal funds and letters of credit, in the liquidation or other resolution of that institution by any receiver appointed by federal authorities. These priority creditors include the FDIC.

Dividends

BayFirst’s ability to pay cash dividends may depend almost entirely upon the aggregate amount of dividends that the Bank is able to pay and that the Bank is permitted to pay, by statutes or regulations, to us. Additionally, the FBCA provides that we may only pay dividends if the dividend payment would not render BayFirst insolvent, or unable to meet our obligations as they come due. These provisions could have the effect of limiting our ability to pay dividends on the shares issued in this offering.

A Florida state-chartered bank is subject to regulatory restrictions on the payment of dividends, including a prohibition of payment of dividends from the Bank’s capital under certain circumstances without the prior approval of the OFR and the Federal Reserve. Except with the prior approval of the OFR, dividends of any Florida bank may only be paid out of retained net profits from the current period and the previous two years, after deducting expenses, including losses and bad debts. In addition, a Florida state-chartered bank is required to transfer at least 20% of its net income to surplus until their surplus equals the amount of paid-in capital.

Banks are also required to hold a capital conservation buffer of CET1 in excess of their minimum risk-based capital ratios to avoid limits on dividend payments and certain other bonus payments. Those requirements are reflected in the following table.

Capital Conservation Buffer(as a percentage of risk weighted assets)						Maximum PayoutRatio (as a % ofthe Previous FourQuarters of NetIncome)
Greater than 2.5%						No payout limitation
Less than or equal to 2.5% and greater than 1.875%						60%
Less than or equal to 1.875% and greater than 1.25%						40%
Less than or equal to 1.25% and greater than 0.625%						20%
Less than or equal to 0.625%						0%

The Federal Reserve expects bank holding companies to serve as a source of strength to their subsidiary bank(s), which may require them to retain capital for investment in their subsidiary bank(s), rather than pay dividends to shareholders. As stated previously, the Bank may not pay dividends to BayFirst, if, after paying those dividends, the bank would fail to meet the required minimum levels under the risk-based capital guidelines and the minimum leverage ratio requirements. Payment of dividends by the Bank may be restricted at any time at the discretion of its applicable regulatory authorities, if they deem such dividends to constitute an unsafe and/or unsound banking practice.

Fiscal and Monetary Policies

The business and earnings of a bank may be significantly affected by the fiscal and monetary policies of the federal government and its agencies. Banks are particularly affected by the policies of the Federal Reserve, which regulates the supply of money and credit in the United States. Among the instruments of monetary policy available to the Federal Reserve are: (i) conducting open market operations in United States government securities; (ii) changing the discount rates of borrowings of depository institutions; (iii) imposing or changing reserve requirements against depository institutions’ deposits; and (iv) imposing or changing reserve requirements against certain borrowing by banks and their affiliates. These methods are used in varying degrees and combinations to directly affect the availability of bank loans and deposits, as well as the interest rates charged on loans and paid on deposits. For that reason alone, the policies of the Federal Reserve have a material effect on the earnings of banks.

Other Laws

State usury and credit laws limit the amount of interest and other charges collected or contracted by a bank on loans. Bank loans are subject to federal laws applicable to credit transactions, such as the:

Federal Truth-In-Lending Act, which governs disclosures of credit terms to consumer borrowers;

Community Reinvestment Act, which requires financial institutions to meet their obligations to provide for the total credit needs of the communities they serve, including investing their assets in loans to low and moderate-income borrowers;

Home Mortgage Disclosure Act requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves;

Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed, or other prohibitive factors in extending credit;

Real Estate Settlement Procedures Act, which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions;

Fair Credit Reporting Act governing the manner in which consumer debts may be collected by collection agencies; and

The rules and regulations of various federal agencies charged with the responsibility of implementing such federal laws.

Bank operations are also subject to the:

Gramm-Leach-Bliley Act of 1999, which contains privacy provisions that requires us to maintain privacy policies intended to safeguard consumer financial information, to disclose these policies to our customers, and allow customers to “opt out” of having their financial service providers disclose their confidential financial information to nonaffiliated third parties, subject to certain exceptions;

Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and

Electronic Funds Transfer Act and Regulation E, which govern automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of debit cards, automated teller machines, and other electronic banking services.

Anti-Money Laundering

Banks are subject to significant regulation and supervision relative to anti-money laundering:

such regulation is broad and includes the extraterritorial jurisdiction of the United States;

compliance and due diligence obligations are significant and may be costly;

banks may be compelled to produce documents located both inside and outside the United States, including those of foreign institutions that have a correspondent relationship in the United States; and

banks enjoy a safe harbor from civil liability to customers for banks’ activities under anti-money laundering laws and regulation.

Treasury, in cooperation with the federal banking agencies, the SEC, the Commodity Futures Trading Commission, and the Department of Justice:

requires customer identification and verification;

imposes the money-laundering program requirement to the major financial services sectors, including insurance and unregistered investment companies, such as hedge funds; and

facilitates and permits the sharing of information between law enforcement and financial institutions, as well as among financial institutions themselves.

Enforcement of the anti-money laundering laws and regulations is significant, on the part of both state and federal regulators.

Dodd-Frank Wall Street Reform and Consumer Protection Act

The Dodd-Frank Act has had a broad impact on the financial services industry, imposing significant regulatory and compliance changes, including the designation of certain financial companies as systemically significant, the imposition of increased capital, leverage, and liquidity requirements, and numerous other provisions designed to improve supervision and oversight of, and strengthen safety and soundness within, the financial services sector. Additionally, the Dodd-Frank Act established a new framework of authority to conduct systemic risk oversight within the financial system to be distributed among new and existing federal regulatory agencies, including the Financial Stability Oversight Council, the Federal Reserve, the OCC, and the FDIC. The following items provide a brief description of certain key provisions of the Dodd-Frank Act that affect banks:

Limitation on debit card transaction fees. The amount a provider can charge for debit card transaction fees, commonly referred to as interchange fees, is now limited to $0.21 plus 0.05% of the price of the transaction (plus $0.01, if the provider has certain fraud prevention standards in place).

Mortgage loan origination and risk retention. Additional regulatory requirements have been put in place that may affect our operations and result in increased compliance costs. For example, new standards have been created for mortgage loan originations on all lenders, including banks and thrifts, in an effort to require steps to verify a borrower’s ability to repay. In addition, the Dodd-Frank Act generally requires lenders or securitizers to retain an economic interest in the credit risk relating to loans the lender sells or mortgage and other asset-backed securities that the securitizer issues. These applicable rules generally require a sponsor of this type of transaction to retain an economic interest equal to at least 5% percent of the aggregate credit risk of the assets collateralizing an issuance.

Expanded FDIC resolution authority. While insured depository institutions have long been subject to the FDIC’s resolution process, the Dodd-Frank Act created a new mechanism for the FDIC to conduct the orderly liquidation of certain “covered financial companies,” including bank and thrift holding companies and systemically significant nonbank financial companies.

Consumer Financial Protection Bureau (“CFPB”). A new independent CFPB was created within the Federal Reserve. The CFPB is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The CFPB has rulemaking authority over many of the statutes governing products and services offered to bank and thrift consumers.

Transactions with affiliates and insiders. The Dodd-Frank Act generally enhanced the restrictions on transactions with affiliates under Section 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions.”

Enhanced lending limits. The Dodd-Frank Act strengthened the limits on a depository institution’s credit exposure to one borrower.

Future Legislation

Various other legislative and regulatory initiatives, including proposals to overhaul the banking regulatory system are from time to time introduced in Congress and state legislatures, as well as regulatory agencies. The latest example was the passing of the Dodd-Frank Act. Future legislation regarding financial institutions may change banking statutes and the operating environment of the Company in substantial and unpredictable ways, and could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance depending upon whether any of this potential legislation will be enacted, and if enacted, the effect that it or any implementing regulations, would have on the financial condition or results of operations of the Company. The nature and extent of future legislative and regulatory changes affecting financial institutions is very unpredictable at this time.

LEGAL MATTERS

Certain legal matters, including, among other things, the validity of the shares of common stock offered hereby, have been passed upon by Igler and Pearlman, P.A., Tallahassee, Florida, legal counsel to BayFirst. The sales agent is represented by Alston & Bird LLP, Atlanta, Georgia.

EXPERTS

The audited consolidated financial statements of BayFirst Financial Corp. as of December 31, ~~2020~~2025 and ~~2019~~2024, and for ~~each of~~ the ~~two~~ years inthen ~~the period~~ ended ~~December 31~~, ~~2020,~~ have been audited by ~~Dixon~~Forvis ~~Hughes~~Mazars, ~~Goodman~~ LLP, independent registered public accounting firm., as set forth in their report thereon, included in ~~this~~the ~~registration~~Company’s ~~statement.~~Annual Report on Form 10-K for the year ended December 31, 2025, and incorporated herein by reference. Such consolidated financial statements have been ~~included~~incorporated by reference herein in reliance upon ~~such~~the report given on the authority of such firm as experts in accounting and auditing.

~~AVAILABLE INFORMATION~~39

WeWHERE ~~have~~YOU ~~filed~~CAN ~~with~~FIND ~~the~~ADDITIONAL SEC a registration statement on Form S-1 under the Securities Act with respect to the shares common stock covered by this prospectus. This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration statement, some of which is contained in exhibits to the registration statement as permitted by the rules and regulations of the SEC. For further information with respect to us and our common stock, we refer you to the registration statement, including the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract, or any other document, are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, please see the copy of the contract or document that has been filed. Each statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an Internet website that contains reports, proxy statements and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.INFORMATION

~~Immediately~~We ~~upon~~have ~~the~~filed ~~effectiveness~~with of the SEC a registration statement on Form S-1 under the Securities Act with respect to the shares of ~~which~~common stock covered by this prospectus. ~~forms~~This prospectus, which constitutes a part of the registration statement, wedoes ~~became~~not ~~subject~~contain toall of the information ~~and~~set ~~reporting~~forth ~~requirements~~in the registration statement, some of which is contained in exhibits to the ~~Exchange~~registration ~~Act~~statement as permitted by the rules and, inregulations ~~accordance~~of the SEC. For further information with ~~this~~respect ~~law~~to us and our common stock, ~~will~~we ~~file~~refer ~~periodic~~you ~~reports~~to the registration statement, ~~proxy~~including ~~statements~~the exhibits filed as a part of the registration statement. Statements contained in this prospectus concerning the contents of any contract, ~~and~~or any other ~~information~~document, ~~with~~are not necessarily complete. If a contract or document has been filed as an exhibit to the ~~SEC~~registration statement, please see the copy of the contract or document that has been filed. ~~These~~Each ~~periodic~~statement in this prospectus relating to a contract or document filed as an exhibit is qualified in all respects by the filed exhibit. The SEC maintains an Internet website that contains reports, proxy statements, and other information ~~will~~about beissuers, ~~available~~like ~~for~~us, ~~inspection~~that ~~and~~file ~~copying~~electronically atwith the ~~website~~SEC. ofThe ~~the~~address ~~SEC~~of ~~referred~~that towebsite ~~above.~~is www.sec.gov.

We ~~also~~are ~~maintain~~subject ato ~~website~~the atinformation ~~www.firsthomebank.com.~~and ~~Upon~~reporting ~~the~~requirements ~~effectiveness~~ of the ~~registration~~Exchange ~~statement~~Act ofand, ~~which~~in ~~this~~accordance ~~prospectus~~with ~~forms~~this ~~a part~~law, ~~you~~file ~~may~~periodic ~~access~~reports, ~~those~~proxy ~~materials~~statements, ~~free~~and ofother ~~charge~~information ~~as soon as reasonably practicable after they are electronically filed~~ with, ~~or furnished to,~~ the SEC. ~~Information~~These ~~contained~~periodic onreports, ~~our~~proxy ~~website~~statements, isand ~~not~~other ainformation ~~part~~are ofavailable ~~this~~for ~~prospectus~~inspection and ~~the~~copying ~~inclusion~~at ofthe ~~our~~ website ~~address~~of inthe ~~this~~SEC ~~prospectus~~referred isto ~~an inactive textual reference only~~above.

76We also maintain a website at www.bayfirstfinancial.com. You may also access those materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Information contained on our website is not a part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.

~~BAYFIRST FINANCIAL CORP.~~40

~~(formerly~~Until ~~First~~____, ~~Home~~2026, ~~Bancorp~~all dealers that effect transactions in these securities, ~~Inc~~whether or not participating in this offering, may be required to deliver a prospectus.) This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

~~CONSOLIDATED~~BayFirst ~~FINANCIAL~~Financial ~~STATEMENTS (UNAUDITED)~~Corp.

~~SEPTEMBER 30~~[ ], ~~2021~~2026

CONTENTS

						PAGE
Consolidated Balance Sheets						F-2
Consolidated Statements of Income						F-3
Consolidated Statements of Comprehensive Income						F-4
Consolidated Statements of Changes in Shareholders’ Equity						F-5
Consolidated Statements of Cash Flows						F-7
Notes to Consolidated Financial Statements						F-8

FIRST HOME BANCORP, INC.

ST. PETERSBURG, FLORIDA

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2020 AND 2019

CONTENTS

						PAGE
Report of Independent Registered Public Accounting Firm						F-34
Consolidated Balance Sheets						F-36
Consolidated Statements of Income						F-37
Consolidated Statements of Changes in Stockholders’ Equity						F-38
Consolidated Statements of Cash Flows						F-39
Notes to Consolidated Financial Statements						F-41
Supplementary Information						F-83

F-1

BAYFIRST FINANCIAL CORP.CONSOLIDATED BALANCE SHEETS (UNAUDITED)(Dollars in thousands)

ASSETS
	September 30, 2021		December 31, 2020
	(Unaudited)
Cash and due from banks	$	2,715	$	2,790
Interest-bearing deposits in banks	104,382		52,589
Cash and cash equivalents	107,097		55,379
Time deposits in banks	2,381		2,381
Investment securities available for sale	32,535		—
Investment securities held to maturity	3		41
Restricted equity securities, at cost	2,827		2,362
Residential loans held for sale	91,243		208,704
SBA loans held for investment, at fair value	9,805		9,264
Loans held for investment, at amortized cost net of allowance for loan losses of $16,616 and $21,162	629,873		1,197,896
Accrued interest receivable	4,292		7,300
Premises and equipment, net	24,622		18,115
Loan servicing rights	6,155		8,160
Right-of-use operating lease assets	4,345		3,737
Bank owned life insurance	12,434		12,183
Other assets	16,131		19,169
Total assets	$	943,743	$	1,544,691
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Noninterest-bearing deposits	$	87,625	$	62,650
Interest-bearing transaction accounts	157,304		140,265
Savings and money market deposits	377,452		286,744
Time deposits	52,653		69,125
Total deposits	675,034		558,784
Subordinated debentures	5,983		5,948
Notes payable	3,413		3,754
PPP Liquidity Facility	144,601		881,262
Accrued interest payable	562		1,999
Operating lease liabilities	4,545		3,925
Accrued expenses and other liabilities	15,307		17,950
Total liabilities	849,445		1,473,622
Shareholders’ equity:
Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at September 30, 2021 and December 31, 2020; aggregate liquidation preference of $6,395	6,161		6,161
Preferred stock, Series B; no par value, 20,000 shares authorized, 4,310 and 8,760 shares issued and outstanding at September 30, 2021 and December 31, 2020; aggregate liquidation preference of $4,310 and $8,760, respectively	4,193		8,516
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 3,919,977 and 3,485,018 shares issued and outstanding at September 30, 2021 and December 31, 2020	50,546		43,043
Accumulated other comprehensive income (loss), net	(201)		—
Unearned compensation	(23)		(41)
Retained earnings	33,622		13,390
Total shareholders’ equity	94,298		71,069
Total liabilities and shareholders’ equity	$	943,743	$	1,544,691

F-2

Table of Contents

BAYFIRST FINANCIAL CORP.CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)(Dollars in thousands, except per share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Interest income:
Loans, including fees	$	9,357	$	12,550	$	39,014	$	29,247
Interest-bearing deposits in banks and other	188		72		420		571
Total interest income	9,545		12,622		39,434		29,818
Interest expense:
Deposits	1,152		1,540		3,666		6,111
Borrowings	377		998		2,218		1,827
Total interest expense	1,529		2,538		5,884		7,938
Net interest income	8,016		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		3,084		34,550		9,980
Noninterest income:
Residential loan fee income	21,323		31,226		76,704		61,888
Loan servicing income, net	417		565		1,446		1,753
Gain (loss) on sale of SBA loans, net	(338)		—		13,460		1,732
Service charges and fees	261		205		730		664
SBA loan fair value gain	72		55		151		49
Other noninterest income	257		141		872		232
Total noninterest income	21,992		32,192		93,363		66,318
Noninterest expense:
Salaries and benefits	12,851		8,876		38,966		24,497
Bonus, commissions, and incentives	8,536		11,919		29,627		23,887
Mortgage banking	1,440		1,620		4,707		3,645
Occupancy and equipment	1,278		1,182		3,907		3,314
Data processing	1,347		1,163		5,209		3,086
Marketing and business development	1,924		717		5,444		2,250
Professional services	1,428		878		3,195		2,343
Loan origination and collection	683		908		2,284		1,771
Employee recruiting and development	809		245		2,431		1,135
Regulatory assessments	138		144		340		418
Other noninterest expense	795		556		2,508		1,649
Total noninterest expense	31,229		28,208		98,618		67,995
Income before income taxes	1,779		7,068		29,295		8,303
Income tax expense	499		1,815		7,488		1,206
Net income	1,280		5,253		21,807		7,097
Preferred stock dividends	230		202		797		557
Net income available to common shareholders	$	1,050	$	5,051	$	21,010	$	6,540
Basic earnings per common share	$	0.27	$	1.47	$	5.60	$	1.91
Diluted earnings per common share	$	0.26	$	1.37	$	5.13	$	1.78

F-3

Table of Contents

BAYFIRST FINANCIAL CORP.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)(Dollars in thousands)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income	$	1,280	$	5,253	$	21,807	$	7,097
Net unrealized gains (losses) on investment securities available for sale	(108)		—		(274)		—
Deferred income tax benefit	29		—		73		—
Other comprehensive income (loss), net	(79)		—		(201)		—
Comprehensive income	$	1,201	$	5,253	$	21,606	$	7,097

See accompanying notes.

F-4

Table of Contents

BAYFIRST FINANCIAL CORP.CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)(Dollars in thousands, except per share data)

	PreferredShares, Series A	PreferredShares, Series B	CommonShares(1)	PreferredStock, Series A		PreferredStock, Series B		Common Stockand AdditionalPaid-in Capital		AccumulatedOtherComprehensiveIncome (Loss)		UnearnedCompensation		RetainedEarnings		Total
Three months ended September 30,:
Balance at July 1, 2020	8	—	3,436	$	7,661	$	—	$	42,199	$	—	$	(53)	$	3,500	$	53,307
Net income	—	—	—	—		—		—		—		—		5,253		5,253
Issuance of common stock under:
Non-qualified stock purchase plan	—	—	12	—		—		107		—		—		—		107
Dividend reinvestment plan	—	—	7	—		—		98		—		—		—		98
Issuance of preferred stock, net	—	4	—	—		3,723		—		—		—		—		3,723
Stock-based awards - common stock:
Restricted stock expense, net of tax impact	—	—	—	—		—		—		—		6		—		6
Stock option expense	—	—	—	—		—		92		—		—		—		92
Dividends declared on:
Preferred stock	—	—	—	—		—		—		—		—		(202)		(202)
Common stock ($0.067 per share)	—	—	—	—		—		—		—		—		(230)		(230)
Balance at September 30, 2020	8	4	3,455	$	7,661	$	3,723	$	42,496	$	—	$	(47)	$	8,321	$	62,154
Balance at July 1, 2021	6	5	3,867	$	6,161	$	4,456	$	49,501	$	(122)	$	(29)	$	32,846	$	92,813
Net income	—	—	—	—		—		—		—		—		1,280		1,280
Issuance of common stock under:
Non-qualified stock purchase plan	—	—	8	—		—		218		—		—		—		218
Dividend reinvestment plan	—	—	4	—		—		105		—		—		—		105
Employee stock ownership plan	—	—	25	—		—		366		—		—		—		366
Stock-based awards - common stock:
Restricted stock expense, net of tax impact	—	—	—	—		—		—		—		6		—		6
Stock option expense	—	—	—	—		—		93		—		—		—		93
Conversion of Series B preferred stock to common stock	—	—	15	—		(263)		263		—		—		—		—
Other comprehensive income (loss), net	—	—	—	—		—		—		(79)		—		—		(79)
Dividends declared on:
Preferred stock	—	—	—	—		—		—		—		—		(230)		(230)
Common stock ($0.07 per share)	—	—	—	—		—		—		—		—		(274)		(274)
Balance at September 30, 2021	6	4	3,920	$	6,161	$	4,193	$	50,546	$	(201)	$	(23)	$	33,622	$	94,298

(1) Common shares for all periods shown herein reflect the three-for-two stock split, effective on May 10, 2021.

See accompanying notes.

F-5

Table of Contents

BAYFIRST FINANCIAL CORP.CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (UNAUDITED)(Dollars in thousands, except per share data)

	PreferredShares, Series A	PreferredShares, Series B	CommonShares(1)	PreferredStock, Series A		PreferredStock, Series B		Common Stockand AdditionalPaid-in Capital		AccumulatedOtherComprehensiveIncome (Loss)		UnearnedCompensation		RetainedEarnings		Total
Nine months ended September 30,:
Balance at January 1, 2020	8	—	3,394	$	7,661	$	—	$	41,362	$	—	$	(156)	$	2,465	$	51,332
Net income	—	—	—	—		—		—		—		—		7,097		7,097
Issuance of common stock under:
Non-qualified stock purchase plan	—	—	25	—		—		303		—		—		—		303
Dividend reinvestment plan	—	—	28	—		—		405		—		—		—		405
Employee stock ownership plan	—	—	18	—		—		260		—		—		—		260
Issuance of preferred stock, net	—	4	—	—		3,723		—		—		—		—		3,723
Stock-based awards - common stock:
Restricted stock expense, net of tax impact	—	—	(9)	—		—		(114)		—		109		—		(5)
Stock option expense	—	—	—	—		—		280		—		—		—		280
Dividends declared on:
Preferred stock	—	—	—	—		—		—		—		—		(557)		(557)
Common stock ($0.201 per share)	—	—	—	—		—		—		—		—		(684)		(684)
Balance at September 30, 2020	8	4	3,455	$	7,661	$	3,723	$	42,496	$	—	$	(47)	$	8,321	$	62,154
Balance at January 1, 2021	6	9	3,485	$	6,161	$	8,516	$	43,043	$	—	$	(41)	$	13,390	$	71,069
Net income	—	—	—	—		—		—		—		—		21,807		21,807
Issuance of common stock under:
Non-qualified stock purchase plan	—	—	35	—		—		662		—		—		—		662
Dividend reinvestment plan	—	—	18	—		—		389		—		—		—		389
Employee stock ownership plan	—	—	25	—		—		366		—		—		—		366
Issuance of preferred stock, net	—	1	—	—		727		—		—		—		—		727
Issuance of common stock, net	—	—	35	—		—		701		—		—		—		701
Stock-based awards - common stock:
Restricted stock expense, net of tax impact	—	—	2	—		—		25		—		18		—		43
Stock option expense	—	—	—	—		—		310		—		—		—		310
Conversion of Series B preferred stock to common stock	—	(5)	319	—		(5,050)		5,050		—		—		—		—
Other comprehensive income (loss), net	—	—	—	—		—		—		(201)		—		—		(201)
Dividends declared on:
Preferred stock	—	—	—	—		—		—		—		—		(797)		(797)
Common stock ($0.207 per share)	—	—	—	—		—		—		—		—		(778)		(778)
Balance at September 30, 2021	6	4	3,920	$	6,161	$	4,193	$	50,546	$	(201)	$	(23)	$	33,622	$	94,298

(1) Common shares for all periods shown herein reflect the three-for-two stock split, effective on May 10, 2021.

See accompanying notes.

F-6

Table of Contents

BAYFIRST FINANCIAL CORP.CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(Dollars in thousands)

	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income	$	21,807	$	7,097
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	1,304		567
Provision for loan losses	(1,000)		11,900
Accretion of discount on unguaranteed loans	(1,523)		(1,705)
Origination of SBA loans held for sale	—		(23,877)
Proceeds from sales of SBA loans held for sale	—		25,228
Net gains on sales of PPP and SBA loans	(13,460)		(1,732)
Origination of residential loans held for sale	(1,744,630)		(1,278,784)
Proceeds from sales of residential loans held for sale	1,930,527		1,268,391
Net gains on sales of residential loans held for sale	(74,842)		(59,328)
Change in fair value of residential loans held for sale	6,168		(3,190)
Change in fair value of SBA loans held for investment, at fair value	(151)		(49)
Amortization of loan servicing rights	2,343		2,641
Non-qualified stock purchase plan expense	56		30
Stock based compensation expense	359		275
Income from bank owned life insurance	(251)		(99)
Changes in:
Accrued interest receivable	3,008		(3,139)
Other assets	2,430		(15,231)
Accrued interest payable	(1,437)		1,077
Other liabilities	(2,023)		7,761
Net cash from operating activities	128,685		(62,167)
Cash flows from investing activities:
Purchase of investment securities available for sale	(33,208)		—
Principal payments on investment securities available for sale	361		—
Principal payments on investment securities held to maturity	37		—
Purchase of restricted equity securities	(465)		(210)
Purchase of PPP loans	—		(22,404)
Proceeds from sales of PPP and SBA loans originally classified as held for investment	331,352		—
Loan (originations) and payments, net	252,220		(932,390)
Purchase of premises and equipment	(7,793)		(1,441)
Purchase of bank owned life insurance	—		(12,000)
Net cash from investing activities	542,504		(968,445)
Cash flows from financing activities:
Net change in deposits	116,250		61,547
Proceeds from issuance of subordinated debt	6,000		—
Payments on notes payable	(341)		(228)
Net proceeds (repayments) of PPP Liquidity Facility borrowings	(736,661)		889,770
Proceeds from issuance of preferred stock, net	727		3,723
Redemption of subordinated debt	(6,000)		—
Proceeds from sale of common stock, net	1,690		678
ESOP contribution	366		260
Dividends paid on common stock	(778)		(684)
Dividends paid on preferred stock	(797)		(557)
Net cash from financing activities	(619,544)		954,509
Net change in cash and cash equivalents	51,645		(76,103)
Cash and cash equivalents, beginning of period	55,379		110,580
Cash and cash equivalents, end of period	$	107,024	$	34,477
Supplemental cash flow information
Interest paid	$	7,321	$	6,861
Income taxes paid	$	10,322	$	932
Supplemental noncash disclosures
Recognition of right of use asset and operating lease liability	$	136	$	1,717
Conversion of Series B preferred stock to common stock	$	5,050	$	—

See accompanying notes.

F-7

Table of Contents

BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements include BayFirst Financial Corp. and its wholly owned subsidiary, First Home Bank, together referred to as “the Company”.

These unaudited consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles followed within the financial services industry for interim financial information and Article 8 of Regulation S-X. Accordingly, they do not include all of the information or notes required for complete financial statements.

The Company principally operates in two business segments, Banking and Residential Mortgage Lending.

In the opinion of management, all adjustments, consisting of normal and recurring items, considered necessary for a fair presentation of the consolidated financial statements for the interim periods have been included. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain amounts reported in prior periods have been reclassified to conform to current year presentation. These reclassifications did not have a material effect on previously reported net income, shareholders’ equity or cash flows.

Operating results for the nine month period ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021. These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2020.

The Company’s significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements for the year ended December 31, 2020 in the Company’s Form S-1. There were no new accounting policies or changes to existing policies adopted during the first nine months of 2021 which had a significant effect on the Company’s results of operations or statement of financial condition. For interim reporting purposes, the Company follows the same basic accounting policies and considers each interim period as an integral part of an annual period.

Effective May 10, 2021, the Company effected a three-for-two stock split. All share amounts and per share financial data contained in these financial statements related to periods prior and subsequent to this stock split have been adjusted to reflect the split.

Use of Estimates: To prepare financial statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The most significant estimates relate to the allowance for loan losses, SBA loan servicing rights, and fair value of residential loans held for sale and residential mortgage derivatives.

Emerging Growth Company Status: The Company is an "emerging growth company," as defined in the JOBS Act, through December 31, 2026. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period when complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period, which means these financial statements, as well as financial statements we file in the future for as long as we remain an emerging growth company, will be subject to all new or revised accounting standards generally applicable to private companies.

Contingencies: Due to the nature of their activities, the Company and its subsidiary are at times engaged in various legal proceedings that arise in the course of normal business, some of which were outstanding as of September 30, 2021.

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

Although the ultimate outcome of all claims and lawsuits outstanding as of September 30, 2021 cannot be ascertained at this time, it is the opinion of management that these matters, when resolved, will not have a material adverse effect on the Company’s results of operations or financial condition.

New Accounting Standards Not Yet Adopted:

Allowance for credit losses:

In June 2016, the FASB issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). This new guidance was issued to replace the incurred loss model for loans and other financial assets with an expected loss model, which is referred to as the CECL model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and debt securities held to maturity. It also applies to off-balance sheet credit exposures not accounted for as insurance (i.e., loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in certain leases recognized by a lessor. In addition, the amendments in ASU 2016-13 require credit losses on securities available for sale to be presented as a valuation allowance rather than as a direct write-down thereon. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early adoption is permitted; however, the Company has elected to adopt new or revised accounting standards using the delayed effective dates applicable to Emerging Growth Companies. Management is in the process of evaluating the impact of adoption of this ASU on its Consolidated Financial Statements, processes, and controls and is not currently able to reasonably estimate the impact of adoption on the Company’s consolidated financial position, results of operations, or cash flows; however, adoption is likely to lead to significant changes in accounting policies related to, and the methods employed in estimating, the allowance for credit losses. It is possible that the impact will be material to the Company’s consolidated financial position and results of operations. To date, the Company has established a CECL steering committee, has developed an implementation plan, and is implementing software to house and maintain the CECL model.

NOTE 2 – ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities are reported as a separate component of shareholders’ equity, such items, along with net income, are components of comprehensive income.

The following table summarizes the change in Accumulated Other Comprehensive Income (Loss) for the nine months ended September 30, 2021:

	Unrealized Gains(Losses) onInvestment SecuritiesAvailable for Sale
Balance, January 1, 2021	$	—
Unrealized gain (losses) on investment securities	(274)
Deferred tax benefit	73
Balance, September 30, 2021	$	(201)

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

NOTE 3 – INVESTMENT SECURITIES

The amortized costs, gross unrealized gains and losses, and estimated fair values of securities available for sale at September 30, 2021 are summarized as follows:

	AmortizedCost		GrossUnrealizedGains		GrossUnrealizedLosses		FairValue
Investment securities available for sale:
Asset-backed securities	$	7,630	$	—	$	(24)	$	7,606
Mortgage-backed securities:
U.S. Government-sponsored enterprises	5,083		—		(44)		5,039
Collateralized mortgage obligations:
U.S. Government-sponsored enterprises	20,096		—		(206)		19,890
Total investment securities available for sale	$	32,809	$	—	$	(274)	$	32,535

The investment securities available for sale were purchased during the nine months ended September 30, 2021 and, therefore, had been in an unrealized loss position for less than 12 months at September 30, 2021.The Company expects full recovery of the carrying amount of these securities and does not intend to sell the securities in an unrealized loss position nor does it believe it will be required to sell securities in an unrealized loss position before the value is recovered. The Company does not consider these securities to be other-than-temporarily impaired at September 30, 2021.

The Company held one security held to maturity at September 30, 2021 and December 31, 2020, which matures in August 2039. The security is a debt security to a government-sponsored enterprise and its amortized cost was $3 and $41, the unrecognized loss was $1 and $2, and the fair value was $2 and $39 at September 30, 2021 and December 31, 2020, respectively.

The security held to maturity had been in an unrealized loss position for over 12 months at September 30, 2021 and December 31, 2020. The unrealized loss has not been recognized into income because the issuer is of high credit quality as a government-sponsored enterprise, management does not intend to sell and it is likely that management will not be required to sell the security prior to its anticipated recovery, and the decline in fair value is largely due to changes in interest rates and other market conditions. The issuer continues to make timely principal and interest payments and the fair value is expected to recover as the bond approaches maturity.

No securities were pledged as of September 30, 2021 or December 31, 2020, and there were no sales of investment securities during the nine months ended September 30, 2021 or 2020.

All securities have contractual remaining maturities of more than 10 years. The weighted average market yield of all securities was 1.31%.

NOTE 4 – LOANS

The Company added a new loan segment in 2020, Commercial and industrial – PPP which consists of all loans originated under the CARES Act’s economic relief program and carry a 100% government guarantee. During the nine months ended September 30, 2021, the Company originated $329,315 and sold $326,318 in PPP loans. During the nine months ended September 30, 2020, the Company originated $876,603 and purchased $22,404 in PPP loans.

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

	September 30,2021		December 31,2020
Real estate:
Residential	$	79,889	$	64,724
Commercial	151,122		114,884
Construction and land	17,848		15,113
Commercial and industrial	232,416		193,927
Commercial and industrial - PPP	156,783		838,847
Consumer and other	4,910		2,896
Loans held for investment, at amortized cost, gross	642,968		1,230,391
Deferred loan costs (fees), net	7,298		(5,819)
Discount on SBA 7(a) loans sold(1)	(3,753)		(5,417)
Discount on PPP loans purchased	(24)		(97)
Allowance for loan losses	(16,616)		(21,162)
Loans held for investment, at amortized cost	$	629,873	$	1,197,896

(1) The Company allocates the retained portion of loans sold based on relative fair value of the retained portion and the sold portion, which results in a discount on the retained portion.

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

NOTE 5 - ALLOWANCE FOR LOAN LOSSES

The following schedule presents the activity in the allowance for loan losses by loan segment for the three and nine months ended September 30, 2021 and 2020:

	Three Months EndedSeptember 30,				Nine Months EndedSeptember 30,
	2021		2020		2021		2020
Balance, beginning of period	$	20,797	$	12,880	$	21,162	$	10,742
Charge-offs:
Real estate - commercial	(173)		(7)		(173)		(7)
Commercial and industrial	(1,500)		(956)		(4,090)		(3,785)
Consumer and other	(20)		(17)		(48)		(79)
Total charge-offs	(1,693)		(980)		(4,311)		(3,871)
Recoveries:
Real estate - commercial	73		—		73		—
Commercial and industrial	439		12		688		131
Consumer and other	—		1		4		11
Total recoveries	512		13		765		142
Net (charge-offs) recoveries	(1,181)		(967)		(3,546)		(3,729)
Provision for loan losses	(3,000)		7,000		(1,000)		11,900
Balance, end of period	$	16,616	$	18,913	$	16,616	$	18,913
Net (charge-offs) recoveries to total average loans held for investment	(0.63)%		(0.35)%		(0.44)%		(0.62)%

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by loan segment and based on impairment method at September 30, 2021. The government guaranteed loan balances are included in the collectively evaluated for impairment balances.

	Real Estate-Residential		Real Estate-Commercial		Real Estate -Constructionand Land		CommercialandIndustrial		CommercialandIndustrial -PPP		Consumerand Other		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	92	$	—	$	790	$	—	$	—	$	—	$	882
Collectively evaluated for impairment	2,556		3,090		339		9,381		—		312		56		15,734
Total	$	2,556	$	3,182	$	339	$	10,171	$	—	$	312	$	—	$	16,616
Loans:
Individually evaluated for impairment	$	—	$	—	$	—	$	790	$	—	$	—	$	—	$	3,715
Collectively evaluated for impairment	79,889		148,197		17,848		231,626		156,783		4,910		—		639,253
Total	$	79,889	$	148,197	$	17,848	$	232,416	$	156,783	$	4,910	$	—	$	642,968

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by loan segment and based on impairment method at December 31, 2020. The government guaranteed loan balances are included in the collectively evaluated for impairment balances.

	Real Estate-Residential		Real Estate-Commercial		Real Estate -Constructionand Land		CommercialandIndustrial		CommercialandIndustrial -PPP		Consumerand Other		Unallocated		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	162	$	—	$	948	$	—	$	—	$	—	$	1,110
Collectively evaluated for impairment	2,088		2,737		310		14,470		—		252		195		20,052
Total	$	2,088	$	2,899	$	310	$	15,418	$	—	$	252	$	195	$	21,162
Loans:
Individually evaluated for impairment	$	—	$	2,348	$	—	$	948	$	—	$	—	$	—	$	3,296
Collectively evaluated for impairment	64,724		112,536		15,113		192,979		838,847		2,896		—		1,227,095
Total	$	64,724	$	114,884	$	15,113	$	193,927	$	838,847	$	2,896	$	—	$	1,230,391

The following table presents information related to impaired loans by loan segment at and for the nine months ended September 30, 2021:

	UnpaidPrincipalBalance		RecordedInvestment		Allowancefor LoanLossesAllocated		AverageRecordedInvestment		InterestIncomeRecognized		Cash BasisInterestRecognized
With no related allowance recorded:
Real estate - residential	$	—	$	—	$	—	$	—	$	—	$	—
Real estate - commercial	2,786		2,786		—		2,216		6		6
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	—		—		—		—		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	2,786		2,786		—		2,216		6		6
With an allowance recorded:
Real estate - residential	—		—		—		—		—		—
Real estate - commercial	139		139		92		435		—		—
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	790		790		790		864		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	929		929		882		1,299		—		—
Total	$	3,715	$	3,715	$	882	$	3,515	$	6	$	6

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

The following table presents information related to impaired loans by loan segment at and for the nine months ended September 30, 2020:

	UnpaidPrincipalBalance		RecordedInvestment		Allowancefor Loan LossesAllocated		AverageRecordedInvestment		InterestIncomeRecognized		Cash BasisInterestRecognized
With no related allowance recorded:
Real estate - residential	$	—	$	—	$	—	$	15	$	—	$	—
Real estate - commercial	605		605		—		612		24		28
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	65		65		—		102		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	670		670		—		729		24		28
With an allowance recorded:
Real estate - residential	—		—		—		—		—		—
Real estate - commercial	2,170		2,170		682		1,452		—		—
Real estate - construction and land	—		—		—		—		—		—
Commercial and industrial	1,447		1,447		1,382		2,190		—		—
Consumer and other	—		—		—		—		—		—
Subtotal	3,617		3,617		2,064		3,642		—		—
Total	$	4,287	$	4,287	$	2,064	$	4,371	$	24	$	28

The unpaid principal balance represents the outstanding contractual balance. For purposes of the impaired loans by loan segment tables above, the unpaid principal balance and recorded investment do not include the government guaranteed balance. The government guaranteed balances of impaired loans at September 30, 2021 and December 31, 2020 were $6,867 and $6,259, respectively.

Nonaccrual loans and loans past due over 89 days still on accrual include both smaller balance homogenous loans that are collectively evaluated for impairment and individually classified impaired loans. Impaired loans include commercial loans that are individually evaluated for impairment and deemed impaired as well as TDR for all loan portfolio segments. The sum of nonaccrual loans and loans past due over 89 days still on accrual will differ from the total impaired loan amount.

The following tables present the recorded investment in nonaccrual and loans past due over 89 days still on accrual by loan segment at September 30, 2021 and December 31, 2020. In the following table, the recorded investment does not include the government guaranteed balance.

	Nonaccrual				Loans Past Due Over89 Days Still Accruing
	September 30, 2021		December 31, 2020		September 30, 2021		December 31, 2020
Real estate - residential	$	—	$	—	$	127	$	573
Real estate - commercial	2,839		1,806		—		—
Commercial and industrial	790		948		—		—
Total	$	3,629	$	2,754	$	127	$	573

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

The following table presents the aging of the recorded investment in past due loans at September 30, 2021 by loan segment:

	30-89 DaysPast Due		Greater Than89 DaysPast Due		TotalPast Due		Loans NotPast Due (1)		TotalLoans
Real estate - residential	$	439	$	127	$	566	$	79,323	$	79,889
Real estate - commercial	—		1,813		1,813		149,309		151,122
Real estate - construction and land	—		—		—		17,848		17,848
Commercial and industrial	1,999		342		2,341		230,075		232,416
Commercial and industrial - PPP	—		—		—		156,783		156,783
Consumer and other	2		—		2		4,908		4,910
Total	$	2,440	$	2,282	$	4,722	$	638,246	$	642,968
(1) There was $24,186 of government guaranteed loan balances 30-89 days past due and $1,285 of government guaranteed loan balances greater than 89 days past due reported as not past due.

The increase in the 30-89 days past due commercial and industrial - PPP loans was primarily due to delinquencies from borrowers with only a PPP loan and no other First Home Bank product. These borrowers were non-responsive to requests for forgiveness applications and payments, and applications were subsequently submitted to the SBA for their 100% guarantee purchase from the Bank.

The following table presents the aging of the recorded investment in past due loans at December 31, 2020 by loan segment:

	30-89 DaysPast Due		Greater Than89 DaysPast Due		TotalPast Due		Loans NotPast Due (1)		TotalLoans
Real estate - residential	$	654	$	573	$	1,227	$	63,497	$	64,724
Real estate - commercial	954		1,743		2,697		112,187		114,884
Real estate - construction and land	—		—		—		15,113		15,113
Commercial and industrial	1,613		—		1,613		192,314		193,927
Commercial and industrial - PPP	—		—		—		838,847		838,847
Consumer and other	4		—		4		2,892		2,896
Total	$	3,225	$	2,316	$	5,541	$	1,224,850	$	1,230,391
(1) There was $252 of government guaranteed loan balances 30-89 days past due and $5,023 of government guaranteed loan balances greater than 89 days past due reported as not past due.

Credit Quality Indicators

Internal risk-rating grades are assigned to loans by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other statistics and factors such as delinquency, to track the migration performance of the portfolio balances. This analysis is performed at least annually. The Bank uses the following definitions for its risk ratings:

Pass – Loans properly approved, documented, collateralized, and performing which do not reflect an abnormal credit risk.

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

Special Mention – These credits constitute an undue and unwarranted credit risk, but not to a point of justifying a classification of “Substandard”. They have weaknesses that, if not checked or corrected, weaken the asset or inadequately protect the Bank.

Substandard – These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – These loans have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable.

The table below sets forth credit exposure for the loan portfolio disaggregated by loan segment based on internally assigned risk ratings at September 30, 2021:

	Pass		SpecialMention		Substandard		Doubtful		TotalLoans
Real estate - residential	$	79,889	$	—	$	—	$	—	$	79,889
Real estate - commercial	148,110		226		2,786		—		151,122
Real estate - construction and land	17,848		—		—		—		17,848
Commercial and industrial	227,653		2,069		2,694		—		232,416
Commercial and industrial - PPP	156,783		—		—		—		156,783
Consumer and other	4,910		—		—		—		4,910
Loans held for investment, at amortized cost	$	635,193	$	2,295	$	5,480	$	—	$	642,968

	Pass		SpecialMention		Substandard		Doubtful		TotalLoans
Real estate - residential	$	64,593	$	—	$	131	$	—	$	64,724
Real estate - commercial	112,260		431		2,193		—		114,884
Real estate - construction and land	15,113		—		—		—		15,113
Commercial and industrial	186,781		5,177		1,896		73		193,927
Commercial and industrial - PPP	838,847		—		—		—		838,847
Consumer and other	2,896		—		—		—		2,896
Loans held for investment, at amortized cost	$	1,220,490	$	5,608	$	4,220	$	73	$	1,230,391

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BAYFIRST FINANCIAL CORP.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Dollars in thousands, except per share data) (Unaudited)

Troubled Debt Restructurings

The following table presents loans classified as TDR at September 30, 2021 and December 31, 2020:

	September 30, 2021				December 31, 2020
	Accruing		Nonaccruing		Accruing		Nonaccruing
Real estate - commercial	$	86	$	1,116	$	542	$	666

The Company had not committed to lend any additional amounts to the loans classified as TDR at September 30, 2021 and December 31, 2020. The Company estimated $39 and $0 of impaired loan loss reserves for these loans at September 30, 2021 and December 31, 2020, respectively. There were no loans which were modified in the previous twelve months that defaulted during the nine months ended September 30, 2021.

There were no new loans classified as TDR during the nine months ended September 30, 2021.

The CARES Act was signed into law on March 27, 2020, permits financial institutions to suspend requirements under GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDR and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. The CAA was signed into law on December 27, 2020, extends the applicable period to include modifications to loans held by financial institutions executed between March 1, 2020 and the earlier of (i) January 1, 2022 or (ii) 60 days after the date of the termination of the COVID-19 national emergency. In addition, federal bank regulatory authorities have issued guidance to encourage financial institutions to make loan modifications for borrowers affected by COVID-19 and have assured financial institutions that they will neither receive supervisory criticism for such prudent loan modifications, nor be required by examiners to automatically categorize COVID-19-related loan modifications as TDR. The Company is applying this guidance to qualifying loan modifications.

Loan modifications related to COVID-19 at September 30, 2021 and December 31, 2020 are presented in the table below:

	September 30, 2021			December 31, 2020
	Number ofLoans	OutstandingRecordedInvestment		Number ofLoans	OutstandingRecordedInvestment
Real estate - residential	1	$	258	11	$	7,106
Real estate - commercial	1	514		4	1,849
Real estate - construction and land	—	—		2	1,424
Commercial and industrial	40	3,174		220	9,624
Total loan modifications related to COVID-19	42	$	3,946	237	$	20,003

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Filing Compare · BayFirst Financial Corp.