BayFirst Financial Corp. Income Taxes Disclosure
| 2024 | 2023 | ||||||||||
| Current tax provision from continuing operations: | |||||||||||
Federal | $ | 3,554 | $ | — | |||||||
State | 950 | — | |||||||||
| Total current tax provision from continuing operations | 4,504 | — | |||||||||
| Deferred expense (benefit) from continuing operations: | |||||||||||
Federal | (171) | 1,758 | |||||||||
State | (18) | 361 | |||||||||
| Total deferred expense from continuing operations | (189) | 2,119 | |||||||||
| Income tax expense from continuing operations | 4,315 | 2,119 | |||||||||
| Income tax benefit from discontinued operations | (23) | $ | (70) | ||||||||
| Total | $ | 4,292 | $ | 2,049 | |||||||
| 2024 | 2023 | ||||||||||
| Federal tax based on federal corporate statutory rate | $ | 3,571 | $ | 1,698 | |||||||
| State tax, net of federal effect | 732 | 361 | |||||||||
| Changes resulting from: | |||||||||||
| BOLI income | (150) | (134) | |||||||||
| Nondeductible Expenses | 93 | 141 | |||||||||
| Other, net | 69 | 53 | |||||||||
| Income tax expense from continuing operations | 4,315 | 2,119 | |||||||||
| Income tax expense (benefit) from discontinued operations | (23) | (70) | |||||||||
| Total income tax expense | $ | 4,292 | $ | 2,049 | |||||||
| 2024 | 2023 | ||||||||||
| Deferred tax assets: | |||||||||||
Allowance for credit losses | $ | 4,106 | $ | 3,636 | |||||||
| Net operating loss carryforward | 16 | 2,161 | |||||||||
Deferred loan fees | 288 | 226 | |||||||||
Discount on loans sold | 1,159 | 643 | |||||||||
| Unrealized loss on available for sale securities | 1,032 | 1,041 | |||||||||
Operating lease liabilities | 3,684 | 821 | |||||||||
Accrued bonuses | 288 | 393 | |||||||||
Fair value adjustments on HFI government guaranteed loans and HFS loans | 311 | — | |||||||||
Other | 1,050 | 1,202 | |||||||||
| Total gross deferred tax assets | 11,934 | 10,123 | |||||||||
| Deferred tax liabilities: | |||||||||||
Fair value adjustments on HFI government guaranteed loans and HFS loans | — | (906) | |||||||||
Government guaranteed loan servicing rights | (4,197) | (3,794) | |||||||||
Deferred loan costs | (2,955) | (3,956) | |||||||||
Right-of-use operating lease assets | (4,015) | (701) | |||||||||
Depreciation | (1,068) | (1,248) | |||||||||
| Total gross deferred tax liabilities | (12,235) | (10,605) | |||||||||
| Net deferred tax asset (liabilities) | $ | (301) | $ | (482) | |||||||
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About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.