BayFirst Financial (BAFN) Q2 2025 earnings summary

Executive summary

• Reported a net loss of $1.2 million ($0.39 per share) for Q2 2025, primarily due to higher provision expense and write-downs on SBA 7(a) loans, with net income available to common shareholders a loss of $1.62 million for Q2 2025 and $2.34 million year-to-date.

• Strategic review underway to de-risk unguaranteed SBA 7(a) balances, enhance shareholder value, and position for long-term growth; dividend payments and board fees suspended.

• Discontinued the Bolt SBA 7(a) loan program in August 2025, resulting in a 17% workforce reduction and expected $6 million in annual cost savings; restructuring charge anticipated in Q3 2025.

• Achieved 47% asset growth since December 31, 2020, reaching $1.34 billion in assets as of June 30, 2025, and ranked #2 in deposits among banks with assets under $10B in the Tampa Bay-Sarasota region.

• Expanded treasury management services and technology platform to support business banking and operational efficiency.

Financial highlights

• Net interest income was $12.3 million in Q2 2025, up $1.3 million from Q1 and $3.2 million year-over-year, with net interest margin improving to 4.06%.

• Noninterest income was $10.8 million in Q2 2025, up from $8.8 million in Q1 but down from $11.7 million year-over-year.

• Noninterest expense increased to $17.5 million in Q2 2025, up $0.9 million year-over-year, reflecting higher loan origination and collection costs.

• Loans held for investment increased by $41 million (3.8%) in Q2 and $117.5 million (11.7%) year-over-year, ending at $1.13 billion.

• Deposits rose by $35.5 million (3.1%) in Q2 and $121.4 million (11.6%) year-over-year, totaling $1.16 billion.

Outlook and guidance

• Management expects to provide further details on strategic plans and results in the coming weeks, with a focus on operational excellence, technology optimization, and business banking expansion.

• Expects a restructuring charge in Q3 2025 related to the Bolt program exit and plans to sell Bolt loan balances and origination platform.

• Net interest margin is expected to remain stable, with only minor temporary compression if the Fed cuts rates.

• Loan and deposit growth rates are considered steady and sustainable.

• Regulatory agreements require improvements in underwriting, credit administration, strategic planning, and capital preservation.