BayFirst Financial (BAFN) Q3 2025 earnings summary

Executive summary

• Reported a net loss of $18.9 million for Q3 2025, driven by higher provision expense and $12.4 million in one-time charges, including a $7.3 million restructuring charge related to the exit from SBA 7(a) lending.

• Exited the SBA 7(a) lending business, signing a definitive agreement to sell a large portion of the SBA 7(a) portfolio to Banesco USA at a 3% discount, with most SBA staff offered positions at Banesco.

• Ranked #2 in deposits among banks with assets under $10B in the Tampa Bay-Sarasota region as of June 30, 2025, with $1.35 billion in total assets and $1.17 billion in deposits as of September 30, 2025.

• Management is focused on derisking the balance sheet, improving credit quality, and returning to profitability with a target ROA of 40-70 bps in 2026.

• Regulatory capital ratios declined, and the bank did not meet all well-capitalized requirements as of September 30, 2025.

Financial highlights

• Net loss available to common shareholders was $19.3 million for Q3 2025, compared to net income of $0.8 million in Q3 2024.

• Net interest income was $11.3 million in Q3 2025, up from $9.4 million in Q3 2024, but down from $12.3 million in Q2 2025.

• Noninterest income was negative $1.0 million in Q3 2025, down from $10.8 million in Q2 and $12.3 million in Q3 2024, mainly due to lower gains on loan sales and a $5.1 million fair value adjustment.

• Noninterest expense rose to $25.2 million in Q3 2025, up $7.7 million from Q2, primarily due to a $7.3 million restructuring charge.

• Book value per common share was $17.90 at September 30, 2025, down from $22.30 in Q2 and $20.86 a year earlier.

Outlook and guidance

• Management expects to complete the SBA 7(a) loan sale in Q4 2025, pending regulatory approval; failure to close could adversely impact earnings and liquidity.

• Focus on reducing non-performing loans, improving credit quality, and returning to profitability with a target ROA of 40-70 bps in 2026.

• The company is taking steps to improve capital ratios and has requested waivers to continue accessing brokered deposits.

• Dividend payments on common and preferred stock have been temporarily suspended.

• Continued wind-down and potential sale of remaining $167 million unguaranteed SBA 7(a) loan balances.