BayFirst Financial Corp. reported a significant decline in its financial performance for the fiscal year ending December 31, 2025, with a net loss of $22.9 million, or $5.93 per share, compared to a net income of $12.6 million, or $2.68 per share, in the previous year. The decrease in profitability was primarily attributed to a substantial increase in the provision for credit losses, which rose to $24.6 million from $14.7 million in 2024. Additionally, noninterest income fell sharply to $18.4 million from $60.5 million, largely due to a decrease in gains from the sale of government guaranteed loans and the absence of significant gains from the sale of branch properties, which had contributed $11.6 million in the prior year.
In terms of operational changes, BayFirst made strategic decisions to exit its SBA 7(a) lending business, which was finalized in the fourth quarter of 2025. This decision was part of a broader restructuring effort aimed at reducing expenses and mitigating risks associated with the bank's balance sheet. The company also reported a 52% reduction in staff over the year, reflecting its commitment to streamline operations. As of December 31, 2025, total assets stood at $1.30 billion, with total loans held for investment at $963.9 million and total deposits at $1.18 billion.
The bank's customer base and engagement metrics showed some fluctuations, with total deposits increasing by 3.56% year-over-year, driven by growth in noninterest-bearing accounts and time deposits. However, the bank's loan portfolio experienced a decline, with total loans held for investment decreasing from $1.07 billion in 2024 to $963.9 million in 2025. The allowance for credit losses on loans increased to $22.0 million, representing 2.42% of total loans held for investment at amortized cost, up from 1.54% in the previous year.
Looking ahead, BayFirst's management expressed cautious optimism about future performance, emphasizing the importance of maintaining adequate capital levels and liquidity. The bank's capital ratios remained above the regulatory requirements for being classified as "well capitalized," with total capital to risk-weighted assets at 10.18% as of December 31, 2025. However, the company has suspended dividend payments to common and preferred shareholders since July 2025, reflecting its focus on strengthening its financial position amid ongoing economic uncertainties and the need to navigate the challenges posed by the current lending environment.
About BayFirst Financial Corp.
BayFirst Financial Corp. is a Florida-based bank holding company operating through BayFirst National Bank, serving consumers and small businesses primarily in the Tampa Bay/Sarasota region. It offers community banking services, including deposit accounts, loans, and cash management, alongside a nationwide government guaranteed lending business specializing in SBA 7(a) and USDA loans. The company emphasizes personalized service, local decision-making, and technology-enabled lending solutions to support small business growth.
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