BayFirst Financial Corp. reported a net loss of $5.7 million, or $1.48 per share, for the first quarter of 2026, a significant decline from a net income of $0.3 million, or $0.17 per share, in the same period last year. The company's total interest income decreased to $17.4 million from $20.7 million, primarily due to a drop in loan interest income, which fell by $3.8 million. Net interest income also declined to $9.4 million from $11.0 million year-over-year, reflecting a net interest margin of 3.42%, down from 3.77%. The provision for credit losses was $3.1 million, compared to $4.4 million in the prior year, while noninterest income plummeted to $0.9 million from $8.8 million, largely due to a decrease in gains from the sale of government guaranteed loans.
In terms of operational changes, BayFirst Financial has undergone a strategic restructuring, exiting the SBA 7(a) lending business after selling a portion of its loan portfolio in late 2025. This decision was part of a broader effort to reduce expenses and mitigate risks associated with its balance sheet. The company has also seen a decrease in total deposits, which fell by $98.1 million to $1.1 billion, driven by a reduction in interest-bearing transaction accounts. However, noninterest-bearing deposits increased to $111.5 million, up from $95.7 million.
The company’s total assets decreased to $1.2 billion as of March 31, 2026, down from $1.3 billion at the end of 2025. The decline in assets was accompanied by a reduction in loans held for investment (HFI), which fell to $930.4 million from $963.9 million. The allowance for credit losses on loans was $20.6 million, representing 2.35% of total loans HFI at amortized cost. Nonperforming loans increased to $21.5 million, or 2.44% of total loans, compared to $24.8 million, or 2.42%, a year earlier.
Looking ahead, BayFirst Financial has raised $80 million through a private investment in public equity (PIPE) offering, which is expected to bolster its capital position and help meet regulatory requirements. The company has appointed Alfred Rogers as the new CEO, succeeding Tom Zernick, who retired in May 2026. The management anticipates that the recent capital raise and strategic adjustments will position the company for improved performance in the coming quarters, despite the challenges faced in the current economic 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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