BayFirst Financial Corp. reported a significant net loss of $18.9 million, or $4.66 per share, for the third quarter of 2025, a stark contrast to a net income of $1.1 million, or $0.18 per share, during the same period in 2024. The loss was attributed to a substantial increase in the provision for credit losses, which rose to $10.9 million from $3.1 million year-over-year, alongside a decrease in noninterest income, which fell to a negative $1.0 million from $12.3 million. The company’s net interest income, however, increased to $11.3 million from $9.4 million, driven by a reduction in interest expenses on deposits.
For the nine months ending September 30, 2025, BayFirst reported a net loss of $20.5 million, or $5.23 per share, compared to a net income of $2.8 million, or $0.40 per share, for the same period in 2024. This decline was primarily due to a $12.4 million increase in the provision for credit losses and a $19.7 million drop in noninterest income, despite a $7.3 million rise in net interest income. The company’s total assets increased to $1.35 billion from $1.29 billion at the end of 2024, while total deposits rose to $1.17 billion from $1.14 billion.
Strategically, BayFirst has decided to exit the SBA 7(a) lending business, signing an agreement to sell a portion of its SBA loan portfolio to Banesco USA. This decision is part of a broader effort to reduce expenses and de-risk the balance sheet. The transaction is expected to close in the fourth quarter of 2025, pending regulatory approvals. Additionally, the company incurred $7.3 million in restructuring charges related to this exit, which included employee compensation and asset impairment costs.
Operationally, the company’s allowance for credit losses (ACL) increased to $24.5 million as of September 30, 2025, up from $15.5 million a year earlier, reflecting a rise in nonperforming loans. The total loans held for investment (HFI) decreased to $924.4 million from $990.8 million, with a notable shift in the composition of the loan portfolio. Residential real estate loans now account for 39.3% of total loans, up from 33.3%, while commercial real estate loans decreased to 25.0% from 30.9%. The company’s employee headcount also declined to 237 from 295, indicating a reduction in workforce as part of its restructuring efforts.
Looking ahead, BayFirst is focused on improving its capital ratios and has requested a waiver from the FDIC to continue accessing brokered deposits, as it currently does not meet all regulatory capital requirements. The company aims to stabilize its financial position while navigating the challenges posed by increased credit losses and a changing 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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