BayFirst Financial Corp. reported a net loss of $1.2 million, or $(0.39) per share, for the second quarter of 2025, a significant decline from a net income of $0.9 million, or $0.12 per share, in the same period last year. For the first half of 2025, the company recorded a net loss of $1.6 million compared to a profit of $1.7 million in the first half of 2024. The downturn in profitability was primarily attributed to a substantial increase in the provision for credit losses, which rose to $7.3 million in the second quarter, up from $3.0 million a year earlier. This increase reflects heightened credit challenges, particularly in the company's Bolt SBA 7(a) loan portfolio, amid a difficult economic environment characterized by rising interest rates and inflation.
Total interest income for the second quarter of 2025 was $22.5 million, an increase from $20.4 million in the prior year, driven by higher loan interest income. Net interest income also rose to $12.3 million from $9.2 million year-over-year, with a net interest margin of 4.06%, up from 3.43%. However, noninterest income decreased to $10.8 million from $11.7 million, primarily due to lower loan servicing income and government guaranteed loan fair value gains. Total noninterest expenses increased slightly to $17.5 million from $16.6 million, reflecting higher loan origination and collection costs.
As of June 30, 2025, BayFirst's total assets increased to $1.34 billion from $1.29 billion at the end of 2024, with total deposits rising to $1.16 billion, up from $1.14 billion. The company’s loan portfolio also expanded, with loans held for investment (HFI) at amortized cost reaching $1.02 billion, compared to $990.2 million at the end of 2024. The allowance for credit losses (ACL) increased to $17.0 million, representing 1.65% of total loans HFI, up from 1.50% a year earlier. The company reported a total of 300 full-time equivalent employees, a slight decrease from 305 in the previous quarter.
Strategically, BayFirst has made significant changes, including the discontinuation of its Bolt loan program, which was aimed at providing small balance loans to small businesses. This decision, effective August 4, 2025, is part of a broader strategic review intended to enhance long-term growth and shareholder value. The company anticipates a restructuring charge related to this exit and has suspended dividend payments to offset the financial impacts. The Bank remains well-capitalized, meeting all regulatory capital requirements, with a total capital ratio of 11.23% as of June 30, 2025.
Looking ahead, BayFirst Financial Corp. is focused on navigating the current economic challenges while maintaining its capital adequacy and exploring opportunities for growth. The management is committed to improving underwriting and credit administration practices in response to regulatory feedback, and it will continue to monitor its loan portfolio closely to manage credit risk effectively.
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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