BayFirst Financial Corp. Reports Fourth Quarter 2025 Results; Capital Ratios Show Notable Improvement

Rhea-AI Summary

BayFirst Financial (NASDAQ: BAFN) reported a Q4 2025 net loss of $2.5M and a 2025 net loss of $22.9M. Key actions included the $96.6M sale of SBA 7(a) loans to Banesco USA, headcount cut to 144, and deposits of $1.18B (+3.6% YoY).

Other metrics: net interest margin 3.58%, loans held for investment $963.9M, allowance for credit losses 2.43%, Tier 1 leverage 6.63%, and treasury management revenue +69% YoY.

Positive

• Sale of $96.6M in SBA 7(a) loans to Banesco USA
• Deposits increased $40.7M year-over-year (+3.6%) to $1.18B
• Treasury management revenue grew 69% year-over-year
• On-balance sheet liquidity ratio improved to 18.35% from 9.17% year-over-year

Negative

• Net loss for full year $22.9M
• Noninterest income declined $42.1M year-over-year
• Annualized net charge-offs rose to 1.95% in Q4 2025
• CET1 ratio declined to 9.05% from 10.89% year-over-year

Key Figures

Q4 2025 net loss: $2.5 million Q3 2025 net loss: $18.9 million Q4 2024 net income: $9.8 million +5 more

8 metrics

Q4 2025 net loss $2.5 million Fourth quarter 2025; $(0.69) per common share

Q3 2025 net loss $18.9 million Third quarter 2025; $(4.66) per common share

Q4 2024 net income $9.8 million Fourth quarter 2024 net income comparison

2025 net loss $22.9 million Year ended December 31, 2025

2024 net income $12.6 million Full year 2024 net income

Net interest margin 3.58% Q4 2025; down from 3.61% in Q3 2025

Loan sale $96.6 million Loans sold to Banesco USA as of year-end 2025

Deposits $1.18 billion Total deposits at December 31, 2025; up 3.6% year over year

Market Reality Check

Price: $6.52 Vol: Volume 1,849 is well belo...

low vol

$6.52 Last Close

Volume Volume 1,849 is well below the 20-day average of 12,383, suggesting limited pre‑announcement positioning. low

Technical Pre‑news price $6.80 trades below the 200-day MA of $11.01 and is closer to the 52-week low of $5.72 than the high of $19.75.

Peers on Argus

BAFN was up 0.89% pre‑results while peers showed mixed moves: TCBS up 3.77%, ASR...

BAFN was up 0.89% pre‑results while peers showed mixed moves: TCBS up 3.77%, ASRV up 0.61%, HFBL and OPHC down modestly. No broad regional-bank trend is evident.

Previous Earnings Reports

5 past events · Latest: Oct 30 (Negative)

Same Type Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Oct 30	Q3 2025 earnings	Negative	-2.3%	Large net loss driven by credit loss provision and restructuring charges.
Jul 29	Q2 2025 earnings	Negative	-9.6%	Net loss, rising charge-offs and provisions despite higher net interest margin.
Apr 24	Q1 2025 earnings	Negative	-9.6%	Shift from prior-quarter profit to loss amid weaker conditions and no one-time gain.
Jan 30	Q4 2024 earnings	Positive	+0.5%	Strong profit supported by margin expansion and large branch sale gain.
Oct 24	Q3 2024 earnings	Positive	-0.7%	Improved earnings and loan growth but shares dipped despite better profitability.

Pattern Detected

Earnings releases have often coincided with negative share reactions when reporting losses or elevated credit costs; even strong quarters have not consistently produced upside moves.

Recent Company History

Across the last five earnings releases from Oct 2024 to Oct 2025, BayFirst moved from modest profitability to mounting losses, driven by higher credit provisions and restructuring tied to exiting SBA 7(a) lending. Net interest margin generally improved into early 2025, but asset quality pressure and strategic derisking weighed on results. The strong Q4 2024 quarter benefited from a one‑time branch sale gain. Today’s Q4 2025 report extends the 2025 loss trend while highlighting capital and balance sheet repositioning.

Historical Comparison

earnings

+4.5 %

Average Historical Move

Historical Analysis

Over the last 5 earnings releases, BAFN moved an average of 4.53% on results. Today’s pre‑news move of 0.89% sits well below that typical earnings volatility.

Typical Pattern

Earnings events show a transition from profitable 2024 quarters, aided by one‑time gains, to 2025 losses marked by higher provisions and a strategic exit from SBA 7(a) lending.

Market Pulse Summary

This announcement details Q4 2025 results, with a reduced net loss of $2.5 million versus Q3, comple...

Analysis

This announcement details Q4 2025 results, with a reduced net loss of $2.5 million versus Q3, completion of a $96.6 million SBA 7(a) loan sale, and improved risk-weighted capital ratios and liquidity. However, full-year 2025 still showed a $22.9 million loss and higher net charge-offs. Investors may track trends in credit quality metrics, net interest margin sustainability, deposit mix, and execution on the community banking strategy following the SBA 7(a) exit.

Key Terms

net interest margin, provision for credit losses, noninterest income, noninterest expense, +2 more

6 terms

net interest margin financial

"The net interest margin was stable at 3.58% and organic deposit growth..."

Net interest margin measures how much a bank earns from lending and investing compared with what it pays for funding, expressed as a percentage of its interest-earning assets. Think of it like a grocery store’s markup: it shows the gap between buying cost and selling price per dollar of goods — here, the cost is interest paid and the sale is interest received. Investors watch it because a higher margin usually means a bank is more profitable and better at managing interest rate and credit conditions.

provision for credit losses financial

"The change... was primarily the result of a decrease in provision for credit losses of $8.9 million..."

Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.

noninterest income financial

"Noninterest income from continuing operations was a negative $0.1 million..."

Noninterest income is the money a bank or financial firm earns from activities other than charging interest on loans, such as account fees, transaction charges, advisory and underwriting fees, trading gains, and service income — like a store making extra money from repairs, warranties or delivery charges rather than product sales. It matters to investors because it shows how diversified a company’s revenue is and whether it can withstand changes in interest rates; a strong noninterest income stream can stabilize profits but may also be more variable than steady loan interest.

noninterest expense financial

"Noninterest expense from continuing operations was $11.9 million in the fourth quarter..."

Costs a company incurs that are not tied to borrowing or lending, such as employee pay, rent, technology, marketing, and office supplies. Think of a household: noninterest expense is everything you pay for living and running the home except mortgage or loan interest; for investors, it shows how efficiently a company runs its core operations and directly affects profit margins and the cash available for growth or dividends.

tier 1 leverage ratio financial

"The Bank’s Tier 1 leverage ratio was 6.63% as of December 31, 2025..."

Tier 1 leverage ratio measures a bank’s core capital — the money that can absorb losses — as a share of its total assets, showing how much of its balance sheet is funded by real loss-absorbing capital rather than borrowed money. Investors use it like a safety gauge: a higher ratio means a bigger cushion against shocks and lower risk of insolvency, similar to how a thicker spare tire reduces the chance of being stranded.

fdic regulatory

"Eighty-five percent of the bank’s deposits were insured at the end of the quarter..."

The Federal Deposit Insurance Corporation (FDIC) is a U.S. government agency that protects individual and business bank deposits by insuring accounts up to a set limit, acting like a safety net for savers if a bank fails. It matters to investors because FDIC insurance reduces the chance of sudden losses for depositors, supports confidence in the banking system, and can influence the perceived risk and stock value of banks and financial firms.

AI-generated analysis. Not financial advice.

ST. PETERSBURG, Fla., Jan. 29, 2026 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today reported a net loss of $2.5 million, or $0.69 per common share and diluted common share, for the fourth quarter of 2025, compared to a net loss of $18.9 million, or $4.66 per common share and diluted common share, in the third quarter of 2025.

“We made continued progress on our restructuring efforts in the fourth quarter, resulting in notably higher capital ratios compared to the prior quarter end,” stated Thomas G. Zernick, Chief Executive Officer. “We closed on the sale of $96.6 million in loans to Banesco USA as of year-end, marking a critical milestone in our strategic plan to derisk our loan portfolio. As we previously announced, we exited the SBA 7(a) lending business in the fourth quarter, and Banesco USA has assumed servicing of loans included in the sale and has been engaged as subservicer on the remaining SBA 7(a) loans owned by BayFirst.

“As we expected, our core community bank function is performing well.  The net interest margin was stable at 3.58% and organic deposit growth was $12.5 million in the fourth quarter. Eighty-five percent of the bank’s deposits were insured at the end of the quarter and the bank finished the year well-capitalized. While the previously announced strategic restructuring resulted in a reduction of headcount from 299 at the end of 2024, to 144 on December 31, 2025, we continue our focus on expense management. Our treasury management revenue continues to grow with the fourth quarter showing a 69% improvement as compared to the same quarter a year ago.”

“At this stage in our strategic plan, we have passed significant milestones, and each major inflection point has generally aligned with our predictions. In this quarter, there were some minor outliers, but the bank was able to address the challenges and stay on track toward our end-state goal.

“Management has taken significant steps to address credit quality issues by dedicating substantial resources to strengthen credit administration and work through legacy loans. Given the compelling market opportunities and our attractive branch footprint, our priority remains implementing our strategic plan to build the premier community bank in Tampa Bay and create lasting value for shareholders,” Zernick concluded.

Fourth Quarter 2025 Performance Review

• Net interest margin was 3.58% in the fourth quarter of 2025, a decrease of 3 basis points from 3.61% in the third quarter of 2025 and a decrease of 2 basis points from 3.60% in the fourth quarter of 2024.
• In September 2025, the Company announced its plan to exit the SBA 7(a) lending business and its intent to sell a portion of the SBA 7(a) loan portfolio. The Company completed the transaction in December 2025 and the transaction was recognized entirely in the third quarter.
• Loans held for investment decreased by $34.8 million, or 3.5%, during the fourth quarter of 2025 to $963.9 million and decreased $102.7 million, or 9.6%, over the past year. During the quarter, the Company originated $26.3 million of loans and sold $7.8 million of government guaranteed loan balances.
• Deposits increased $12.5 million, or 1.1%, during the fourth quarter of 2025 and increased $40.7 million, or 3.6%, over the past year to $1.18 billion. The increase in deposits during the quarter was primarily due to increases in interest-bearing transaction account balances and time deposit balances, partially offset by decreases in noninterest-bearing account balances and savings and money market account balances.
• Book value and tangible book value at December 31, 2025 were $17.22 per common share, a decrease from $17.90 at September 30, 2025.

Results of Operations

Net Income (Loss)

The Company had a net loss of $2.5 million for the fourth quarter of 2025, compared to a net loss of $18.9 million in the third quarter of 2025 and net income of $9.8 million in the fourth quarter of 2024. The change in the fourth quarter of 2025 from the preceding quarter was primarily the result of a decrease in provision for credit losses of $8.9 million, an increase in noninterest income of $0.9 million, and a decrease in noninterest expense of $13.3 million. This was partially offset by a decrease in income tax benefit of $6.6 million. The change from the fourth quarter of 2024 was due to a decrease in noninterest income of $22.4 million, partially offset by a decrease in provision for credit losses of $2.5 million, an increase in net interest income of $0.5 million, a decrease in noninterest expense of $3.5 million, and a decrease in income tax expenses of $3.6 million.

For the year ended December 31, 2025, the Company had a net loss of $22.9 million, a decrease from net income of $12.6 million for the year ended December 31, 2024. The decrease was primarily due to an increase in provision for credit losses of $9.9 million, a decrease in noninterest income of $42.1 million, and an increase in noninterest expense of $3.6 million. This was partially offset by an increase in net interest income of $7.8 million and a decrease in income tax expense of $12.2 million.

Net Interest Income and Net Interest Margin

Net interest income from continuing operations was $11.2 million in the fourth quarter of 2025, a decrease from $11.3 million during the third quarter of 2025, and an increase from $10.7 million during the fourth quarter of 2024. The net interest margin was 3.58% in the fourth quarter of 2025, a decrease of 3 basis points from 3.61% in the third quarter of 2025 and a decrease of 2 basis points from 3.60% in the fourth quarter of 2024.

The decrease in net interest income from continuing operations during the fourth quarter of 2025, as compared to the third quarter of 2025, was mainly due to a decrease in loan interest income, including fees, of $1.4 million, partially offset by an increase in interest income on interest bearing deposits in banks and other of $0.7 million and a decrease in interest expense of $0.6 million.

The increase in net interest income from continuing operations during the fourth quarter of 2025, as compared to the year ago quarter, was mainly due to an increase in interest income on interest bearing deposits in banks and other of $0.6 million and a decrease in interest expense on deposits of $1.1 million, partially offset by a decrease in loan interest income, including fees, of $1.4 million.

Net interest income from continuing operations was $45.8 million for the year ended December 31, 2025, an increase from $38.0 million for the year ended December 31, 2024. The increase was mainly due to an increase in loan interest income, including fees, of $2.4 million and a decrease in interest expense of $4.8 million.

Noninterest Income

Noninterest income from continuing operations was a negative $0.1 million for the fourth quarter of 2025, compared to a negative $1.0 million in the third quarter of 2025 and a decrease from $22.3 million in the fourth quarter of 2024. The change from the fourth quarter of 2025, as compared to the third quarter of 2025, was primarily the result an increase in gain on sale of government guaranteed loans of $2.3 million, partially offset by a decrease in government guaranteed loan fair value gains of $1.0 million. The decrease in the fourth quarter of 2025, as compared to the fourth quarter of 2024, was the result of the gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, a decrease in gain on sale of government guaranteed loans of $8.1 million, a decrease in fair value gains on government guaranteed loans of $1.8 million, and a decrease in government guaranteed loan packaging fees of $0.7 million.

Noninterest income from continuing operations was $18.4 million for the year ended December 31, 2025, which was a decrease from $60.5 million for the year ended December 31, 2024. The decrease was primarily the result of the gain on sale of two branch office properties of $11.6 million in the fourth quarter of 2024, a decrease in gain on sale of government guaranteed loans of $16.5 million, a decrease in government guaranteed loan fair value gains of $10.9 million, and a decrease in government guaranteed loan packaging fees of $2.3 million.

Noninterest Expense

Noninterest expense from continuing operations was $11.9 million in the fourth quarter of 2025 compared to $25.2 million in the third quarter of 2025 and $15.3 million in the fourth quarter of 2024. The decrease in the fourth quarter of 2025, as compared to the prior quarter, was primarily due to the third quarter restructure charges of $7.2 million related to the comprehensive strategic review aimed at reducing expenses and derisking the bank's balance sheet which included the exit of the SBA 7(a) lending business. In addition, there were decreases in compensation expense of $3.5 million and loan servicing and origination expense of $2.1 million. The decrease in the fourth quarter of 2025, as compared to the fourth quarter of 2024, was primarily due to a decrease in compensation expense of $3.8 million.

Noninterest expense from continuing operations was $70.4 million for the year ended December 31, 2025 compared to $66.8 million for the year ended December 31, 2024. The increase was primarily the result of the restructure charges of $7.3 million, an increase in data processing expense of $1.1 million, and an increase in loan servicing and origination expense of $1.6 million, partially offset by a decrease in compensation expense of $6.2 million.

Balance Sheet

Assets

Total assets decreased $45.7 million, or 3.4%, during the fourth quarter of 2025 to $1.30 billion, mainly due to the sale of $96.6 million of SBA 7(a) loans to Banesco USA and a decrease in loans held for investment of $34.8 million, partially offset by an increase in cash and cash equivalents of $88.4 million. Compared to the end of the fourth quarter last year, total assets increased $12.0 million, or 0.9%, driven primarily by an increase in cash and cash equivalents of $129.2 million, partially offset by a decrease in loans held for investment of $102.7 million.

Loans

Loans held for investment decreased $34.8 million, or 3.5%, during the fourth quarter of 2025 and $102.7 million, or 9.6%, over the past year to $963.9 million. The decrease during the quarter was primarily due to government guaranteed loan sales and loan payoffs, partially offset by originations in both conventional community bank loans and government guaranteed loans.

Loans held for sale on December 31, 2025, decreased $94.1 million from the end of the third quarter of 2025 as a result of the sale of SBA 7(a) loans to Banesco USA; and were unchanged from December 31, 2024.

Deposits

Deposits increased $12.5 million, or 1.1%, during the fourth quarter of 2025 and increased $40.7 million, or 3.6%, from the fourth quarter of 2024, ending December 31, 2025, at $1.18 billion. During the fourth quarter, there were increases in interest-bearing transaction account balances of $20.9 million and time deposit balances of $26.4 million, partially offset by decreases in noninterest-bearing account balances of $10.2 million and savings and money market account balances of $24.6 million. At December 31, 2025, approximately 85% of total deposits were insured by the FDIC. At times, the Bank has brokered time deposit and non-maturity deposit relationships available to diversify its funding sources. At December 31, 2025, September 30, 2025, and December 31, 2024, the Company had $195.5 million, $235.9 million, and $76.9 million, respectively, of brokered deposits.

Asset Quality

The Company recorded a provision for credit losses in the fourth quarter of $2.0 million, compared to provisions of $10.9 million for the third quarter of 2025 and $4.5 million during the fourth quarter of 2024.

The ratio of allowance for credit losses (ACL) on loans to total loans held for investment at amortized cost was 2.43% at December 31, 2025, 2.61% as of September 30, 2025, and 1.54% as of December 31, 2024. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 2.59% at December 31, 2025, 2.78% as of September 30, 2025, and 1.79% as of December 31, 2024. The increase in the ACL from the prior year was the result of increases in nonperforming loans and continued economic uncertainty.

Net charge-offs for the fourth quarter of 2025 were $4.6 million, which was an increase from $3.3 million for the third quarter of 2025 and an increase from $3.4 million for the fourth quarter of 2024. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.95% for the fourth quarter of 2025, compared to 1.24% in the third quarter of 2025 and 1.34% in the fourth quarter of 2024. Nonperforming assets were 2.04% of total assets as of December 31, 2025, compared to 1.97% as of September 30, 2025, and 1.50% as of December 31, 2024. Nonperforming assets, excluding government guaranteed loan balances, were 1.29% of total assets as of December 31, 2025, compared to 1.21% as of September 30, 2025, and 1.06% as of December 31, 2024.

Capital

The Bank’s Tier 1 leverage ratio was 6.63% as of December 31, 2025, compared to 6.64% as of September 30, 2025, and 8.82% as of December 31, 2024. The CET 1 and Tier 1 capital ratios to risk-weighted assets were 9.05% as of December 31, 2025, compared to 8.44% as of September 30, 2025, and 10.89% as of December 31, 2024. The total capital to risk-weighted assets ratio was 10.31% as of December 31, 2025, compared to 9.71% as of September 30, 2025, and 12.14% as of December 31, 2024. The Bank finished the year well-capitalized.

Liquidity

The Bank's overall liquidity position remains strong and stable with liquidity in excess of internal minimums as stated by policy and monitored by management and the Board. The on-balance sheet liquidity ratio at December 31, 2025 was 18.35%, as compared to 9.17% at December 31, 2024. The Bank has liquidity resources which include secured borrowings available from the Federal Home Loan Bank, the Federal Reserve, and lines of credit with other financial institutions. As of December 31, 2025, the Bank had no borrowings from the FHLB, the FRB or other financial institutions. This compared to $50.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions at September 30, 2025.

Conference Call

BayFirst will host a conference call on Friday, January 30, 2026, at 9:00 a.m. ET to discuss its fourth quarter results. Interested parties may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com or are invited to dial (800) 549-8228 to participate in the call using Conference ID 15602. A replay of the call will be available for one year at www.bayfirstfinancial.com.

About BayFirst Financial Corp.

BayFirst Financial Corp. is a registered bank holding company based in St. Petersburg, Florida which commenced operations on September 1, 2000. Its primary source of income is derived from its wholly owned subsidiary, BayFirst National Bank, a national banking association which commenced business operations on February 12, 1999. The Bank currently operates twelve full-service banking offices throughout the Tampa Bay-Sarasota region and offers a broad range of commercial and consumer banking services to businesses and individuals. As of December 31, 2025, BayFirst Financial Corp. had $1.30 billion in total assets.

Forward-Looking Statements

In addition to the historical information contained herein, this presentation includes "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of health crises, global military hostilities, weather events, or climate change, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets and credit quality; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; enforcement actions initiated by our regulators and their impact on our operations; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements.

Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate," "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

BAYFIRST FINANCIAL CORP.
SELECTED FINANCIAL DATA (Unaudited)
	At or for the three months ended
(Dollars in thousands, except for share data)	12/31/2025				9/30/2025				6/30/2025				3/31/2025				12/31/2024
Net income (loss)	$	(2,463	)		$	(18,902	)		$	(1,237	)		$	(335	)		$	9,776
Balance sheet data:
Average loans held for investment at amortized cost		937,023				1,060,520				1,047,568				1,027,648				1,003,867
Average total assets		1,334,912				1,345,553				1,324,455				1,287,618				1,273,296
Average common shareholders’ equity		73,470				92,734				95,049				96,053				87,961
Government guaranteed loans held for sale		—				94,052				—				—				—
Total loans held for investment		963,894				998,683				1,125,799				1,084,817				1,066,559
Total loans held for investment, excl gov’t gtd loan balances		893,765				923,390				972,942				943,979				917,075
Allowance for credit losses		21,996				24,485				17,041				16,513				15,512
Total assets		1,300,258				1,345,978				1,343,867				1,291,957				1,288,297
Total deposits		1,183,938				1,171,457				1,163,796				1,128,267				1,143,229
Common shareholders’ equity		70,747				73,677				92,172				94,034				94,869
Share data:
Basic earnings (loss) per common share	$	(0.69	)		$	(4.66	)		$	(0.39	)		$	(0.17	)		$	2.27
Diluted earnings (loss) per common share		(0.69	)			(4.66	)			(0.39	)			(0.17	)			2.11
Dividends per common share		—				—				0.08				0.08				0.08
Book value per common share		17.22				17.90				22.30				22.77				22.95
Tangible book value per common share(1)		17.22				17.90				22.30				22.77				22.95
Performance ratios:
Return on average assets(2)		(0.74	)%			(5.62	)%			(0.37	)%			(0.10	)%			3.07	%
Return on average common equity(2)		(15.51	)%			(83.19	)%			(6.83	)%			(3.00	)%			42.71	%
Net interest margin(2)		3.58	%			3.61	%			4.06	%			3.77	%			3.60	%
Asset quality ratios:
Net charge-offs	$	4,558			$	3,294			$	6,799			$	3,301			$	3,369
Net charge-offs/avg loans held for investment at amortized cost(2)		1.95	%			1.24	%			2.60	%			1.28	%			1.34	%
Nonperforming loans(3)	$	24,343			$	24,687			$	21,665			$	24,806			$	17,607
Nonperforming loans (excluding gov't gtd balance)(3)	$	16,271			$	15,822			$	14,187			$	15,078			$	13,570
Nonperforming loans/total loans held for investment(3)		2.69	%			2.63	%			2.09	%			2.42	%			1.75	%
Nonperforming loans (excl gov’t gtd balance)/total loans held for investment(3)		1.80	%			1.69	%			1.37	%			1.47	%			1.35	%
ACL/Total loans held for investment at amortized cost		2.43	%			2.61	%			1.65	%			1.61	%			1.54	%
ACL/Total loans held for investment at amortized cost, excl government guaranteed loans		2.59	%			2.78	%			1.85	%			1.84	%			1.79	%
Other Data:
Full-time equivalent employees		144				237				300				305				299
Banking center offices		12				12				12				12				12
(1) See section entitled "GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures" below for a reconciliation to most comparable GAAP equivalent.
(2) Annualized
(3) Excludes loans measured at fair value

Reconciliation and Management Explanation of Non-GAAP Financial Measures

Some of the financial measures included in this report are not measures of financial condition or performance recognized by GAAP. These non-GAAP financial measures include tangible common shareholders' equity and tangible book value per common share. Our management uses these non-GAAP financial measures in its analysis of our performance, and we believe that providing this information to financial analysts and investors allows them to evaluate capital adequacy.

The following presents the calculation of the non-GAAP financial measures.

Tangible Common Shareholders' Equity and Tangible Book Value Per Common Share (Unaudited)
	As of
(Dollars in thousands, except for share data)	December 31, 2025				September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024
Total shareholders’ equity	$	87,569			$	89,728			$	108,223			$	110,085			$	110,920
Less: Preferred stock liquidation preference		(16,822	)			(16,051	)			(16,051	)			(16,051	)			(16,051	)
Total equity available to common shareholders		70,747				73,677				92,172				94,034				94,869
Less: Goodwill		—				—				—				—				—
Tangible common shareholders' equity	$	70,747			$	73,677			$	92,172			$	94,034			$	94,869
Common shares outstanding		4,108,069				4,116,913				4,134,127				4,129,027				4,132,986
Tangible book value per common share	$	17.22			$	17.90			$	22.30			$	22.77			$	22.95

BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)	12/31/2025			9/30/2025			12/31/2024
Assets	Unaudited			Unaudited
Cash and due from banks	$	5,123		$	5,193		$	4,499
Interest-bearing deposits in banks		201,859			113,357			73,289
Cash and cash equivalents		206,982			118,550			77,788
Time deposits in banks		—			1,284			2,270
Investment securities available for sale, at fair value (amortized cost $31,974, $32,614, and $40,279 at December 31, 2025, September 30, 2025, and December 31, 2024, respectively)		29,363			29,857			36,291
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $7, $9, and $12 (fair value: $2,384, $2,375, and $2,346 at December 31, 2025, September 30, 2025, and December 31, 2024, respectively)		2,493			2,491			2,488
Nonmarketable equity securities		4,656			7,028			4,526
Government guaranteed loans held for sale		—			94,052			—
Government guaranteed loans held for investment, at fair value		58,592			61,780			60,833
Loans held for investment, at amortized cost		905,302			936,903			1,005,726
Allowance for credit losses on loans		(21,996	)		(24,485	)		(15,512	)
Net Loans held for investment, at amortized cost		883,306			912,418			990,214
Accrued interest receivable		8,421			8,898			9,155
Premises and equipment, net		31,188			31,695			33,249
Loan servicing rights		12,580			15,663			16,534
Deferred income tax assets		6,538			5,839			—
Right-of-use operating lease assets		14,504			14,833			15,814
Bank owned life insurance		27,264			27,071			26,513
Other real estate owned		400			400			132
Other assets		13,971			14,119			12,490
Total assets	$	1,300,258		$	1,345,978		$	1,288,297
Liabilities:
Noninterest-bearing deposit accounts	$	95,731		$	105,937		$	101,743
Interest-bearing transaction accounts		231,227			210,336			256,793
Savings and money market deposit accounts		454,639			479,262			474,425
Time deposits		402,341			375,922			310,268
Total deposits		1,183,938			1,171,457			1,143,229
FHLB borrowings		—			50,000			—
Subordinated debentures		5,962			5,961			5,956
Notes payable		1,593			1,593			1,934
Accrued interest payable		1,133			1,082			1,036
Operating lease liabilities		13,264			13,554			14,510
Deferred income tax liabilities		—			—			301
Accrued expenses and other liabilities		6,799			12,603			10,411
Total liabilities		1,212,689			1,256,250			1,177,377
Shareholders’ equity:	Unaudited			Unaudited
Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at December 31, 2025, September 30, 2025, and December 31, 2024; aggregate liquidation preference of $6,395 at September 30, 2025 and December 31, 2024, and $6,683 at December 31, 2025		6,161			6,161			6,161
Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210 shares issued and outstanding at December 31, 2025, September 30, 2025, and December 31, 2024; aggregate liquidation preference of $3,210 at September 30, 2025 and December 31, 2024 and $3,338 at December 31, 2025		3,123			3,123			3,123
Preferred stock, Series C; no par value, 10,000 shares authorized, 6,446 shares issued and outstanding at December 31, 2025, September 30, 2025, and December 31, 2024; aggregate liquidation preference of $6,446 at September 30, 2025 and December 31, 2024 and $6,801 at December 31, 2025		6,446			6,446			6,446
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,108,609, 4,116,913, and 4,132,986 shares issued and outstanding at December 31, 2025, September 30, 2025, and December 31, 2024, respectively		54,371			54,764			54,764
Accumulated other comprehensive loss, net		(1,960	)		(2,069	)		(2,956	)
Unearned compensation		(335	)		(538	)		(752	)
Retained earnings		19,763			21,841			44,134
Total shareholders’ equity		87,569			89,728			110,920
Total liabilities and shareholders’ equity	$	1,300,258		$	1,345,978		$	1,288,297

BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME
	For the Quarter Ended												Year-to-Date
(Dollars in thousands, except per share data)	12/31/2025				9/30/2025				12/31/2024				12/31/2025				12/31/2024
Interest income:	Unaudited				Unaudited				Unaudited				Unaudited
Loans, including fees	$	19,326			$	20,708			$	20,747			$	81,244			$	78,831
Interest-bearing deposits in banks and other		1,624				946				1,007				4,550				3,979
Total interest income		20,950				21,654				21,754				85,794				82,810
Interest expense:
Deposits		9,451				9,576				10,600				37,740				42,872
Other		341				798				501				2,269				1,912
Total interest expense		9,792				10,374				11,101				40,009				44,784
Net interest income		11,158				11,280				10,653				45,785				38,026
Provision for credit losses		2,007				10,915				4,546				24,586				14,726
Net interest income after provision for credit losses		9,151				365				6,107				21,199				23,300
Noninterest income:
Loan servicing income, net		788				761				582				2,769				3,100
Gain (loss) on sale of government guaranteed loans, net		290				(2,033	)			8,425				11,720				28,252
Service charges and fees		471				474				451				1,867				1,794
Government guaranteed loans fair value gain (loss), net		(1,880	)			(882	)			(80	)			(1,075	)			9,843
Government guaranteed loan packaging fees		95				380				773				1,768				4,105
Gain on sale of premises and equipment		—				—				11,649				—				11,649
Other noninterest income		132				254				476				1,347				1,726
Total noninterest income		(104	)			(1,046	)			22,276				18,396				60,469
Noninterest Expense:
Salaries and benefits		4,681				7,637				7,351				28,429				31,063
Bonus, commissions, and incentives		(8	)			530				1,074				855				4,445
Occupancy and equipment		1,330				1,525				1,217				6,068				4,848
Data processing		1,687				2,049				1,749				7,859				6,745
Marketing and business development		281				262				390				1,433				2,050
Professional services		1,083				859				803				3,456				3,882
Loan servicing and origination expense		1,135				3,273				758				8,001				6,391
Employee recruiting and development		210				364				445				1,653				2,186
Regulatory assessments		694				484				379				1,869				1,249
Restructure charges		21				7,262				—				7,283				—
Other noninterest expense		755				970				1,169				3,519				3,923
Total noninterest expense		11,869				25,215				15,335				70,425				66,782
Income (loss) before taxes from continuing operations		(2,822	)			(25,896	)			13,048				(30,830	)			16,987
Income tax expense (benefit) from continuing operations		(359	)			(6,994	)			3,272				(7,893	)			4,315
Net income (loss) from continuing operations		(2,463	)			(18,902	)			9,776				(22,937	)			12,672
Loss from discontinued operations before income taxes		—				—				—				—				(92	)
Income tax benefit from discontinued operations		—				—				—				—				(23	)
Net loss from discontinued operations		—				—				—				—				(69	)
Net income (loss)		(2,463	)			(18,902	)			9,776				(22,937	)			12,603
Preferred dividends		385				385				385				1,541				1,541
Net income available to (loss attributable to) common shareholders	$	(2,848	)		$	(19,287	)		$	9,391			$	(24,478	)		$	11,062
Basic earnings (loss) per common share:	Unaudited				Unaudited				Unaudited				Unaudited
Continuing operations	$	(0.69	)		$	(4.66	)		$	2.27			$	(5.93	)		$	2.69
Discontinued operations		—				—				—				—				(0.01	)
Basic earnings (loss) per common share	$	(0.69	)		$	(4.66	)		$	2.27			$	(5.93	)		$	2.68
Diluted earnings (loss) per common share:
Continuing operations	$	(0.69	)		$	(4.66	)		$	2.11			$	(5.93	)		$	2.64
Discontinued operations		—				—				—				—				(0.02	)
Diluted earnings (loss) per common share	$	(0.69	)		$	(4.66	)		$	2.11			$	(5.93	)		$	2.62

Loan Composition

(Dollars in thousands)	12/31/2025				9/30/2025				6/30/2025				3/31/2025				12/31/2024
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Real estate:
Residential	$	365,427			$	364,020			$	356,559			$	339,886			$	330,870
Commercial		212,579				231,039				292,923				296,351				305,721
Construction and land		48,397				43,700				53,187				46,740				32,914
Commercial and industrial		180,242				194,654				223,239				234,384				226,522
Commercial and industrial - PPP		6				13				191				457				941
Consumer and other		86,441				90,946				93,333				93,889				93,826
Loans held for investment, at amortized cost, gross		893,092				924,372				1,019,432				1,011,707				990,794
Deferred loan costs, net		16,371				17,096				21,118				20,521				19,499
Discount on government guaranteed loans		(6,811	)			(7,506	)			(8,780	)			(8,727	)			(8,306	)
Premium on loans purchased, net		2,650				2,941				3,342				3,415				3,739
Loans held for investment, at amortized cost, net		905,302				936,903				1,035,112				1,026,916				1,005,726
Government guaranteed loans held for investment, at fair value		58,592				61,780				90,687				57,901				60,833
Total loans held for investment, net	$	963,894			$	998,683			$	1,125,799			$	1,084,817			$	1,066,559

Nonperforming Assets (Unaudited)

(Dollars in thousands)	12/31/2025				9/30/2025				6/30/2025				3/31/2025				12/31/2024
Nonperforming loans (government guaranteed balances), at amortized cost, gross	$	8,072			$	8,865			$	7,478			$	9,728			$	4,037
Nonperforming loans (unguaranteed balances), at amortized cost, gross		16,271				15,822				14,187				15,078				13,570
Total nonperforming loans, at amortized cost, gross		24,343				24,687				21,665				24,806				17,607
Nonperforming loans (government guaranteed balances), at fair value		83				—				502				507				—
Nonperforming loans (unguaranteed balances), at fair value		1,453				1,385				1,430				1,419				1,490
Total nonperforming loans, at fair value		1,536				1,385				1,932				1,926				1,490
OREO		400				400				400				132				132
Repossessed assets		263				32				—				36				36
Total nonperforming assets, gross	$	26,542			$	26,504			$	23,997			$	26,900			$	19,265
Nonperforming loans as a percentage of total loans held for investment(1)		2.69	%			2.63	%			2.09	%			2.42	%			1.75	%
Nonperforming loans (excluding government guaranteed balances) to total loans held for investment(1)		1.80	%			1.69	%			1.37	%			1.47	%			1.35	%
Nonperforming assets as a percentage of total assets		2.04	%			1.97	%			1.79	%			2.08	%			1.50	%
Nonperforming assets (excluding government guaranteed balances) to total assets		1.29	%			1.21	%			1.12	%			1.22	%			1.06	%
ACL to nonperforming loans(1)		90.35	%			99.18	%			78.66	%			66.57	%			88.10	%
ACL to nonperforming loans (excluding government guaranteed balances)(1)		135.18	%			154.75	%			120.12	%			109.52	%			114.31	%

⁽¹⁾ Excludes loans measured at fair value

Contacts:
Thomas G. Zernick	Scott J. McKim
Chief Executive Officer	Chief Financial Officer
727.399.5680	727.521.7085

FAQ

What were BayFirst Financial (BAFN) fourth quarter 2025 results?

BayFirst reported a Q4 2025 net loss of $2.5 million with NIM at 3.58%. According to the company, the quarter benefited from lower provision for credit losses and reduced noninterest expense versus Q3 2025, but noninterest income remained lower year-over-year.

How did the $96.6M loan sale to Banesco USA affect BayFirst (BAFN)?

The sale removed $96.6 million of SBA 7(a) loans from the balance sheet. According to the company, Banesco USA also assumed servicing and was engaged as subservicer on remaining SBA loans, aiding the bank's derisking and capital improvement efforts.

What is BayFirst's (BAFN) capital position after Q4 2025?

BayFirst reported a Tier 1 leverage ratio of 6.63% and CET1 of 9.05% at December 31, 2025. According to the company, capital ratios improved sequentially and the bank finished the year classified as well-capitalized.

Did BayFirst (BAFN) reduce headcount during 2025 and why?

Yes — headcount fell from 299 to 144 by December 31, 2025 as part of a strategic restructuring. According to the company, the reduction aligned with cost and derisking initiatives intended to stabilize operations and improve capital ratios.

How did BayFirst's (BAFN) deposits and liquidity change in Q4 2025?

Deposits ended at $1.18 billion, up $12.5 million in Q4 and $40.7 million year-over-year. According to the company, on-balance sheet liquidity rose to 18.35%, supported by increased cash and cash equivalents.

What drove BayFirst's (BAFN) year-over-year decline in noninterest income?

Noninterest income decreased by about $42.1 million year-over-year, largely due to the absence of 2024 gains on sale of two branch properties and lower gains on sale and fair value of government-guaranteed loans. According to the company, these items materially reduced noninterest income.