BayFirst Financial Corp. Reports Third Quarter 2025 Results, Announces Restructuring Plan Including Exit From SBA 7(a) Lending

Insights

Banking strategy analyst

Significant strategic reset after a large quarterly loss; exits SBA 7(a) lending to reduce risk and shore up capital.

The Company reported a $18.9 million net loss for Q3 2025 driven by higher provisions and $12.4 million of one‑time charges, including a $7.3 million restructuring charge tied to exiting the SBA 7(a) business and a planned sale of loans at 97% of balances.

Key dependencies include completion of the loan sale (contingent on federal approvals) and agreements with the OCC on credit administration and capital actions; these steps directly affect capital ratios that declined to a 6.64% Tier 1 leverage ratio and CET1 of 8.44%. Close regulatory coordination and timely closing of the sale are necessary to stabilize capital.

Watch for the close of the SBA loan sale in the fourth quarter and subsequent OCC actions; near‑term focus should be on allowance trends, regulatory memoranda, and any capital remedies within the next 30–90 days.

Credit quality and capital specialist

Credit deterioration forced higher provisions and larger ACL; restructuring reduces SBA exposure but weakens capital metrics.

Provision expense rose to $10.9 million in Q3 and the allowance ratio increased to 2.61% of loans, reflecting higher nonperforming assets and net charge‑offs of $3.3 million. The reclassification of $97.0 million of loans to held for sale and an unfavorable fair value adjustment of $5.1 million materially reduced noninterest income.

The bank’s capital cushions eroded quarter‑over‑quarter: Tier 1 leverage fell from 8.11% to 6.64% and total capital ratio fell below prior levels. Resolution of problem loans, the outcome of the SBA portfolio sale, and any OCC‑required capital measures will determine whether capital and liquidity stabilize over the next few quarters.

Concrete items to monitor in the next 90–180 days: final sale terms and timing, OCC supervisory agreements, quarterly ACL movement, and changes to risk‑weighted assets that will affect regulatory capital ratios.

ST. PETERSBURG, Fla., Oct. 30, 2025 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today reported a net loss of $18.9 million, or $4.66 per common share and diluted common share, for the third quarter of 2025, compared to a net loss of $1.2 million, or $0.39 per common share and diluted common share, in the second quarter of 2025. The current quarter’s net loss was driven by higher provision expense and $12.4 million in one-time charges, including a restructuring charge of $7.3 million, as a result of the exit from the SBA 7(a) lending business and the definitive agreement to sell SBA 7(a) loans to Banesco USA.

“Our third quarter results reflect a period of significant strategic transformation for the Company,” stated Thomas G. Zernick, Chief Executive Officer. “The quarter included significant one-time items related to our restructuring efforts, all of which represent decisive steps toward a stronger future.

“As we announced earlier this year, Management and the Board initiated a comprehensive strategic review aimed at derisking our balance sheet and positioning the Company for long-term growth and enhanced shareholder value. During the third quarter, we made meaningful progress on this initiative. In September, we announced the signing of a definitive agreement to sell a portion of the Bank's SBA 7(a) loan portfolio to Banesco USA for 97% of the retained loans' balances or a net loss of $5.1 million. In conjunction with this transaction, we will be exiting the SBA 7(a) lending business entirely. We are on track to close this transaction during the fourth quarter, contingent on the federal government reopening to complete the necessary approvals. While this represents a significant shift in our business model, we believe it is the right decision to reduce risk, strengthen our balance sheet, and better focus our resources on our core strategic priorities.

“We anticipate agreeing to additional actions with the OCC during the fourth quarter, focused on credit administration, strategic planning, and capital preservation. We take our regulatory obligations very seriously and are fully committed to meeting the highest operational standards,” Zernick continued. “Management has already taken significant steps to address credit quality issues, and we are dedicating substantial resources to strengthen our credit administration. This is our top priority and our team is committed to addressing the concerns outlined as quickly as possible. With the support of our Board of Directors, we have full confidence in our team to ensure these matters are resolved promptly, positioning BayFirst for improved operating results.

“Our focus remains firmly on what matters most: being the premier community bank in Tampa Bay. That means building real relationships with local individuals, families, and small businesses through reliable checking and savings accounts. These connections give us a solid, stable funding foundation while strengthening our footprint throughout Tampa Bay's dynamic market. In fact, more than 84% of our deposits are insured. This relationship-driven strategy positions us to deliver sustainable growth while maintaining the disciplined risk management and operational efficiency central to our long-term value creation.

“Though profitability has not met expectations, we are building a stronger, more resilient organization. Once restructuring is complete, we expect to return to profitability with a goal of positive return on assets of 40-70 basis points in 2026, with continued improvement in later years. Additionally, we will continue resolving problem loans and improving credit quality. With strong market opportunities and operational capabilities, we remain focused on executing our strategy and delivering long-term shareholder value,” Zernick concluded.

Third Quarter 2025 Performance Review

• Net interest margin was 3.61% in the third quarter of 2025, a decrease of 45 basis points from 4.06% in the second quarter of 2025 and an increase of 27 basis points from 3.34% in the third quarter of 2024. There was an adjustment of $0.6 million which was the result of a one-time reversal of accrued interest on loans that moved to nonaccrual status combined with the recognition of unamortized premiums of $0.4 million on a single USDA loan which was liquidated during the quarter.
• The Company’s government guaranteed loan team originated $47.0 million in new loans during the third quarter of 2025, a decrease from $106.4 million of loans produced in the previous quarter, and a decrease from $94.4 million of loans produced during the third quarter of 2024. In August 2025, the Company discontinued its Bolt loan program, an SBA 7(a) loan designed to provide small balance loans to small businesses, typically used for working capital. The discontinuance of the Bolt program contributed to the decrease in loan originations. Additionally, on September 29, 2025, the Company announced its plan to exit the SBA 7(a) lending business altogether and its intent to sell a portion of the SBA 7(a) loan portfolio.
• Loans held for investment decreased by $127.1 million, or 11.3%, during the third quarter of 2025 to $998.7 million and decreased $43.8 million, or 4.2%, over the past year. The decrease was primarily the result of the reclassification of $97.0 million of loans to held for sale, which was subsequently marked to the lower of cost or market. Additionally, during the quarter, the Company originated $75.0 million of loans and sold $51.9 million of government guaranteed loan balances.
• Deposits increased $7.7 million, or 0.7%, during the third quarter of 2025 and increased $59.3 million, or 5.3%, over the past year to $1.17 billion. The increase in deposits during the quarter was primarily due to increases in time deposit balances, partially offset by decreases in noninterest-bearing account balances, interest-bearing transaction account balances, and savings and money market account balances.
• Book value and tangible book value at September 30, 2025 were $17.90 per common share, a decrease from $22.30 at June 30, 2025.

Results of Operations

Net Income (Loss)

The Company had a net loss of $18.9 million for the third quarter of 2025, compared to a net loss of $1.2 million in the second quarter of 2025 and net income of $1.1 million in the third quarter of 2024. The change in the third quarter of 2025 from the preceding quarter was primarily the result of a decrease in net interest income of $1.1 million, an increase in provision for credit losses of $3.7 million, a decrease in noninterest income of $11.8 million, and an increase in noninterest expense of $7.7 million. This was partially offset by an increase in income tax benefit of $6.6 million. The change from the third quarter of 2024 was due to an increase in provision for credit losses of $7.8 million, a decrease in noninterest income of $13.3 million, and an increase in noninterest expense of $8.2 million, partially offset by an increase in net interest income of $1.8 million and a decrease in income tax expenses of $7.4 million.

In the first nine months of 2025, the Company had a net loss of $20.5 million, a decrease from net income of $2.8 million for the first nine months of 2024. The decrease was primarily due to an increase in provision for credit losses of $12.4 million, a decrease in noninterest income of $19.7 million, and an increase in noninterest expense of $7.1 million. This was partially offset by an increase in net interest income of $7.3 million and a decrease in income tax expense of $8.6 million.

Net Interest Income and Net Interest Margin

Net interest income from continuing operations was $11.3 million in the third quarter of 2025, a decrease from $12.3 million during the second quarter of 2025, and an increase from $9.4 million during the third quarter of 2024. The net interest margin was 3.61% in the third quarter of 2025, a decrease of 45 basis points from 4.06% in the second quarter of 2025 and an increase of 27 basis points from 3.34% in the third quarter of 2024.

The decrease in net interest income from continuing operations during the third quarter of 2025, as compared to the second quarter of 2025, was mainly due to a decrease in loan interest income, including fees, of
$0.6 million which was the result of a one-time reversal of accrued interest on loans that moved to nonaccrual status combined with the recognition of unamortized premium on a single USDA loan which was liquidated during the quarter.

The increase in net interest income from continuing operations during the third quarter of 2025, as compared to the year ago quarter, was mainly due to a decrease in interest expense on deposits of $2.0 million.

Net interest income from continuing operations was $34.6 million in the first nine months of 2025, an increase from $27.4 million in the first nine months of 2024. The increase was mainly due to an increase in loan interest income, including fees, of $3.8 million and a decrease in interest expense of $3.5 million.

Noninterest Income

Noninterest income from continuing operations was a negative $1.0 million for the third quarter of 2025, which was a decrease from $10.8 million in the second quarter of 2025 and a decrease from $12.3 million in the third quarter of 2024. The decrease in the third quarter of 2025, as compared to the second quarter of 2025, was primarily the result of a decrease in gain on sale of government guaranteed loans of $3.1 million, a decrease in government guaranteed loan fair value gains of $3.3 million, and the unfavorable fair value adjustment on held for sale loans of $5.1 million. The unfavorable fair value adjustment on held for sale loans was the result of the expected sale of a portion of the SBA 7(a) loan portfolio. The decrease in the third quarter of 2025, as compared to the third quarter of 2024, was the result of a decrease in gain on sale of government guaranteed loans of $3.1 million, a decrease in fair value gains on government guaranteed loans of $4.3 million, the unfavorable fair value adjustment on held for sale loans of $5.1 million, and a decrease in government guaranteed loan packaging fees of $0.5 million.

Noninterest income from continuing operations was $18.5 million for the first nine months of 2025, which was a decrease from $38.2 million for the first nine months of 2024. The decrease was primarily the result of a decrease in gain on sale of government guaranteed loans of $3.3 million, a decrease in government guaranteed loan fair value gains of $9.1 million, the unfavorable fair value adjustment on held for sale loans of $5.1 million, and a decrease in government guaranteed loan packaging fees of $1.7 million.

Noninterest Expense

Noninterest expense from continuing operations was $25.2 million in the third quarter of 2025 compared to $17.5 million in the second quarter of 2025 and $17.1 million in the third quarter of 2024. The increase in the third quarter of 2025, as compared to the prior quarter, was primarily due to the restructure charges of $7.3 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) business. The increase in the third quarter of 2025, as compared to the third quarter of 2024, was primarily due to the restructure charges of $7.3 million and higher loan origination and collection expenses of $1.3 million.

Noninterest expense from continuing operations was $58.6 million for the first nine months of 2025 compared to $51.4 million for the first nine months of 2024. The increase was primarily the result of the restructure charges of $7.3 million.

Balance Sheet

Assets

Total assets increased $2.1 million, or 0.2%, during the third quarter of 2025 to $1.35 billion, mainly due to an increase in cash and cash equivalents of $41.3 million, partially offset by decreases in total loans (held for investment and held for sale) of $33.1 million and an increase in allowance for credit losses on loans of $7.4 million. Compared to the end of the third quarter last year, total assets increased $100.9 million, or 8.1%, driven primarily by growth in loans (held for investment and held for sale) of $49.7 million and cash and cash equivalents of $54.2 million.

Loans

Loans held for investment decreased $127.1 million, or 11.3%, during the third quarter of 2025 and $43.8 million, or 4.2%, over the past year to $998.7 million, primarily due to the transfer of $97.0 million of loans to held for sale, which was subsequently marked to the lower of cost or market, as well as government guaranteed loan sales, partially offset by originations in both conventional community bank loans and government guaranteed loans.

Deposits

Deposits increased $7.7 million, or 0.7%, during the third quarter of 2025 and increased $59.3 million, or 5.3%, from the third quarter of 2024, ending September 30, 2025, at $1.17 billion. During the third quarter, there was an increase in time deposit balances of $53.0 million, partially offset by decreases in noninterest-bearing account balances of $3.8 million, interest-bearing transaction account balances of $27.9 million, and savings and money market account balances of $13.7 million. At September 30, 2025, approximately 84% 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 September 30, 2025, June 30, 2025, and September 30, 2024, the Company had $235.9 million, $186.7 million, and $76.9 million, respectively, of brokered deposits.

Asset Quality

The Company recorded a provision for credit losses in the third quarter of $10.9 million, compared to provisions of $7.3 million for the second quarter of 2025 and $3.1 million during the third quarter of 2024.

The ratio of allowance for credit losses on loans (ACL) to total loans held for investment at amortized cost was 2.61% at September 30, 2025, 1.65% as of June 30, 2025, and 1.48% as of September 30, 2024. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 2.78% at September 30, 2025, 1.85% as of June 30, 2025, and 1.70% as of September 30, 2024. The increase in the ACL was the result of increases in nonperforming loans and continued economic uncertainty.

Net charge-offs for the third quarter of 2025 were $3.3 million, which was a decrease from $6.8 million for the second quarter of 2025 and an increase from $2.8 million for the third quarter of 2024. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.24% for the third quarter of 2025, compared to 2.60% in the second quarter of 2025 and 1.16% in the third quarter of 2024. Nonperforming assets were 1.97% of total assets as of September 30, 2025, compared to 1.79% as of June 30, 2025, and 1.38% as of September 30, 2024. Nonperforming assets, excluding government guaranteed loan balances, were 1.21% of total assets as of September 30, 2025, compared to 1.12% as of June 30, 2025, and 0.88% as of September 30, 2024.

Capital

The Bank’s Tier 1 leverage ratio was 6.64% as of September 30, 2025, compared to 8.11% as of June 30, 2025, and 8.41% as of September 30, 2024. The CET 1 and Tier 1 capital ratios to risk-weighted assets were 8.44% as of September 30, 2025, compared to 9.98% as of June 30, 2025, and 10.14% as of September 30, 2024. The total capital to risk-weighted assets ratio was 9.71% as of September 30, 2025, compared to 11.23% as of June 30, 2025, and 11.39% as of September 30, 2024.

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 September 30, 2025 was 11.31%, 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 September 30, 2025, the Bank had $50.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions. This compared to $40.0 million of borrowings from the FHLB and no borrowings from the FRB or other financial institutions at June 30, 2025.

Recent Events

Exit from SBA 7(a) Business. BayFirst signed a definitive agreement to sell a portion of the SBA 7(a) loan portfolio to Banesco USA. In conjunction with this agreement, BayFirst will exit the SBA 7(a) lending business, and the majority of the SBA lending staff and support teams will be offered positions with Banesco USA. The transaction is expected to close in the fourth quarter of this year.

Share Repurchase Program. During the first quarter of 2025, the Company announced that its Board of Directors has adopted a share repurchase program. Under the repurchase program, the Company may repurchase up to $2.0 million of the Company’s outstanding shares, over a period beginning on January 28, 2025, and continuing until the earlier of the completion of the repurchase, or December 31, 2025, or termination of the program by the Board of Directors. On October 28, 2025, the Company’s Board of Directors terminated the stock repurchase program effective immediately.

Conference Call

BayFirst will host a conference call on Friday, October 31, 2025, at 9:00 a.m. ET to discuss its third 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 85147. 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 September 30, 2025, BayFirst Financial Corp. had $1.35 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; 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)	9/30/2025				6/30/2025				3/31/2025				12/31/2024				9/30/2024
Net income (loss)	$	(18,902	)		$	(1,237	)		$	(335	)		$	9,776			$	1,137
Balance sheet data:
Average loans held for investment at amortized cost		1,060,520				1,047,568				1,027,648				1,003,867				948,528
Average total assets		1,345,553				1,324,455				1,287,618				1,273,296				1,228,040
Average common shareholders’ equity		92,734				95,049				96,053				87,961				86,381
Government guaranteed loans held for sale		94,052				—				—				—				595
Total loans held for investment		998,683				1,125,799				1,084,817				1,066,559				1,042,445
Total loans held for investment, excl gov’t gtd loan balances		923,390				972,942				943,979				917,075				885,444
Allowance for credit losses		24,485				17,041				16,513				15,512				14,186
Total assets		1,345,978				1,343,867				1,291,957				1,288,297				1,245,099
Total deposits		1,171,457				1,163,796				1,128,267				1,143,229				1,112,196
Common shareholders’ equity		73,677				92,172				94,034				94,869				86,242
Share data:
Basic earnings (loss) per common share	$	(4.66	)		$	(0.39	)		$	(0.17	)		$	2.27			$	0.18
Diluted earnings (loss) per common share		(4.66	)			(0.39	)			(0.17	)			2.11				0.18
Dividends per common share		—				0.08				0.08				0.08				0.08
Book value per common share		17.90				22.30				22.77				22.95				20.86
Tangible book value per common share(1)		17.90				22.30				22.77				22.95				20.86
Performance ratios:
Return on average assets(2)	(5.62		)%		(0.37		)%		(0.10		)%			3.07	%			0.37	%
Return on average common equity(2)	(83.19		)%		(6.83		)%		(3.00		)%			42.71	%			3.48	%
Net interest margin(2)		3.61	%			4.06	%			3.77	%			3.60	%			3.34	%
Asset quality ratios:
Net charge-offs	$	3,294			$	6,799			$	3,301			$	3,369			$	2,757
Net charge-offs/avg loans held for investment at amortized cost(2)		1.24	%			2.60	%			1.28	%			1.34	%			1.16	%
Nonperforming loans(3)	$	24,687			$	21,665			$	24,806			$	17,607			$	15,489
Nonperforming loans (excluding gov't gtd balance)(3)	$	15,822			$	14,187			$	15,078			$	13,570			$	10,992
Nonperforming loans/total loans held for investment(3)		2.63	%			2.09	%			2.42	%			1.75	%			1.62	%
Nonperforming loans (excl gov’t gtd balance)/total loans held for investment(3)		1.69	%			1.37	%			1.47	%			1.35	%			1.15	%
ACL/Total loans held for investment at amortized cost		2.61	%			1.65	%			1.61	%			1.54	%			1.48	%
ACL/Total loans held for investment at amortized cost, excl government guaranteed loans		2.78	%			1.85	%			1.84	%			1.79	%			1.70	%
Other Data:
Full-time equivalent employees		237				300				305				299				295
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)	September 30, 2025				June 30, 2025				March 31, 2025				December 31, 2024				September 30, 2024
Total shareholders’ equity	$	89,728			$	108,223			$	110,085			$	110,920			$	102,293
Less: Preferred stock liquidation preference		(16,051	)			(16,051	)			(16,051	)			(16,051	)			(16,051	)
Total equity available to common shareholders		73,677				92,172				94,034				94,869				86,242
Less: Goodwill		—				—				—				—				—
Tangible common shareholders' equity	$	73,677			$	92,172			$	94,034			$	94,869			$	86,242
Common shares outstanding		4,116,913				4,134,127				4,129,027				4,132,986				4,134,059
Tangible book value per common share	$	17.90			$	22.30			$	22.77			$	22.95			$	20.86

BAYFIRST FINANCIAL CORP.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(Dollars in thousands)	9/30/2025			6/30/2025			9/30/2024
Assets
Cash and due from banks	$	5,193		$	6,142		$	4,708
Interest-bearing deposits in banks		113,357			71,157			59,675
Cash and cash equivalents		118,550			77,299			64,383
Time deposits in banks		1,284			1,280			2,264
Investment securities available for sale, at fair value (amortized cost $32,614, $33,410, and $41,104 at September 30, 2025, June 30, 2025, and September 30, 2024, respectively)		29,857			30,256			37,984
Investment securities held to maturity, at amortized cost, net of allowance for credit losses of $9, $9, and $13 (fair value: $2,375, $2,369, and $2,321 at September 30, 2025, June 30, 2025, and September 30, 2024, respectively)		2,491			2,491			2,487
Nonmarketable equity securities		7,028			6,551			4,997
Government guaranteed loans held for sale		94,052			—			595
Government guaranteed loans held for investment, at fair value		61,780			90,687			86,441
Loans held for investment, at amortized cost		936,903			1,035,112			956,004
Allowance for credit losses on loans		(24,485	)		(17,041	)		(14,186	)
Net Loans held for investment, at amortized cost		912,418			1,018,071			941,818
Accrued interest receivable		8,898			9,495			8,537
Premises and equipment, net		31,695			32,407			38,736
Loan servicing rights		15,663			16,074			15,966
Deferred income tax assets		5,839			—			—
Right-of-use operating lease assets		14,833			15,160			2,018
Bank owned life insurance		27,071			26,881			26,330
Other real estate owned		400			400			—
Other assets		14,119			16,815			12,543
Total assets	$	1,345,978		$	1,343,867		$	1,245,099
Liabilities:
Noninterest-bearing deposit accounts	$	105,937		$	109,698		$	95,995
Interest-bearing transaction accounts		210,336			238,215			247,923
Savings and money market deposit accounts		479,262			493,005			455,297
Time deposits		375,922			322,878			312,981
Total deposits		1,171,457			1,163,796			1,112,196
FHLB borrowings		50,000			40,000			10,000
Subordinated debentures		5,961			5,959			5,954
Notes payable		1,593			1,707			2,048
Accrued interest payable		1,082			1,148			1,114
Operating lease liabilities		13,554			13,819			2,271
Deferred income tax liabilities		—			895			1,488
Accrued expenses and other liabilities		12,603			8,320			7,735
Total liabilities		1,256,250			1,235,644			1,142,806
Shareholders’ equity:
Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at September 30, 2025, June 30, 2025, and September 30, 2024; aggregate liquidation preference of $6,395 each period		6,161			6,161			6,161
Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210 shares issued and outstanding at September 30, 2025, June 30, 2025, and September 30, 2024; aggregate liquidation preference of $3,210 each period		3,123			3,123			3,123
Preferred stock, Series C; no par value, 10,000 shares authorized, 6,446 shares issued and outstanding at September 30, 2025, June 30, 2025, and September 30, 2024; aggregate liquidation preference of $6,446 at September 30, 2025, June 30, 2025, and September 30, 2024		6,446			6,446			6,446
Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,116,913, 4,134,127, and 4,134,059 shares issued and outstanding at September 30, 2025, June 30, 2025, and September 30, 2024, respectively		54,764			54,739			54,780
Accumulated other comprehensive loss, net		(2,069	)		(2,368	)		(2,312	)
Unearned compensation		(538	)		(1,006	)		(978	)
Retained earnings		21,841			41,128			35,073
Total shareholders’ equity		89,728			108,223			102,293
Total liabilities and shareholders’ equity	$	1,345,978		$	1,343,867		$	1,245,099

BAYFIRST FINANCIAL CORP.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
	For the Quarter Ended												Year-to-Date
(Dollars in thousands, except per share data)	9/30/2025				6/30/2025				9/30/2024				9/30/2025				9/30/2024
Interest income:
Loans, including fees	$	20,708			$	21,459			$	20,442			$	61,918			$	58,084
Interest-bearing deposits in banks and other		946				1,046				1,000				2,926				2,972
Total interest income		21,654				22,505				21,442				64,844				61,056
Interest expense:
Deposits		9,576				9,282				11,609				28,289				32,272
Other		798				875				384				1,928				1,411
Total interest expense		10,374				10,157				11,993				30,217				33,683
Net interest income		11,280				12,348				9,449				34,627				27,373
Provision for credit losses		10,915				7,264				3,122				22,579				10,180
Net interest income after provision for credit losses		365				5,084				6,327				12,048				17,193
Noninterest income:
Loan servicing income, net		761				484				918				1,981				2,518
Gain on sale of government guaranteed loans, net		3,063				6,136				6,143				16,526				19,827
Service charges and fees		474				473				447				1,396				1,343
Government guaranteed loans fair value gain (loss), net		(882	)			2,442				3,416				805				9,923
Fair value adjustment on loans held for sale		(5,096	)			—				—				(5,096	)			—
Government guaranteed loan packaging fees		380				577				903				1,673				3,332
Other noninterest income		254				683				445				1,215				1,250
Total noninterest income		(1,046	)			10,795				12,272				18,500				38,193
Noninterest Expense:
Salaries and benefits		7,637				8,113				7,878				23,748				23,712
Bonus, commissions, and incentives		530				262				1,141				863				3,371
Occupancy and equipment		1,525				1,579				1,248				4,738				3,631
Data processing		2,049				2,078				1,789				6,172				4,996
Marketing and business development		262				403				532				1,152				1,660
Professional services		859				782				853				2,373				3,079
Loan origination and collection		3,273				2,558				1,956				6,866				5,633
Employee recruiting and development		364				462				595				1,443				1,741
Regulatory assessments		484				352				309				1,175				870
Restructure charges		7,262				—				—				7,262				—
Other noninterest expense		970				939				763				2,764				2,754
Total noninterest expense		25,215				17,528				17,064				58,556				51,447
Income (loss) before taxes from continuing operations		(25,896	)			(1,649	)			1,535				(28,008	)			3,939
Income tax expense (benefit) from continuing operations		(6,994	)			(412	)			398				(7,534	)			1,043
Net income (loss) from continuing operations		(18,902	)			(1,237	)			1,137				(20,474	)			2,896
Loss from discontinued operations before income taxes		—				—				—				—				(92	)
Income tax benefit from discontinued operations		—				—				—				—				(23	)
Net loss from discontinued operations		—				—				—				—				(69	)
Net income (loss)		(18,902	)			(1,237	)			1,137				(20,474	)			2,827
Preferred dividends		385				386				385				1,156				1,156
Net income available to (loss attributable to) common shareholders	$	(19,287	)		$	(1,623	)		$	752			$	(21,630	)		$	1,671
Basic earnings (loss) per common share:
Continuing operations	$	(4.66	)		$	(0.39	)		$	0.18			$	(5.23	)		$	0.42
Discontinued operations		—				—				—				—				(0.02	)
Basic earnings (loss) per common share	$	(4.66	)		$	(0.39	)		$	0.18			$	(5.23	)		$	0.40
Diluted earnings (loss) per common share:
Continuing operations	$	(4.66	)		$	(0.39	)		$	0.18			$	(5.23	)		$	0.42
Discontinued operations		—				—				—				—				(0.02	)
Diluted earnings (loss) per common share	$	(4.66	)		$	(0.39	)		$	0.18			$	(5.23	)		$	0.40

Loan Composition

(Dollars in thousands)	9/30/2025				6/30/2025				3/31/2025				12/31/2024				9/30/2024
	(Unaudited)				(Unaudited)				(Unaudited)								(Unaudited)
Real estate:
Residential	$	364,020			$	356,559			$	339,886			$	330,870			$	321,740
Commercial		231,039				292,923				296,351				305,721				292,026
Construction and land		43,700				53,187				46,740				32,914				33,784
Commercial and industrial		194,654				223,239				234,384				226,522				200,212
Commercial and industrial - PPP		13				191				457				941				1,656
Consumer and other		90,946				93,333				93,889				93,826				92,546
Loans held for investment, at amortized cost, gross		924,372				1,019,432				1,011,707				990,794				941,964
Deferred loan costs, net		17,096				21,118				20,521				19,499				18,060
Discount on government guaranteed loans		(7,506	)			(8,780	)			(8,727	)			(8,306	)			(7,880	)
Premium on loans purchased, net		2,941				3,342				3,415				3,739				3,860
Loans held for investment, at amortized cost, net		936,903				1,035,112				1,026,916				1,005,726				956,004
Government guaranteed loans held for investment, at fair value		61,780				90,687				57,901				60,833				86,441
Total loans held for investment, net	$	998,683			$	1,125,799			$	1,084,817			$	1,066,559			$	1,042,445

Nonperforming Assets (Unaudited)

(Dollars in thousands)	9/30/2025				6/30/2025				3/31/2025				12/31/2024				9/30/2024
Nonperforming loans (government guaranteed balances), at amortized cost, gross	$	8,865			$	7,478			$	9,728			$	4,037			$	4,497
Nonperforming loans (unguaranteed balances), at amortized cost, gross		15,822				14,187				15,078				13,570				10,992
Total nonperforming loans, at amortized cost, gross		24,687				21,665				24,806				17,607				15,489
Nonperforming loans (government guaranteed balances), at fair value		—				502				507				—				24
Nonperforming loans (unguaranteed balances), at fair value		1,385				1,430				1,419				1,490				1,535
Total nonperforming loans, at fair value		1,385				1,932				1,926				1,490				1,559
OREO		400				400				132				132				—
Repossessed assets		32				—				36				36				94
Total nonperforming assets, gross	$	26,504			$	23,997			$	26,900			$	19,265			$	17,142
Nonperforming loans as a percentage of total loans held for investment(1)		2.63	%			2.09	%			2.42	%			1.75	%			1.62	%
Nonperforming loans (excluding government guaranteed balances) to total loans held for investment(1)		1.69	%			1.37	%			1.47	%			1.35	%			1.15	%
Nonperforming assets as a percentage of total assets		1.97	%			1.79	%			2.08	%			1.50	%			1.38	%
Nonperforming assets (excluding government guaranteed balances) to total assets		1.21	%			1.12	%			1.22	%			1.06	%			0.88	%
ACL to nonperforming loans(1)		99.18	%			78.66	%			66.57	%			88.10	%			91.59	%
ACL to nonperforming loans (excluding government guaranteed balances)(1)		154.75	%			120.12	%			109.52	%			114.31	%			129.06	%

⁽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