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- **Strategic Shift Complete**: Exited SBA 7(a) business, with $167M of remaining loans for sale. 
- **Financial Pain Points**: Q3 net loss of $18.9M driven by restructuring; NIM down 45bps to 3.61%. 
- **Community Bank Focus**: 84% deposits insured; 2026 ROA target of 40-70bps. 
- **Credit Improvement**: Annualized charge-offs at 1.24%, down from 2.6% Q2; ACL at 2.61%. 
- **Treasury Growth**: 4 new treasury staff; new software adoption driving mid-market share. 
- **Insider Lockup**: Board compensation suspended; insiders restricted until post-earnings. 


**【CEO Opening Remarks】**
- Announced exit from SBA 7(a) lending business, with $167 million of unguaranteed loans remaining post-transaction closure. 
- Sold majority of SBA portfolio to Banesco USA at 97% of cost, with servicing transition underway. 
- Restructuring aims to return to profitability in 2026 with 40-70bps ROA, focusing on Tampa Bay community banking.
- Noted 84% of deposits are FDIC-insured, providing stability amid restructuring.

**【CFO Financial Commentary】**
- Q3 2025 net loss of $18.9M vs. $1.2M in Q2, driven by $7.3M restructuring charge and $5.1M portfolio sale impact. 
- Net interest margin (NIM) declined 45bps to 3.61% due to one-time items, but expects stabilization. 
- Noninterest income negative ($1M) due to SBA sale exit, vs. $10.8M in Q2. 
- Provision for credit losses rose to $10.9M, with annualized net charge-offs at 1.24% (down from 2.6% Q2). 
- Allowance for credit losses (ACL) increased to 2.61% of loans, reflecting retained SBA risk. 

**【COO Operational Updates】**
- Conducted third-party review of $70M in loans, targeting 8-10% of portfolio for credit quality. 
- Expanded treasury management with Jack Henry software and lockbox services, adding 4 treasury staff. 
- Leadership changes: Adam Curtis becomes Tampa market leader & Chief Lending Officer; Brandi Jaber leads Banesco transition. 
- Nonperforming assets (NPA) at 1.97% of total assets, up from 1.79% Q2 but below peers. 

**【Q&A Highlights】**
- **SBA Portfolio Sale**: Remaining $167M of unguaranteed loans will be marketed for sale; no additional ACL expected. 
- **Treasury Growth**: New clients and software adoption driving 2026 expansion plans. 
- **Insider Trading**: Board compensation suspended; insider lockup将持续至 earnings release + 2 days. 
- **Credit Quality**: Aggressive workout of problem loans expected to reduce NPA in 2026. 


BayFirst Financial Corp. (BAFN) Q3 2025 Earnings Call Transcript

- **Q2 Net Loss**: $1.2 million due to elevated credit losses and strategic portfolio write-downs.
- **NIM Expansion**: Net interest margin improved 29 bps to 4.06%, driven by deposit cost management.
- **SBA Credit Challenges**: Small-dollar loans (avg $125k) saw charge-offs jump 3.5x Q/Q to $6.8 million.
- **Strategic Review**: Evaluating alternatives for high-risk SBA loans, with potential changes to program structure.
- **Capital Strength**: Tangible book value of $22.30/share, no immediate capital raise plans despite dividend suspension.

**【CEO Opening Remarks】**
- Reported a net loss of $1.2 million for Q2, driven by higher provision expenses and write-downs on unguaranteed SBA 7(a) loans.
- Announced strategic review to derisk unguaranteed SBA loans and strengthen balance sheet for community banking growth.
- Suspended common and preferred stock dividends to offset financial impact of charges.
- Net interest margin improved to 4.06% (up 29 bps Q/Q), fueled by core deposit growth programs (e.g., Trendsetter, Cash Kids Club).
- Originated $100.4 million in government-guaranteed loans, including $67.9 million in Bolt loans.

**【CFO Financial Commentary】**
- Loans held for investment increased $41 million (3.8%) to $1.13 billion; deposits grew $35.5 million (3.1%) to $1.16 billion.
- Net interest income rose $1.3 million Q/Q to $12.3 million, with deposit cost declining 45 bps to 3.33%.
- Noninterest income was $11.4 million, down $1.2 million from Q1 due to lower loan sales volume.
- Provision for credit losses jumped to $7.3 million (up $2.9 million Q/Q), driven by $6.8 million in net charge-offs.
- Nonperforming assets were 1.79% of total assets, up from 1.28% a year ago.

**【President & COO Comments】**
- Credit quality challenges concentrated in small-dollar SBA 7(a) loans, with charge-offs up 3.5x Q/Q to $6.8 million.
- Conventional commercial loans grew $31.9 million (16%), and consumer/residential loans expanded $78.9 million (20%).
- Evaluating strategic alternatives for SBA loan program, including potential changes to underwriting and origination volumes.

**【Q&A Highlights】**
- **Net Interest Margin Stability**: CFO expects NIM to remain stable at ~4.06%, with limited impact from potential Fed rate cuts.
- **Capital Position**: Well-capitalized with tangible book value of $22.30/share, but no immediate plans for capital raises.
- **SBA Loan Risk**: 90%+ of credit losses from SBA 7(a) loans, with small-dollar loans (avg $125k) performing worst.
- **Strategic Review**: Management evaluating alternatives for SBA loan portfolio, including potential sale or wind-down of high-risk segments.
- **Loan Sales Pipeline**: Fair value gains on unsold loans offset write-downs, but processing delays constrained sales volume.


BayFirst Financial (BAFN)-30 Jul 25-2025 Q2 Earnings call transcript

- **Q1 2025 Results**: Net loss $335K due to macroeconomic stress, despite 17bps NIM expansion
- **Strategic Shifts**: 
  -Gov't loan origination stable at $106M
  -Minimal CRE risk (9.4% of loans)
  -Deposit mix optimization driving margin
- **Credit Challenges**: 
  -Nonperforming assets rise to 1.94% of assets
  -SBA loan defaults persist despite modifications
- **Growth Drivers**: 
  -Checking accounts +12% YoY
  -Conventional loans +26% YoY
  -New credit team additions
- **Risk Management**: 
  -Allowance ratio 1.61%
  -Tangible book value $22.77/sh

**【CEO Opening Remarks】**
- Q1 2025 net loss of $335,000 driven by higher provision expenses and loan write-downs amid macroeconomic stress (slow demand, high rates, inflation). 
- Key positives: 
  - Net interest margin improved 17bps to 3.77% via deposit mix optimization
  - Checking accounts +2% QoQ, +12% YoY
  - Minimal CRE exposure (9.4% of loans)
  - Gov't guaranteed loan origination $106.3M (Bolt loans $60.5M)
- Strategic review underway to derisk balance sheet and position for growth

**【CFO Financial Highlights】**
- Q1 2025 Results: 
  - Net loss $335K vs. Q4 2024 net income $9.8M
  - Assets $1.29B (+12.9% YoY)
  - Deposits $1.13B (-1.3% QoQ)
  - Tangible book value $22.77/sh
- Key metrics: 
  - Net interest income $11M (+$300K QoQ)
  - Noninterest income $8.8M (-60% vs. Q4 2024)
  - Provision for credit losses $4.4M
  - Net charge-offs 1.28% annualized
  - Nonperforming assets 1.94% of total assets

**【COO Operational Updates】**
- SBA loan portfolio management: 
  - Modification program helped 581 borrowers
  - Enhanced underwriting for Bolt loans (3/2024 vintage default rate lower)
  - New credit team additions
- Portfolio growth: 
  - Conventional loans +$140M YoY
  - Treasury services expanded to HOAs
  - Health care lending pipeline
- Credit quality focus: 
  - Unsecured consumer loans net charge-offs $285K
  - Strong asset quality in non-SBA portfolio

BayFirst Financial (BAFN)-25 Apr 25-2025 Q1 Earnings call transcript

- **Q4 Financial Highlights**: Net income of $9.8 million, 16.5% deposit growth, and 26bps net interest margin expansion.
- **Strategic Moves**: $11.6M gain from sale-leaseback, suspension of fair value accounting for loans, and $2M share buyback.
- **Credit Trends**: 1.5% nonperforming assets, 500 modified SBA loans, and stable SBA loan margins of 12%-14%.
- **Operational Strength**: 74% insured deposits, minimal CRE exposure, and AI-driven efficiency improvements.
- **Risk Management**: Hurricane-impacted borrowers granted deferrals, with no material portfolio losses.


**【CEO Summary Section】**
- Fourth-quarter net income: $9.8 million, with $1.1 million excluding a $11.6 million gain from a sale-leaseback transaction.
- Net interest margin improved by 26 basis points to 3.6%.
- Deposit growth: 16.5% year-to-date, ending at $1.14 billion.
- Loan origination highlights: $107.8 million in government-guaranteed loans (Q4 2024 vs. $94.4 million in Q3 2024) and $64.8 million in Bolt loans (Q4 2024 vs. $741.5 million since launch in 2022).
- Strategic initiatives: Sale-leaseback transaction to enhance capital position, suspension of fair value accounting for government-guaranteed loans, and upgrades to the PowerLOS loan origination system.
- Recognition: Ranked top bank in Florida by Forbes Magazine for 2024.

**【CFO Financial Commentary】**
- Full-year net income: $12.6 million, with $4.0 million excluding the sale-leaseback gain.
- Total assets grew 15.3% year-over-year to $1.29 billion.
- Noninterest income (excluding the gain): $10.6 million in Q4, down $1.6 million from Q3 due to the accounting change.
- Noninterest expense decreased $1.9 million in Q4, driven by lower origination costs and compensation expenses.
- Provision for credit losses: $4.5 million in Q4 (up from $3.1 million in Q3), with annualized net charge-offs at 1.34%.
- Tangible book value increased to $22.95 per share (from $20.86 in Q3).

**【President & Credit Update】**
- Credit quality: Nonperforming assets at 1.5% of total assets (up from 0.92% in Q4 2023), with 500 SBA loans modified to reduce payments.
- Portfolio trends: Minimal CRE exposure (6% of loans held for investment), 74% of deposits insured.
- Operational improvements: Launch of a lockbox treasury management solution and AI-driven workflow automation tool.
- New leadership: Appointment of a Chief Credit Officer to enhance portfolio monitoring.

**【Q&A Key Highlights】**
- **Branches & Leaseback**: Sold two branches (opened in 1999 and 2018) with 1%-2% annual rent increases. 8 of 12 branches remain owned.
- **Share Repurchase**: $2 million buyback authorized (vs. $1 million expired in 2023), prioritizing loan growth and capital allocation.
- **SBA Loan Performance**: Bolt loans yield 12%-14% gross premiums, with stable margins expected in 2025.
- **Disaster Impact**: Minimal losses from hurricanes, with 3-month deferrals granted to affected borrowers.
- **Interest Rate Sensitivity**: 90% of loan portfolio variable-rate, with stress-testing for borrower repayment capacity.


BayFirst Financial (BAFN)-31 Jan 25-2024 Q4 Earnings call transcript

BayFirst Financial (BAFN)-25 Oct 24-2024 Q3 Earnings call transcript

BayFirst Financial (BAFN)-26 Jul 24-2024 Q2 Earnings call transcript

BayFirst Financial (BAFN)-26 Apr 24-2024 Q1 Earnings call transcript

BayFirst Financial (BAFN)-26 Jan 24-2023 Q4 Earnings call transcript

- **Revenue Growth**: Q3 net income up 171% YoQ to $1.9M, driven by BOLT SBA loans ($85M Q3) and digital banking expansion.
- **Margin Pressure**: NIM compressed 82 bps to 3.36% due to 6% CD rates, but loan growth offset margin decline.
- **Digital Success**: 179 new digital accounts opened in 30 days, ACH transfers launched.
- **Risk Management**: BOLT charge-off rate 2.93% annualized, consumer loan portfolio shrinking (Upgrade portfolio down 33% YoY).
- **Asset Quality**: ROA 0.71%, ROE 8.46%, tangible book value $20.12/sh (up 1.6% QoQ).

**【Management Opening Remarks】**
- Anthony Leo, retiring CEO, highlighted BayFirst's 10-year growth from $69M to $1.1B in assets, emphasizing strategic pillars of retail banking expansion and SBA lending.
- Tom Zernick, incoming CEO, emphasized confidence in the company's intrinsic value despite stock price concerns and outlined Q3 performance.

**【CEO Commentary】**
- Q3 net income: $1.9M (171% YoQ increase, 39% QoQ increase), ROA: 0.71%, ROE: 8.46%.
- Net interest margin (NIM) compressed 82 bps QoQ to 3.36% due to 6% CD campaign costs, but BOLT loans ($85M Q3) offset margin pressure with 13.25% yield.
- Digital banking expansion: 179 new digital accounts ($7.1M AUM) and ACH transfer capability launched.
- Retail deposits grew $70M (21.6% new checking accounts YoY), savings accounts up 31.8%.

**【CFO Financial Commentary】**
- Total assets: $1.13B (4.3% QoQ, 20.8% YoY), deposits: $1.02B (7.7% QoQ, 29.5% YoY).
- Tangible book value: $20.12/sh (up 1.6% QoQ).
- Noninterest income: $14.7M (38% QoQ increase), driven by $1.1M gain on SBA loan sales and $1.6M fair value gains.
- BOLT economics: $8.9K net origination impact per $130K loan, with $1.2K annualized income from retained unsecured balance.

**【Asset Quality & Risk Management】**
- Consumer loan charge-offs: $19.6M remaining from $29.4M Upgrade portfolio (down 33% YoY).
- BOLT charge-off rate: 2.93% annualized (1.96% lifetime), with 8.5-month average time to charge-off.
- Unguaranteed SBA nonaccruals: 1.58% (up 55% QoQ), but 85% of BOLT loans sold with risk mitigation.
- CRE exposure minimal (5.8% of loans held for investment).

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