BayFirst Financial (BAFN) investor relations material

Executive summary

• Initiated a comprehensive strategic review, resulting in the decision to exit the SBA 7(a) lending business and sell a large portion of the portfolio to Banesco USA, aiming to de-risk the balance sheet and focus on core community banking in Tampa Bay and Sarasota.

• Ranked #2 in deposits among banks with assets under $10B in the Tampa Bay-Sarasota region as of June 30, 2025, with $1.35 billion in total assets and $1.17 billion in deposits as of September 30, 2025.

• Restructuring efforts included staff reductions, leadership changes, and a shift to relationship-driven community banking, with over 84% of deposits now insured.

• Management is focused on derisking the balance sheet, improving credit quality, and returning to profitability with a target ROA of 40–70 bps in 2026.

• Expanded treasury management services and increased number of checking accounts by 6% year-to-date.

Financial highlights

• Reported a net loss of $19.3 million for Q3 2025, compared to a $1.2 million net loss in Q2 2025 and net income of $1.1 million in Q3 2024, driven by higher provision expense and $12.4 million in one-time charges, including a $7.3 million restructuring charge.

• Net interest income was $11.3 million, down $1 million sequentially but up $1.8 million year-over-year.

• Noninterest income was negative $1 million, down from $10.8 million in Q2 and $12.3 million in Q3 2024, mainly due to the decline in gains on SBA 7(a) loan sales and a $5.1 million fair value adjustment.

• Noninterest expense rose to $25.2 million, up $7.7 million from Q2 and $8.2 million year-over-year, primarily due to restructuring charges.

• Tangible book value per share declined to $17.90 from $22.30 at the end of Q2 and $20.86 a year ago.

Outlook and guidance

• Management expects to complete the SBA 7(a) loan sale in Q4 2025, contingent on federal approvals.

• Once restructuring is complete, a return to profitability is targeted for 2026, with a goal of 40–70 bps ROA and continued improvement thereafter.

• Continued focus on reducing non-performing loans, improving credit quality, and expanding treasury management and community banking services.

• Ongoing efforts to sell remaining $167 million of unguaranteed SBA 7(a) loans.

• Additional actions with the OCC are anticipated in Q4, focusing on credit administration, strategic planning, and capital preservation.