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Image source: The Motley Fool. Friday, Aug. 14, 2026 at 9:00 a.m. ET President and Chief Executive Officer - Alfred Rogers Chief Financial Officer - Scott McKim Chief Operating Officer - Robin Oliver Operator: Hello, everyone. Thank you for joining us, and welcome to the BayFirst Financial Corp. Q2 2026 Conference Call and Webcast. [Operator Instructions] I will now hand the conference over to Al Rogers, President and CEO. Al, please go ahead. Alfred Rogers: Thank you, Marina. Good morning, and thank you for joining our call today. With me is Scott McKim, our CFO; and Robin Oliver, our COO. Please remember, today's call will include forward-looking statements and non-GAAP financial measures. Please refer to our cautionary statement on forward-looking statements contained on Page 2 of the investor presentation. My first full quarter as CEO at BayFirst has been very busy. We set to work on a number of initiatives, both short and longer term. The substantial $80 million capital raise at the end of April was the first and was certainly biggest step for the future of our bank. We completed and deployed our asset resolution plan to address the bank's legacy credit issues, predominantly related to unguaranteed balances of the SBA 7(a) loans. During the process of completing the asset resolution plan, our team also identified some material misstatements from prior periods. We have restated financial statements for the years ended December 31, 2024, December 31, 2025, and the quarter ended March 31, 2026. The amended 10-K and 10-Q have been filed this week. Scott will elaborate on both in a few minutes. We held a special meeting of shareholders on July 14, where the company obtained shareholder approval to amend BayFirst Financial Corporation's articles of incorporation to increase the number of authorized shares of common stock from 15 million to 100 million and exchange all 4,000 outstanding shares of mandatorily convertible cumulative perpetual preferred stock Series D and all 4,000 outstanding shares of mandatorily convertible cumulative perpetual preferred stock Series E for a total of 22,856,000 shares of common stock. Upon conversion, all shares of Series D and Series E preferred stock were retired. The company's Series A and Series B preferred shares were redeemed in July as well. Management also noted a mid-August launch as the date for the rights offering we announced back in April. Beyond these shareholder actions, we've also moved decisively to strengthen our operating structure and leadership team. Most notably, Trey Korhn has joined as BayFirst Chief Banking Officer. Trey has been a career banker in Tampa for over 22 years and will lead our retail and commercial banking teams. As a lifelong Tampa resident with deep roots and involvement in several real estate, industry and community organizations, Trey brings the local market insight, relationship orientation and proven leadership needed to help us sharpen execution and accelerate growth across our franchise. Adam Curtis will continue to lead commercial lending with the organization as Chief Lending Officer. He will report to Trey. The commercial relationship managers and portfolio managers will report to Adam as that team focuses on growing and serving our commercial business customers across our footprint. Adam's steady leadership, strong customer relationships and strong lending expertise remain critical to our ability to serve commercial clients and grow this important line of business with quality and consistency. Samantha Hill has transitioned to Director of Retail Banking with responsibility for production, growth and execution across our retail banking centers. She will also report to Trey. All banking center managers now report to Sam, giving us clear accountability and a more focused retail strategy. Sam brings a strong record of team development, customer experience and branch execution, and her leadership will be important as we expand core relationships across our banking center network. Additionally, we have submitted an application to open a new retail location in South Tampa. This office will bring our total retail branch network back to 12, having closed an office in Sarasota last quarter. With that operational foundation in place, I will now turn the call over to Scott, who will discuss the quarter's earnings, including the impact of the asset resolution plan and restatement. Scott? Scott McKim: Thank you, Al. Good morning, everyone. We are reporting a net loss of $32.7 million in the second quarter. This compares to the restated net loss of $5.9 million we reported for the first quarter. As Al mentioned, the asset resolution plan was deployed during the second quarter and therefore, has dominated the results that we will talk about today. The plan was a thorough review of the bank's legacy unguaranteed SBA 7(a) portfolio as well as our other portfolios. We conducted an analysis, which provided adjustments to the net amount expected to be collected on over 7,000 individual SBA loans, which resulted in the full or partial charge-off on several of those loans. We established a specific allowance for credit losses on 6 loans, increased the overall allowance on unguaranteed SBA 7(a) loan categories and also adjustments to the fair market values on our portfolio of loans that we have measured at fair value. In total, the adjustment amounted to $38.4 million. Provision expense for the quarter was $29.7 million, and the company's total allowance for credit losses on June 30, 2026, was $45.1 million. Additionally, the company booked an impairment of $1.5 million on a nonmarketable equity investment in a firm who was a partner of the company's former SBA 7(a) lending business. Finally, the company wrote down the unamortized premiums on the bank's portfolio of purchased, only guaranteed USDA loans, which are at risk of default or early prepayment. I want to be clear, this adjustment is not credit specific. In total, the asset resolution plan impact was $41.5 million. As our new management team has assessed the existing business and started to make updates to the strategic plan, we identified some additional onetime charges during the quarter, which amount to $2.2 million and reflect the write-off of vendor contracts, which will no longer be used and also the accrual of a change in control payment to prior management. All of these adjustments together equal $43.8 million of the company's pretax $44 million loss for the quarter. We announced on July 15 that we identified $2.8 million of deferred origination costs and $2.1 million of accrued interest as of March 31, 2026, relate to loans which had defaulted or was placed into nonaccrual status in prior periods, which resulted in a material understatement of provision expense and overstatement of net interest income during the affected quarterly periods in which the errors were accumulated in 2024, 2025 and the first quarter of 2026. Subsequent to that announcement, we further identified another $3.4 million of deferred origination costs, which should have been netted against net gain on sale of government-guaranteed loans and resulted in a material overstatement of those net gain on sale of government guaranteed loans during the affected quarterly period in which the error accumulated specifically in the years of 2024 and 2025. These errors occurred in periods prior to 2024 as well, but were not material during those periods. Our restatement efforts have correctly restated the company's earnings to date, and we have amended our 2025 10-K and our first quarter 10-Q. Management and the Board of Directors take our obligation to provide accurate and transparent financial reporting seriously. We moved quickly to investigate what happens and to correct it and to notify our shareholders. We continue to work through internal operational remediation activities and we will report in future SEC filings on our progress towards resolution and strengthening our internal controls over financial reporting. It is important to note that by exiting the SBA 7(a) lending business, these errors will not repeat. Nonetheless, we will ensure that our internal operations are compliant. Please note, as I continue, our prior period metrics, which I will mention are the restated metrics. Other financial results include loans held for investment decreased by $41.4 million or 4% during the second quarter of 2026 to $882.8 million and decreased $237.7 million or 21% over the past year. Most of this decrease year-over-year reflects the sale of loans and the exit of the SBA 7(a) lending in the fourth quarter of 2025. Deposits decreased $97 million or 9% during the second quarter of 2026 and decreased $175 million or 15% over the past year to $989 million. The decrease in deposits during the quarter was primarily due to reductions in high-rate promotional deposits held with non-relationship customers and also a decrease in broker deposits. 80% of the bank's deposits were insured by FDIC on June 30, 2026. And the bank's on-balance sheet liquidity ratio as of June 30, 2026, was 14.95%, and the bank did not have any wholesale borrowings. Shareholders' equity at the end of the quarter was $115.9 million, which is $40.3 million higher than it was at the end of the first quarter. The increase is from the capital raise net of the asset resolution plan. Net accumulated other comprehensive loss increased slightly by $57,000 during the quarter, ending at $2.1 million. Tangible book value per share decreased this quarter to $4.82 per share from $14.22 per share at the end of the first quarter. Our net interest margin was 3.48%, up 4 basis points from first quarter. Net interest income was $9.4 million in the second quarter, virtually unchanged from the first quarter and down $2.7 million from the year ago quarter. On a normalized basis, the net interest margin for the second quarter, excluding the onetime impact that I mentioned as part of the asset resolution plan was 4.07%, which was driven by positive trends in cost of funds, which decreased 24 basis points from the prior quarter to 2.66%. The bank's cost of funds is now down 49 basis points year-to-date, reflecting our efforts to exit promotional rate balances and brokered deposit balances. Noninterest income was negative $6.8 million in the second quarter of 2026, which is $7.7 million worse than the first quarter and a decrease of $17.3 million from the second quarter of 2025. Current quarter net interest income includes an $8 million in onetime impacts related to the Board-approved asset resolution plan. Additionally, the year-over-year decrease is exacerbated by exiting the SBA 7(a) lending business as no additional gains on sales of government-guaranteed loans will be booked. Noninterest expense was $17.7 million, an increase of $2 million compared to the first quarter. Essentially, all of this increase is related to onetime charges that were driven by our actions under the asset resolution plan and the onetime items that I have mentioned, in total, approximately $2.5 million. Compensation costs were about $600,000 higher, driven largely by accrued change in control payment that I mentioned. Also, as I mentioned, our provision for credit losses was $29 million in the second quarter compared to $3.4 million in the first quarter and $7.6 million in the second quarter of 2025. Net charge-offs were $4.5 million, down $200,000 compared to the first quarter, which was $4.7 million. Total unguaranteed SBA 7(a) loan balances were $142 million on June 30. In comparison, the bank had $159.3 million of unguaranteed SBA 7(a) loan balances at the end of the first quarter. Total annualized charge-offs as a percentage of average loans held for investment at amortized cost were 2.08% for the second quarter, a decrease from 2.14% in the first quarter of the year. The ratio of allowance for credit losses on loans to total loans held for investment at amortized cost was 5.37% on June 30, compared to 2.36% on March 31, 2026, and 2.43% as of the end of 2025. The ratio of allowance for credit losses to total loans held for investment at amortized cost and excluding government-guaranteed loan balances was 5.82% on June 30, 2026, 2.55% at the end of the first quarter and 2.60% at the end of 2025. The bank's Tier 1 leverage ratio was 8.3% as of June 30, 2026, compared to 5.89% at March 31, 2026, and 7.73% as of June 30, 2025. The total capital to risk-weighted assets ratio was 12.77% as of June 30, 2026, compared to 9% on March 31, 2026, and 10.77% as of June 30, 2025. I will now turn the call over to Robin to make some operational and credit comments. Robin? Robin Oliver: Thank you, Scott. Good morning, everyone. First, I want to provide some further details around the asset resolution plan and the related impact. As Scott mentioned, the asset resolution plan identified and provided resolution for troubled balances, but it also provides protection from future charge-offs. Also, as Scott mentioned, our allowance for credit losses divided by total loans held for investment at amortized cost, excluding government-guaranteed loans, increased to 5.82% at the end of June. That is up from 1.86% a year ago. Further, the SBA BOLT loan portfolio now has 32.8% reserved against unguaranteed balances and the SBA FlashCap portfolio now has a 25% reserve. These 2 small loan portfolios represent $83 million of unguaranteed SBA balances. As these loans season, we continue to learn how they perform, but we believe the actions taken under the asset resolution plan have adequately positioned the bank to manage future charge-offs. That being said, we know we must remain diligent in collecting and resolving problem assets. And to that end, progress is being made. And at the end of the second quarter, total nonperforming loans, excluding government guaranteed balances were $14.4 million, down from $15.9 million at the end of the first quarter and the percentage of nonperforming loans, excluding government guaranteed balances compared to total loans held for investment was also down to 1.72%, which was a 10 basis point drop from March 31, 2026. Although that's up from a year ago, we are still making clear progress. I should also note that of the $14.4 million in nonperforming loans, $3.1 million of these balances were current and paying as agreed. And we will be evaluating those for potential return to accrual status as time continues. And in addition, as I noted last quarter, although our classified loans are elevated at the moment, 68% of our classified loans were current and performing loans, whereby we are working with the borrowers towards resolution. Switching gears from credit. As we look towards the future growth of the bank and work towards a return to profitability, we are also focused on becoming as efficient as possible in our processes while ensuring we provide an excellent experience for our customers to make banking easy with a high level of personal touch. Our focus over the last 2 years has been on growing business deposits and treasury services, but the infusion of capital this past quarter really allows us to get back to lending, which will help the bank grow both loans and deposits to add stable net interest income and fee income instead of transactional earnings. Without adding significant headcount, we've also added leadership and talent in various areas of the bank, which we believe will position us for growth, including Trey, the Chief Banking Officer that Al mentioned, a Chief Data Officer and retail personnel, including the retail individuals to support our new South Tampa location that is scheduled to open in September. We are excited about further expanding in Hillsborough County as we seek to round out our presence in the Tampa Bay market. At this time, I will turn the call over to Al to make some final comments. Alfred Rogers: Thank you, Rob. As I complete my first few months at BayFirst, what I've seen only reinforces my belief that we have a significant opportunity ahead. I've spent time with our employees, customers, shareholders and community leaders. And one thing is clear, BayFirst has the people, relationships and market position to become the leading community bank in the Tampa Bay region. Our focus is simple. We're building a high-performing community bank centered on relationship banking, disciplined execution, sound credit practices and exceptional service. We believe local businesses and consumers are best served when decisions are made close to home by bankers who know the market, understand their customers and are invested in the success of the communities in which they serve. That community banking model starts with strong customer relationships. Our deposit mix and cost of funds remain a top priority. We are working to deepen existing relationships and improve the mix from higher cost transactional accounts to relationships that value service, responsiveness and long-term partnerships. On the lending side, loan growth has already begun. While we continue to manage payoffs and charge-offs associated with the legacy SBA portfolio, our focus has shifted toward growing traditional commercial and consumer lending with borrowers located in the markets we serve. Our loan pipeline is strong, and we are seeing encouraging opportunities across our footprint. We're also investing in technology and process improvements that enhance efficiency, improve customer experience and position us to scale responsibly as we grow. The capital we raised earlier this year provides us with strength and flexibility as we execute this strategy. We intend to deploy that capital thoughtfully, focusing on opportunities that strengthen the franchise, improve profitability and support sustainable growth. While there is still work to do, I'm encouraged by the progress we've made and the momentum we are building. Our priorities are clear: Grow core relationships, strengthen performance, expand our presence in Tampa Bay and deliver consistent long-term value for our shareholders. I want to thank our employees for their dedication, our customers for their trust and our shareholders for their continued support. I am optimistic about our future and excited about what lies ahead. Marina, I'll turn the call back over to you for some questions. Thank you. Operator: [Operator Instructions] Your first question comes from the line of Ross Haberman with Rlh Investments. Ross Haberman: Just 2 or 3 quick questions. Al, could you talk about this new branch you're going to open? How big could it be? And how quickly do you think you will hit a breakeven on it? How long will that take? Alfred Rogers: Location is in South Tampa, a very prosperous area in the market that we do not have a significant location. We do have an office 4 miles away, but in a significantly different demographic and market. We've already started opening accounts in this area, and we expect that would come quickly as this is initially a leased location in that market. Ross Haberman: Will it be a 2-year breakeven or hopefully something less than that? Or what's your guess? Alfred Rogers: I would say, given our investment, it would be sooner than that. Ross Haberman: And just a question or 2 for Scott. Scott, the $142 million of unguaranteed SBA loans, I think you broke that out into a piece of $82 million and then another $60 million. Could you go over the reserves on each of those parts? And how quickly are -- do you think they'll be paying down? I think you said in the last quarter, they paid down a total of $17 million. Is that correct? Scott McKim: Ross, yes, so we went from $159 million down to $142 million. That's a pretty quick drop, but also keep in mind, some part of that was also related to the asset resolution plan. So it was a little bit higher than what I would consider to be a true run rate for it. I will tell you that the -- I'll start to break the pieces down as far as what's in the portfolio for you. The BOLT portfolio is the largest part -- Ross, I'm getting a little feedback. Ross Haberman: Sorry, is that better? Scott McKim: That's right. Okay. Here we go. So the BOLT portfolio, and this is all the loans that are booked at amortized cost. This excludes the fair value portfolio. We ended the quarter with $60 million in the BOLT, and that has a 33% reserve against that. So that's a little over almost $9.1 million. The Flash portfolio, and this is the one that really is amortizing a little bit quicker, that had $29 million in balances and has a 25% reserve against it, which is $3.2 million. And then the core -- what we call the core C&I, so this is some of the larger loans that have collateral other than real estate have $45 million in balances in it, and that has a 23% reserve against it or $1.5 million. Now there's another component of the SBA portfolio that has -- that is all real estate backed. It has $53 million in balances, and there's a relatively small reserve of about 1% against that. That part of the portfolio performs as expected. It is not a big loss driver for us. So you roll all those bits and pieces together and on the riskier parts of the portfolio, we're reserved in the high 20%. Ross Haberman: And just one final question. Could you be a little more specific on the timing of the rights offering? You said mid-August. We're basically here. Is it going to be this week or next week? What's your timing on the execution of the rights offering for the shareholders? Scott McKim: Yes, Ross, thanks for asking that question. I was kind of expecting that one this morning. Just for you and everybody else that's listening that the rights offering is coming, there was -- because of the restatement, we wanted to make sure that we had updated reliable financials in all prior periods and current periods available to all investors so that you have a complete package of information for consideration before we launched the rights offering. The -- obviously, that's pushed the timing out on that a little bit. But now that we have everything filed or we'll have the second quarter 10-Q will be filed later today, that kind of frees us up to move on to the rights offering component. So what we'll end up doing is preparing the communication that goes out to all of the shareholders of record as of May 12. And those communications we should have in hand or be ready to mail those next week. Coincidentally, we also have the full proxy, which will be going out. Our Annual Shareholder Meeting is scheduled for September 22. So really, we're going to have a full population of all important documents in hand for investors to look at before they make a decision around the rights offer. So it is coming. I know it's taken a little bit longer than what we had initially wanted to do, but we wanted to make sure that we were checking all the boxes for everyone. Ross Haberman: So you're saying it's going to be pushed off to September. Is that what you're implying? Scott McKim: No, the rights offering, we'll launch that in August. I just wanted to mention when the shareholder meeting was, and that's in September. Operator: Your next question comes from the line of Julienne Cassarino with Sycamore Analytics. Julienne Cassarino: Just trying to cut through a lot of the noise in the quarter. On the call, you just said that of the $44 million pretax loss, $43.8 million came from the restructuring and nonrecurring. So that implies still a loss for the quarter, excluding all onetime? Or what was the core earnings power in the quarter? Scott McKim: I think if I understand your question, the onetime items in the asset resolution component was $43.8 million. The total was $44 million. So the remaining operating loss to think about was about $200,000 for the quarter. Julienne Cassarino: And that was just a regular recurring operating loss, right? Is that correct? Scott McKim: Yes. I think you can refer to that as being core, Julienne. Julienne Cassarino: Okay. So there's -- so we're really -- the core earnings power that we're starting with is kind of 0 right now, right? Or is there anything masking that? Is there any core earnings power on the nonresolution piece? Scott McKim: I will tell you this. The -- as we look forward, essentially, the things that we talked about, if you recall, I mentioned on the net interest margin really on a core basis was 4.07%. So there's a lot more in terms of overall earnings revenue that we are expecting going forward, plus all of the components that Al talked about in terms of growth in the balance sheet, combined with continued efforts to reduce the bank's overall cost of funds. So I'd like to think about it from the standpoint that core earnings in the second quarter was just below breakeven. But now that we have a clear path ahead, a lot of strength, a lot of good focus as far as what's coming, the bank is positioned for profitable earnings going forward. Julienne Cassarino: Okay. With operating leverage. What about the tax rate? So is there a deferred tax -- is there a DTA valuation allowance that's been set up or no? Scott McKim: No, there's no valuation allowance against the deferred tax asset. Truthfully, and these are conversations that obviously we've had internally, the bank is positioned for profitable growth going forward. And the new leadership team, a lot of strength that's coming in. We believe that we will have no issues whatsoever in terms of reacquiring that asset in the future. So there is no valuation allowance at this time. Like I said, we continue to look at it, but at this time, it is 0. Julienne Cassarino: Okay. So does that mean what tax rate to use going forward? Scott McKim: Tax rate for the quarter is about 25%. Julienne Cassarino: Okay. Okay. And so the quarter -- and did that include the redemption payments of, I think, almost $10 million, right, the $9.7 million payments to redeem the -- forgive me if I get the names wrong, but basically the preferred holders. Did that -- is that $9.7 million included that payment? And is that pretax or after tax? Like should we be adjusting the TCE for that or... Scott McKim: The payout for the Series A and Series B, which I think you're referring to, actually concluded this week. So that will actually be a Q3 event. Julienne Cassarino: That's the Q3. So is that totaled $9.7 million, right? Is that pretax or after? Scott McKim: It's a redemption. It's not really an income statement component. So it's not an earnings. Julienne Cassarino: But is it a TC -- does it come out of tangible common equity or no because it's sitting on one bucket to another? Scott McKim: Yes. Julienne Cassarino: So no impact on TC from that. No impact on shares either, right, share count. Scott McKim: Correct. Julienne Cassarino: So the redemption payment is kind of going from one bucket to another, don't need to adjust for that. What about the exchange too, nothing to adjust for that. You mentioned 22.9 million shares from an exchange, but that's already -- like we don't have to adjust for that? Or is that a third quarter adjustment that we should make? Scott McKim: Yes. It's a third quarter event, but that is preferred to common. And obviously, the share count is going to go up. So that -- if you're asking the tangible book value, you already have that dilution component baked into it. Julienne Cassarino: That's what I was asking. Okay. Now so the only thing to adjust in the third quarter for tangible book per share is the rights offering. Is that correct? Scott McKim: That is correct. And obviously, it's -- we would like to maximize that for shareholders, but we're not sure how much we will get. We'll report that when it's done. Julienne Cassarino: So let's just assume everyone exercised, that everyone who could exercise at $3.50, I believe it is. So what would be that impact on TCE and share count if everyone were to exercise? Is that something I can calculate or... Scott McKim: Yes, $3.50 at 4.1 million shares. Julienne Cassarino: 4.1 million? Scott McKim: Yes. Julienne Cassarino: Okay. Okay. All right. All right. Very good. It was the 4.1 million, I think I needed to have. Okay. And then just to ask about the deposit franchise. So you mentioned that you've gone through the loan book pretty completely but now the deposit franchise. Is there -- have you finished the review of depositor -- you mentioned in the press release, I think the earnings release, non-relationship customers. Are there -- about what percent of the deposit franchise right now would you estimate as non-relationship customers approximately? Scott McKim: Julienne, it's very small. We have -- we are strictly focused on relationship-based, I guess, depositors. And when I say relationship, it's not just the deposit side. In a lot of cases, we also have lending relationships that's something that we have really been focused on, and I think Al did a really nice job of explaining how we will go about that in the future. The key thing is in the past, we had some relatively large, what I'll call -- well, I'll just say, I mean, they were more of a place for entities to park money, we're paying them a very attractive rate to do it because it was funding business funding loan growth around the SBA business. That's not what we're doing any longer. So we had conversations with those people. We said, look, we're not going to pay these rates anymore. They're out of market. Most of that money has left and that was by design as well as the runoff of the broker deposits that we have, and that was also part of our strategy. Julienne Cassarino: Right. So you'd say this quarter's -- or this quarter end deposit franchise is there's no more transition to be done looking at the interest-free and the brokered, this is a good base to go forward. Like there's no more... Scott McKim: Yes. There's still some brokered in there that's going to run off, but really what's there, I'm going to call core deposits, I suppose. Julienne Cassarino: Right. And is it all local? Is the 100% local? Or about how much would you say is out of market, just excluding the brokered? So excluding brokered, is it all predominantly local customers? Scott McKim: It's local. It's local. Yes. These are people we know that we can drive for about an hour to go visit them. Julienne Cassarino: Okay. Great. Great. And is there -- is any one customer more than -- or any one customer 5% to 10% or more of total deposits? Scott McKim: No. Operator: Your next question comes from the line of Ian Green with Pendragon Capital Management. Ian Green: Lots of great questions here. I just wanted to kind of come back a little bit to some of the new initiatives like your treasury business and some other incentives to -- or initiatives to grow fee income. Do you have the systems in place to do that? Is this going to require any significant capital expenditures in technology and so forth? And I guess it's a very crowded space, a lot of those businesses. Where do you think you have the edge to compete? Robin Oliver: Yes, this is Robin. I'll take that one. We do already have the systems in place that we need. I think we have all the tools to be successful here. And if you look at our growth in '25 over '24, our treasury fee revenue grew about 75% year-over-year, and we continue to be on track to continue that increase this year. I think really what it is, as we move upmarket a bit, we are now really targeting our commercial business customers, and we are going to be banking some larger businesses than we have in the past, and those customers have more sophisticated needs. And we're going to do their loan, we're going to get their operating account and those operating accounts are just by the nature of the business going to come with treasury. So I really think there's a strong opportunity there. And we have 2 different treasury platforms, one for very small businesses and another that is more sophisticated. So I think we're well positioned. Alfred Rogers: I'll add -- this is Al. Talk about the edge. Our bankers know their customers. They're accessible and at 5:00, they don't turn their cell phones off. So it's true relationships, solving problems, being accessible, being local, not outsourcing or offshoring customer support. And generally speaking, banking professional executives and small businesses and investors and companies, they generally have larger average balances and their cost of funds is generally lower. So that comes with our initiative to act as a commercial bank serving commercial customers in our community. So it comes all together. Ian Green: So we shouldn't -- so in the end, we shouldn't see a significant... Robin Oliver: There will be a significant investment. I mean we will need to continue to expand the treasury team. It's a small team today. They're a small but mighty team. But certainly, the opportunities that this will provide will have need some additions to the team. But we don't have investments in software or other things. And certainly, the revenue that we get from it should balance off the additional costs that we may have. Operator: There are no more questions at this time. This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in BayFirst Financial, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and BayFirst Financial wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. BayFirst Financial (BAFN) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

This article first appeared on GuruFocus. Net Loss: Reported a net loss of $32.7 million in the second quarter, compared to a restated net loss of $5.9 million in the first quarter. Asset Resolution Plan Impact: Total impact of $41.5 million, including a $38.4 million adjustment to the SBA 7A portfolio and other credit items. Provision for Credit Losses: $29.7 million in the second quarter, compared to $3.4 million in the first quarter and $7.6 million in the second quarter of 2025. Net Interest Income: $9.4 million in the second quarter, virtually unchanged from the first quarter and down $2.7 million from the year-ago quarter. Net Interest Margin: 3.48%, up 4 basis points from the first quarter; normalized margin was 4.07% excluding one-time impacts. Non-Interest Income: Negative $6.8 million in the second quarter, $7.7 million worse than the first quarter and a decrease of $17.3 million from the second quarter of 2025. Non-Interest Expense: $17.7 million, an increase of $2 million compared to the first quarter, driven by one-time charges. Net Charge-Offs: $4.5 million, down $200,000 compared to the first quarter's $4.7 million. Loans Held for Investment: Decreased by $41.4 million or 4% during the second quarter to $882.8 million, and decreased $237.7 million or 21% year over year. Deposits: Decreased $97 million or 9% during the second quarter and decreased $175 million or 15% year over year to $989 million. Allowance for Credit Losses: Total allowance was $45.1 million on June 30, 2026; ratio to total loans held for investment was 5.37%, up from 2.36% on March 31, 2026. Tangible Book Value Per Share: Decreased to $4.82 per share from $14.22 per share at the end of the first quarter. Cost of Funds: Decreased 24 basis points from the prior quarter to 2.66%, down 49 basis points year to date. Capital Ratios: Tier 1 leverage ratio was 8.3% as of June 30, 2026, compared to 5.89% at March 31, 2026; total capital to risk-weighted assets ratio was 12.77%, compared to 9% on March 31, 2026. Non-Performing Loans: Excluding government guaranteed balances, were $14.4 million, down from $15.9 million at the end of the first quarter. Branch Network: Submitted an application to open a new retail location in South Tampa, bringing the total retail branch network back to 12 after closing an office in Sarasota last quarter. Warning! GuruFocus has detected 2 Warning Sign with BAFN. Is BAFN fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BayFirst Financial Corp (NASDAQ:BAFN) successfully completed an $80 million capital raise, significantly strengthening its balance sheet and providing flexibility for future growth. The company's asset resolution plan has adequately positioned it to manage future charge-offs, with increased reserves on riskier SBA loan portfolios (e.g., 32.8% on SBA BOLT and 25% on SBA FlashCap). Net interest margin improved to 4.07% on a normalized basis, driven by a 24 basis point reduction in cost of funds to 2.66%. The bank's capital ratios improved substantially, with Tier 1 leverage ratio rising to 8.3% and total capital to risk-weighted assets ratio to 12.77%. Management has strengthened the leadership team with key hires, including a new Chief Banking Officer, and is expanding its retail presence with a new South Tampa branch, positioning for growth in core markets. BayFirst Financial Corp (NASDAQ:BAFN) reported a significant net loss of $32.7 million for Q2 2026, primarily due to the $41.5 million impact of the asset resolution plan. The company identified material misstatements in prior financial statements, leading to restatements for 2024, 2025, and Q1 2026, which raises concerns about internal controls. Tangible book value per share plummeted to $4.82 from $14.22 in the prior quarter, reflecting the substantial charge-offs and capital actions. The bank's core earnings power is currently near break-even, with a core operating loss of approximately $200,000 for the quarter, indicating a lack of profitability. The rights offering has been delayed due to the restatement process, creating uncertainty for shareholders and potentially diluting existing investors. Q: Can you break down the reserves on the $142 million of unguaranteed SBA loans and how quickly they will pay down?A: Scott McKim (CFO) detailed the portfolio breakdown: the BOLT portfolio has $60 million in balances with a 33% reserve ($9.1 million), the FlashCap portfolio has $29 million with a 25% reserve ($3.2 million), and core C&I loans have $45 million with a 23% reserve ($1.5 million). Additionally, there is $53 million in real estate-backed SBA loans with a relatively small 1% reserve, as that portion performs as expected. The riskier parts of the portfolio are reserved in the high 20% range. The decline from $159 million to $142 million was partly accelerated by the asset resolution plan, so the true run rate is somewhat lower. Q: What was the core earnings power in the quarter, excluding the one-time restructuring and asset resolution plan impacts?A: Scott McKim (CFO) clarified that of the $44 million pre-tax loss, $43.8 million came from one-time items and the asset resolution plan, leaving a core operating loss of approximately $200,000 for the quarter. He noted that on a normalized basis, the net interest margin was 4.07%, and with the clear path ahead, growth in the balance sheet, and continued efforts to reduce the bank's cost of funds, the bank is positioned for profitable earnings going forward. Q: What is the timing for the rights offering launch?A: Scott McKim (CFO) explained that the rights offering was delayed due to the restatement, as the company wanted to ensure updated, reliable financials were available to all investors before launching. Now that the amended 10-K and 10-Q have been filed, the company will prepare communications to shareholders of record as of May 12, with documents ready to mail next week. The rights offering will launch in August, coinciding with the annual shareholder meeting scheduled for September 22. Q: Is there a deferred tax asset valuation allowance that has been set up?A: Scott McKim (CFO) confirmed there is no valuation allowance against the deferred tax asset. The bank is positioned for profitable growth going forward with a new leadership team, and management believes there will be no issues in realizing that asset in the future. The tax rate for the quarter was approximately 25%. Q: What is the impact of the preferred stock redemptions and exchanges on tangible common equity and share count?A: Scott McKim (CFO) clarified that the $9.7 million payout for the Series A and Series B preferred redemptions concluded this week and will be a Q3 event. However, it is a redemption, not an income statement component, so it does not impact tangible common equityit's simply moving from one bucket to another. The exchange of Series D and E preferred stock into 22.9 million common shares is also a Q3 event, and the dilution is already baked into the tangible book value. The only adjustment for Q3 tangible book value per share will be the rights offering. Q: What percentage of the deposit franchise is non-relationship customers, and is the transition complete?A: Scott McKim (CFO) stated that the non-relationship customer base is now very small. The bank is strictly focused on relationship-based depositors, often with lending relationships. Previously, the bank paid attractive rates to entities parking money to fund SBA loan growth, but that strategy has ended. Most of that money has left by design, along with broker deposit runoff. While some brokered deposits remain to run off, the current base is essentially core deposits, all local customers within about an hour's drive, with no single customer representing 5% to 10% or more of total deposits. Q: Do you have the systems in place for the treasury business and fee income growth initiatives, and will this require significant capital expenditures?A: Robin Oliver (COO) confirmed the systems are already in place. Treasury fee revenue grew about 75% year-over-year in 2025, and the bank is on track to continue that increase. As the bank moves upmarket to target larger commercial business customers, operating accounts will naturally come with treasury services. The bank has two treasury platformsone for very small businesses and another for more sophisticated needs. Al Rogers (CEO) added that the bank's edge is its local, accessible bankers who provide true relationships and don't outsource customer support. While the treasury team may need additions, there are no significant software or technology investments required, and the revenue should offset any additional costs. Q: Can you provide details on the new South Tampa branch and how quickly it will reach breakeven?A: Al Rogers (CEO) explained that the new location is in South Tampa, a prosperous area where the bank currently lacks a significant presence. The bank has already started opening accounts in the area, and since it's a leased location, the investment is relatively low. He estimated breakeven would be achieved sooner than the typical two-year timeframe given the modest investment. Q: What is the status of the restatement and the material misstatements identified?A: Scott McKim (CFO) detailed that the company identified $2.8 million of deferred origination costs and $2.1 million of accrued interest as of March 31, 2026, related to loans that had defaulted or were placed on non-accrual status in prior periods. This resulted in a material understatement of provision expense and overstatement of net interest income. Additionally, another $3.4 million of deferred origination costs should have been netted against net gain on sale of government guaranteed loans. The restatement efforts have correctly restated earnings, and the amended 10-K and 10-Q have been filed. Management continues to work through internal operational remediation and will report on strengthening internal controls in future SEC filings. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Completed a comprehensive asset resolution plan to address legacy credit issues, primarily within the unguaranteed SBA 7(a) loan portfolio, resulting in a $38.4 million adjustment. Identified and corrected material financial misstatements from 2024 through Q1 2026 related to deferred origination costs and accrued interest on defaulted loans. Successfully raised $80 million in capital in April, providing the necessary strength to pivot from transactional SBA lending to traditional commercial and consumer banking. Restructured the leadership team with the appointment of a new Chief Banking Officer to lead retail and commercial teams, emphasizing local market expertise and relationship-driven growth. Deliberately reduced high-rate promotional and brokered deposits to improve the cost of funds, which decreased by 24 basis points during the quarter. Shifted the lending strategy toward traditional commercial and consumer loans within the Tampa Bay footprint to build stable net interest and fee income. Expanded the retail presence with a new South Tampa location, aiming to capture higher-demographic customers and deepen core deposit relationships. Management expects a return to profitability following the one-time $43.8 million impact of the asset resolution plan and restructuring charges. The bank intends to deploy recently raised capital into traditional lending opportunities, leveraging a strong current loan pipeline across its footprint. Future earnings are expected to be driven by a normalized net interest margin of 4.07% and continued reductions in the overall cost of funds. Strategic focus remains on scaling treasury services and business deposits to generate sustainable fee income without requiring significant new technology investment. Internal operational remediation is ongoing to strengthen internal controls over financial reporting and prevent the recurrence of past accounting errors. Recognized a $44 million pretax loss, of which $43.8 million was attributed to non-recurring items including the asset resolution plan and prior management change-in-control payments. Recorded a $1.5 million impairment on a nonmarketable equity investment linked to the former SBA 7(a) lending partner. Wrote down unamortized premiums on purchased USDA loans due to risks of default or early prepayment, noted as a non-credit specific adjustment. Restated prior periods to reflect $2.8 million in deferred origination costs, $2.1 million in accrued interest, and an additional $3.4 million in deferred origination costs related to net gain on sale that were previously misstated. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management confirmed that the riskier BOLT and Flash SBA portfolios are now heavily reserved at 33% and 25% respectively. The unguaranteed SBA balance dropped from $159 million to $142 million in the quarter, though this was accelerated by the resolution plan rather than just organic run-off. The rights offering was delayed to ensure investors had access to restated and reliable financial statements, with a launch now targeted for August. The offering involves 4.1 million shares at a price of $3.50 per share, which is the only remaining dilution component for tangible book value per share. Excluding one-time items, the bank operated at a near-breakeven level (approximately $200,000 loss) during the quarter. Management opted not to set up a valuation allowance against the deferred tax asset, citing confidence in the bank's ability to return to profitable growth. BayFirst intends to compete by offering high-touch, local accessibility that larger banks lack, specifically targeting larger commercial operating accounts. The bank already possesses the necessary technology platforms for treasury growth, meaning future investment will focus on personnel rather than capital-intensive software.

ST. PETERSBURG, Fla., Aug. 13, 2026 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) reported a net loss of $32.7 million, or $8.05 per common share and diluted common share, for the second quarter of 2026, compared to a restated net loss of $5.9 million, or $1.54 per common share and diluted common share, in the first quarter of 2026. The current quarter’s net loss was driven by expenses related to the Company's asset resolution plan of $41.5 million. “This quarter’s results reflect the financial impact of actions taken under our asset resolution plan, a deliberate step we believe strengthens our balance sheet and will position us well for the future,” stated Alfred Rogers, Chief Executive Officer. “Even as we absorbed this impact, we continued to invest in our Community Banking initiatives, including the upcoming opening of our newest branch in South Tampa, reflecting our long-term commitment to the markets we serve regardless of near-term conditions. We are taking a disciplined approach as we work through the issues affecting our performance, with a clear focus on the fundamentals of profitability and serving our local markets. “We take our obligation to provide accurate and transparent financial reporting seriously. When we identified an understatement of provision expense and an overstatement of gain of sale on government guaranteed loans through our internal review process, we moved quickly to investigate, correct it, and inform our shareholders and regulators. The Bank remains well capitalized and well positioned to continue serving our customers and communities as we work toward improved performance. “BayFirst’s commitment to the communities we serve has not changed, and I am confident we will keep strengthening our position as the community bank of choice within our Tampa Bay and Sarasota markets.” Second Quarter 2026 Performance Review The capital raise reported on April 28, 2026 was $80 million before transaction fees. Of this total investment, $60 million was invested in the Bank during the second quarter. The Company completed and quantified the impact of the asset resolution plan adopted in accordance with the transactions contemplated by the Stock Purchase Agreement dated April 28, 2026. The asset resolution plan includes the identification of specific loans within the Company’s government guaranteed loan portfolio, as well as adjustments to the net amount expected to be collected on over 7,000 unguaranteed SBA 7(a) small balance loans. As a result, the Company recorded $41.5 million of provision expense, write-downs on loans measured at fair value, amortization of premiums paid on purchased government guaranteed loans, and impairment on nonmarketable securities during the quarter. Net interest margin was 3.48% in the second quarter of 2026, an increase of 4 basis points from 3.44% in the first quarter of 2026 and a decrease of 53 basis points from 4.01% in the second quarter of 2025. Loans held for investment decreased by $41.4 million, or 4.5%, during the second quarter of 2026 to $882.8 million and decreased $237.7 million, or 21.2%, over the past year. The decrease from the prior year was partially the result of no new SBA 7(a) loan originations and the sale of $97.4 million of government guaranteed loans to a third party as part of the Bank’s discontinuance of SBA 7(a) lending. Deposits decreased $97.0 million, or 8.9%, during the second quarter of 2026 and decreased $174.9 million, or 15.0%, over the past year to $988.9 million. The decrease in deposits during the quarter was primarily due to decreases in high-rate promotional interest-bearing transaction account balances, savings and money market account balances, brokered deposits, and time deposit balances, partially offset by an increase in noninterest-bearing account balances. At June 30, 2026, book value per common share was $4.83 and tangible book value was $4.82 per common share, a decrease from $14.22 at March 31, 2026. The decrease was primarily the result of the net loss in the second quarter 2026. Results of Operations Net Loss The Company had a net loss of $32.7 million for the second quarter of 2026, compared to a net loss of $5.9 million in the first quarter of 2026 and a net loss of $1.9 million in the second quarter of 2025. The change in the second quarter of 2026 from the preceding quarter and from the second quarter of 2025 was primarily the result of $41.5 million of expense related to the asset resolution plan. For the six months ended June 30, 2026, the Company had a net loss of $38.6 million, compared to a net loss of $2.8 million for the six months ended June 30, 2025. The decrease was primarily the result of $41.5 million expense related to the asset resolution plan. Net Interest Income and Net Interest MarginNet interest income was $9.4 million in the second quarter of 2026 was relatively unchanged compared to the first quarter of 2026, which is a decrease of $2.7 million from $12.1 million during the second quarter of 2025. The decrease in loan interest income, including fees, was primarily related to the write down of $1.6 million of unamortized premiums on the Company’s portfolio of purchased fully guaranteed USDA loans which are at risk of default or early prepayment. The net interest margin was 3.48% in the second quarter of 2026, an increase of 4 basis points from 3.44% in the first quarter of 2026 and a decrease of 53 basis points from 4.01% in the second quarter of 2025. Excluding the write-downs, the net interest margin for the second quarter was 4.07%. The decrease in net interest income during the second quarter of 2026, as compared to the year ago quarter, was mainly due to a decrease in loan interest income, including fees, of $6.4 million, partially offset by a decrease in interest expense on deposits of $2.4 million. Net interest income was $18.9 million for the six months ended June 30, 2026, a decrease from $22.7 million for the year ended June 30, 2025. The decrease was mainly due to a decrease in loan interest income, including fees, of $9.9 million, partially offset by a decrease in interest expense of $4.9 million. Noninterest Income Noninterest income was a negative $6.8 million for the second quarter of 2026, compared to income of $0.9 million in the first quarter of 2026 and income of $10.5 million in the second quarter of 2025. The change from the second quarter of 2026, as compared to the first quarter of 2026, was primarily the result of a decrease in government guaranteed loan fair value gains of $5.9 million of which $6.2 million was related to the asset resolution plan. The decrease was also due to a loss on nonmarketable equity securities of $1.5 million which was related to the impairment of an investment in a firm who was a partner with the Company’s former SBA 7(a) lending business. The decrease in the second quarter of 2026, as compared to the second quarter of 2025, was the result of a decrease in gain on sale of government guaranteed loans of $5.9 million and the loss on nonmarketable equity securities of $1.5 million. Noninterest income was a negative $5.9 million for the six months ended June 30, 2026, which was a decrease from income of $19.0 million for the six months ended June 30, 2025. The decrease was primarily the result of a decrease in gain on sale of government guaranteed loans of $13.0 million, a decrease in government guaranteed loan fair value gains of $8.7 million, a decrease in government guaranteed loan packaging fees of $1.3 million, and the loss on nonmarketable equity securities of $1.5 million. Noninterest Expense Noninterest expense was $17.7 million in the second quarter of 2026 compared to $14.9 million in the first quarter of 2026 and $17.5 million in the second quarter of 2025. The increase in the second quarter of 2026, as compared to the prior quarter, was primarily due to $1.7 million of expenses related to the asset resolution plan and $2.3 million of one-time expenses to record a change in control payment and write-off vendor contracts related to national lending and digital account opening businesses which are not part of our community banking focus. The increase in the second quarter of 2026, as compared to the second quarter of 2025, was primarily due to an increase in loan servicing and origination expense of $0.6 million, an increase in data processing expenses of $0.6 million of which $1.4 million was related to the asset resolution plan, and an increase in other expense of $1.4 million of which $1.7 million was related to the asset resolution plan. These increases were partially offset by a decrease in compensation expense of $2.3 million which included $0.8 million of expense related to the asset resolution plan. Noninterest expense was $32.6 million for the six months ended June 30, 2026 compared to $33.3 million for the six months ended June 30, 2025. The decrease was primarily the result of a decrease in compensation expense of $5.0 million, partially offset by an increase in loan servicing and origination expense of $3.4 million and an increase in other expense of $1.3 million. Balance Sheet Assets Total assets decreased $54.7 million, or 4.6%, during the second quarter of 2026 to $1.13 billion, primarily the result of a decrease in loans held for investment of $41.4 million, an increase in allowance for credit losses on loans of $24.4 million, and an increase in the deferred tax asset of $11.4 million. Compared to the end of the second quarter last year, total assets decreased $202.5 million, or 15.1%, driven primarily by a decrease in loans held for investment of $237.7 million, and an increase in allowance for credit losses on loans of $28.0 million, partially offset by an increase in cash and cash equivalents of $61.9 million. Loans Loans held for investment decreased $41.4 million, or 4.5%, during the second quarter of 2026 and $237.7 million, or 21.2%, over the past year to $882.8 million. The decrease from prior year was primarily due to loan payoffs and government guaranteed loan sales, which included the sale of the SBA 7(a) loans to a third party in the fourth quarter as part of the Bank’s discontinuance of SBA 7(a) lending. This was partially offset by originations in both conventional community bank loans and USDA government guaranteed loans. Deposits Deposits decreased $97.0 million, or 8.9%, during the second quarter of 2026 and decreased $174.9 million, or 15.0%, from the second quarter of 2025, ending June 30, 2026, at $988.9 million. During the second quarter, there were decreases in interest-bearing transaction account balances of $18.2 million, savings and money market account balances of $9.8 million, and time deposit balances of $74.2 million, partially offset by an increase in noninterest-bearing account balances of $5.3 million. The decrease in deposits during the quarter was primarily due to reductions in high-rate promotional deposits held with non-relationship customers and also a decrease in brokered deposits. During the second quarter, the Bank reduced cost of funds by 20 basis points. At June 30, 2026, March 31, 2026, and June 30, 2025, the Company had $163.8 million, $183.9 million, and $186.7 million, respectively, of brokered deposits. Asset Quality The Company recorded a provision for credit losses in the second quarter of $29.0 million, compared to provisions of $3.4 million for the first quarter of 2025 and $7.6 million during the second quarter of 2025. The increase in the provision expense was primarily the result of $30.5 million of expense related to the asset resolution plan. The ratio of allowance for credit losses (ACL) on loans to total loans held for investment at amortized cost was 5.37% at June 30, 2026, 2.36% as of March 31, 2026, and 1.65% as of June 30, 2025. The ratio of ACL on loans to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 5.82% at June 30, 2026, 2.55% as of March 31, 2026, and 1.86% as of June 30, 2025. The increase in ACL percentage was the result of provision expense booked during the quarter as determined by the asset resolution plan. Net charge-offs for the second quarter of 2026 were $4.5 million, which was a decrease from $4.7 million for the first quarter of 2025 and a decrease from $7.1 million for the second quarter of 2025. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 2.08% for the second quarter of 2026, compared to 2.14% in the first quarter of 2025 and 2.74% in the second quarter of 2025. Nonperforming assets were 1.75% of total assets as of June 30, 2026, compared to 2.01% as of March 31, 2026, and 1.79% as of June 30, 2025. Nonperforming assets, excluding government guaranteed loan balances, were 1.32% of total assets as of June 30, 2026, compared to 1.39% as of March 31, 2026, and 1.13% as of June 30, 2025. Capital The Bank’s Tier 1 leverage ratio was 8.30% as of June 30, 2026, compared to 5.89% as of March 31, 2026, and 7.73% as of June 30, 2025. The CET 1 and Tier 1 capital ratios to risk-weighted assets were 11.47% as of June 30, 2026, compared to 7.74% as of March 31, 2026, and 9.51% as of June 30, 2025. The total capital to risk-weighted assets ratio was 12.77% as of June 30, 2026, compared to 9.00% as of March 31, 2026, and 10.77% as of June 30, 2025. At June 30, 2026, the Bank met all of its regulatory capital requirements to be 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 June 30, 2026 was 14.95%, as compared to 18.44% at December 31, 2025. 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 June 30, 2026 and March 31, 2026, the Bank had no borrowings from the FHLB, the FRB or other financial institutions. Recent Events Restatement of Previously Issued Financial Statements As previously disclosed in the Current Report on Form 8-K filed with the SEC on July 15, 2026, the Company is restating its previously issued financial statements as and for the years ended December 31, 2024, and December 31, 2025, and the quarter ended March 31, 2026. Management identified $2.8 million, pretax, of deferred origination costs and $2.1 million, pretax, of accrued interest as of March 31, 2026, related to unguaranteed portions of SBA 7(a) loans which had defaulted or were placed into nonaccrual status in prior periods, which resulted in a material understatement of provision for credit losses expense and overstatement of net interest income during the effected quarterly periods in which the errors accumulated in 2024, 2025, and the first quarter of 2026. Furthermore, management identified $3.4 million, pretax, of deferred origination costs which should have been netted against gain on sale of guaranteed SBA 7a loans which resulted in a material over statement of gain on sale of government guaranteed loans, during the affected quarterly periods in which the error accumulated in 2024 and 2025. Stock Purchase and Exchange Agreements and Rights Offering On July 14, 2026, the Company obtained shareholder approval to amend the BayFirst Financial Corp. Articles of Incorporation to increase the number of authorized shares of the common stock from 15,000,000 to 100,000,000 and exchanged all 4,000 outstanding shares of Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series D, and all 4,000 outstanding shares of Mandatorily Convertible Cumulative Perpetual Preferred Stock, Series E for a total of 22,856,000 shares of common stock. Upon conversion, all shares of Series D and Series E Preferred Stock were retired. Management also noted a Mid-August launch date for the rights offering, discussed in the Stock Purchase Agreement included with the Company’s Form 8-K and the exhibits dated April 28, 2026, and filed with the Securities and Exchange Commission on April 30, 2026. Redemption of Series A and Series B Preferred Shares On July 20, 2026, the Company sent notifications to holders of Series A and Series B Preferred Shares formally redeeming all shares outstanding. On August 10, 2026, the Company made a payment in the amount of $6,463,746.25 for Preferred Series A, including accrued dividends of $302,746.25, and payment in the amount of $3,240,687.60 for Preferred Series B, including accrued dividends of $117,687.60. Conference Call BayFirst will host a conference call on Friday, August 14, 2026, at 9:00 a.m. ET to discuss its second quarter results. Interested parties may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com or are invited to dial (833) 461-5787 to participate in the call using Conference ID 560643219. 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 eleven 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 June 30, 2026, BayFirst Financial Corp. had $1.13 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) 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 adjusted income before income taxes, 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. Loan Composition Nonperforming Assets (Unaudited) (1) Excludes loans measured at fair value

ST. PETERSBURG, Fla., July 28, 2026 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today announced that it has changed the date for reporting its second quarter results to after the market close on August 13, 2026. In a Form 8-K filed on July 14, 2026, the Company announced the implementation of its asset resolution plan. In the same Form 8-K, the Company also reported that its consolidated financial statements as of and for the years ended December 31, 2024, and December 31, 2025, and the quarter ended March 31, 2026, should be restated, and the previously issued consolidated financial statements, and the related audit reports from its independent registered public accounting firm for such periods, should no longer be relied on. As a result, the Company will file amendments to its 2025 Form 10-K and to its first quarter 2026 Form 10-Q. As previously reported, the Company expects to file these amendments by August 12, 2026. In connection with the asset resolution plan, the financial statement restatements, and the preparation of the Form 10-Q and Form 10-K amendments, the Company also requires additional time to complete its procedures related to its earnings release and webcast for the quarter ended June 30, 2026. The Company expects to issue its earnings release on Thursday, August 13, 2026 and management will host a conference call on Friday, August 14, 2026, at 9:00 a.m. ET to discuss the results. The call will also be broadcast live via the internet. Interested investors may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com. Investment professionals are invited to dial (833) 461-5787 to participate in the call using Conference ID 560643219. 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 eleven 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 March 31, 2026, BayFirst Financial Corp. had $1.20 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.

ST. PETERSBURG, Florida, June 30, 2026 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today announced that it will report its second quarter results after the market close on Thursday, July 30, 2026. Management will host a conference call on Friday, July 31, 2026, at 9:00 a.m. ET to discuss the results. The call will also be broadcast live via the internet. Interested investors may listen to the call live under the Investor Relations tab at www.bayfirstfinancial.com. Investment professionals are invited to dial (833) 461-5787 to participate in the call using Conference ID 560643219. 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 eleven 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 March 31, 2026, BayFirst Financial Corp. had $1.20 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.

This article first appeared on GuruFocus. Release Date: May 01, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. BayFirst Financial Corp (NASDAQ:BAFN) successfully raised $80 million in capital through a private investment in a public equity offering, reflecting investor trust. The company plans to resume dividend payments to preferred shareholders and redeem Series A shares. The capital raise will support growth and expansion, focusing on relationship growth through lending in the Tampa Bay and Sarasota markets. The bank's liquidity ratio was 13.85% as of March 31, 2026, with no wholesale borrowings, indicating a strong liquidity position. BayFirst Financial Corp (NASDAQ:BAFN) is focusing on community banking and expanding its presence in the Tampa metropolitan area, leveraging its branch network for growth. BayFirst Financial Corp (NASDAQ:BAFN) reported a net loss of $5.7 million in the first quarter, an increase from the previous quarter's loss. Loans held for investment decreased by $33.5 million during the first quarter, reflecting a decline in loan growth. Deposits decreased by $98 million during the first quarter, primarily due to reductions in high-rate promotional deposits and broker deposits. Net interest margin decreased to 3.42%, down 16 basis points from the fourth quarter, impacting profitability. Non-interest expense increased by $3 million compared to the fourth quarter, driven by higher servicing costs and compensation expenses. Warning! GuruFocus has detected 2 Warning Sign with BAFN. Is BAFN fairly valued? Test your thesis with our free DCF calculator. Q: Good morning, Al. Welcome on board. Could you prioritize your top initiatives and address the non-guaranteed portion of the $160 million? A: Thank you. Our primary goals are to understand the portfolio, return to profitability, and expand relationships with local customers. It's hard to specify what will be needed to shore up the current loan book, but we are working diligently on it. Al Rogers, CEO Q: Can you elaborate on the reserves for the unguaranteed components of the portfolio? A: The bulk of the unguaranteed portfolio, about $100 million, is reserved at close to 13%. This makes up a significant portion of our allowance for credit losses. We continuously review this to ensure adequacy. Scott McKim, CFO Q: Does the $100 million reserved at 13% have any collateral, or is it similar to a credit card loan? A: It's similar to a small business credit card in terms of performance. Some loans have collateral, but most are unsecured, performing like credit card loans. Scott McKim, CFO Q: What is your current cash position? A: The bank's liquidity ratio was about 13.6% at the end of the first quarter, equating to approximately $130 million. This does not include the recent capital raise. Scott McKim, CFO Q: Is the 13% reserve on the $100 million of flash loans adequate? A: From a CECL compliance standpoint, it is considered adequate. Historical loss modeling suggests it is sufficient under current rules. Scott McKim, CFO For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Management successfully raised $80 million through a private investment in public equity (PIPE) to provide foundational support for growth and the resolution of legacy assets. The net loss of $5.7 million was primarily driven by the strategic exit from SBA 7a lending, which eliminated gains on loan sales that previously bolstered noninterest income. Net interest margin compression of 16 basis points was attributed to the sale of a $97 million loan portfolio in late 2025, partially offset by a 27 basis point reduction in cost of funds. The bank is intentionally reducing high-rate promotional and brokered deposits to improve the quality of the liability mix and focus on relationship-based funding. Elevated net charge-offs of $4.4 million were largely concentrated in the unguaranteed SBA 7a portfolio, which management is actively working to put into the 'rearview mirror'. The appointment of Al Rogers as CEO signals a strategic shift toward becoming a premier community bank in the Tampa Bay and Sarasota markets. The $80 million capital raise will be deployed to expand the community bank's retail footprint, specifically targeting increased coverage in the Tampa Metropolitan Area. Management plans to leverage the new capital to make more aggressive decisions regarding the resolution of problem assets and nonperforming credits. The bank has no plans to deploy lending programs outside of the Tampa Bay and Sarasota markets, focusing growth on relationship lending across its retail footprint. The bank expects the legacy unguaranteed SBA 7a portfolio to continue running off at a rate of approximately $12 million per quarter. A rights offering for existing shareholders is scheduled for July 14 to allow current investors to participate in the capital raise alongside the PIPE investors. The bank has fully exited SBA 7a lending, shifting its revenue model away from government-guaranteed loan sale gains toward core interest income. Noninterest expense increased by $3 million, largely due to a full quarter of servicing costs for the legacy SBA 7a portfolio. The 'Bolt' and 'FlashCap' segments of the loan portfolio, totaling approximately $100 million, are identified as high-risk, unsecured credits similar to small business credit cards. Management resumed dividend payments to preferred shareholders and announced the formal redemption of Series A shares following the capital raise. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. CEO Al Rogers identified his top three priorities as understanding the loan portfolio, returning to profitability, and deepening local customer relationships. Management noted that the $100 million high-risk portion of the SBA portfolio is reserved at approximately 13% under CECL modeling. The defaults in the legacy portfolio are being driven by borrowers facing 500-plus basis point rate increases combined with inflationary pressures. The bank reported a liquidity ratio of 13.85% at quarter-end, representing approximately $130 million in cash. Management clarified that this liquidity figure does not yet include the $80 million in proceeds from the recently completed capital raise. CFO Scott McKim stated that while the 13% reserve is adequate from a CECL compliance standpoint, the future performance of the portfolio remains less clear than desired. The bank is prepared for further defaults but aims to manage asset resolution smartly to refocus on the core community bank. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

ST. PETERSBURG, Fla., April 30, 2026 (GLOBE NEWSWIRE) -- BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today reported the Company has raised $80 million of capital from investors in a private investment in public equity (“PIPE”) offering. The Company has issued shares of convertible preferred stock in the PIPE, which subject to shareholder and regulatory approvals, will convert to, or be exchanged for, approximately 22.9 million shares of common stock at an effective purchase price of $3.50 per share. Additionally, the Company reported a net loss of $5.7 million, or $1.48 per common share and diluted common share, for the first quarter of 2026, compared to a net loss of $2.5 million, or $0.69 per common share and diluted common share, in the fourth quarter of 2025. “Today we announce a substantial recapitalization of BayFirst Financial Corp. and BayFirst National Bank,” stated Anthony Saravanos, Chairman of the Board of Directors. “This successful capital raise reflects the trust our investors place in our institution and our long-term strategic direction. I am also pleased to announce that the Board has elected Alfred Rogers as Chief Executive Officer and President of the Bank, in place of Tom Zernick who is retiring. Al is a veteran banker who is well respected across the Tampa Bay market. He served as CEO of Manufacturers Bank of Florida and most recently as Executive Vice President and Chief Lending Officer of USAmeribank, which was acquired by Valley National Bank. “The Board of Directors believe that Al’s experience and leadership, combined with this capital raise, will lead BayFirst back to profitability and growth as the premier financial institution of Tampa Bay.” “I am excited to begin my next chapter with the Board and the Bank’s leadership at BayFirst,” said Rogers. “While progress has been made with our focus on Community Banking, much work lies ahead for us. Our terrific network of branches and dedicated people are the ideal foundation for BayFirst to become the community bank of choice in our market. I’ve been proud to have led several community banks in our area, with each serving and growing local businesses and retail customers. BayFirst has that same dedication to this community, and I’m looking forward to rolling up my sleeves with the team to accomplish great things right here in our backyard.” Saravanos concluded, “the Board of Directors have made additional decisions, including the resumption of dividend payments to our preferred shareholders and will formally redeem the Series A preferred shares. Furthermore, the Board has appointed Kenneth R. Lehman as a member of the Boards.” Mr. Rogers' appointment to the Board of Directors of the Bank and as Chief Executive Officer have received all necessary regulatory approvals and became effective upon the completion of the capital raise. The appointments of Mr. Rogers as CEO and President of the Company, as well as a director, is contingent upon receipt of regulatory non-objections. Mr. Lehman's appointment to the Boards of Directors of the Company and the Bank are contingent upon receipt of regulatory non-objections. First Quarter 2026 Performance Review Net interest margin was 3.42% in the first quarter of 2026, a decrease of 16 basis points from 3.58% in the fourth quarter of 2026 and a decrease of 35 basis points from 3.77% in the first quarter of 2025. Loans held for investment decreased by $33.5 million, or 3.5%, during the first quarter of 2026 to $930.4 million and decreased $154.4 million, or 14.2%, over the past year. The decrease from the prior year was partially the result of the sale of $97.4 million of government guaranteed loans to Banesco USA as part of the Bank’s discontinuance of SBA 7(a) lending. Deposits decreased $98.1 million, or 8.3%, during the first quarter of 2026 and decreased $42.4 million, or 3.8%, over the past year to $1.09 billion. The decrease in deposits during the quarter was primarily due to decreases in interest-bearing transaction account balances, savings and money market account balances, and time deposit balances, partially offset by an increase in noninterest-bearing account balances. Book value and tangible book value at March 31, 2026 were $15.74 per common share, a decrease from $17.22 at December 31, 2025. Results of Operations Net Loss The Company had a net loss of $5.7 million for the first quarter of 2026, compared to a net loss of $2.5 million in the fourth quarter of 2025 and a net loss of $0.3 million in the first quarter of 2025. The change in the first quarter of 2026 from the preceding quarter was primarily the result of a decrease of $1.7 million in net interest income, an increase in provision for credit losses of $1.1 million, and an increase in noninterest expense of $3.0 million. This was partially offset by an increase in noninterest income of $1.0 million and a decrease in income tax benefit of $1.6 million. The change from the first quarter of 2025 was due to a decrease in net interest income of $1.6 million, a decrease in noninterest income of $7.9 million, partially offset by a decrease in provision for credit losses of $1.3 million, a decrease in noninterest expense of $0.9 million, and a decrease in income tax expenses of $1.8 million. Net Interest Income and Net Interest Margin Net interest income was $9.4 million in the first quarter of 2026, a decrease from $11.2 million during the fourth quarter of 2025, and a decrease from $11.0 million during the first quarter of 2025. The net interest margin was 3.42% in the first quarter of 2026, a decrease of 16 basis points from 3.58% in the fourth quarter of 2025 and a decrease of 35 basis points from 3.77% in the first quarter of 2025. The decrease in net interest income during the first quarter of 2026, as compared to the fourth quarter of 2025, was mainly due to a decrease in loan interest income, including fees, of $3.4 million, partially offset by a decrease in interest expense of $1.8 million. The decrease in net interest income during the first quarter of 2026, as compared to the year ago quarter, was mainly due to a decrease in loan interest income, including fees, of $3.8 million, partially offset by 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 $1.5 million. Noninterest Income Noninterest income was $0.9 million for the first quarter of 2026, compared to a negative $0.1 million in the fourth quarter of 2025 and $8.8 million in the first quarter of 2025. The change from the first quarter of 2026, as compared to the fourth quarter of 2025, was primarily the result an increase in government guaranteed loan fair value gains of $1.3 million. The decrease in the first quarter of 2026, as compared to the first quarter of 2025, was the result a decrease in gain on sale of government guaranteed loans of $7.4 million and a decrease in government guaranteed loan packaging fees of $0.7 million. Noninterest Expense Noninterest expense was $14.9 million in the first quarter of 2026 compared to $11.9 million in the fourth quarter of 2025 and $15.8 million in the first quarter of 2025. The increase in the first quarter of 2026, as compared to the prior quarter, was primarily due to an increase in loan servicing and origination expense of $2.7 million. The decrease in the first quarter of 2026, as compared to the first quarter of 2025, was primarily due to a decrease in compensation expense of $2.7 million and a decrease in data processing expenses of $0.6 million, partially offset by an increase in loan servicing and origination expense of $2.8 million. Balance Sheet Assets Total assets decreased $104.3 million, or 8.0%, during the first quarter of 2026 to $1.20 billion, mainly due to a decrease in cash and cash equivalents of $72.5 million. and a decrease in loans held for investment of $33.5 million. Compared to the end of the first quarter last year, total assets decreased $96.0 million, or 7.4%, driven primarily by a decrease in loans held for investment of $154.4 million, partially offset by a decrease in cash and cash equivalents of $71.3 million. Loans Loans held for investment decreased $33.5 million, or 3.5%, during the first quarter of 2026 and $154.4 million, or 14.2%, over the past year to $930.4 million. The decrease from prior year was primarily due to loan payoffs and government guaranteed loan sales, which included the sale of the SBA 7(a) loans to Banesco USA as part of the Bank’s discontinuance of SBA 7(a) lending. This was partially offset by originations in both conventional community bank loans and government guaranteed loans. Deposits Deposits decreased $98.1 million, or 8.3%, during the first quarter of 2026 and decreased $42.4 million, or 3.8%, from the first quarter of 2025, ending March 31, 2026, at $1.09 billion. During the first quarter, there were decreases in interest-bearing transaction account balances of $77.4 million savings and money market account balances of $21.9 million, and time deposit balances of $14.6 million, partially offset by an increase in noninterest-bearing account balances of $15.7 million. The decrease in deposits during the quarter was primarily due to reductions in high-rate promotional deposits held with non-relationship customers and also a decrease in brokered deposits. During the first quarter, the Bank reduced cost of funds by 27 basis points. At March 31, 2026, approximately 83% of total deposits were insured by the FDIC. At March 31, 2026, December 31, 2025, and March 31, 2025, the Company had $183.9 million, $195.5 million, and $112.3 million, respectively, of brokered deposits. Asset Quality The Company recorded a provision for credit losses in the first quarter of $3.1 million, compared to provisions of $2.0 million for the fourth quarter of 2025 and $4.4 million during the first quarter of 2025. The ratio of allowance for credit losses (ACL) on loans to total loans held for investment at amortized cost was 2.35% at March 31, 2026, 2.42% as of December 31, 2025, and 1.61% as of March 31, 2025. The ratio of ACL to total loans held for investment at amortized cost, excluding government guaranteed loan balances, was 2.53% at March 31, 2026, 2.58% as of December 31, 2025, and 1.84% as of March 31, 2025. The increase in the ACL ratios from the prior year was the result of increases in nonperforming loans and continued economic uncertainty. Net charge-offs for the first quarter of 2026 were $4.4 million, which was a decrease from $4.6 million for the fourth quarter of 2025 and an increase from $3.3 million for the first quarter of 2025. Annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.98% for the first quarter of 2026, compared to 1.94% in the fourth quarter of 2025 and 1.28% in the first quarter of 2025. Nonperforming assets were 2.00% of total assets as of March 31, 2026, compared to 2.04% as of December 31, 2025, and 2.08% as of March 31, 2025. Nonperforming assets, excluding government guaranteed loan balances, were 1.38% of total assets as of March 31, 2026, compared to 1.29% as of December 31, 2025, and 1.22% as of March 31, 2025. Capital The Bank’s Tier 1 leverage ratio was 6.54% as of March 31, 2026, compared to 6.52% as of December 31, 2025, and 8.56% as of March 31, 2025. The CET 1 and Tier 1 capital ratios to risk-weighted assets were 8.58% as of March 31, 2026, compared to 8.92% as of December 31, 2025, and 10.47% as of March 31, 2025. The total capital to risk-weighted assets ratio was 9.84% as of March 31, 2026, compared to 10.18% as of December 31, 2025, and 11.73% as of March 31, 2025. At March 31, 2026, the Bank did not meet all of its regulatory capital requirements to be well-capitalized but the consummation of the capital raise is intended to meet these capital requirements going forward. Impact of Capital Raise On a proforma basis, giving effect to a $42 million capital contribution from the Company to the Bank, it’s Tier 1 leverage ratio was 10.02% as of March 31, 2026. The CET 1 and Tier 1 capital ratios to risk-weighted assets were 13.13% as of March 31, 2026. The total capital to risk-weighted assets ratio was 14.40% as of March 31, 2026. 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 March 31, 2026 was 13.85%, as compared to 18.35% at December 31, 2025. 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 March 31, 2026 and December 31, 2025, the Bank had no borrowings from the FHLB, the FRB or other financial institutions. Recent Events Following the closing of the PIPE, the Company intends to identify certain criticized assets and develop an Asset Resolution Plan. The Asset Resolution Plan will provide a work-out strategy for identified assets for subsequent disposition, work-out, upgrade, or other resolution. On April 30, 2026, the Company filed a registration statement on Form S-1 regarding the public offering of up to 4,108,072 shares of Common Stock at an offering price of $3.50 per share. The Company intends to exclusively market this offering to its shareholders of record on May 12, 2026. Hovde Group, LLC is acting as sole placement agent for the PIPE. Igler and Pearlman, P.A. is serving as legal counsel to the Company, and Alston & Bird LLP, is serving as legal counsel to the placement agent. Special Meeting of Shareholders A special meeting of shareholders is scheduled for July 14, 2026 at 8:30 a.m. to approve an amendment to the Company’s articles of incorporation to increase the number of authorized shares to permit the conversion and exchange of the preferred stock issued in the PIPE and the conversion of such preferred stock into shares of common stock. The Company intends to file a proxy statement with the SEC that will be sent to Company shareholders seeking their approval of the transactions described above. Shareholders are urged to read the proxy statement when it becomes available (and any other relevant documents filed with the SEC in connection with the transactions described herein) because such documents will contain important information regarding the Company, the transactions, certain investors in the transactions, and related matters. Shareholders may obtain free copies of these documents, once they are filed, and other documents filed with the SEC by the Company through the website maintained by the SEC at http://www.sec.gov. Investors and security holders will also be able to obtain these documents, once they are filed, free of charge, by requesting them in writing from [email protected], or by telephone at (727) 440-6848. The Company and its directors and executive officers may be deemed to be participants in the solicitation of proxies from Company shareholders. Information about Company directors and executive officers and their ownership of Company common stock is set forth in the Company’ Form 10-K for the year ended December 31, 2025, as previously filed with the SEC on March 27, 2026. Certain investments discussed above involve the sale of securities in private transactions that will not be registered under the Securities Act of 1933, as amended, and will be subject to the resale restrictions under that Act. Such securities may not be offered or sold absent registration or an applicable exemption from registration. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Conference Call BayFirst will host a conference call on Friday, May 1, 2026, at 9:00 a.m. ET to discuss its first 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 37957. 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 March 31, 2026, BayFirst Financial Corp. had $1.20 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. 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. Loan Composition Nonperforming Assets (Unaudited) (1) Excludes loans measured at fair value

Image source: The Motley Fool. Friday, May 1, 2026 at 9 a.m. ET Chief Executive Officer and President — Al Rogers Chief Financial Officer — Scott McKim Chief Operating Officer — Robin Oliver Chairman — Anthony Cervanos Anthony Cervanos: Good morning, and thank you for joining our call today. With me are Scott McKim, our CFO; Robin Oliver, our COO; and I would like to introduce Al Rogers as the new Chief Executive Officer and President of BayFirst National Bank. We are announcing some exciting news regarding the future of BayFirst Financial Corp. First, we have raised $80 million of capital from investors through a private investment in a public equity offering. The company issued shares of convertible preferred stock in this PIPE which, subject to shareholder and regulatory approvals, will convert to or be exchanged for approximately 22.9 million shares of common stock at an effective purchase price of $3.50 per share. We are announcing a rights offering for our existing shareholders to participate in this capital raise and are scheduling a special shareholder meeting on July 14. This successful capital raise reflects the trust our investors place in our institution and our long-term strategic direction. This has been a lengthy process over the past several quarters following the bank's exit from SBA 7a lending. I am extremely pleased to have Al join Robin, Scott, and all the BayFirst Financial Corp. team members to lead the company back to profitability and growth as a premier financial institution of Tampa Bay. We will hear more from Al in a few minutes. The board of directors has made additional decisions, including the appointment of Kenneth R. Lehman as a member of both boards. Al’s appointment to the board of directors of the bank and as Chief Executive Officer has received all necessary regulatory approvals. The appointment of Al as CEO and President of the holding company as well as a director is contingent upon receipt of regulatory non-objection. Ken Lehman’s appointment to the board of directors of the holding company and the bank is also contingent upon receipt of regulatory non-objections. Finally, the board of directors has made the decision to resume dividend payments to our preferred shareholders and will formally redeem the Series A shares. I will now turn the call over to Scott, who will discuss the earnings report for the quarter and the impact of the capital raise. Scott McKim: Thank you, Anthony. Good morning, everyone. Please remember today’s call will include forward-looking statements and non-GAAP financial measures. Please refer to our cautionary statement on forward-looking statements contained on page two of the investor presentation. We are reporting a net loss of $5.7 million in the first quarter. This compares to a net loss of $2.8 million we reported for the fourth quarter of last year. Loans held for investment decreased by $33.5 million, or 3%, during the first quarter of 2026, down to $930.4 million, and decreased $154.4 million, or 14%, over the past year. Most of this year-over-year decrease reflects the sale of loans as well as our exit from SBA 7a lending that we had mentioned in previous quarters. Deposits decreased $98 million, or 8%, during the first quarter of 2026, and decreased $42.4 million, or 4%, over the past year to [inaudible]. The decrease in deposits during the quarter was primarily due to reductions in high-rate promotional deposits held with non-relationship customers and also a decrease in brokered deposits. Eighty-three percent of the bank’s deposits were insured by the FDIC on 03/31/2026. The bank balance sheet liquidity ratio as of 03/31/2026 was 13.85%, and the bank did not have any wholesale borrowings. Shareholders’ equity at quarter end was [inaudible], which is $5.7 million lower than the end of 2025. Net accumulated other comprehensive loss increased slightly by $94,000 during the quarter and ended at $2.1 million. Tangible book value decreased this quarter to [inaudible] per share from $17.22 per share at the end of the fourth quarter. Our net interest margin was 3.42%, down 16 basis points from fourth quarter. Net interest income was $9.4 million in the first quarter, down $1.7 million compared to the fourth quarter and down $1.5 million from the year-ago quarter. This reduction reflects the sale of a portfolio of loans that we announced and fulfilled back in December 2025 of approximately $97 million. Notably, the bank’s cost of funds was also 27 basis points lower than the fourth quarter, reflecting efforts to exit promotional-rate balances on deposits and brokered deposit balances. Noninterest income was $884,000 in the first quarter of 2026, which is a $1 million improvement over 2025, and a decrease of $7.9 million from the year-ago quarter. The year-over-year decrease is primarily from the decrease in gains on the sale of SBA 7a government-guaranteed loans. Please recall that with the exit of SBA 7a lending, revenue from gains on sale of government-guaranteed loans will no longer impact our noninterest income as it has in prior periods. Noninterest expense was $14.9 million, an increase of $3 million compared to the fourth quarter. Most of this increase—$2.3 million—represents a full quarter of servicing cost on the bank’s legacy SBA 7a portfolio. The bank still receives a servicing strip on the guaranteed balances which we had sold in prior periods, and the bank also is the holder of the related servicing rights on these loans. That revenue, less the amortization of the servicing rights, was $770,000 and is recorded as noninterest income. Compensation costs were higher by $700,000, reflecting lower deferred personnel costs and higher commission and bonus expenses. Provision for credit losses was $3.1 million in the first quarter, compared to $2 million in the fourth quarter and $4.4 million in 2025. Net charge-offs were $4.4 million, down $200,000 from the fourth quarter, which was $4.6 million, with unguaranteed SBA 7a loans accounting for $3.4 million of the $4.4 million in net charge-offs during the last quarter. By comparison, unguaranteed SBA 7a loans accounted for $4.4 million of the $4.6 million of net charge-offs we announced in the fourth quarter. The bank had $159.3 million of unguaranteed SBA 7a loan balances on 03/31/2026. This is a decrease of $12.3 million from 12/31/2025. Total annualized net charge-offs as a percentage of average loans held for investment at amortized cost were 1.98% for the first quarter, up slightly from 1.94% in 2025. The ratio of allowance for credit losses on loans held for investment at amortized cost was 2.35% at 03/31/2026. That compares to 2.42% as of 12/31/2025 and 1.61% as of 03/31/2025. The ratio of ACL to total loans held for investment at amortized cost, excluding government-guaranteed loan balances, was 2.53% at 03/31/2026, down very slightly from 2.58% as of 12/31/2025, and 1.84% as of 03/31/2025. The increase in ACL ratios from the prior year was a result of increases in nonperforming loans and continued economic stability impacting this portfolio. The addition of $80 million of additional cash will provide for growth and expansion of the community bank, with a focus on relationship growth through lending across the bank’s retail footprint. The bank has no plans to deploy lending programs outside of the Tampa Bay and Sarasota markets. It also provides foundational support as the bank continues to manage the legacy unguaranteed SBA 7a portfolio, which continues to account for most of the bank’s net charge-offs and our allowance for credit losses. The bank’s Tier one leverage ratio was 6.54% at March 31, 2026, compared to 6.52% at 12/31/2025, and 8.56% at March 31, 2025. Total capital to risk-weighted assets ratio was 9.84% as of 03/31/2026. That compares to 10.18% as of 12/31/2025, and 11.73% as of 03/31/2025. On a pro forma basis, giving effect to a $42 million capital contribution from the holding company to the bank, the Tier one leverage ratio improved to 10.02% as of 03/31/2026. The total capital to risk-weighted assets ratio improves to 14.4% as of 04/30/2026. At this time, I will hand the call over to Robin for some additional comments on credit and operations. Robin Oliver: Thank you, Scott. As we look forward to the future growth of the bank and work towards returning to profitability, we will simultaneously closely manage our credit risk and problem assets to reduce future losses. The additional capital will allow us to make different decisions on the resolution of problem assets than we otherwise could have. That being said, we have already taken proactive steps to resolve nonperforming and classified credits as quickly as possible and are continually working with our BayFirst Financial Corp. team as well as our lender service provider who services our SBA 7a portfolio to enhance collection processes, collect updated financials from borrowers as quickly as possible, and to evaluate loans for upgrade or return to accrual status whenever appropriate. At the end of the first quarter, total nonperforming loans, excluding government-guaranteed balances, were $15.9 million, down from $16.3 million at the end of the fourth quarter. The percentage of nonperforming loans, excluding government-guaranteed balances, compared to total loans held for investment was up slightly by one basis point to 1.81% from the fourth quarter and up 34 basis points from the year-ago quarter. It should be noted that of the $15.9 million in nonperforming loans, $3.8 million of these balances were current and paying as agreed. In addition, classified loans remain relatively unchanged from last quarter, and as of quarter end, 68% of the bank’s classified loans were current and performing loans whereby we are working with the borrowers towards resolution. While we acknowledge that problem loans and charge-offs remain elevated, we want to assure you we are taking proactive measures to get the losses behind us as quickly as possible so we can focus on our bright future ahead. Our focus over the last two years on growing business deposits and treasury services while maintaining our fantastic set of consumer products should set us up to adapt quickly to serve a growing client base and add earnings to the bottom line. We believe our current set of products, along with our technology and branch footprint, positions us well to support this future growth that is needed for BayFirst Financial Corp. to thrive and return to profitability in our fantastic Tampa Bay market. At this time, I will turn the call over to Al to make some final comments. Al Rogers: Thank you, Robin, Anthony, and Scott. I am excited to begin my next chapter with the board and the bank’s leadership at BayFirst Financial Corp. While progress has been made with our focus on community banking, much work lies ahead for us. I have worked in the Tampa Bay market for most of my career, and our terrific network of branches and dedicated people are the ideal foundation for BayFirst Financial Corp. to become the community bank of choice in our market. I am looking forward to getting to know our talented people. I have been blessed to have had the opportunity to lead several community banks, with each serving and helping to grow local businesses and retail customers. BayFirst Financial Corp. has the same dedication to this community, and I am looking forward to rolling up my sleeves with the team to accomplish great things right here in our backyard. This means investing dollars back into our community to create opportunities, fund investments, and expand businesses that generate jobs. I will be working with our marketplace leaders to expand our reach across the Tampa Bay area. Our branch network is well positioned for growth. We will be leveraging this network with more focus than in the past. We plan on expanding our presence specifically in the Tampa Metropolitan Area, providing more coverage beyond the two branches we currently have today. I have spent the past few months working as a consultant for BayFirst Financial Corp., and in that capacity, I have supported the capital raise to ensure that much of the investment in this capital raise came from local investors, whom I have known and done business with for several years. I believe that local investors make the best partners for community banks. This also reinforces the bank’s network of partners and will lead to deposit and loan growth opportunities. Finally, I already know many of our investors and look forward to meeting the rest of you. As we proceed with the rights offering Anthony mentioned, Robin, Scott, and I are looking forward to speaking with each and every one of our existing investors should they have any additional questions. Operator, I will now turn the call back over to you so that we can take some questions. Operator: Thank you. Ladies and gentlemen, we will now open the call for questions. Should you have a question, you will hear a prompt that your hand has been raised. If you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. The first question comes from Ross Haberman at RLH Investments. Please go ahead. Ross Haberman: Good morning, Al. Al, welcome on board. As you said, you are going to have some heavy lifting. Could you prioritize what your one, two, and three initiatives are going to be, and then, specifically, could you address the non-guaranteed portion, the roughly $160 million, how you view that, and your initial thoughts on what kind of plug you are going to need for that $160 million? Thank you. Al Rogers: Thank you, Ross. Really, getting an understanding of the portfolio is job one. As Robin mentioned, we have to work diligently at working our way out of that, so that is really number one. Returning to profitability is number two. And, of course, expanding, deepening, and growing relationships with local customers is our ultimate goal as we look to stabilize and grow the bank. It is hard for me to say at this point, having just arrived, what we are going to need to shore up the current loan book, but I can turn that over to one of my partners here should they want to expand on that. Scott McKim: Ross, this is Scott. I will talk a little bit more about it. Previously, we have had a conversation around how much is set aside in terms of reserves for the unguaranteed components of the portfolio. What I can share with you is that the Bolt and the FlashCap components of that portfolio, which represent about $100 million of the $159 million that is there, are collectively reserved at close to 13%. So that makes up the bulk of what is in the allowance for credit losses right now—approximately almost $12 million of the approximately $20 million that is out there. The other components—the core real estate and the core C&I—are reserved at closer to 4%, and those particular groups of loans do not exhibit the same high default characteristics that the Bolt and the FlashCap portfolio do. We continuously are looking at this, and under GAAP and the CECL model, we are adequately reserved for that portfolio. That is not to say that we will not potentially take a look at it and make other changes that need to be made to reflect additional defaults. We do believe that there is an underlying component of this portfolio that performs well and has performed well, but the defaults have really been overshadowing that. The portfolio continues to run off—about $12 million just in the first quarter alone—and will continue at that rate. Some component of that is charge-off, I do acknowledge that, but at the same time, it is also continuing to pay down. As we look forward, the question is going to be at what point will the defaults begin to subside, and I do not have a clear answer for you at this time. That is certainly something that leadership here is spending quite a bit of time on. We will spend time with Al and obviously look at it from an asset resolution point of view. We want to put this in our rearview mirror, but we are going to do it smartly so our focus can continue to be on the payday bank. Ross Haberman: Just one follow-up, if I may. The $100 million you are talking about, which you have reserved—I think you said 13%—does that have any sort of collateral, or, for generalizing, is that as good or bad as basically a credit card loan? Thank you. That is my last question. Scott McKim: Ross, that is actually a pretty good comparison. I think we have talked about that before, that the Bolt and FlashCap components are more like a small business credit card in terms of overall performance. Some of the loans do have collateral; however, for the most part, the nature of the portfolio is that these really are unsecured. I think it is safe to assume that it is going to perform more like that versus less like that. Kind of like a credit card, as interest rates went up, a lot of these borrowers saw their rates go up 500-plus basis points. That, combined with inflation, supply chain issues, and some of the other things that a lot of small business owners and managers are incurring, is really what is driving the defaults. This portfolio has a very unique nature to it. To be honest with you, we have not found anything that is similar to it that we could use as a basis or a business case to support our modeling around it. So the future is not as clear as we would like it to be, but we very much are prepared for what is going to come next with it. Ross Haberman: Thank you very much. Best of luck. Al Rogers: Thanks, Ross. Operator: Thank you. Ladies and gentlemen, as a reminder, if you have any other questions, please press 1 now. Our next question comes from Duane Roberts at Charis. Please go ahead. Duane Roberts: Good morning. I am sorry, I may have missed this, but can you please tell me what your cash position is now? Scott McKim: Sure. The bank liquidity ratio was about 13.6% at the end of the first quarter. So on about $1 billion, you can do the math there—it is about $130 million. Duane Roberts: Thank you. Duane Roberts: I am sorry. Does that include the capital raise that was just done, or does it not? Scott McKim: No, that is exclusive. That was as of 03/31. The capital raise was completed this week, so you could add those funds to it if you wanted a more real-time number. Duane Roberts: Okay. Thank you. Operator: Thank you. The next question comes from Sam Haskell from Clarion. Please go ahead. Sam Haskell: Hey, thank you all. Scott, I just want to make sure I heard you correctly. Did you say that the 13% reserve on the roughly $100 million Flash loans—that you felt that was adequate per the reserve? Thank you. Scott McKim: Yes. I will put it in this context: from a CECL compliance standpoint, it suggests that it is adequate. Most of my career was spent in historical loss modeling, and we do not get to operate under those rules today, but according to CECL, it is adequate. Sam Haskell: Got it. Okay. Thank you. Operator: Thank you. This does conclude our Q&A session. Ladies and gentlemen, this concludes our conference call for today. We thank you for your participation, and we ask that you please disconnect your lines. 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