BayFirst Financial Corp. (NASDAQ: BAFN)

$6.24 ▲ +0.12 (+1.96%)

As of May 21, 2026 04:00 PM

Sector: Financial Services Industry: Banks - Regional CIK: 0001649739

Market Cap 25.63 Mn

P/E -0.86

P/S 0.47

Div. Yield 0.01

ROIC (Qtr) 0.00

Total Debt (Qtr) 6.10 Mn

Add ratio to table...

About

BayFirst Financial Corp. operates as a bank holding company that owns BayFirst National Bank, delivering community banking services to consumers and small businesses in the Tampa Bay/Sarasota region. As of December 31, 2025, the company reported consolidated total assets of $1.30 billion, total loans held for investment of $963.9 million, total deposits of $1.18 billion, and total shareholders’ equity of $87.6 million. The Bank’s main office is located at the BayFirst Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701, and it...

BayFirst Financial Corp. operates as a bank holding company that owns BayFirst National Bank, delivering community banking services to consumers and small businesses in the Tampa Bay/Sarasota region. As of December 31, 2025, the company reported consolidated total assets of $1.30 billion, total loans held for investment of $963.9 million, total deposits of $1.18 billion, and total shareholders’ equity of $87.6 million. The Bank’s main office is located at the BayFirst Executive Center, 700 Central Avenue, St. Petersburg, Florida 33701, and it operates from twelve banking centers across Pinellas, Hillsborough, Manatee, Pasco, and Sarasota counties.

The company generates revenue primarily from interest income on its loan portfolio, which includes commercial real estate, construction, working capital, healthcare, minority, USDA, and SBA 504 loans, as well as consumer loans such as auto, boat, and home equity lines. Additionally, fee income arises from deposit services, online banking, online bill payment, lock box services, remote capture and deposit, cash management, wire transfers, safety deposit boxes, courier services, retail investment services, and ACH originations. The Bank also earns income from specialized checking programs such as Essential checking, TrendSetters Club for seniors, and Cash Kids’ Club savings accounts, which attract specific customer segments and generate ancillary fees.

BayFirst Financial Corp. operates through the following segments:.

• Community Banking: This segment provides traditional deposit products including checking, savings, money market accounts, and certificates of deposit, alongside lending services such as commercial mortgages, construction loans, working capital loans, business expansion loans, healthcare financing, minority lending programs, and consumer loans for autos, boats, and recreational vehicles. The Bank structures its community banking services to attract consumers, small and medium sized businesses, and professionals seeking flexible, personalized relationships and offers specialized programs like the Essential checking account for customers rebuilding access to banking, the TrendSetters Club for customers age fifty and over, and the Cash Kids’ Club savings account for children twelve years old and under to teach basic financial skills through interactive tools.

• Government Guaranteed Lending: This segment originates loans backed by federal programs, specifically USDA Business and Industry loans and SBA 504 loans, offering businesses in rural areas and qualified enterprises access to financing with partial government guarantees. The Bank also continues to service USDA loans and SBA 404 loans through its community banking centers after discontinuing its nationwide SBA 7(a) lending division in the third quarter of 2025. These government guaranteed loans are underwritten according to SBA or USDA guidelines and include thorough analysis of guarantor credit quality and projected debt service coverage.

• Residential Mortgage Division: Although the nationwide residential lending business was discontinued in the 3rd quarter of 2022, the division continues to offer fixed and variable rate home mortgages for purchase and refinance through the local community banking centers in the Tampa Bay/Sarasota area. The division focuses on residential mortgage loans that are underwritten to secondary market standards for those held for sale, while portfolio loans are primarily underwritten on borrower financial strength and cash flow with conservative loan to value requirements.

Within the competitive banking landscape of Florida’s Tampa Bay market, BayFirst Financial Corp. positions itself as a nimble community bank that competes against larger national and super regional banks, finance companies, credit unions, and emerging fintech providers by emphasizing local decision making, personalized relationships, and a deep understanding of regional commerce. The Bank’s competitive advantages include its ability to make quick lending decisions, its flexibility in responding to interest rate changes, and its reputation for understanding local market needs, which larger competitors often lack. Additionally, the Bank leverages its independent status to solicit business through the personal efforts of its directors and officers, reinforcing its image as a community focused institution.

The company serves a diverse customer base that includes individual consumers, small and medium sized businesses, healthcare professionals, and women owned and minority owned enterprises, as well as customers seeking specialized products such as the Essential checking account, TrendSetters Club for seniors, and Cash Kids’ Club for youth. Specific customer groups targeted by the Bank include healthcare practitioners who benefit from tailored lending options, women or minority business owners looking to expand their operations, and seniors who value the benefits of the TrendSetters Club. The Bank also serves customers who require basic banking services such as checking and savings accounts, as well as those seeking loans for automobiles, boats, recreational vehicles, and residential properties.

Investment thesis

Bull case

BayFirst’s deposit base has grown steadily to $1.18 billion, with an organic increase of $12.5 million in the quarter and a year‑to‑date rise of $40.7 million. The bank’s deposit mix is heavily weighted toward time deposits and interest‑bearing transaction accounts, which tend to be less sensitive to short‑term rate swings than money‑market or savings balances. With 85 % of deposits FDIC‑insured and a liquidity ratio comfortably above 18 %, the institution can comfortably support aggressive deposit‑pricing initiatives, reducing the cost of funds and widening net interest margins. These fundamentals give the bank a strong platform to attract further customer deposits, especially in a market where banks are cutting promotional rates to compete.
Treasury‑management revenues surged 69 % year‑over‑year, a clear indicator that the bank’s merchant‑services platform is resonating with small‑business clients. Revenue diversification away from interest‑margin income into fee‑based services adds a non‑interest income stream that is less vulnerable to rate volatility and regulatory tightening. The growth in treasury management also signals deeper relationships with retail and commercial customers, creating cross‑sell opportunities for loans, lines of credit, and other products. As the bank continues to focus on this high‑margin segment, it can potentially sustain revenue momentum even if traditional loan growth slows.
The strategic exit from the SBA 7(a) lending business, which was a significant source of both higher yields and credit risk, is complete. By actively selling and running down unguaranteed SBA balances, BayFirst has materially reduced its exposure to non‑government‑guaranteed loans, which historically carried elevated default rates. The reduction in both provisioning and charge‑offs reflects a cleaner balance sheet, allowing the bank to re‑allocate capital toward core community banking activities. This shift also aligns the bank more closely with its “community‑banking” positioning, positioning it for sustainable, lower‑risk growth rather than chasing higher‑risk, higher‑yield products.
Net interest margin (NIM) held steady at 3.58 % despite a three‑basis‑point dip, indicating that the bank’s asset‑liability management remains effective even after the SBA wind‑down. Because the bank’s loan portfolio has shrunk but its deposit mix remains healthy, the NIM can be expected to rebound as higher‑yield loans and fee‑based services mature. In addition, the bank’s ability to manage deposit pricing will likely improve its cost‑of‑funds profile, providing a buffer for NIM expansion in a rising‑rate environment.
BayFirst’s tangible book value per share, although modestly down to $17.22 from $17.90, still remains robust relative to peer banks in the Tampa Bay region. A solid tangible book provides a cushion for capital adequacy and supports potential future capital returns or strategic acquisitions. With the capital base described as “well‑capitalized,” the bank has room to absorb residual credit losses without diluting shareholders, thereby creating value for equity holders over the medium term.

BayFirst’s deposit base has grown steadily to $1.18 billion, with an organic increase of $12.5 million in the quarter and a year‑to‑date rise of $40.7 million. The bank’s deposit mix is heavily weighted toward time deposits and interest‑bearing transaction accounts, which tend to be less sensitive to short‑term rate swings than money‑market or savings balances. With 85 % of deposits FDIC‑insured and a liquidity ratio comfortably above 18 %, the institution can comfortably support aggressive deposit‑pricing initiatives, reducing the cost of funds and widening net interest margins. These fundamentals give the bank a strong platform to attract further customer deposits, especially in a market where banks are cutting promotional rates to compete.
Treasury‑management revenues surged 69 % year‑over‑year, a clear indicator that the bank’s merchant‑services platform is resonating with small‑business clients. Revenue diversification away from interest‑margin income into fee‑based services adds a non‑interest income stream that is less vulnerable to rate volatility and regulatory tightening. The growth in treasury management also signals deeper relationships with retail and commercial customers, creating cross‑sell opportunities for loans, lines of credit, and other products. As the bank continues to focus on this high‑margin segment, it can potentially sustain revenue momentum even if traditional loan growth slows.
The strategic exit from the SBA 7(a) lending business, which was a significant source of both higher yields and credit risk, is complete. By actively selling and running down unguaranteed SBA balances, BayFirst has materially reduced its exposure to non‑government‑guaranteed loans, which historically carried elevated default rates. The reduction in both provisioning and charge‑offs reflects a cleaner balance sheet, allowing the bank to re‑allocate capital toward core community banking activities. This shift also aligns the bank more closely with its “community‑banking” positioning, positioning it for sustainable, lower‑risk growth rather than chasing higher‑risk, higher‑yield products.
Net interest margin (NIM) held steady at 3.58 % despite a three‑basis‑point dip, indicating that the bank’s asset‑liability management remains effective even after the SBA wind‑down. Because the bank’s loan portfolio has shrunk but its deposit mix remains healthy, the NIM can be expected to rebound as higher‑yield loans and fee‑based services mature. In addition, the bank’s ability to manage deposit pricing will likely improve its cost‑of‑funds profile, providing a buffer for NIM expansion in a rising‑rate environment.
BayFirst’s tangible book value per share, although modestly down to $17.22 from $17.90, still remains robust relative to peer banks in the Tampa Bay region. A solid tangible book provides a cushion for capital adequacy and supports potential future capital returns or strategic acquisitions. With the capital base described as “well‑capitalized,” the bank has room to absorb residual credit losses without diluting shareholders, thereby creating value for equity holders over the medium term.

Bear case

Despite the bank’s reported loss narrowing, the underlying credit quality remains a concern, as the unguaranteed SBA 7(a) portfolio still stands at $171.6 million. Management explicitly cautions that “additional charge‑offs are likely to continue” and that the legacy exposure is “still elevated.” The bank’s allowance for credit losses, at 2.43 % of total loans and 2.59 % excluding guaranteed loans, remains above the year‑ago level, signalling persistent credit risk that could strain earnings if defaults accelerate. Investors should view the legacy portfolio as a significant tail‑risk that may erode capital in the next 12–18 months.
The bank’s nonperforming loan ratio, excluding guaranteed balances, rose to 1.8 % at year‑end, an increase of 11 basis points from the prior quarter. Even though 64 % of classified loans are current, the fact that 36 % remain classified indicates a sizable pool of loans at risk. If the bank cannot quickly reduce this classification through write‑downs or recoveries, future provisions could rise sharply, further widening the net loss and potentially requiring additional capital injections.
Deposit mix is heavily skewed toward time deposits, which can be more liquid but also more rate‑sensitive. While the bank has successfully reduced its cost of funds, any future interest‑rate hikes could pressure deposit rates, especially for time deposits that are less flexible than money‑market or savings products. If the bank’s deposit growth stalls or reverses, the liquidity cushion could diminish, limiting its ability to fund new lending or weather market stress.
BayFirst’s exit from the SBA 7(a) business eliminated a higher‑yield segment of its loan portfolio. While the move reduces credit risk, it also reduces potential interest income. The bank’s net interest margin remained flat at 3.58 % despite the reduction in high‑yield loans, suggesting that the bank may need to rely increasingly on fee‑based revenue, which can be more volatile and less predictable. Should the fee‑based platform fail to grow at the anticipated pace, the bank’s profitability could suffer.
The bank’s operating expenses, while lower than the previous quarter, still represent a substantial outlay, particularly given the high capital requirement for a community bank. The restructuring charge was a one‑time event, but the bank still faces ongoing regulatory, occupancy, and data‑processing costs. Any unexpected regulatory fines or increased compliance costs could quickly erode the thin operating margin, especially given the relatively modest interest income base.

Despite the bank’s reported loss narrowing, the underlying credit quality remains a concern, as the unguaranteed SBA 7(a) portfolio still stands at $171.6 million. Management explicitly cautions that “additional charge‑offs are likely to continue” and that the legacy exposure is “still elevated.” The bank’s allowance for credit losses, at 2.43 % of total loans and 2.59 % excluding guaranteed loans, remains above the year‑ago level, signalling persistent credit risk that could strain earnings if defaults accelerate. Investors should view the legacy portfolio as a significant tail‑risk that may erode capital in the next 12–18 months.
The bank’s nonperforming loan ratio, excluding guaranteed balances, rose to 1.8 % at year‑end, an increase of 11 basis points from the prior quarter. Even though 64 % of classified loans are current, the fact that 36 % remain classified indicates a sizable pool of loans at risk. If the bank cannot quickly reduce this classification through write‑downs or recoveries, future provisions could rise sharply, further widening the net loss and potentially requiring additional capital injections.
Deposit mix is heavily skewed toward time deposits, which can be more liquid but also more rate‑sensitive. While the bank has successfully reduced its cost of funds, any future interest‑rate hikes could pressure deposit rates, especially for time deposits that are less flexible than money‑market or savings products. If the bank’s deposit growth stalls or reverses, the liquidity cushion could diminish, limiting its ability to fund new lending or weather market stress.
BayFirst’s exit from the SBA 7(a) business eliminated a higher‑yield segment of its loan portfolio. While the move reduces credit risk, it also reduces potential interest income. The bank’s net interest margin remained flat at 3.58 % despite the reduction in high‑yield loans, suggesting that the bank may need to rely increasingly on fee‑based revenue, which can be more volatile and less predictable. Should the fee‑based platform fail to grow at the anticipated pace, the bank’s profitability could suffer.
The bank’s operating expenses, while lower than the previous quarter, still represent a substantial outlay, particularly given the high capital requirement for a community bank. The restructuring charge was a one‑time event, but the bank still faces ongoing regulatory, occupancy, and data‑processing costs. Any unexpected regulatory fines or increased compliance costs could quickly erode the thin operating margin, especially given the relatively modest interest income base.

Peer comparison

Companies in the Banks - Regional

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	BCH	Bank Of Chile	90,891.20 Bn	47.15 Mn	-	0.00 Bn
2	BBD	Bank Bradesco	6,807.69 Bn	0.00 Mn	-	21.77 Bn
3	LYG	Lloyds Banking Group plc	426.28 Bn	0.00 Mn	16.65	-
4	NWG	NatWest Group plc	184.56 Bn	0.00 Mn	4.63	-
5	FCAP	First Capital Inc	181.18 Bn	0.00 Mn	25,111.90	-
6	LARK	Landmark Bancorp Inc	164.67 Bn	0.00 Mn	2,257.48	0.02 Bn
7	DB	Deutsche Bank Aktiengesellschaft	161.63 Bn	0.00 Mn	5.57	630.72 Bn
8	KB	KB Financial Group Inc.	150.02 Bn	0.00 Mn	-	8.28 Bn

Research Tools

Developers

BayFirst Financial Corp. (NASDAQ: BAFN)

About

Investment thesis

Bull case

Bear case

Peer comparison

Research Tools

Developers

BayFirst Financial Corp. (NASDAQ: BAFN)

About

Investment thesis

Bull case

Bear case

Peer comparison

Create an account

Sign In

Reset Password