BayFirst Financial Corp. reported a net loss of $1.2 million, or $(0.39) per common share, for the second quarter of 2025, widening from the $0.3 million net loss in the first quarter. This was primarily driven by a significant increase in the provision for credit losses, which surged to $7.3 million from $4.4 million in the prior quarter, and higher net charge-offs of $6.8 million, up from $3.3 million.
In response to the challenging credit environment and as part of an ongoing strategic review, the Board of Directors voted to suspend common and preferred stock dividend payments, as well as board of director fees. This action aims to conserve capital and strengthen the balance sheet. Nonperforming assets decreased slightly to 1.79% of total assets from 2.08% in the previous quarter, but remained elevated compared to 1.28% a year ago.
Despite the widening loss, net interest income continued its upward trend, reaching $12.3 million, an increase from $11.0 million in Q1 2025. The net interest margin also expanded by 29 basis points to 4.06%. Management noted that core community banking operations showed continued strength in loan and deposit growth, but these gains were offset by losses in the government-guaranteed lending division, particularly from unguaranteed SBA 7(a) loans.
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