BayFirst Financial Corp. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported a net loss of $0.7 million ($0.04 per diluted share) for Q3 2026, a significant improvement from a net loss of $32.7 million ($8.05 per share) in Q2 2026 and a net loss of $19.1 million in Q3 2025.
• Net interest income was $10.6 million for Q3 2026, up $1.2 million from Q2 2026 but down $0.7 million from Q3 2025.
• Net interest margin expanded to 4.07% in Q3 2026, an increase of 59 basis points from Q2 2026 (3.48%) and 43 basis points from Q3 2025 (3.64%).
• Noninterest income was $1.1 million for Q3 2026, reversing a loss of $6.8 million in Q2 2026 and a loss of $1.1 million in Q3 2025.
• Noninterest expense decreased to $12.8 million in Q3 2026 from $17.7 million in Q2 2026 and $25.2 million in Q3 2025.
• Provision for credit losses was a negative $0.1 million (benefit) in Q3 2026, compared to $29.0 million in Q2 2026 and $11.2 million in Q3 2025.
• Total assets increased $13.0 million (1.1%) to $1.15 billion in Q3 2026, down $192.3 million (14.3%) year-over-year.
• Total loans held for investment increased $20.1 million (2.3%) to $903.0 million in Q3 2026, down $90.1 million (9.1%) year-over-year.
• Total deposits increased $25.3 million (2.6%) to $1.01 billion in Q3 2026, down $157.3 million (13.4%) year-over-year.
• Book value per common share was $3.64 at September 30, 2026, down from $4.82 at June 30, 2026.
• Tangible book value per common share was $3.64 at September 30, 2026, down from $4.82 at June 30, 2026.
• Return on average assets was (0.24)% for Q3 2026, compared to (11.02)% in Q2 2026 and (5.70)% in Q3 2025.
• Return on average common equity was (6.39)% for Q3 2026, compared to (195.50)% in Q2 2026 and (89.51)% in Q3 2025.

Guidance and Future Outlook:

• Management stated that the company is positioned for continued improvement in the coming quarters and remains focused on achieving sustained profitability.
• The company noted that deposit growth outpaced loan growth for the first time in nearly three years, strengthening the funding base.
• Management expressed confidence in building on its standing as the community bank of choice in Tampa Bay and Sarasota markets.

Business Segments and Product Lines:

• Total community bank loans, excluding the government guaranteed portfolio, grew $41.9 million over the prior quarter, representing 25% annualized growth.
• The Bank discontinued SBA 7(a) lending, resulting in no new originations and the sale of $97.4 million of government guaranteed loans to a third party in the fourth quarter.
• Loan originations continued in conventional community bank loans and USDA government guaranteed loans.
• Noninterest-bearing account balances increased $4.4 million, interest-bearing transaction accounts increased $6.9 million, and savings/money market balances increased $22.6 million during Q3 2026.
• Time deposit balances decreased $8.7 million during Q3 2026.
• Brokered deposits decreased to $165.7 million at September 30, 2026, from $163.8 million at June 30, 2026, and $235.9 million at September 30, 2025.

Market and Competitive Landscape:

• The company operates 12 full-service banking offices in the Tampa Bay-Sarasota region.
• Full-time equivalent employees decreased to 146 at September 30, 2026, from 237 at September 30, 2025.
• The company reported strong demand for community bank loans and noted customer trust in the relationship-focused approach.

Risks and Challenges:

• Net charge-offs were $3.2 million in Q3 2026, down from $4.5 million in Q2 2026 and $3.5 million in Q3 2025.
• Annualized net charge-offs as a percentage of average loans were 1.52% in Q3 2026, compared to 2.08% in Q2 2026 and 1.34% in Q3 2025.
• Nonperforming assets were 1.29% of total assets at September 30, 2026, down from 1.75% at June 30, 2026, and 1.98% at September 30, 2025.
• The allowance for credit losses (ACL) on loans to total loans held for investment was 4.85% at September 30, 2026, up from 2.63% at September 30, 2025.
• The ACL ratio excluding government guaranteed loans was 5.20% at September 30, 2026, compared to 2.80% at September 30, 2025.
• The company faces risks related to health crises, global military hostilities, weather events, climate change, interest rate changes, and regulatory enforcement actions as detailed in forward-looking statements.

Management Commentary and Tone:

• CEO Alfred T. Rogers, Jr. stated that deliberate steps taken in the second quarter under the asset resolution plan are beginning to pay off.
• Rogers highlighted that the significant improvement in the third quarter loss compared to the second quarter was primarily due to the cessation of the $41.5 million expense related to the asset resolution plan.
• Management emphasized that the focus on communities served remains unwavering and expressed confidence in the asset resolution efforts working to improve asset quality.
• The tone was optimistic regarding the strengthening foundation and the potential for sustained profitability.

Other Key Points:

• On July 14, 2026, shareholders approved an amendment to increase authorized common stock from 15,000,000 to 100,000,000 shares.
• The Company exchanged 4,000 shares each of Mandatorily Convertible Cumulative Perpetual Preferred Stock Series D and Series E for a total of 22,856,000 shares of common stock; all Series D and E shares were retired upon conversion.
• On August 13, 2026, the Company redeemed all outstanding Series A and Series B Preferred Shares for $6,464 (Series A) and $3,241 (Series B), including accrued dividends.
• On October 8, 2026, the Company sold and issued 4,107,908 common shares at $3.50 per share in a rights offering, generating $14.4 million in gross proceeds to improve capital levels and support growth.
• The Bank's Tier 1 leverage ratio was 8.79% at September 30, 2026, up from 6.14% at September 30, 2025.
• The Bank met all regulatory capital requirements to be well-capitalized as of September 30, 2026.
• The Company had no borrowings from the FHLB, FRB, or other financial institutions as of September 30, 2026.
• The on-balance sheet liquidity ratio was 13.49% at September 30, 2026, down from 18.44% at December 31, 2025.