BayFirst Financial Corp.

BayFirst reported Q2 2026 net loss of $32.7 million versus a restated Q1 net loss of $5.9 million. Pretax loss was $44 million, of which $43.8 million came from the asset resolution plan and other one-time charges. Net interest margin was 3.48%, up 4 basis points sequentially; net interest income was $9.4 million, flat versus Q1 and down $2.7 million year over year. Noninterest income was negative $6.8 million, down $7.7 million from Q1 and $17.3 million from Q2 2025. Noninterest expense was $17.7 million, up $2 million sequentially. Provision expense was $29.7 million, and total allowance for credit losses was $45.1 million at June 30, 2026. Loans held for investment were $882.8 million, down $41.4 million sequentially and $237.7 million year over year; deposits were $989 million, down $97 million sequentially and $175 million year over year. Tangible book value per share fell to $4.82 from $14.22 at March 31. On a normalized basis, management said Q2 net interest margin would have been 4.07%, with cost of funds down to 2.66%. For Q3 and beyond, management said the rights offering will launch in August, the Series A and B redemption was a Q3 event, and the company expects to keep building core deposits and grow traditional lending.

Alfred Rogers framed the quarter as a transition period after his first full quarter as CEO, with the $80 million capital raise as the key step to rebuild the franchise. He said the bank has completed the asset resolution plan, cleaned up legacy credit issues, reset leadership, and is shifting back toward relationship banking, traditional commercial and consumer lending, and branch expansion. His tone was optimistic but pragmatic, stressing disciplined execution, stronger local relationships, and a goal of becoming the leading community bank in Tampa Bay.

Scott McKim focused on the financial cleanup and restatement, saying the asset resolution plan, loan marks, write-offs, and other one-time items totaled $43.8 million of the $44 million pretax loss. He cited a $38.4 million adjustment from the loan review, $29.7 million of provision expense, $45.1 million of allowance for credit losses, and $29 million of provision in Q2 versus $3.4 million in Q1. He also noted loans held for investment of $882.8 million, deposits of $989 million, equity of $115.9 million, liquidity of 14.95%, no wholesale borrowings, Tier 1 leverage of 8.3%, and total capital of 12.77%; on a core basis he said Q2 net interest margin was 4.07% and cost of funds was 2.66%.

Analysts pressed management on how much earnings power remains after the cleanup, when the rights offering will launch, and what the deposit base looks like after the runoff of high-rate and brokered balances. McKim said the remaining operating loss excluding one-time items was about $200,000 and described core earnings as just below breakeven, while also saying there is no deferred tax asset valuation allowance currently. On the rights offering, he said it will launch in August after the company finishes filing updated financials, and he said the deposit base is now largely relationship-based and local, with only some brokered deposits still running off.