10-Q · August 12, 2026
BayFirst’s Q1 2026 results showed worsening profitability, with net interest income down to $9.440 million, a $5.930 million net loss, and diluted EPS of negative $1.54. Deposit attrition of $98.1 million, operating…
Earnings analysis · 10-Q
BAFN earnings analysis
Filed August 14, 2026 · Our reading of the company's report
The latest report
BayFirst’s Q2 2026 results deteriorated substantially, with a $32.665 million net loss and $(8.05) diluted EPS versus a $1.854 million loss and $(0.54) EPS in Q2 2025. The $41.5 million asset resolution plan drove a…
Read full summary
BayFirst’s Q2 2026 results deteriorated substantially, with a $32.665 million net loss and $(8.05) diluted EPS versus a $1.854 million loss and $(0.54) EPS in Q2 2025. The $41.5 million asset resolution plan drove a $28.977 million credit-loss provision and contributed to negative noninterest income, while deposits fell 16.48% to $988.874 million and operating cash flow was $(2.843) million for the first six months. The $74.508 million preferred raise improved regulatory capital and the Bank remained well capitalized, but common-equity dilution, deposit attrition, credit risk, and the unresolved material weakness remain significant concerns.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-8.05
- Segment
- One reportable operating segment: consolidated banking operations; Q2 2026 net interest income was $9.422 million and total noninterest income was $(6.809) million.
What stood out
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Q2 loss widened sharply
Q2 2026 net loss was $32.665 million, or $(8.05) diluted EPS, versus a $1.854 million net loss and $(0.54) EPS in Q2 2025. Sequentially, the loss widened from $5.930 million, or $(1.54) EPS, in Q1 2026.
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Net interest income remained pressured
Net interest income declined to $9.422 million from $12.127 million year over year and $9.440 million sequentially. Net interest margin fell to 3.48% from 4.01% year over year, although management reported 4.07% excluding write-downs.
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Credit reserves increased materially
The allowance for credit losses increased to $45.081 million from $17.041 million a year earlier, lifting ACL to 5.37% of amortized-cost loans from 1.65%. Net charge-offs were $4.460 million in Q2 2026 versus $7.142 million in Q2 2025.
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Preferred raise strengthened capital
The $74.508 million net preferred-stock capital raise helped increase shareholders’ equity to $115.901 million from $81.580 million at December 31, 2025. The Bank was classified as well capitalized, with total capital of $108.083 million and a 12.77% risk-based capital ratio.
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Investing cash flow offset operating outflow
Operating cash flow was $(2.843) million for the six months ended June 30, 2026, versus $139.266 million in the prior-year period. Investing cash flow was $57.447 million, primarily reflecting $56.032 million of net loan payments/originations cash inflow.
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Asset resolution plan quantified
Management completed the asset resolution plan, recording $41.5 million of Q2 expense. The plan included adjustments to more than 7,000 unguaranteed SBA 7(a) small-balance loans and write-downs including $1.5 million on a nonmarketable equity investment and $1.6 million of purchased-loan premiums.
What to watch
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Material weakness and restatement risk
Disclosure controls and internal control over financial reporting remained ineffective at June 30, 2026 because of a material weakness involving nonaccrual placement, charge-offs, origination-cost recognition, and gain-on-sale calculations. The weakness contributed to restatements involving $2.8 million of deferred origination costs, $2.1 million of accrued interest, and $3.4 million of deferred origination costs.
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Deposit attrition and uninsured funding
Deposits declined $195.064 million, or 16.48%, during the six months to $988.874 million. Brokered deposits were $163.8 million, while approximately $195.5 million of deposits exceeded the FDIC insurance limit.
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Elevated credit-loss exposure
Credit losses remain a major earnings risk: Q2 provision expense was $28.977 million versus $7.607 million a year earlier, while commercial and industrial gross charge-offs were $3.800 million in the quarter. Nonperforming assets totaled $19.898 million at June 30, 2026.
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Thin common-equity cushion
Common shareholders’ equity fell to $19.850 million from $58.421 million at March 31, 2026, and tangible book value was $4.82 per share versus $14.22 sequentially. The quarter generated a $32.665 million net loss and included $0.386 million of preferred dividends.
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Government-guaranteed portfolio volatility
The company’s government-guaranteed loan fair-value portfolio declined to $43.847 million from $54.076 million at December 31, 2025 and carried a $(13.510) million fair-value loss relative to unpaid principal. Noninterest income was $(6.809) million in Q2 versus $10.531 million in Q2 2025.
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Risk disclosures unchanged; remediation pending
The company stated that there were no material changes to the risk factors disclosed in the 2025 Form 10-K/A, but remediation of the material weakness is only expected to be implemented in Q3 2026 and will require sufficient operating and testing time before considered remediated.
Management's outlook
No quantitative revenue or EPS guidance was provided. Management expects currently available liquid assets and borrowing capacity to satisfy liquidity needs; liquid assets were 14.95% of total assets versus the 7.0% minimum, and borrowing capacity was up to $183.545 million from the FHLB and $34.034 million from the FRB. Management noted a mid-August 2026 launch for the rights offering.
Earlier filings 4
10-K · August 12, 2026
BayFirst’s core banking net interest performance improved in 2025, with net interest income up to $45.207 million and deposits up 3.56%, but those gains were overwhelmed by credit losses, restructuring and the collapse…
10-Q · May 12, 2026
BayFirst Financial Corp. reported a challenging Q1 2026, with revenues of $10.3 million and a net loss of $5.7 million (-$1.48 EPS), significantly below the previous year and estimates. The firm undertook a capital…
10-K · March 27, 2026
BayFirst is a community-focused bank concentrated in the Tampa Bay / Sarasota region with $1.30 billion in consolidated assets and $963.9 million of loans held for investment as of December 31, 2025. The company is…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.