BayFirst Financial Corp. (NASDAQ: BAFN) (“BayFirst” or “Company”), parent company of BayFirst National Bank (“Bank”) today announced that it has completed and quantified the impact of the asset resolution plan adopted in accordance with the transactions contemplated by the Stock Purchase Agreement dated April 28, 2026. The asset resolution plan includes the identification of specific loans within the Company’s government guaranteed loan portfolio, as well as adjustments to the net amount expected to be collected on over 7,000 unguaranteed SBA 7(a) small balance loans. These adjustments impact loans measured at amortized cost and loans measured at fair value, and amount to $37.0 million.
Furthermore, the Company will book an impairment of $1.5 million on a non-marketable equity investment in a firm who was a partner with the Company’s former SBA 7(a) lending business and will also write down by $1.6 million the unamortized premiums on the Company’s portfolio of purchased fully guaranteed USDA loans which are at risk of default or early prepayment. These items will be included in the Company’s second quarter earnings and financial reports that are scheduled to be released after the close of markets on July 30, 2026.
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As a result of such review, the Company will restate its previously issued audited financial statements for the years ended December 31, 2024 and 2025, and for the first quarter ended March 31, 2026. The Company’s management, in consultation with its Audit Committee and its Board of Directors, identified $2.8 million of deferred origination costs and $2.1 million of accrued interest related to loans which had defaulted or were placed into non-accrual status in prior periods, which resulted in a material understatement of provision expense and overstatement of net interest income during the effected periods 2024, 2025 and the first quarter of 2026.
These misstatements have resulted in corrections to the Company’s results of operations for the periods of 2024, 2025, and the first quarter of 2026. Specifically, the previously reported: (i) 2024 net income of $12.6 million will be restated to a net income of $11.4 million; (ii) 2025 net loss of $22.9 million will be restated to a net loss of $24.2 million; and (iii) first quarter 2026 net loss of $5.7 million will be restated to a net loss of $5.9 million. As a result, the Company’s previously filed financial statements and other communication relating to those periods should no longer be relied upon. The Company anticipates it will file amendments to its 2025 Form 10-K and first quarter 2026 Form 10-Q by August 12, 2026.
“We take our obligation to provide accurate and transparent financial reporting seriously,” stated Alfred Rogers, Chief Executive Officer. “Once this understatement of provision expense was identified through our internal review process, we moved quickly to investigate, correct the error, and notify our shareholders and regulators. Despite the correction, the Bank remains well capitalized and well positioned to continue serving our customers and communities.”
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