BayFirst Financial Corp. (BAFN): Business Model Canvas [Dec-2025 Updated]

You're looking at BayFirst Financial Corp. right now as they execute a major strategic pivot, shedding the national SBA lending game to double down on being a pure-play community bank across the Tampa Bay-Sarasota region. This isn't just a minor tweak; it's a fundamental reshaping of how they make money, moving from a national footprint to focusing on core local deposit gathering-they held $1.17 billion in deposits as of late 2025-and originating local real estate loans, all while managing a significant restructuring charge of $7.3 million in Q3 2025. To see exactly how this shift impacts their engine-from their $1.35 billion asset base to their $11.3 million in Q3 Net Interest Income-dive into the nine building blocks of their new Business Model Canvas below.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Key Partnerships

You're looking at the core relationships BayFirst Financial Corp. relies on to manage liquidity and execute its strategic pivot away from national SBA 7(a) lending toward a Tampa Bay-focused community bank model. These partnerships are critical for funding and operational continuity.

SBA Loan Portfolio Sale to Banesco USA

The exit from the SBA 7(a) business involved a significant transaction with Banesco USA. This partnership was structured to de-risk the balance sheet, though it incurred immediate costs.

• BayFirst Financial Corp. signed an agreement to sell \$103 million in SBA 7(a) loan balances to Banesco USA.
• The sale price was 97 percent of retained balances.
• This transaction resulted in a \$5.1 million loss on the sale of the loan portfolio.
• Banesco USA, which had \$5.2 billion in assets as of June 30, 2025, also purchased the servicing rights for the transferred loans.
• BayFirst Financial Corp. retained approximately \$167 million in unguaranteed SBA 7(a) loan balances post-sale.

Secured Borrowing and Liquidity Backstops

BayFirst Financial Corp. maintains access to secured borrowing facilities to ensure robust liquidity, a key resource monitored by management and the Board.

The Federal Home Loan Bank (FHLB) serves as a primary source of secured borrowing liquidity. The usage of this facility has fluctuated through 2025:

The Federal Reserve (FRB) is cited as an additional liquidity resource, though BayFirst Financial Corp. reported no borrowings from the FRB as of September 30, 2025, and June 30, 2025.

Third-Party Vendors for Treasury Management Platforms

As BayFirst Financial Corp. transitions to a community bank focus, growing fee income from treasury management services is a stated goal, which relies on technology platforms.

The services offered imply partnerships with third-party technology providers for core functions:

• Online and Mobile Banking access.
• ACH (Automated Clearing House) for payments and deposits.
• Positive Pay for fraud prevention and reconciliation.
• Wire Transfers for large-value transfers.
• Merchant Services for processing credit card transactions.

While the specific dollar amounts or names of the third-party vendors are not detailed in the latest public filings, the platform supports features like Remote Deposit Capture and Transaction Review And Approval.

Finance: draft 13-week cash view by Friday.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Key Activities

You're focused on the core engine of BayFirst Financial Corp. right now, which is shifting from a heavy reliance on government-guaranteed loan gains to a more stable, local community banking model as of late 2025. This transition heavily influences what the bank must actively do day-to-day.

Core commercial and consumer deposit gathering

Gathering stable, low-cost deposits is a critical activity to fund the expanding community bank loan portfolio and reduce reliance on less predictable income sources like government-guaranteed loan sales. BayFirst Financial Corp. is actively focused on growing its core deposit account base, which is less rate sensitive.

As of September 30, 2025, total deposits stood at $1.17 billion. This represented an increase of $7.7 million, or 0.7%, during the third quarter of 2025, and an increase of $59.3 million, or 5.3%, over the past year. To be fair, the composition shifted within the quarter; the growth was primarily due to increases in time deposit balances, partially offset by decreases in noninterest-bearing account balances, interest-bearing transaction account balances, and savings and money market account balances. The stability of this funding base is underscored by the fact that approximately 84% of total deposits were insured by the FDIC at the end of Q3 2025. Still, management noted that short-term brokered deposits stood at $236 million as of that date.

Originating commercial and residential real estate loans

The origination of commercial and residential real estate loans is the primary asset-side activity supporting the shift to relationship-driven community banking, particularly in the Tampa Bay region. This involves disciplined underwriting standards for conventional loans.

The total loans held for investment on the balance sheet decreased to $998.7 million by September 30, 2025, largely due to the strategic reduction of the SBA portfolio. However, the community bank operations were still active in originating new credit.

Here are the recent origination and portfolio figures:

The bank is actively managing credit risk within this portfolio, with nonperforming assets at 1.97% of total assets as of September 30, 2025.

Providing enhanced treasury management services to businesses

A key component of the new community bank focus is growing fee income through services tailored to small, medium, and large businesses. BayFirst Financial Corp. has been actively enhancing its treasury management capabilities.

The operational focus includes:

• Expanding treasury management services through a new platform.
• Adding additional treasury management associates.
• Servicing businesses through two online platforms.

This activity is showing measurable growth in fee income, moving from $20,000 in 2022 to $69,000 year-to-date in 2025.

Managing and resolving the retained unguaranteed SBA 7(a) loan portfolio

This activity is centered on winding down the SBA 7(a) business entirely to de-risk the balance sheet, which was a source of operating losses. This involves selling a large portion of the portfolio and managing the remainder.

Key actions and figures related to the SBA 7(a) portfolio as of late 2025 include:

• Exiting the SBA 7(a) lending business entirely.
• Signing a definitive agreement to sell a portion of the portfolio to Banesco USA at 97% of retained balances.
• Incurring a $5.1 million loss on the sale of the portion to Banesco USA.
• Expecting to retain approximately $167 million in unguaranteed SBA 7(a) balances post-closing.
• The company discontinued its small-balance loan program, called BOLT, in August 2025.

The impact of this resolution on credit quality is visible in the charge-off metrics. Annualized net charge-offs fell to 1.24% in the third quarter of 2025, a significant improvement from 2.60% in the second quarter of 2025, which management attributes to the reduction of unguaranteed SBA 7(a) loans.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Key Resources

You're looking at the core assets BayFirst Financial Corp. uses to deliver its services as of late 2025. These aren't just line items; they are the tangible and human capital foundations supporting their strategic pivot back to a pure community bank model in the Tampa Bay-Sarasota region.

The physical footprint and financial scale provide the necessary base for local operations. As of September 30, 2025, BayFirst Financial Corp. reported $1.35 billion in total assets. This scale supports the physical presence, which consists of twelve full-service banking offices strategically located throughout the Tampa Bay-Sarasota region. This physical network is key for local relationship building, which is central to community banking.

Funding stability is another critical resource, especially following the strategic restructuring. The stable deposit base stood at $1.17 billion as of September 30, 2025. To be fair, this base is considered secure, with over 84% of those total deposits insured by the FDIC as of that same date. This high level of insured deposits translates directly into a more predictable, lower-cost funding base, which management is targeting to help achieve a projected return on assets closer to 40-70 bps in 2026.

Here's a quick look at the balance sheet anchors as of the end of the third quarter of 2025:

The human capital, particularly the experienced teams, is now being sharpened to focus on the core mission. Following the definitive agreement to exit the SBA 7(a) lending business, the focus is squarely on the community bank operations. This means the remaining teams are the engine for local commercial and consumer lending.

The leadership team itself represents significant experience in the banking sector, which is vital for navigating the current strategic shift:

• Thomas G. Zernick, Chief Executive Officer, has served in leadership roles at community banks and as an SBA Product Manager.
• Robin L. Oliver, President and Chief Operating Officer, brings experience from public accounting and serving as Controller at another financial institution.
• Susan P. Khayat, Chief Credit Officer (joined in 2025), has prior experience as Chief Credit Officer at other community banks and as a bank regulator with the US Department of the Treasury.
• The overall strategy emphasizes serving individuals, families, and small businesses in the Tampa Bay area with C&I, consumer, and residential lending.

The commercial lending focus is now on segments like Commercial & Industrial (C&I), Business and Professional (B&P), and Commercial Real Estate (CRE) within the local market, leveraging the expertise of the teams that remain committed to the community bank mandate. This shift is intended to reduce reliance on gain-on-sale revenue and focus on more stable, relationship-based banking activities.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Value Propositions

You're looking at BayFirst Financial Corp. (BAFN) as it completes a major strategic pivot late in 2025. The core value proposition has shifted decisively toward being the premier community bank in the Tampa Bay-Sarasota market, moving away from the risk profile associated with its former large-scale SBA 7(a) operations. This means the value offered now centers on deep local ties and a more traditional, relationship-focused banking model.

Relationship-driven, personalized community banking services.

The bank is emphasizing building real relationships with local individuals, families, and small businesses. This personalized approach is designed to secure a solid, stable funding foundation through low-cost core deposits. For example, the Refer Live program, which encourages current customers to bring in friends and family, generated over $\text{\$10.5 million}$ in consumer loans and over $\text{\$4 million}$ in new deposits over the 12 months leading up to Q2 2025. This focus on household relationships is central to their strategy to grow recurring net interest income.

Comprehensive commercial and consumer banking product suite.

Following the restructuring, the product suite is being honed to support the local community bank focus. This includes a full range of conventional community bank loans, residential mortgages, and a strong push for core deposit accounts. You see this commitment in their deposit base, where as of September 30, 2025, over $\text{84%}$ of total deposits were insured by the FDIC, signaling stability for the customer base. The total deposit base stood at $\text{\$1.17 billion}$ at that same date.

Here's a quick look at the scale of the core business as of the end of Q3 2025:

The consumer side includes personal loans, vehicle loans, and home equity/mortgage options, while the commercial side is now heavily weighted toward conventional community bank loans, specifically commercial and industrial (C&I) lending within the target region.

Local market expertise in the Tampa Bay-Sarasota region.

The value proposition is explicitly tied to geography. BayFirst Financial Corp. aims to be the premier community bank in the Tampa Bay area. This local expertise is critical for underwriting the conventional commercial and consumer loans that now form the core of the loan portfolio. The company has leadership explicitly designated as the Tampa market leader, underscoring this geographic commitment. This local focus helps them better understand the longer-term implications for their borrowers navigating current economic conditions.

Enhanced treasury management solutions for small and medium-sized businesses.

As part of the transition, BayFirst Financial Corp. is expanding its treasury management services to better service small and medium-sized businesses, as well as larger enterprises, through two online platforms. This suite is designed to help businesses manage cash flow, streamline payments, and reduce risk. The bank has added a new platform and additional treasury management associates to support this push. To be fair, the fee income from this area is still relatively small, showing year-to-date 2025 treasury management fee income of $\text{\$69,000}$, up from $\text{\$20,000}$ in 2022, indicating a growth trajectory for this specific value-add.

Key Treasury Management Features offered include:

• Cash Management and Liquidity Management.
• Fraud Prevention tools like Positive Pay.
• Payment Solutions, including ACH Transfers and Wire Transfers.
• Remote Deposit Capture.
• Merchant Services.

Finance: draft 13-week cash view by Friday.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Customer Relationships

You're looking at how BayFirst Financial Corp. (BAFN) connects with and serves its customers as they pivot back to a pure community bank model following the exit from the SBA 7(a) business. The foundation of their relationship strategy is built on personalized service within their local footprint, which is the Tampa Bay/Sarasota area. This focus is directly reflected in their deposit base, which is the lifeblood of a community bank.

The dedicated, relationship-driven service model at the branch level is central to their current strategy. This is evident in their deposit gathering success; as of September 30, 2025, total deposit balances stood at $1.17 billion. Furthermore, the bank saw the number of deposit accounts grow by 1.8% during the third quarter of 2025, showing traction in acquiring and retaining customer relationships. To be fair, the bank is actively growing its low-cost deposit account base, focusing on checking and savings accounts, which are less rate sensitive.

For commercial clients, the high-touch service is now centered on enhanced treasury services, a key focus after the strategic shift. While the company exited the large SBA 7(a) lending business, which previously involved an expanded SBA lending team, the commitment to local business relationships remains. The bank is now focusing on Tampa Bay Commercial & Industrial (C&I), consumer, and residential lending. Treasury management fee income, a measure of high-touch commercial service adoption, was reported at $69,000 year-to-date in 2025.

The digital banking platforms are designed to support self-service and convenience alongside the branch network. BayFirst Financial Corp. introduced new features to its mobile and online banking platforms, including biometric authentication and real-time transaction alerts. This digital layer supports the core banking products offered to individuals and families. For context in the market, 77 percent of U.S. consumers prefer to manage their bank accounts via a mobile app or computer.

Direct contact with lending officers for commercial and consumer lending is maintained, though the composition of the loan portfolio has changed significantly. The company is now focused on conventional commercial and consumer loan portfolios. While the former SBA lending team transitioned staff roles following the portfolio sale, general customer support is routed through the BayFirst Customer Contact Center. You can reach them by phone at 833.698.2265, Monday through Friday, from 8:00 a.m. - 6:00 p.m. Customers also have the option to reach a local banking center representative in person or by phone. If onboarding takes 14+ days, churn risk rises, so speed here matters.

Here's a quick look at some key relationship and deposit metrics as of late 2025:

The digital self-service options available to customers include:

• Mobile Banking App with mobile check deposit.
• Online Banking for secure account access.
• Digital Wallet Integration (Apple Pay, Google Pay, Samsung Pay).
• Bill pay functionality.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Channels

You're looking at how BayFirst Financial Corp. gets its value proposition to the customer base as of late 2025, which is heavily influenced by its strategic pivot away from nationwide SBA 7(a) lending toward a core community bank model focused on the Tampa Bay area.

The physical presence remains a key channel, though its role is evolving alongside the digital offering.

• Network of 12 full-service physical bank branches in the Florida Tampa Bay-Sarasota region.
• Mobile and online banking platforms used for consumer and business clients, supporting services like Treasury Management transactions.

The direct sales force channel is now centered on conventional commercial and industrial (C&I) lending and other core community bank services, following the September 2025 announcement to exit the SBA 7(a) business.

For context on the lending channel's scale leading into this transition, the government guaranteed loan team originated $106.4 million in new loans during the second quarter of 2025.

The Treasury management channel targets business clients with services designed to improve cash flow and efficiency, with the bank suggesting potential savings of up to $400 a month in fees for small businesses that switch.

Here's a quick look at the scale of the core banking and lending channels as of mid-2025:

The Treasury Management sales associates focus on delivering a suite of services, which includes:

• Online and Mobile Banking access.
• ACH and Wire Transfers.
• Merchant Services.
• Fraud Prevention tools like Positive Pay.

The C&I lending focus post-restructuring targets the Tampa Bay market specifically, aiming to return to profitability with a targeted positive return on assets of 40-70 bps in 2026.

Finance: draft 13-week cash view by Friday.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Customer Segments

BayFirst Financial Corp. (BAFN) is actively pivoting its customer focus following a strategic restructuring announced in 2025, moving from a nationwide SBA 7(a) origination model to a concentrated community bank approach centered on the Tampa Bay area.

Individuals and families in the Tampa Bay-Sarasota region.

This segment forms the core of the deposit-gathering strategy for BayFirst National Bank. The bank operates twelve full-service banking offices throughout the Tampa Bay-Sarasota region, where the majority of deposits are sourced. The stability of this customer base is suggested by the deposit insurance level; as of September 30, 2025, more than 84% of the bank's total deposits were insured by the FDIC. The Q1 2025 strategy emphasized growing checking and savings accounts from individuals and small businesses because they are less rate sensitive.

• Operates 12 full-service banking offices in the target region.
• Total deposits stood at $1.17 billion as of September 30, 2025.
• Strategy targets growing low-cost deposit accounts from this segment.

Small and medium-sized businesses (SMBs) in the local market.

While BayFirst Financial Corp. exited the high-volume SBA 7(a) lending business, selling 97% of that portfolio in Q3 2025, the focus shifts to local commercial and industrial (C&I) lending. The bank is positioning itself to serve local businesses through conventional commercial loan portfolios. Historically, the bank was ranked the 8th largest SBA 7(a) lender by number of units originated nationwide through the SBA's quarter ended June 30, 2025.

Commercial Real Estate (CRE) investors and developers.

This segment is a primary target for the post-restructuring loan portfolio. The loan book, which totaled $999 million in loans held for investment as of Q3 2025, shows a clear concentration in this area. The company is focusing on conventional commercial lending within the Tampa Bay area.

Professionals and high-net-worth individuals seeking treasury services.

As part of the pivot to a pure community bank model, BayFirst Financial Corp. is emphasizing enhanced treasury services for its local commercial and high-value individual clients. This service offering is intended to build recurring revenue and deepen relationships beyond just lending and basic deposits. The bank reported total assets of $1.35 billion in Q3 2025.

• Focus area: Enhanced treasury services.
• Total Assets: $1.35 billion (Q3 2025).
• Net Interest Income for Q3 2025 was $34.6 million.

Finance: draft 13-week cash view by Friday.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Cost Structure

The Cost Structure for BayFirst Financial Corp. in late 2025 is heavily influenced by strategic transformation and elevated credit costs stemming from the exit of the SBA 7(a) lending business.

Significant noninterest expense reached $25.2 million from continuing operations in the third quarter of 2025, a notable jump from $17.5 million in the second quarter of 2025. This surge included $12.4 million in one-time charges related to the restructuring plan. The largest single component of this was a $7.3 million restructuring charge recorded in Q3 2025.

The components of this restructuring charge give you a clearer view of the immediate costs associated with the strategic pivot:

• $2.9 million write-off for assets and prepaid expenses tied to the SBA 7(a) exit.
• $3.9 million for personnel-specific costs, which included the termination of the ESOP plan.
• Approximately $0.5 million for conversion and deal costs.

The cost of credit quality deteriorated significantly, evidenced by a high provision for credit losses totaling $10.9 million in Q3 2025. This provision was more than triple the $3.1 million recorded in the third quarter of 2024. The Allowance for Credit Losses (ACL) to total loans increased to 2.61% (or 2.78% excluding government guaranteed loans).

Key Q3 2025 Cost Metrics:

Costs associated with the physical footprint, covering personnel and occupancy costs for the branch network, are embedded within the noninterest expense figures. While the prompt specifies a twelve branch network, the latest available data indicates BayFirst National Bank operated ten full-service banking offices as of June 30, 2023. Occupancy expense specifically saw an increase of $0.3 million in Q2 2025 compared to the second quarter of 2024.

Interest expense on deposits and borrowed funds is a core funding cost. You saw a decrease in interest expense on deposits of $2.0 million in Q3 2025 compared to the third quarter of 2024, which helped net interest income despite lower overall net interest margin. For the first nine months of 2025, total interest expense decreased by $3.5 million year-over-year. Total deposits stood at $1.17 billion at the end of Q3 2025.

The breakdown of interest expense changes for the first nine months of 2025 versus the first nine months of 2024 shows:

• Decrease in interest expense: $3.5 million.
• Increase in loan interest income (including fees): $3.8 million.

If you look at the quarter-over-quarter change from Q1 2025 to Q2 2025, interest expense from borrowings increased by $0.6 million. Finance: draft 13-week cash view by Friday.

BayFirst Financial Corp. (BAFN) - Canvas Business Model: Revenue Streams

You're looking at the core ways BayFirst Financial Corp. brings in money now, especially after the big strategic shift away from SBA 7(a) lending. Honestly, the revenue mix is in transition, moving from a heavy reliance on loan sales to a more traditional, relationship-based banking model.

The primary engine remains Net Interest Income (NII) from loans and securities. For the third quarter of 2025, this key metric from continuing operations hit \$11.3 million. That's a solid increase compared to the \$9.4 million reported in the third quarter of 2024. The net interest margin (NIM) for Q3 2025 settled at 3.61%, up 27 basis points from the year-ago quarter's 3.34%.

The core earning asset supporting this is the retained loan portfolio. As of the end of Q3 2025, the Loans held for investment on the balance sheet stood at \$998.7 million. This figure reflects an 11.3% decrease during the quarter, largely due to reclassifying loans to held for sale as part of the restructuring.

The former major component, noninterest income, which historically included significant gains from selling government-guaranteed loans, has sharply contracted. In Q3 2025, noninterest income was negative at \$1 million, a significant swing from the \$12.3 million seen in Q3 2024. This was driven by a \$5.1 million fair value adjustment on loans marked as held for sale and lower gains on sale, all tied to exiting the SBA 7(a) business.

To compensate for the loss of SBA gain-on-sale revenue, BayFirst Financial Corp. is leaning into fee-based services. This includes fee income from service charges and treasury management services. The focus is now on enhanced treasury services for small and medium-sized businesses. While a smaller piece, treasury management fee income showed growth, moving from \$20,000 in 2022 to \$69,000 year-to-date in 2025.

Regarding loan servicing income, this component is definitely smaller post-SBA exit. Banesco USA assumed servicing for the majority of the sold SBA 7(a) loans. BayFirst Financial Corp. expects to retain approximately \$167 million of unguaranteed SBA 7(a) balances post-close and will continue marketing those remaining balances for sale.

Here's a quick look at the key revenue drivers and related figures from the Q3 2025 period:

The strategy is clearly about building predictable, recurring revenue streams, which you can see in the year-to-date numbers too. For the first nine months of 2025, NII from continuing operations reached \$34.6 million, up from \$27.4 million in the first nine months of 2024. This year-over-year increase in NII was largely due to a \$3.8 million increase in loan interest income, including fees, over that nine-month period.

You should keep an eye on these shifts:

• Focus on core community banking in Tampa Bay-Sarasota.
• Growing low-cost deposit base to fund loan portfolios.
• Transitioning away from gain-on-sale reliance.
• Expectation to return to profitability with a targeted positive return on assets of 40-70 bps in 2026.

Finance: draft 13-week cash view by Friday.