BayFirst Financial Corp. (NASDAQ: BAFN) has announced a significant strategic shift. The company is discontinuing its BayFirst Bolt Program, an SBA 7(a) loan product. This decision, effective immediately, marks a major restructuring for the St. Petersburg-based bank. It impacts small businesses that relied on the expedited working capital loans. Investors and the financial market are closely watching the implications of this strategic move.
BayFirst Bolt Program: A Strategic Shift
The BayFirst Bolt Program specifically offered small balance SBA 7(a) loans. These loans typically provided working capital to small businesses. However, BayFirst Financial Corp. initiated a comprehensive strategic review earlier this year. This review aimed to reduce risk associated with unguaranteed SBA 7(a) loans. Furthermore, it sought to position the company for long-term growth and enhance shareholder value.
Tom Zernick, Chief Executive Officer of BayFirst, confirmed the discontinuation. He stated, “As part of this effort, we are discontinuing the Bank’s Bolt loan program, our SBA 7(a) loan product which offered expedited working capital loans.” Consequently, this move signals a pivot in BayFirst’s lending strategy. The company will now focus on strengthening its core community banking activities and traditional SBA 7(a) offerings.
Restructuring Efforts and Financial Implications for BayFirst Financial
The discontinuation of the BayFirst Bolt Program comes with substantial restructuring measures. BayFirst is implementing a significant workforce reduction. This includes 26 positions from the Bolt program and an additional 25 positions from other areas of the Bank. In total, this represents 51 positions, or 17% of their workforce. This reduction is expected to generate approximately $6 million in annual cost savings for the company.
Furthermore, BayFirst is taking several financial steps to address the transition:
- Charge-offs and Write-downs: The company recorded charge-offs and fair value write-downs on high-risk SBA 7(a) loans in the second quarter of 2025.
- Restructuring Charge: BayFirst anticipates recording a restructuring charge in the third quarter of 2025 related to the Bolt program exit.
- Asset Sale: They plan to seek offers to sell the remaining Bolt loan balances and the Bolt loan origination platform to an unaffiliated third party.
- Dividend Suspension: To offset these impacts, the Board has suspended dividend payments.
- Director Fees: Additionally, directors will forgo board fees.
These measures aim to mitigate financial risks. They also support the company’s new strategic direction. BayFirst remains committed to exploring alternatives that serve shareholders, customers, and communities effectively.
Focus on Core Community Banking: BayFirst’s Future
BayFirst Financial Corp. is now intensifying its focus on core community banking. The company aims to increase emphasis on its banking activities within Florida markets. This strategic realignment involves strengthening existing core SBA 7(a) offerings. It also means improving operations to adapt to evolving local and financial market conditions.
CEO Tom Zernick highlighted the company’s infrastructure. “With twelve banking centers throughout Tampa Bay, we have both the infrastructure and banking teams in place to efficiently grow and gain market share in our attractive Florida markets,” he explained. This commitment underscores BayFirst’s dedication to building a premier community banking franchise. The bank seeks to capitalize on its established strengths in the region. The discontinuation of the BayFirst Bolt Program allows resources to be reallocated for this purpose.
Implications for Small Businesses and Investors
For small businesses, the immediate impact is the unavailability of the expedited BayFirst Bolt Program loans. However, BayFirst National Bank remains an active SBA 7(a) lender. It was the 8th largest SBA 7(a) lender by number of units originated nationwide through June 30, 2025. Therefore, other SBA 7(a) loan options are still available through BayFirst.
For investors in BAFN stock, the strategic restructuring presents both challenges and opportunities. The suspension of dividend payments and expected restructuring charges represent short-term negative impacts. However, the company projects significant annual cost savings. This, coupled with a focus on risk reduction and core business growth, could lead to long-term value creation. The sale of the Bolt loan portfolio may also provide additional liquidity. This strategic shift aims to enhance the company’s financial resilience and market position.
Looking Ahead: BayFirst Financial Corp.
BayFirst Financial Corp. is positioning itself for a new phase of development. The leadership team is committed to driving innovation and resilience. The company aims to better align itself with the demands of a rapidly changing banking landscape. By streamlining operations and focusing on its strengths, BayFirst seeks to optimize its resources.
BayFirst Financial Corp. began operations on September 1, 2000. Its primary subsidiary, BayFirst National Bank, commenced business in February 1999. The Bank operates twelve full-service banking offices across the Tampa Bay-Sarasota region. It offers a broad range of commercial and consumer banking services. As of June 30, 2025, BayFirst Financial Corp. reported $1.34 billion in total assets. The strategic discontinuation of the BayFirst Bolt Program is a decisive step towards a focused and potentially more stable future for the financial institution.
Forward-Looking Statements: This article contains forward-looking statements. These statements are subject to risks and uncertainties. Actual events may differ materially from those projected. Readers should refer to BayFirst Financial Corp.’s SEC filings for detailed risk factors.
Frequently Asked Questions (FAQs)
Why did BayFirst Financial (NASDAQ: BAFN) discontinue its BayFirst Bolt Program?
BayFirst discontinued the BayFirst Bolt Program as part of a comprehensive strategic review. This review aimed to reduce risk from unguaranteed SBA 7(a) loans and position the company for long-term growth and enhanced shareholder value.
How many jobs will be cut at BayFirst Financial due to this restructuring?
BayFirst is reducing its workforce by 51 positions. This includes 26 Bolt positions and 25 positions in other areas. This reduction represents 17% of their total workforce.
What are the expected financial benefits of BayFirst’s 2025 restructuring?
The workforce reduction is expected to save approximately $6 million in annual costs. The restructuring also involves mitigating risks through charge-offs and fair value write-downs on high-risk loans.
How will BayFirst’s dividend payments be affected by the restructuring?
BayFirst has suspended dividend payments to offset the financial impacts of the restructuring. Additionally, directors will forgo board fees as part of these measures.
What are BayFirst’s plans for the remaining Bolt loan portfolio?
BayFirst plans to seek offers to sell the remaining Bolt loan balances and the Bolt loan origination platform to an unaffiliated third party.
Will BayFirst Financial continue to offer other SBA 7(a) loans?
Yes, BayFirst will continue to strengthen its core SBA 7(a) offerings. The discontinuation specifically applies to the Bolt program, which was a particular type of SBA 7(a) loan for expedited working capital.
