ST. PETERSBURG, Fla. – August 6, 2025 – BayFirst Financial Corp. (NASDAQ: BAFN), the parent company of BayFirst National Bank, has announced a significant restructuring plan, discontinuing its Bolt Small Business Administration (SBA) 7(a) loan program and reducing its workforce by 51 positions, representing 17% of its staff.
This move, effective immediately, aims to streamline operations, reduce financial risk, and refocus the bank’s efforts on its core community banking operations in the Tampa Bay-Sarasota region.
The decision follows a comprehensive strategic review prompted by mounting losses and economic pressures impacting small-dollar lending.
The Bolt program, designed to provide small businesses with expedited working capital loans of up to $150,000, has been a cornerstone of BayFirst’s national SBA lending efforts.
However, the program faced significant challenges due to high-risk, unguaranteed loans, particularly those originated before the 2022-2023 interest rate hikes.
According to BayFirst’s Chief Operating Officer, Robin Oliver, older Bolt loans have struggled with repayment as small businesses grapple with economic headwinds, including rising costs, tariff uncertainties, and labor market difficulties.
BayFirst reported a net loss of $1.2 million in the second quarter of 2025, following a $300,000 loss in the first quarter, driven largely by charge-offs and fair value write-downs on high-risk SBA 7(a) loans.
To address these challenges, the bank expects to incur a restructuring charge in the third quarter of 2025 related to the Bolt program’s termination.
Additionally, the company plans to sell the Bolt loan balances and its loan origination platform to an unaffiliated third party, a move intended to further de-risk its balance sheet.
Workforce Reduction and Cost-Saving Measures
The workforce reduction includes 26 positions directly tied to the Bolt program and 25 additional roles across other bank operations.
This restructuring is projected to save BayFirst approximately $6 million annually in operating costs.
To bolster its financial resilience, the bank’s board of directors has suspended dividend payments and agreed to forgo their own board fees, signaling a commitment to stabilizing the company’s capital position during this transition.
BayFirst’s CEO, Thomas Zernick, emphasized the necessity of these measures: “Our strategic review focused on reducing exposure to high-risk, unguaranteed SBA loans while positioning BayFirst for sustainable growth.
By exiting the Bolt program, we can redirect resources to strengthen our community banking franchise and capitalize on opportunities in our Florida markets.”
While BayFirst is discontinuing the Bolt program, it remains committed to its broader SBA 7(a) lending activities, particularly for larger loans that have demonstrated stronger performance.
Oliver noted that larger SBA loans typically involve more sophisticated borrowers with robust financial statements, reducing the risk of default.
In the SBA’s fiscal year 2025 (through June 30), BayFirst ranked as the 8th largest SBA 7(a) lender by loan units and 18th by dollar volume nationwide, underscoring its prominence in this space.
The bank, with $1.34 billion in total assets as of June 30, 2025, operates 12 full-service banking offices across the Tampa Bay-Sarasota region.
BayFirst aims to enhance its community banking services, focusing on growing low-cost deposit accounts and expanding its commercial and consumer loan portfolios.
This shift aligns with the bank’s “SOAR” strategic initiatives, which prioritize operational excellence, technology optimization, and market share growth in Florida.
Economic Context and Future Outlook
The decision to terminate Bolt comes amid broader economic challenges impacting small businesses, including high interest rates, inflation, and supply chain disruptions.
Zernick highlighted these pressures in an interview, noting that lending into the small-dollar space has become increasingly untenable in the current macroeconomic environment.
BayFirst’s prior exit from national mortgage lending in 2022, which incurred a $3.1 million charge, reflects a pattern of strategic retreats from underperforming business lines affected by interest rate volatility.
Despite recent financial setbacks, BayFirst reported positive developments in its second-quarter 2025 results, including a 33.7% increase in net interest income to $12.3 million and a 0.63 percentage point improvement in net interest margin.
The bank’s community banking segment also saw $50.7 million in new loan production, signaling resilience in its core operations.
BayFirst’s leadership remains optimistic about its long-term prospects.
“Our focus is on building a premier community banking franchise that leverages our strong infrastructure and market presence in Tampa Bay,” Zernick stated.
The bank is exploring various strategic alternatives to enhance shareholder value and improve operational efficiency, with further updates expected in the coming weeks.
Founded in 2000 and headquartered in St. Petersburg, Florida, BayFirst Financial Corp. is a registered bank holding company that derives its primary income from BayFirst National Bank.
Established in 1999, the bank provides a wide range of commercial and consumer banking services across its 12 Tampa Bay-Sarasota branches.
Recognized as Florida’s top bank by Forbes in 2024, BayFirst continues to prioritize community engagement and financial innovation.
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