BayFirst Financial Corp.
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 12, 2025
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Rate/Volume Analysis
The table below presents the effects of volume and rate changes on interest income and expense for the periods indicated. Changes in volume are changes in the average balance multiplied by the previous period’s average rate. Changes in rate are changes in the average rate multiplied by the average balance from the previous period. The net changes attributable to the combined impact of both rate and volume have been allocated proportionately to the changes due to volume and the changes due to rate. Loans in nonaccrual status, for the purpose of the following computations, are included in the average loan balances. FRB, FHLB, and FNBB restricted equity holdings are included in other interest-earning assets. The Company did not have a significant amount of tax-exempt assets.
| (Dollars in thousands) | Rate | Volume | Total |
|---|---|---|---|
| Three Months Ended September 30, 2025 vs. September 30, 2024: | |||
| Interest-earning assets: | |||
| Investment securities | $(47) | $(78) | $(125) |
| Loans | (1,775) | 2,041 | 266 |
| Other interest-earning assets | (91) | 162 | 71 |
| Total interest-earning assets | (1,913) | 2,125 | 212 |
| Interest-bearing liabilities: | |||
| NOW, MMDA and savings | (1,607) | 242 | (1,365) |
| Time deposits | (999) | 331 | (668) |
| Other borrowings | (74) | 488 | 414 |
| Total interest-bearing liabilities | (2,680) | 1,061 | (1,619) |
| Net change in net interest income | $767 | $1,064 | $1,831 |
| (Dollars in thousands) | Rate | Volume | Total |
|---|---|---|---|
| Nine Months Ended September 30, 2025 vs. September 30, 2024: | |||
| Interest-earning assets: | |||
| Investment securities | $7 | $(189) | $(182) |
| Loans | (3,493) | 7,327 | 3,834 |
| Other interest-earning assets | (268) | 404 | 136 |
| Total interest-earning assets | (3,754) | 7,542 | 3,788 |
| Interest-bearing liabilities: | |||
| NOW, MMDA, and savings | (4,460) | 1,753 | (2,707) |
| Time deposits | (2,440) | 1,164 | (1,276) |
| Other borrowings | (209) | 726 | 517 |
| Total interest-bearing liabilities | (7,109) | 3,643 | (3,466) |
| Net change in net interest income | $3,355 | $3,899 | $7,254 |
Provision for Credit Losses
The provision for credit losses is charged to operations to adjust the ACL to a level deemed appropriate by management and is based upon the volume and type of lending the Bank conducts, industry standards, the amount of nonperforming loans, general economic conditions, particularly as they relate to its market area, economic forecasts, and other factors that may affect the ability to collect on the loans in its portfolio.
The Company recorded a provision for credit losses on loans for the three months ended September 30, 2025 of $10.9 million compared to a provision of $3.1 million for the three months ended September 30, 2024. During the three months ended September 30, 2025, $3.3 million of net charge offs were recorded compared to $2.8 million during the three months ended September 30, 2024. The increase in the ACL was the result of increases in nonperforming loans and economic uncertainty for our small business customers.
The Company recorded a provision for credit losses for the nine months ended September 30, 2025 of $22.6 million compared to a $10.2 million provision for the nine months ended September 30, 2024. For the nine months ended
September 30, 2025, net loan charge offs totaled $13.4 million compared to $9.7 million for the nine months ended September 30, 2024. The increase of $12.4 million in the provision for credit losses expense was primarily due to higher than expected charge-offs primarily in the SBA 7(a) portfolio, increases in nonperforming loans, and continued economic uncertainty.
The ACL was $24.5 million at September 30, 2025 and $14.2 million at September 30, 2024.
Noninterest Income
The following table presents noninterest income from continuing operations for the three and nine months ended September 30, 2025 and September 30, 2024.
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Noninterest income: | ||||
| Loan servicing income, net | 761 | 918 | 1,981 | 2,518 |
| Gain on sale of SBA and PPP loans, net | 3,063 | 6,143 | 16,526 | 19,827 |
| Service charges and fees | 474 | 447 | 1,396 | 1,343 |
| Fair value adjustment on loans held for sale | (5,096) | — | (5,096) | — |
| SBA loan fair value gain (loss) | (882) | 3,416 | 805 | 9,923 |
| Government guaranteed loan packaging fees | 380 | 903 | 1,673 | 3,332 |
| Other non-interest income | 254 | 445 | 1,215 | 1,250 |
| Total noninterest income | (1,046) | 12,272 | 18,500 | 38,193 |
Noninterest income from continuing operations was negative $1.0 million during the three months ended September 30, 2025, a decrease from$12.3 million during the three months ended September 30, 2024. The decrease in the third quarter of 2025, as compared to the third quarter of 2024, was the result of a decrease in gain on sale of government guaranteed loans of $3.1 million, a decrease in fair value gains on government guaranteed loans of $4.3 million, the unfavorable fair value adjustment on held for sale loans of $5.1 million, and a decrease in government guaranteed loan packaging fees of $0.5 million. The unfavorable fair value adjustment on held for sale loans was the result of the expected sale of a portion of the SBA 7(a) loan portfolio.
Noninterest income from continuing operations was $18.5 million for the nine months ended September 30, 2025, adecrease from $38.2 million for the nine months ended September 30, 2024. The decrease was primarily the result of a decrease in gain on sale of government guaranteed loans of $3.3 million, a decrease in government guaranteed loan fair value gains of $9.1 million, the unfavorable fair value adjustment on held for sale loans of $5.1 million, and a decrease in government guaranteed loan packaging fees of $1.7 million.
Noninterest Expense
The following table presents noninterest expense from continuing operations for the three and nine months ended September 30, 2025 and September 30, 2024.
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||
|---|---|---|---|---|
| (Dollars in thousands) | 2025 | 2024 | 2025 | 2024 |
| Noninterest expense: | ||||
| Salaries and benefits | $7,637 | $7,878 | $23,748 | $23,712 |
| Bonus, commissions, and incentives | 530 | 1,141 | 863 | 3,371 |
| Occupancy and equipment | 1,525 | 1,248 | 4,738 | 3,631 |
| Data processing | 2,049 | 1,789 | 6,172 | 4,996 |
| Marketing and business development | 262 | 532 | 1,152 | 1,660 |
| Professional services | 859 | 853 | 2,373 | 3,079 |
| Loan origination and collection | 3,273 | 1,956 | 6,866 | 5,633 |
| Employee recruiting and development | 364 | 595 | 1,443 | 1,741 |
| Regulatory assessments | 484 | 309 | 1,175 | 870 |
| Restructure charges | 7,262 | — | 7,262 | — |
| Director compensation | 137 | 143 | 390 | 427 |
| Liability and fidelity bond insurance | 168 | 143 | 468 | 431 |
| ATM and interchange | 134 | 150 | 356 | 432 |
| Telecommunication | 82 | 127 | 282 | 354 |
| Other noninterest expense | 449 | 200 | 1,268 | 1,110 |
| Total noninterest expense | $25,215 | $17,064 | $58,556 | $51,447 |
Noninterest expense from continuing operations was $25.2 million during the three months ended September 30, 2025, an increase from $17.1 million during the three months ended September 30, 2024. The increase in the third quarter of 2025, as compared to the third quarter of 2024, was primarily due to the restructure charges of $7.3 million and higher loan origination and collection expenses of $1.3 million. The restructure charges of $7.3 million related to the comprehensive strategic review aimed at reducing expenses and derisking the bank's balance sheet which included the exit of the SBA 7(a) business.
Noninterest expense was $58.6 million for the nine months ended September 30, 2025, an increase from $51.4 million for the nine months ended September 30, 2024. The increase was primarily the result of the restructure charges of $7.3 million.
Income Taxes
Income tax benefit from continuing operations was $7.0 million for the three months ended September 30, 2025, a decrease from income tax expense of $0.4 million for the three months ended September 30, 2024. The change was attributed to a net loss from continuing operations for the current quarter compared to net income from continuing operations in the third quarter of the prior year. There was no income tax expense from discontinued operations for the three months ended September 30, 2025 and September 30, 2024.
The One Big Beautiful Bill Act was signed into law on July 4, 2025. While the legislation has significant tax provisions, none are expected to materially impact the Company.
Income tax benefit from continuing operations was$7.5 million for the nine months ended September 30, 2025, a decrease from income tax expense of$1.0 million for the nine months ended September 30, 2024. The change was attributed to a net loss from continuing operations for the current year compared to net income from continuing operations in the prior year. There was no income tax expense from discontinued operations for the nine months ended September 30, 2025, compared to an income tax benefit of $23 thousand for the nine months ended September 30, 2024.
At September 30, 2025, the Company had $7.3 million federal net operating loss carryforward and $7.3 million of state net operating loss carryforward. At September 30, 2024, the Company had $1.4 million of federal net operating loss carryforward and $0.3 million of state net operating loss carryforward. The net operating loss carryforwards do not expire.
The effective income tax rate was 26.90% for the nine months ended September 30, 2025 and 26.51% for the nine months ended September 30, 2024.
Financial Condition
Investment Securities
The following table presents the fair value of the Company's investment securities portfolio classified as available for sale as of September 30, 2025 and December 31, 2024.
| (Dollars in thousands) | September 30, 2025 | December 31, 2024 |
|---|---|---|
| Investment securities available for sale: | ||
| Asset-backed securities | $2,930 | $4,990 |
| Mortgage-backed securities: | ||
| U.S. Government-sponsored enterprises | 4,966 | 7,130 |
| Collateralized mortgage obligations: | ||
| U.S. Government-sponsored enterprises | 18,080 | 15,286 |
| Corporate bonds | 3,881 | 8,885 |
| Total investment securities available for sale | $29,857 | $36,291 |
The net unrealized loss on the investment securities AFS at September 30, 2025 and December 31, 2024, was $2.8 million and $4.0 million, respectively.
The following table presents the amortized cost of the Company's investment securities portfolio classified as held to maturity as of September 30, 2025 and December 31, 2024.
| (Dollars in thousands) | September 30, 2025 | December 31, 2024 |
|---|---|---|
| Investment securities held to maturity: | ||
| Corporate bonds | $2,500 | $2,500 |
| Total investment securities held to maturity | $2,500 | $2,500 |
There was a $9 thousand ACL on the corporate bonds HTM as of September 30, 2025 and $12 thousand at December 31, 2024. The net unrealized loss on the investment securities HTM at September 30, 2025, was $125 thousand compared with a net unrealized loss on investment securities HTM of $154 thousand at December 31, 2024.
No investment securities were pledged as of September 30, 2025 or December 31, 2024, and there were no sales of investment securities for the three or nine months ended September 30, 2025 or three or nine months ended September 30, 2024.
The investment securities available for sale presented in the following tables are reported at amortized cost and by contractual maturity as of September 30, 2025 and December 31, 2024. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities and collateralized mortgage obligations receive monthly principal payments, which are not reflected below.
| September 30, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| One year or less | One to five years | Five to ten years | After ten years | |||||
| (Dollars in thousands) | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield |
| Asset-backed securities | $— | —% | $— | —% | $— | —% | $2,942 | 5.25% |
| Mortgage-backed securities: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 5,390 | 2.79 |
| Collateralized mortgage obligations: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 20,442 | 2.31 |
| Corporate bonds | — | — | 3,840 | 5.40 | — | — | — | — |
| Total investment securities available for sale | $— | —% | $3,840 | 5.40% | $— | —% | $28,774 | 2.70% |
| December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| One year or less | One to five years | Five to ten years | After ten years | |||||
| (Dollars in thousands) | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield |
| Asset-backed securities | $— | —% | $— | —% | $1,804 | 5.10% | $3,225 | 5.72% |
| Mortgage-backed securities: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | 4,463 | 4.63 | 3,328 | 1.25 |
| Collateralized mortgage obligations: | ||||||||
| U.S. Government-sponsored enterprises | — | — | — | — | — | — | 18,627 | 1.82 |
| Corporate bonds | — | — | 8,832 | 5.58 | — | — | — | — |
| Total investment securities available for sale | $— | —% | $8,832 | 5.58% | $6,267 | 4.76% | $25,180 | 2.25% |
The investment securities held to maturity presented in the following tables are reported at amortized cost and by contractual maturity as of September 30, 2025 and December 31, 2024. Actual timing may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Additionally, residential mortgage-backed securities receive monthly principal payments, which are not reflected below.
| September 30, 2025 | ||||||||
|---|---|---|---|---|---|---|---|---|
| One year or less | One to five years | Five to ten years | After ten years | |||||
| (Dollars in thousands) | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield |
| Corporate bonds | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
| Total investment securities held to maturity | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
| December 31, 2024 | ||||||||
|---|---|---|---|---|---|---|---|---|
| One year or less | One to five years | Five to ten years | After ten years | |||||
| (Dollars in thousands) | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield | AmortizedCost | Average Yield |
| Corporate bonds | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
| Total investment securities held to maturity | $— | —% | $1,500 | 4.38% | $1,000 | 4.38% | $— | —% |
Loan Portfolio Composition
The Company offers a variety of products designed to meet the credit needs of our borrowers. Our lending activities primarily consist of government guaranteed, commercial real estate, commercial business, residential mortgage, and consumer loans. Senior management and loan officers have continued to develop new sources of loan referrals, particularly among centers of local influence and real estate professionals, and have also enjoyed repeat business from loyal customers in the markets the Bank serves. The Bank has no concentration of credit in any industry that represents 10% or more of its loan portfolio. Additionally, the loan portfolio is well-diversified across major loan types with a low concentration of non owner-occupied commercial real estate loans which makes up 9% of the total portfolio. The following table sets forth the composition of its HFI loan portfolio.
| September 30, 2025 · December 31, 2024 | |||||
|---|---|---|---|---|---|
| (Dollars in thousands) · Amount · % of Total · Amount · % of Total | |||||
| Loans HFI: | |||||
| Government guaranteed loans HFI, at fair value | $61,780 | $60,833 | |||
| Loans HFI, at amortized cost: | |||||
| Residential real estate | 364,020 | 39.3% | 330,870 | 33.3% | |
| Commercial real estate | 231,039 | 25.0 | 305,721 | 30.9 | |
| Construction and land | 43,700 | 4.7 | 32,914 | 3.3 | |
| Commercial and industrial | 194,654 | 21.1 | 226,522 | 22.9 | |
| Commercial and industrial – PPP | 13 | — | 941 | 0.1 | |
| Consumer and other | 90,946 | 9.9 | 93,826 | 9.5 | |
| Loans HFI, at amortized cost, gross | 924,372 | 100.0% | 990,794 | 100.0% | |
| Discount on government guaranteed loans | (7,506) | (8,306) | |||
| Premium on loans purchased, net | 2,941 | 3,739 | |||
| Deferred loan costs, net | 17,096 | 19,499 | |||
| Allowance for credit losses | (24,485) | (15,512) | |||
| Loans HFI, at amortized cost, net | 912,418 | 990,214 | |||
| Total loans HFI, net | $974,198 | $1,051,047 | |||
For the nine months ended September 30, 2025, the Bank originated $129.7 million in loans through conventional lending channels and $259.7 million in loans through its government guaranteed lending function. In addition, the Bank sold guaranteed loan balances of $191.2 million.
Loan Maturity/Rate Sensitivity
The following table shows the contractual maturities of our loans at September 30, 2025. Loan balances in this table include loans HFI at fair value, loans HFI at amortized cost, discount on retained balances of loans sold, premium and discount on loans purchased, and deferred loan costs, net.
| (Dollars in thousands) | Due in One Yearor Less | Due After OneYear to FiveYears | Due After FiveYears to 15 Years | Due After 15Years | Total |
|---|---|---|---|---|---|
| Real estate: | |||||
| Residential | $1,387 | $687 | $16,327 | $346,130 | $364,531 |
| Commercial | 2,632 | 6,596 | 47,153 | 190,692 | 247,073 |
| Construction and land | 5,426 | — | 10,147 | 28,127 | 43,700 |
| Commercial and industrial | 11,412 | 29,393 | 198,494 | 9,777 | 249,076 |
| Commercial and industrial - PPP | 13 | — | — | — | 13 |
| Consumer and other | 2,892 | 22,046 | 21,842 | 47,510 | 94,290 |
| Total loans HFI | $23,762 | $58,722 | $293,963 | $622,236 | $998,683 |
The following table shows the loans with contractual maturities of greater than one year that have fixed or adjustable interest rates at September 30, 2025.
| (Dollars in thousands) | FixedInterest Rate | AdjustableInterest Rate |
|---|---|---|
| Real estate: | ||
| Residential | $72,747 | $290,397 |
| Commercial | 5,116 | 239,325 |
| Construction and land | — | 38,274 |
| Commercial and industrial | 16,861 | 220,803 |
| Consumer and other | 83,659 | 7,739 |
| Total loans HFI | $178,383 | $796,538 |
Credit Risk
The Bank’s primary business is making commercial, consumer, and real estate loans. This activity inevitably has risks for potential credit losses, the magnitude of which depends on a variety of economic factors affecting borrowers, which are beyond its control. The Bank has developed policies and procedures for evaluating the overall quality of its credit portfolio and the timely identification of potential problem loans. Management’s judgment as to the adequacy of the allowance is based upon a number of assumptions about the economic environment that it believes impacts credit quality as of the balance sheet date that it believes to be reasonable, but which may or may not prove accurate. Thus, there can be no assurance that charge-offs in future periods will not exceed the ACL, or that additional increases in the ACL will not be required.
Allowance for Credit Losses. The Bank must maintain an adequate ACL based on a comprehensive methodology that assesses the probable losses inherent in its loan portfolio. The Bank maintains an ACL based on a number of quantitative and qualitative factors, including levels and trends of past due and nonaccrual loans, asset classifications, change in volume and mix of loans, collateral value, historical loss experience, size and complexity of individual credits, and economic conditions. In addition to this, the Company uses reasonable and supportable forecasts that are developed with internal and external data. These are updated quarterly by management and utilize data from the FOMC’s median forecasts of change in national GDP and of national unemployment. Provisions for credit losses are provided on both a specific and general basis. Specific allowances are provided for individual loans that do not share similar risk characteristics with instruments evaluated using a collective (pooled) basis. General valuation allowances are determined by loan pools with a further evaluation of various quantitative and qualitative factors noted above.
The Bank periodically reviews the assumptions and formulates methodologies by which changes are made to the specific and general valuation ACL in an effort to refine such allowances in light of the current status of the factors described above.
All nonaccrual loans and modifications to loans for borrowers experiencing financial difficulty are reviewed to determine if the loans share the same risk characteristics as the pooled loans. If the loan does not share the same risk characteristics, the loan is evaluated individually for credit losses. Specific allocation of reserves for individually evaluated loans considers the value of the collateral, the financial condition of the borrower, and industry and current economic trends. The Bank reviews the collateral value, cash flow, and other support on each individually evaluated credit. Any deficiency outlined by a real estate collateral evaluation analysis, or cash flow shortfall, is accounted for through a specific allocation for the loan.
Nonperforming Assets. At September 30, 2025, the Company had $17.6 million in nonperforming assets, excluding government guaranteed loan balances. The ACL represented 2.61% of total loans HFI at amortized cost. At September 30, 2024, the Company had $12.5 million in nonperforming assets, excluding government guaranteed loan balances. The ACL represented 1.48% of total loans HFI at amortized cost. The increase in nonperforming assets was partially the result of a nonaccrual loan for $2.6 million that is fully secured and has no ACL allocated. Total loans HFI at September 30, 2025 and September 30, 2024 included government guaranteed balances and loans measured at fair value, which had no reserves allocated to them. ACL as a percentage of loans HFI at amortized cost, not including government guaranteed loan balances, was 2.78% at September 30, 2025, compared to 1.70% at September 30, 2024.
The following table sets forth certain information on nonaccrual loans, loans 90 days or more past due, and foreclosed assets, the ratio of such loans and foreclosed assets to total assets as of the dates indicated, and certain other related information.
| (Dollars in thousands) | September 30,2025 | September 30,2024 | December 31,2024 |
|---|---|---|---|
| Nonperforming loans (government guaranteed balances), at amortized cost, gross | $8,865 | $4,497 | $4,037 |
| Nonperforming loans (unguaranteed balances), at amortized cost, gross | 15,822 | 10,992 | 13,570 |
| Total nonperforming loans, at amortized cost, gross | 24,687 | 15,489 | 17,607 |
| Nonperforming loans (government guaranteed balances), at fair value | — | 24 | — |
| Nonperforming loans (unguaranteed balances), at fair value | 1,385 | 1,535 | 1,490 |
| Total nonperforming loans, at fair value | 1,385 | 1,559 | 1,490 |
| OREO | 400 | — | 132 |
| Repossessed assets | 32 | 94 | 36 |
| Total nonperforming assets, gross | $26,504 | $17,142 | $19,265 |
| Nonperforming loans as a percentage of total loans HFI(1) | 2.63% | 1.62% | 1.75% |
| Nonperforming loans (excluding government guaranteed balances) to total loans HFI(1) | 1.69% | 1.15% | 1.35% |
| Nonperforming assets as a percentage of total assets | 1.97% | 1.38% | 1.50% |
| Nonperforming assets (excluding government guaranteed balances) to total assets | 1.21% | 0.88% | 1.06% |
| ACL to nonperforming loans(1) | 99.18% | 91.59% | 88.10% |
| ACL to nonperforming loans (excluding government guaranteed balances)(1) | 154.75% | 129.06% | 114.31% |
(1)Excludes loans measured at fair value
The following table sets forth information with respect to activity in the ACL for loans for the periods shown:
| (Dollars in thousands) | At and for the Three Months Ended September 30, | At and for the Nine Months Ended September 30, | ||
|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | |
| Allowance at beginning of period | $17,041 | $13,843 | $15,512 | $13,497 |
| Charge-offs: | ||||
| Residential real estate | (121) | (20) | (963) | (20) |
| Commercial real estate | — | — | (431) | (60) |
| Commercial and industrial | (3,186) | (2,375) | (11,213) | (7,898) |
| Consumer and other | (312) | (550) | (1,763) | (2,299) |
| Total charge-offs | (3,619) | (2,945) | (14,370) | (10,277) |
| Recoveries: | ||||
| Residential real estate | — | — | 27 | — |
| Commercial real estate | 2 | 2 | 4 | 6 |
| Commercial and industrial | 191 | 111 | 654 | 352 |
| Consumer and other | 132 | 75 | 291 | 249 |
| Total recoveries | 325 | 188 | 976 | 607 |
| Net charge-offs | (3,294) | (2,757) | (13,394) | (9,670) |
| Provision for credit losses on loans | 10,738 | 3,100 | 22,367 | 10,359 |
| Allowance at end of period | $24,485 | $14,186 | $24,485 | $14,186 |
| Net charge-offs to average loans HFI at amortized cost | 1.24% | 1.16% | 1.71% | 1.43% |
| Allowance as a percent of total loans HFI at amortized cost | 2.61% | 1.48% | 2.61% | 1.48% |
| Allowance as a percent of loans HFI at amortized cost, not including government guaranteed loans | 2.78% | 1.70% | 2.78% | 1.70% |
| Allowance as a percent of nonperforming loans at amortized cost, gross | 99.18% | 91.59% | 99.18% | 91.59% |
| Total loans HFI | $998,683 | $1,042,445 | $998,683 | $1,042,445 |
| Average loans HFI at amortized cost | $1,060,520 | $948,535 | $1,044,830 | $901,004 |
| Nonperforming loans (including government guaranteed balances) at amortized cost, gross | $24,687 | $15,489 | $24,687 | $15,489 |
| Nonperforming loans (excluding government guaranteed balances) at amortized cost, gross | $15,822 | $10,992 | $15,822 | $10,992 |
| Guaranteed balance of government guaranteed loans | $75,293 | $157,001 | $75,293 | $157,001 |
The following table details net charge-offs to average loans outstanding by loan category for thethree months ended September 30, 2025 and September 30, 2024.
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | |||||
|---|---|---|---|---|---|---|
| (Dollars in thousands) | Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio |
| Residential real estate | $(121) | $356,159 | (0.14)% | $(20) | $301,296 | (0.03)% |
| Commercial real estate | 2 | 367,781 | — | 2 | 350,518 | — |
| Commercial and industrial | (2,995) | 243,236 | (4.93) | (2,264) | 202,850 | (4.46) |
| Commercial and industrial - PPP | — | 131 | — | — | 1,917 | — |
| Consumer and other | (180) | 93,213 | (0.77) | (475) | 91,954 | (2.07) |
| Total loans HFI at amortized cost | $(3,294) | $1,060,520 | (1.24)% | $(2,757) | $948,535 | (1.16)% |
The following table details net charge-offs to average loans outstanding by loan category for thenine months ended September 30, 2025 and September 30, 2024.
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | |||||
|---|---|---|---|---|---|---|
| (Dollars in thousands) | Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio | Net (Charge-off) Recovery | Average Loans HFI at amortized cost | Net (Charge-off) Recovery Ratio |
| Residential real estate | $(936) | $341,915 | (0.37)% | $(20) | $282,908 | (0.01)% |
| Commercial real estate | (427) | 367,078 | (0.16) | (54) | 340,933 | (0.02) |
| Commercial and industrial | (10,559) | 241,575 | (5.83) | (7,546) | 200,378 | (5.02) |
| Commercial and industrial - PPP | — | 353 | — | — | 2,602 | — |
| Consumer and other | (1,472) | 93,909 | (2.09) | (2,050) | 74,183 | (3.68) |
| Total loans HFI, at amortized cost | $(13,394) | $1,044,830 | (1.71)% | $(9,670) | $901,004 | (1.43)% |
SBA and Other Government Guaranteed Loans
The following table sets forth, for the periods indicated, information regarding the SBA and other government guaranteed lending activity, excluding PPP loans.
| (Dollars in thousands) · At and for the Nine Months Ended September 30, · At and for the Year Ended December 31, | |||
|---|---|---|---|
| Government Guaranteed, Excluding PPP | 2025 | 2024 | 2024 |
| Number of loans originated | 1,352 | 1,965 | 2,508 |
| Amount of loans originated | $259,730 | $323,591 | $431,375 |
| Average loan size originated | $192 | $165 | $172 |
| Government guaranteed loan balances sold | $191,228 | $290,820 | $385,342 |
| Total government guaranteed loan balances: | |||
| Guaranteed portion of government guaranteed loan balances HFI | $75,280 | $155,345 | $148,543 |
| Unguaranteed portion of government guaranteed loan balances HFI | 238,700 | 239,810 | 277,420 |
| Total government guaranteed loans HFI | 313,980 | 395,155 | 425,963 |
| Guaranteed portion of government guaranteed loan balances HFS | 94,052 | 595 | — |
| Unguaranteed portion of government guaranteed loan balances HFS | 50,120 | 595 | — |
| Total government guaranteed loans HFS | 43,932 | — | — |
| Total government guaranteed loan balances | $408,032 | $395,750 | $425,963 |
| Government guaranteed loans serviced for others | $1,038,738 | $1,009,797 | $1,056,665 |
The Bank makes government guaranteed loans throughout the United States. The following table sets forth, at the dates indicated, the geographic disbursement of gross principal balances of its government guaranteed loan portfolio. The “All Other” category includes states with less than 5% in any period presented.
| September 30, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (Dollars in thousands) | Amount | % of Total | Amount | % of Total |
| Florida | $139,784 | 34% | $121,223 | 31% |
| California | 42,401 | 10 | 47,653 | 12 |
| Tennessee | 23,361 | 6 | 28,622 | 7 |
| Texas | 32,574 | 8 | 31,253 | 8 |
| All Other | 176,853 | 43 | 166,404 | 42 |
| Total government guaranteed loans, excluding PPP loans | $414,973 | 101% | $395,155 | 100% |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.