BayFirst National Bank Cuts Jobs and Discontinues SBA Loan Program Amid Financial Restructuring
BayFirst National Bank Cuts Jobs and Discontinues SBA Loan Program Amid Financial Struggles
St. Petersburg, FL — In a significant restructuring move, BayFirst National Bank has announced the elimination of 51 jobs and the discontinuation of its Small Business Administration (SBA) 7(a) loan program, known as Bolt. This decision, revealed on Monday, is part of a broader strategy to mitigate financial losses and reposition the bank for future growth.
The workforce reduction, which accounts for 17% of BayFirst’s total employees, is expected to save the bank approximately $6 million annually. However, the bank anticipates incurring a restructuring charge in the third quarter, the amount of which remains unspecified. To offset this charge, BayFirst’s board has suspended dividend payments and its directors will forgo board fees.
Since its inception in 2022, the Bolt program has originated over 6,700 loans totaling $870 million. Despite its initial success, the program has faced challenges, particularly with older loans that began at lower interest rates. Robin Oliver, the bank’s president and chief operating officer, noted that these loans have struggled to keep up with payments, leading to discomfort among the bank’s leadership.
“The older vintages definitely have had stress,” Oliver stated during a recent call with analysts. “Lending into the [small-dollar] space didn’t make sense, given the macroenvironment we’re in today.”
BayFirst’s CEO, Thomas Zernick, echoed these sentiments, citing various economic headwinds affecting small businesses, including tariffs, rising costs, and employment difficulties. “They’re struggling across the board,” he said, emphasizing the need for the bank to pivot away from the small-dollar lending space.
While the Bolt program is being phased out, BayFirst plans to continue offering larger SBA loans, targeting more sophisticated borrowers with stronger financial statements. The bank’s leadership is committed to exploring new opportunities to enhance its community banking activities, following its exit from the national mortgage lending space in 2022.
The decision to terminate the Bolt program follows two consecutive quarters of losses for BayFirst, which reported a $300,000 loss in the first quarter and a $1.2 million loss in the second. The bank’s leadership has undertaken a comprehensive strategic review to reduce risk from unguaranteed SBA loans and align the bank with the evolving demands of the financial landscape.
As BayFirst navigates these changes, Oliver emphasized the importance of modeling various scenarios to identify new income streams and restore the bank’s financial health. “We’re committed to driving innovation and resilience as we move forward into the next phase of our development,” Zernick stated.
With these significant changes, BayFirst National Bank aims to position itself for long-term success while addressing the immediate challenges posed by the current economic climate.