BayFirst Financial Corp.

Good morning, ladies and gentlemen, and welcome to the Bay First Financial Corp Q4 2025 conference call and webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, January 30, 2026. I would now like to turn the conference over to Tom Zernick, CEO of BayFirst. Please go ahead.

Thank you, Vanessa. Good morning, and thank you for joining our call today. Once again, with me is Robin Oliver, our President and Chief Operating Officer, and Scott McKim, our Chief Financial Officer. Today's call will include forward-looking statements and non-GAAP financial measures. please refer to our cautionary statement on forward-looking statements contained on page two of the investor presentation. The end of 2025 marks the completion of several significant milestones. We have executed and completed a number of strategic initiatives, including the exit from the SBA 7A lending business, the sale of a substantial amount of 7A loan balances, a significant reduction in headcounts and expenses, and a complete focus on our community bank. The results of these efforts are lower risk, more efficient operations, and a better position for sustainable growth and enhanced shareholder value. We are also pleased to report that we closed the year well capitalized, providing a strong foundation as we move forward. You have heard me talk about our community banking mission, of delivering excellent service to our customers across the Tampa Bay and Sarasota markets. The next chapter for BayFirst is our focus on what matters most, being the premier community bank in Tampa Bay. To that end, the bank organically grew deposits 12.5 million in the fourth quarter, and 85% of our deposits are insured. Our net interest margin was stable at 3.58%. Treasury management revenues continue to grow, showing a 69% improvement as compared to the fourth quarter of 2024. As we previously reported, we recorded additional provision expense in the third quarter in connection with our exit of the SBA 7A lending business, specifically allocated to our small loan program SBA loans. In the fourth quarter, net charge-offs from unguaranteed SBA 7A loans were elevated, and this additional allowance for credit losses covered a substantial portion of those charge-offs. Our provision expense for the fourth quarter was $2 million, and we acknowledged the risk in this legacy portfolio. but our efforts around credit administration are designed to make an impact to manage future risk. Although the SBA 7A portfolio was winding down and efforts to sell additional unguaranteed balances are ongoing, I will note that additional charge-offs are likely to continue into this year, but we expect a lessening impact over time. As Bay First CEO and on behalf of the entire leadership team, I want you to know that we take full ownership of these results. They fall short of our expectations, but we understand the responsibility we have for our shareholders to address these challenges and deliver better results. As I have already noted, outside of a legacy SBA 7A business, community bank metrics look strong. Furthermore, I want to highlight that the company's liquidity ratio was over 18% at year end. As we work through our deposit pricing strategy, this additional liquidity will support efforts to reduce high-cost deposits and improve the bank's cost of funds to levels more in line with peers in our market. These actions are expected to drive improvements in profitability and competitive loan pricing while enhancing the bank's net interest margin. Now I will pass the microphone to Scott McKim, our CFO, to provide an overview of our financial performance.

Thank you, Tom. Good morning, everyone. Today, we are reporting a net loss of $2.5 million in the fourth quarter. This compares to the net loss of $18.9 million we reported in the third quarter, which also included a restructuring charge of $7.3 million and additional provision expense of $8.1 million, as Tom had already explained. Loans held for investment decreased by $34.8 million, or 3.5% during the fourth quarter of 2025, to end at $963.9 million. And total loans held for investment decreased $102.7 million, or 9.6% over the past year. During the quarter, loans held for sale decreased by $94.1 million, reflecting the Benesco USA transaction. Deposits increased $12.5 million, or 1.1%, during the fourth quarter of 2025, and increased $40.7 million, or 3.6%, over the past year to end at $1.18 billion. The increase in deposits during the quarter was primarily due to an increase in time deposits of $26.4 million and an increase in interest-bearing transaction deposits of $20.9 million. This partially offset decreases in non-interest-bearing account balances of $10.2 million and in money market and savings accounts, lower balances of $24.6 million. Furthermore, as Tom already mentioned, 85% of the bank's deposits were insured by the FDIC on December 31, 2025. Shareholders' equity at quarter end was $87.6 million, which is $23.4 million lower than the end of 2024. Net accumulated other comprehensive loss decreased by $109,000, ending the quarter at $2 million. Our tangible book value decreased this quarter to $17.22 per share from $17.90 per share at the end of the third quarter. Our net interest margin was 3.58%. This was down three basis points from the third quarter. Net interest income was $11.2 million in the fourth quarter, which is down about $100,000 compared to the third quarter, yet it was up a half a million dollars from the year-ago quarter. During this quarter, the bank wrote off about $160,000 of unamortized premiums related to a single USDA guaranteed loan, which was liquidated during the quarter. Non-interest income was a negative $104,000 for the fourth quarter of 2025, which is $900,000 better than the third quarter of 2021, which included the impact of the loan sale and a decrease from $22.3 million in the fourth quarter of 2024. I should note that the fourth quarter of 2024 also included an $11 million gain from our sale-leaseback transaction that we closed during that quarter. The year-over-year decrease is primarily, however, from the decrease in gains from the sale of FBA 7A government-guaranteed loans. As I mentioned when we spoke last, with the exit of the FBA 7A lending business, revenue from gains on the sale of government-guaranteed loans will no longer impact non-interest income as it has in prior periods. Turning now to non-interest expense, which was $11.9 million in the quarter, which is a decrease of $13.3 million compared to the third quarter. Most of this decrease, $7.3 million, represents the restructuring charge. Additionally, compensation expense was $2.9 million lower. Data processing was $350,000 lower. Loan servicing and origination expense was $2.2 million lower, slightly offset by an increase in professional services of $200,000. On a full-year basis, non-interest expense was $3.6 million higher. However, excluding the third quarter restructuring charge, non-interest expense was actually $3.7 million lower year over year. Notable reductions this year include reductions in compensation of $2.6 million, bonus and commission expense was lowered by $3.6 million, marketing was lowered by $500,000, and these were offset by higher occupancy costs, primarily the rent expense from the sale-leaseback, and $1.2 million. Data processing was $1.2 million higher, and loan servicing and origination expenses were higher by $1.6 million. Finally, higher regulatory assessments were $700,000. The provision for credit losses was $2 million in the fourth quarter compared to $10.9 million in the third quarter and $4.5 million in the fourth quarter of 2024. Net charge-offs were $4.6 million, which was up $1.3 million compared to the third quarter, which came in at $3.3 million. Unguaranteed SBA 7A loans account for $4.1 million of the $4.6 million of net charge-offs during the fourth quarter. Our on-balance sheet, unguaranteed SBA 7A loans, accounted for 3 million of the $3.3 million of net charge-offs which were reported in the third quarter. To highlight the basis for this risk, the bank had $171.6 million of unguaranteed SBA 7 loan balances on December 31st, 2025. This is down $50.4 million from September 30th, 2025, and also $51.4 million lower than it was at the end of 2024. Total annualized net charge-offs as a percentage of average loans held for investment at amortized costs were 1.95% for the fourth quarter, which was up from 1.24% in the third quarter and also up from 1.34% in the fourth quarter of 2024. The ratio of allowance for credit losses to total loans held for investment at amortized costs was 2.43% on December 31, 2025, 2.61% as of September 30, 2025, and 1.54% as of December 31, 2024. The ratio of allowance to credit losses to total loans held for investment at amortized costs, excluding government-guaranteed loan balances, was 2.59% as of December 31, 2025. It was 2.78% September 30, 2025, and 1.79% as of December 31, 2024. At this time, I'm going to turn the call over to Robin to continue with our discussion.