BayFirst Financial Exits SBA 7(a) Lending Business with $103 Million Loan Sale to Banesco USA

BayFirst Financial Corp., parent company of BayFirst National Bank, has announced plans to exit the SBA 7(a) lending business and sell $103 million of SBA 7(a) loan balances to Banesco USA. This transaction represents a significant strategic shift for both financial institutions and marks a major milestone in BayFirst's comprehensive strategic review aimed at derisking SBA 7(a) balances from its balance sheet.

Thomas G. Zernick, Chief Executive Officer of BayFirst, stated that this move positions the company for long-term growth and enhanced shareholder value. The definitive agreement calls for the loans to be sold at 97% of retained balances, with Banesco USA assuming servicing responsibilities for these loans. Additionally, Banesco USA will purchase the servicing rights associated with the purchased loans at book value and will conduct servicing for all SBA loans that BayFirst will continue to own.

The transaction, expected to close in the fourth quarter of this year, includes the transition of most of BayFirst's current SBA lending staff and support teams to Banesco USA. This personnel transfer ensures that the experienced SBA lending team will continue to support SBA lending operations, now under Banesco USA's umbrella. While BayFirst transitions away from SBA 7(a) lending, the company remains committed to its community bank mission of serving individuals, families, and small businesses with stable checking and savings products.

BayFirst's strategic shift emphasizes relationship-driven banking that contributes to a more predictable, low-cost funding base. This approach strengthens the bank's presence across the Tampa Bay region and creates opportunities to expand its community bank portfolio, deposit growth, and fee income sources such as treasury management services.

For Banesco USA, this acquisition represents a strategic expansion into national SBA lending. As an independent, Florida state-chartered bank with over $5 billion in assets and eight locations across South Florida and Puerto Rico, Banesco USA distinguishes itself through personalized customer service and comprehensive product offerings for domestic and international clients. The bank's growth trajectory is fueled by investments in Commercial & Industrial, Business and Professional, International, and Commercial Real Estate lines of business.

Calixto (Cali) Garcia-Velez, President & CEO of Banesco USA, emphasized that the addition of BayFirst's SBA lending team and portfolio acquisition provides the infrastructure, expertise, and enhanced capabilities to deliver SBA lending on a national scale. This transaction aligns with Banesco USA's growth strategy to expand small business lending capabilities while establishing a presence in the Greater Tampa Bay region. The move positions Banesco USA to serve more small and mid-size companies across Florida and nationally, recognizing that small businesses are the backbone of the economy.

The implications of this transaction extend beyond the immediate financial transfer. For BayFirst, exiting the SBA 7(a) business represents a strategic derisking move that allows the company to focus on core community banking services while maintaining financial stability. For Banesco USA, the acquisition accelerates its national expansion in SBA lending and strengthens its position as a comprehensive business banking solution. Small businesses nationwide may benefit from Banesco USA's enhanced SBA lending capabilities, while the Tampa Bay region gains continued SBA lending support through the transition of experienced personnel to Banesco USA's operations.