St. Pete bank files breach of contract claim in $60M loan cancellation

St. Petersburg-based BayFirst Financial Corp. (NASDAQ: BAFN), which holds BayFirst National Bank, recently reported $739,000 in net income in the 2023 first quarter. That’s a substantial gain from the $13,000 generated last year — but down 40% from the last quarter of 2022. 

That decrease was driven largely by a canceled sale of $60 million in government guaranteed loans to Signature Bank, which regulators recently placed into receivership. “Signature Bank was one of the largest aggregators of SBA loans,” BayFirst CEO Anthony Leo says in a press release. “We moved quickly to identify another buyer to mitigate our damages.”

The bank estimates it lost $1.6 million in reduced income on the canceled sale. However, it expects the terms of the original transaction to eventually be honored by the FDIC. “We are in the process of submitting a claim for breach of contract to the FDIC as receiver for the gain differential,” Leo says.