With its residential mortgage business slumping to start 2022, the parent company of St. Petersburg’s First Home Bank said it has cut its workforce by 65 employees.
In a quarterly earnings announcement on Thursday, BayFirst Financial Corp. said the cuts took place in the first quarter of this year, with 62 coming in the residential mortgage division.
BayFirst chief strategy officer Jeffrey Hunt said in an email the cuts were “commensurate with residential mortgage volume projections.”
The company blamed higher interest rates and other outside factors on lower loan and refinance volume compared to previous quarters. The bank wrote $333.6 million in loans during the first three months of this year, a 29.7 percent drop from the fourth quarter of 2021, and a 53.1 percent drop from the same period a year prior.
BayFirst CEO Anthony Leo said in a statement that the company “tactically reduced our workforce to reflect the shift in our business model” as the company shifted away “from the boom in mortgage demand of 2020 and early 2021.”
“We began taking steps to right-size our residential lending team and overall expense structure,” he said. “Our efforts for the remainder of the year will focus on our strategic growth plan and improving profitability. As a rapidly growing financial institution, we are driven by our commitment to take advantage of strategic opportunities and establish our reputation as one of the preeminent community banks in the Tampa Bay area.”
A big part of BayFirst’s growth strategy revolves around its status as a preferred Small Business Administration lender. Over the last two years, the company’s CreditBench lending platform originated more than $1.2 billion in Paycheck Protection Program loans. Overall, the company originated $47.3 million in new 7(a) and other Small Business Administration loans during the first quarter, which was down 20.2 percent from the previous quarter, but up 205 percent from the same period in 2021.
The company has expanded its Small Business Administration lending operation in early 2022. This month it launched LoanBud, a lending division targeting small business owners and self-employed homebuyers nationwide.
Overall, BayFirst reported net income of $13,000 during the first quarter, down from $2.8 million in the previous quarter and $7.5 million from the same period in 2021.
BayFirst operates seven First Home Bank branches in Pinellas, Hillsborough and Sarasota counties. As of March 31, it had $888.5 million in assets, down from $1.7 billion a year ago, before it sold its Paycheck Protection Program loans and those loans were forgiven by the Small Business Administration.
BayFirst Financial Corp. began trading publicly on the NASDAQ last fall. Its stock opened at $22 per share Friday, down slightly from Thursday’s close.