Key insight: After closing a $95 million SBA loan sale to Miami-based Banesco USA, BayFirst Financial is working to close a second, larger sale to Banesco by year-end.Forward look: Banesco USA CEO Calixto Garcia Velez is confident his bank can meet or exceed BayFirst's SBA origination levels, which approached $500 million annually prior to the onset of credit quality issues.Expert quote: "We're going to make a big effort to see if we can be successful in cross-selling these small business clients. We want t ...

Key Takeaways PYPL applied to Utah regulators and the FDIC to form PayPal Bank, a proposed Utah-chartered ILC.PayPal Bank will boost U.S. small-business lending, reduce third-party reliance and strengthen operations.Plans to get savings accounts, U.S. card-network membership and FDIC-insured deposits if approval is granted.PayPal Holdings, Inc. (PYPL) announced that it has filed applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation (FDIC) to establish Pa ...

SAN JOSE, Calif., Dec. 15, 2025 /PRNewswire/ -- PayPal Holdings, Inc. (NASDAQ: PYPL) today announced it has submitted applications to the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation to establish PayPal Bank, a proposed Utah-chartered industrial loan company.  Since 2013, PayPal has provided access to over $30 billion in loans and working capital to more than 420,000 business accounts worldwide, filling a critical gap for small businesses seeking capital to expand ...

Core Insights - Eastern Bank has been recognized as the top lender for SBA 7(a) loans in Massachusetts for 17 consecutive years, reflecting its commitment to supporting local businesses [1][3]. Company Overview - Eastern Bank, founded in 1818, is the leading local bank in Greater Boston with over 110 locations serving eastern Massachusetts, southern and coastal New Hampshire, Rhode Island, and Connecticut [5]. - As of September 30, 2025, Eastern Bank had approximately $25.5 billion in assets and offers a full range of banking and wealth management solutions [5]. - The bank has a strong community focus, having contributed over $240 million in charitable giving since 1994 [5]. SBA Lending Performance - In the most recent fiscal year, Eastern Bank originated 290 SBA 7(a) loans totaling approximately $43.5 million, helping businesses that may not qualify for conventional loans [3]. - The bank's Equity Alliance for Business program supports women and entrepreneurs of color, enhancing its SBA lending activity [3]. Customer Impact - A real estate investor, Greg Banks, successfully purchased a home staging business with the help of an SBA 7(a) loan from Eastern Bank, highlighting the bank's role in facilitating business ownership [4].

Core Insights - The government shutdown has not significantly impacted most banks, but small and midsized banks are facing challenges due to halted Small Business Administration (SBA) loan processing [1][2][3] - Hundreds of billions of dollars in SBA loans are frozen, affecting community bankers and small business owners [4][6] - The shutdown has led to a complete halt in new SBA loan originations since October 1, which could negatively impact bank earnings in the fourth quarter [8][10] Impact on Small and Midsized Banks - Small and midsized banks are more exposed to government programs that are currently on hold, particularly SBA loans [3][9] - The SBA guarantees loans, making them attractive for smaller banks, but the shutdown prevents banks from collecting fees associated with these loans [5][6] - Small business owners are at risk of going under due to lack of access to capital during the shutdown, which could further strain banks if these businesses fail [6][8] Future Outlook - Analysts hope for a quick reopening of the government to recapture lost loan activity, but prolonged shutdowns could extend the impact into future earnings seasons [9][10] - The expectation is that there may be a surge in loan transactions once the government reopens, but the uncertainty remains a concern for bank earnings [9][10]

Core Insights - Lending under the Small Business Administration's 7(a) program increased by 20% in the last fiscal year, reaching a record $37.3 billion, surpassing the previous high of $36.5 billion in fiscal 2021 [1][10] - Live Oak Bancshares emerged as the largest gainer, increasing its loan volume by 43% to $2.85 billion during fiscal 2025 [2][3] - U.S. Bancorp also reported strong growth, with a 23% increase in loan volume to $871.2 million, driven by high demand and business acquisition activity [5][10] Company Performance - Live Oak Bancshares attributed its success to higher volumes of business-acquisition loans and real estate-based loans, alongside a resilient small business sector [3][4] - U.S. Bancorp's head of SBA lending noted continued momentum in small business loan demand, with no signs of slowdown [6][10] - Huntington Bancorp and M&T Bank also reported significant increases in 7(a) lending, with growth rates of 21% and over 40%, respectively [9][10] Loan Size Trends - The average size of 7(a) loans rose to $477,600 from $443,100 in fiscal 2024, indicating a trend towards larger loans [11] - Live Oak's average loan size exceeded $1.25 million, while it also focused on increasing small-dollar loans, which now constitute a significant portion of its production volume [12][13] - Small-dollar loan volume increased from approximately $50 million to $300-350 million annually, reflecting efforts to streamline the lending process [13]

Core Viewpoint - BayFirst Financial Corp. plans to exit the SBA 7(a) lending business and sell $103 million of SBA 7(a) loan balances to Banesco USA, marking a strategic move to derisk its balance sheet and enhance long-term growth and shareholder value [1][2]. Company Overview - BayFirst Financial Corp. is a registered bank holding company based in St. Petersburg, Florida, with total assets of $1.34 billion as of June 30, 2025. It operates twelve full-service banking offices in the Tampa Bay-Sarasota region, offering a range of commercial and consumer banking services [5]. - Banesco USA, an independent Florida state-chartered bank founded in 2006, has $5.2 billion in assets as of June 30, 2025, and operates six branches across South Florida and Puerto Rico. The bank focuses on serving small and middle-market businesses, as well as professionals, with personalized financial services [6]. Transaction Details - BayFirst has signed a definitive agreement to sell $103 million in SBA 7(a) loans to Banesco USA at 97% of retained balances. Banesco USA will assume servicing of these loans and purchase servicing rights for book value [2][3]. - The transaction is expected to close in the fourth quarter of 2025, with the majority of BayFirst's current SBA lending staff being offered positions with Banesco USA [2][3]. Strategic Implications - The exit from the SBA 7(a) lending business allows BayFirst to focus on its community bank mission, enhancing its portfolio of stable checking and savings products, and creating opportunities for deposit growth and fee income [3]. - Banesco USA aims to leverage the acquisition of BayFirst's SBA lending team and loan portfolio to establish a nationwide SBA lending platform, enhancing its capabilities to serve small and mid-size companies across Florida and nationally [4].