third quarter 2026
Filed Oct 28, 2026GBank reported third-quarter net income of $3.9 million, or $0.27 per diluted share, as lower gaming-related interchange income and higher non-interest expense outweighed higher net interest income, improved net interest margin and stronger SBA originations.
Net income and adjusted earnings declined from both the second quarter of 2026 and the third quarter of 2025. Core banking metrics improved sequentially, including net interest income, net interest margin, SBA originations and gain-on-sale margin, but interchange income fell sharply and credit costs remained elevated.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net interest income, three months ended September 30, 2026GAAP | $13.6M | increase of $813 thousand, or 6.4% | increase of $616 thousand, or 4.7% |
| Net interest margin, three months ended September 30, 2026other | 3.95% | increased 17 basis points | – |
| Net revenue, three months ended September 30, 2026non-GAAP | $20.3M | decrease of $1.6 million, or 7.3% | increased $0.2 million, or 0.8% |
| Non-interest income, three months ended September 30, 2026GAAP | $6.7M | decrease of $2.4 million | decrease of $0.5 million |
| Gain on sales of loans, three months ended September 30, 2026GAAP | $4.7M | decrease of $0.8 million | increase of $1.1 million |
| Net interchange fees, three months ended September 30, 2026GAAP | $300K | decrease of $1.5 million | decrease of $2.1 million |
| Provision for credit losses on loans, three months ended September 30, 2026GAAP | $2.6M | decrease of $0.2 million | – |
| Non-interest expense, three months ended September 30, 2026GAAP | $12.8M | increase of $0.8 million | – |
| Efficiency ratio, three months ended September 30, 2026other | 63.0% | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $1M | – | – |
| Effective tax rate, three months ended September 30, 2026GAAP | 20.7% | – | – |
| Net income, three months ended September 30, 2026GAAP | $3.9M | decrease of $1.6 million | decrease of $455 thousand |
| Diluted earnings per share, three months ended September 30, 2026GAAP | $0.27 per diluted share | – | – |
| Adjusted net income, three months ended September 30, 2026non-GAAP | $4.3M | decrease of $1.2 million | decrease of $2.0 million |
| Adjusted diluted earnings per share, three months ended September 30, 2026non-GAAP | $0.30 adjusted diluted earnings per share | – | – |
| Net income, nine months ended September 30, 2026GAAP | $10.6M | – | – |
| Diluted earnings per share, nine months ended September 30, 2026GAAP | $0.73 per diluted share | – | – |
| Adjusted net income, nine months ended September 30, 2026non-GAAP | $14.4M | – | – |
| Adjusted diluted earnings per share, nine months ended September 30, 2026non-GAAP | $0.99 adjusted diluted earnings per share | – | – |
| Total assets as of September 30, 2026GAAP | $1.5B | – | increase of 11.9% |
| Total loans, net of deferred fees and costs, as of September 30, 2026GAAP | $1.1B | increased $24.5 million | increase of $131.2 million |
| Total deposits as of September 30, 2026GAAP | $1.2B | decrease of $41.8 million | increase of $71.8 million |
| Allowance for credit losses as of September 30, 2026GAAP | $13.9M | – | – |
| Allowance for credit losses to total loans as of September 30, 2026GAAP | 1.30% | – | – |
| Net loan charge-offs, three months ended September 30, 2026GAAP | $1.1 million, or 0.38% of average net loans (annualized) | – | – |
| Non-performing assets as of September 30, 2026GAAP | $54.2M | decrease of $3.9 million | increase of $16.8 million |
| Non-performing assets to total assets ratio as of September 30, 2026GAAP | 3.72% | – | – |
| Short-term borrowings as of September 30, 2026GAAP | $60M | – | – |
| Subordinated notes outstanding as of September 30, 2026GAAP | $30.4M | – | – |
| Stockholders' equity as of September 30, 2026GAAP | $175.4M | – | – |
| Book value per share as of September 30, 2026GAAP | $12.08 | increase of 1.1% | increase of 9.1% |
| SBA loan originations, three months ended September 30, 2026other | $171.7M | – | – |
| Gain on sale of loans margin, three months ended September 30, 2026non-GAAP | 5.57% | – | – |
| Gaming-related credit card transaction volume, three months ended September 30, 2026other | $19.5M | – | – |
Q4 2026 and 2027 outlook
- NoteThe majority of guaranteed loans held for sale plus new originations are expected to be sold during the fourth quarter.
- NoteTerrible’s is expected to launch BoltBetz in early November at three locations with a full rollout planned during 2027.
- NoteIntegration of the BVNKROLL payments infrastructure with the AXES digital casino management system should be completed by year end 2026.
- NoteThe LuckyLoads prepaid card is now expected to be launched during the second quarter of 2027.
- NoteThe Company does not expect its broader gaming payments strategy to contribute materially to financial results in the near term.
What drove it
- Net interest income increased as higher interest income from average loan and investment growth more than offset higher interest expense from average deposits and borrowings.
- Average loans increased $34.6 million to 83.1% of average earning assets, while lower-yielding average interest-bearing deposits with banks decreased $26.9 million.
- Net interchange fees declined after several large sports betting operators discontinued credit cards as a funding source.
- SBA lending originations were $171.7 million and gain-on-sale margin increased to 5.57%.
- Guaranteed loans held for sale increased by $19 million from June 30, 2026.
- Average daily gaming and fintech deposits increased from approximately $29.9 million in July to $30.9 million in September.
Concerns
- Net income was $3.9 million, down from $5.5 million in the second quarter of 2026 and $4.3 million in the third quarter of 2025.
- Gaming-related credit card transaction volume fell to $19.5 million from $84.2 million in the second quarter, and net interchange fee income declined 84.6% to $0.3 million.
- Non-interest expense increased principally due to a $1.1 million increase in salaries and employee benefits, including $0.5 million in severance expense.
- The third-quarter provision included $687 thousand for the legacy non-gaming retail credit card program due to elevated delinquency levels.
- Other real estate owned increased to $10.9 million following foreclosure proceedings on three commercial real estate non-owner occupied properties totaling $6.9 million.
- At-risk non-performing assets were $28.8 million, or 1.97%, as of September 30, 2026, compared to $21.3 million, or 1.49% of total assets, as of June 30, 2026.
What to watch
- Whether SBA loans held for sale and new originations are sold during the fourth quarter.
- The pace at which legacy retail credit card portfolio runoff reduces provision expense.
- The recovery, if any, in gaming-related payment volumes and interchange income after changes to sports-betting credit-card funding practices.
- BoltBetz deployment at Terrible’s, completion of BVNKROLL and AXES integration by year end 2026, and the expected LuckyLoads launch during the second quarter of 2027.
- The trend in non-guaranteed non-performing assets, specific reserves, other real estate owned and short-term borrowings.
Balance sheet and cash flow
- Total cash and cash equivalents were $113.3 million as of September 30, 2026, compared to $141.3 million as of June 30, 2026 and $103.4 million as of September 30, 2025.
- The Company had approximately $387.6 million in available borrowing capacity as of September 30, 2026.
- The ratio of loans to deposits was 92.1% as of September 30, 2026, compared to 86.9% as of June 30, 2026 and 86.1% as of September 30, 2025.
- Total assets under management, including $1.2 billion of sold loans for which servicing is retained, totaled $2.7 billion as of September 30, 2026.
- Operating cash flow and free cash flow were not reported.
Analysis
GBank delivered a mixed third quarter. Net income was $3.9 million and diluted earnings per share were $0.27, compared with $5.5 million and $0.38 in the second quarter of 2026 and $4.3 million and $0.30 in the third quarter of 2025. Adjusted net income was $4.3 million and adjusted diluted earnings per share were $0.30, below both comparison periods. Net revenue was $20.3 million, down $1.6 million, or 7.3%, sequentially, although it increased $0.2 million, or 0.8%, from the third quarter of 2025.
Core balance-sheet and spread trends strengthened sequentially. Net interest income rose $813 thousand, or 6.4%, to $13.6 million, and net interest margin increased 17 basis points to 3.95%. The improvement reflected a 15 basis point increase in the yield on average earning assets to 6.87% and a 5 basis point decrease in the cost of average interest-bearing liabilities to 3.86%. Average loans increased $34.6 million and represented 83.1% of average earning assets, while lower-yielding average interest-bearing deposits with banks decreased $26.9 million.
The principal earnings pressure came from non-interest income and expenses. Net interchange fees declined 84.6% to $0.3 million following changes in credit-card funding practices by several large sports betting operators, while gaming-related credit-card transaction volume was $19.5 million versus $84.2 million in the second quarter. Gain on loan sales declined to $4.7 million as loans sold fell to $84.5 million from $110.1 million, although gain-on-sale margin improved to 5.57% from 5.04%. Non-interest expense rose to $12.8 million, including a $0.5 million severance expense, and the efficiency ratio increased to 63.0% from 54.7%.
Credit conditions remain an important counterweight to franchise growth. Provision for credit losses on loans was $2.6 million, including $687 thousand related to the legacy non-gaming retail credit card program. The allowance for credit losses increased to $13.9 million, or 1.30% of total loans. Total non-performing assets declined to $54.2 million from $58.2 million sequentially, but other real estate owned increased to $10.9 million and non-performing assets excluding guaranteed portions increased to $28.8 million, or 1.97% of total assets. Management expects the legacy card portfolio to continue affecting provision expense in the near term.
The balance sheet expanded, with total assets at $1.5 billion and total loans at $1.1 billion as of September 30, 2026. Deposits totaled $1.2 billion but declined $41.8 million from June 30, 2026, while short-term borrowings were $60 million compared with none at the prior quarter-end. Management's forward milestones center on fourth-quarter loan sales, further BoltBetz rollout, completion of BVNKROLL and AXES integration by year end 2026, and a LuckyLoads launch expected during the second quarter of 2027. The Company stated that gaming payments are not expected to contribute materially to financial results in the near term.
Management, verbatim
Despite the lower than expected earnings during the period, I want to emphasize that our core banking franchise performed well during the third quarter, with higher net interest income, an improved net interest margin, and strong SBA production and gain-on-sale margin.
Jeff Newgard, President and Chief Executive Officer of GBank Financial Holdings
While earnings were affected by lower interchange income following the decision by several large sports betting operators to discontinue credit cards as a funding source, as well as several one-time or non-core items, we believe the underlying performance of the bank reflects the strength of our franchise.
Jeff Newgard, President and Chief Executive Officer of GBank Financial Holdings
While the legacy retail credit card portfolio will continue to affect provision expense in the near term, we expect that impact to diminish as the portfolio continues to run off.
Jeff Newgard, President and Chief Executive Officer of GBank Financial Holdings
Not in the filing
stated, not guessed- Quantified financial guidance for revenue, net interest income, net interest margin, non-interest expense, provision expense, tax rate, earnings, deposits or loans was not provided.
- Previous-release outlook was not provided, so comparison with prior guidance is unavailable.
- Gross margin was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases, dividends and other capital-return actions were not reported.
- CFO commentary was not provided.
- Formal reportable segment revenue was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.