$SHFS earnings report

Safe Harbor reported third-quarter 2026 revenue of $1.95 million, up 6.5% from $1.83 million, and the company attributes the increase to a 70.2% rise in loan program income to approximately $869,000. The company explains that this rise reflects the amended Partner Colorado Credit Union agreement, which raised its share of applicable loan program income from approximately 35% to up to 65%, and that it occurred despite lower average loan portfolio balances. The nine-month loan program income increase of 58.6% to $2.55 million is described by the company as reflecting the revised revenue-sharing arrangement rather than loan volume growth. Set against this, account fee income fell 17.1% to approximately $798,000 and investment income fell 16.7% to approximately $284,000. The filing gives the company's explanations for both declines but does not separate the revenue lines into segments beyond these three income streams.

Deposit metrics moved up. Average client deposit balances were $112 million, up 3.8% from approximately $108 million, and the trailing 14-day average at quarter-end was $119.3 million, up 7.4% from $111.1 million. The company states that the quarter-end trailing 14-day balance was its highest since April 2024. The average account balance rose 5.6% to $147,209 while average active accounts declined 1.7% to 761, which the company attributes to a shift toward larger client relationships.

On costs, total operating expenses fell 3.2% to $2.95 million and compensation and employee benefits fell 10.6% to $1.52 million. The company cites an approximately $353,000 credit benefit tied to changes in estimated credit losses as a factor in the lower expense total. Professional services expenses rose 63.3% to approximately $722,000, which the company links to higher legal, accounting and other professional costs. The operating loss narrowed 17.7% to $1.00 million ($(1,002) thousand), from $(1,217) thousand. Below the operating line, the company reported a net loss of approximately $979,000, or $(0.95) per basic and diluted share, against net income of approximately $180,000 in Q3 2025. The company states that the prior-year comparison was significantly affected by a $3.34 million gain on debt extinguishment recorded in Q3 2025, so the swing to a loss is not a like-for-like operating comparison. The nine-month net loss was $(4,272) thousand against $(1,578) thousand, and the net loss attributable to common stockholders was $(5,341) thousand.

The balance sheet and cash flow carry the main risk. Cash and cash equivalents fell to $4.40 million from $6.78 million at December 31, 2025, total assets were $13.09 million against $17.21 million at year-end 2025, and net cash used in operating activities was $4.05 million for nine months against $2.35 million a year earlier. The company reports no secured debt, but its unaudited financial statements carry a going concern disclosure, and management states that its plans have not alleviated substantial doubt. The company also states that it does not intend to draw on its equity line of credit while the Opifex term sheet remains in effect.

The filing is dominated by corporate actions. A nonbinding term sheet signed October 23, 2026 with Opifex Media Inc. contemplates a combined company in which Opifex security holders would own approximately 85% and existing Safe Harbor stakeholders approximately 15%, with the Safe Harbor share adjustable between 12.5% and 17.5% following an independent fairness opinion. The transaction is subject to a definitive agreement, Series B consents, Nasdaq approval and stockholder approval, among other conditions. On October 20, 2026, Nasdaq granted an additional 180-day period, to April 19, 2027, to regain compliance with the $1 minimum bid price. The company also effected a 1-for-12 reverse split on September 30, 2026. The filing contains no revenue guidance for the coming periods.

Safe Harbor disclosed preliminary operating information rather than a complete third-quarter earnings release. Its trailing 14-day average client deposits were approximately $119.3 million as of September 30, 2026, compared with approximately $111.1 million a year earlier and approximately $108.9 million as of June 30, 2026. The Company characterized the September balance as its highest since April 2024.

Deposit momentum accelerated sequentially in the reported figures. The trailing 14-day average rose approximately 4.1% from $104.6 million as of March 31, 2026 to approximately $108.9 million as of June 30, 2026, then increased approximately 9.6% sequentially to approximately $119.3 million as of September 30, 2026. Management said the third-quarter sequential increase was more than double the second-quarter increase. The September balance was also approximately 25% above the approximately $95.3 million low recorded in May 2025.

The higher deposit base can support investment income, but the filing explicitly limits the direct read-through to reported revenue. Safe Harbor earns investment income on a portion of client balances under arrangements with partner financial institutions, while the deposits themselves are held by those institutions, are their liabilities, and do not appear on Safe Harbor’s consolidated balance sheet. The Company also stated that deposit-balance changes do not necessarily result in proportional revenue changes.

Management estimates that the Federal Reserve’s 25-basis-point increase in the federal funds target rate on September 16, 2026 will contribute approximately $150,000 in incremental annualized investment income, based on September 30 balances and unchanged partner arrangements. That estimate is contingent on future balances, partner arrangements, and future rate changes. There is no revenue, profitability, margin, cash-flow, balance-sheet, capital-return, or formal full-quarter financial guidance in this preliminary release, and the Company cautioned that final results may differ materially.