GBank Financial Holdings Inc. Q1 FY2025 earnings call

• Celebrated NASDAQ listing and SEC registration, acknowledging team efforts. - Reported net income of $4.5 million with ~$1 million in extraordinary expenses. - Net revenue $17.4 million, down QoQ but up YoY. - Net interest income up QoQ and YoY, NIM 4.47% QoQ. - Noninterest income grew, with interchange from credit card contributing to growth. - Noninterest expenses up due to SEC costs, compensation, and technology development. - Balance sheet showed growth in assets, loans, deposits, and equity. - Asset quality had provision and charge-offs, but nonperforming loans still manageable. - Credit card growth with interchange, pause in marketing for app development, slot program near launch.

Net income for the quarter was $4.5 million or $0.31 per diluted share, with nearly $1 million in extraordinary expenses. Net revenue was $17.4 million, down ~$196k QoQ but up $4.2 million YoY. Net interest income was up $105k QoQ and ~$1.1 million YoY, with NIM at 4.47% QoQ. Noninterest income saw growth, with other income having sequential and YoY changes; interchange from credit card went from $1 million in Q4 to $2 million in Q1. Other expenses included ~$1 million in one-time items. Balance sheet: total assets were $1.19 billion (up 24% YoY), total loans $843 million (up 15% YoY), deposits $996 million (up 6.5% QoQ), and equity $147 million (up 43% YoY). Asset quality: provision for the quarter was $710k, net charge-offs ~$828k, nonperforming loans up but still manageable.

• SEC uplift costs: ~$1 million budgeted for Q2, but expecting less than that. - Credit card: transaction volume likely flat in Q2, then pick up in Q3. - Slot program: launch in Q2, deposits expected in Q3. - SBA and commercial: pipeline over $300 million, demand strong. - GAAP gain: not expected to return to 10% soon, but hospitality gain may improve over time.

• Ongoing SEC uplift costs could impact expenses. - Uncertainty in SBA loan premiums and market conditions. - Delays in regulatory approvals for the slot program could affect launch and revenue.

Q: About SEC uplift costs in Q2?

A: We have $1 million budget for Q2, but expecting less than that.

Q: Credit card transaction volume in Q2?

A: Transaction volumes are likely to stay flat in Q2 while we work on app development, then pick up in Q3.

Q: Enhanced offerings for credit card?

A: Working on credit lines, secured card applications, with enhancements expected in Q3.

Q: Slot program deposits?

A: The slot program is launching in Q2, and deposits are expected in Q3.

Q: SBA pipeline and demand?

A: SBA and commercial pipeline is over $300 million, and demand remains strong.

Q: SBA loan premiums?

A: Premiums are soft, expecting improvements in H2 but need more certainty on rates and prepayments