GBank Financial Holdings Inc. Q3 FY2025 earnings call

• Jeff discussed salient financial numbers, explaining rationale behind them. Implemented new fraud detection processes like Experian BustOut Score, NEO ID, etc. - Restructured SBA incentive structure to align with a 4% GAAP gain on sale. - Addressed CRA rating issue by quadrupling loans in 60 days and enhancing service hours. - Launched BoltBetz with Terribles Gaming, working on acquiring bank status and stablecoin. - Hired Hilary Sledge-Sarnor as Chief Legal Officer and Olga Bencini as technology consultant. - Focus on payments and digital transformation, including influencer partnerships and API development.

The company reported quarterly earnings of $4.3 million or $0.30 per diluted share, a decrease of $500,000 from the prior quarter's $4.8 million. Included in the results were approximately $2 million in unusual operating expenses. Net revenue grew 13.5% to $20.2 million. Interest income increased 4.9% to $13 million. Net interchange income was up 56.7% with total transaction volume at $131 million. Gain on sale revenue increased 38.5%. SBA and commercial lending had record loan production of $242 million. Total assets ended the quarter at over $1.3 billion. Nonperforming assets increased to $10.4 million, representing 0.8% of total assets.

• Anticipates cash flow and loan sales to resume once government reopens. - Expecting deposits and transactions from gaming initiatives to be significant in the second half of 2026. - Plans to reprice deposits as the Fed lowers rates and implement stablecoin strategies.

• Government shutdown impacting SBA loan origination and sales. - Fraud in credit card application process due to direct mail campaigns. - Delays in BoltBetz launch due to Nevada Gaming Control Board product testing.

Q: How long has credit card fraud been taking place?

A: Started in July '24, detected when a direct mail campaign led to swamping of applications with fraudsters trying to game the $200 award for $1k spend.

Q: Status of SBA pipeline?

A: Funded loans but can't issue or sell due to government shutdown; pipeline is ready to go once the government reopens.

Q: CEO succession search?

A: There is no search ongoing right now.

Q: Influencer partnerships and expenses?

A: Influencers receive interchange fee, no upfront fees; marketing costs related to influencers are less than direct mail campaigns.

Q: Gaming deposit expectations?

A: Deposits and transactions from gaming are expected to be significant in the second half of 2026, with market penetration taking 3-6 months.