GBank Financial NASDAQ: GBFH used its third-quarter 2026 earnings call to outline a leadership transition, discuss pressure on recent earnings and credit costs, and detail its strategy for expanding commercial banking, SBA lending and gaming-focused payments services.
Ed Nigro, the company’s founder and a director, said Jeff Newgard’s appointment as president and chief executive officer of both GBank Financial Holdings and GBank completed the second phase of the company’s succession plan. Nigro said he plans to focus on his role as CEO of BankCard Services while continuing to work with Newgard on GBank’s gaming FinTech business.
Newgard, who joined GBank in June after previously serving as a bank executive including at Bank of Idaho, said he sees three growth engines for the company: its Las Vegas commercial bank, its national SBA lending operation and its payments business serving gaming customers.
Management Cites Improving Margin, Lower Delinquencies
Newgard said the bank’s adjusted results reflected higher net interest income, improving net interest margin and early progress on expense management. He acknowledged that noninterest income was below management’s expectations, although he characterized the sequential decline in SBA gain-on-sale income as a timing issue.
The company reported a 5.57% gain-on-sale margin during the quarter, up from 5.04% in the preceding quarter. Newgard said the margin improvement reflected the bank’s SBA lending platform and its process for selling guaranteed loan portions.
However, he said a change in SBA operating procedures will affect the timing of loan-sale gains. Under the revised rules, loans originated in a given month cannot be sold during that same month. As a result, loans originated in December will not be eligible for sale until January, which Newgard said is expected to affect fourth-quarter gain-on-sale income. The loans will generate interest income while they remain on the balance sheet, though he said that income will not fully offset the timing impact on gains.
In response to analyst questions, Newgard said a gain-on-sale margin in the range of 5% to 5.5% or 6% would be reasonable. He also said the company has a strong SBA pipeline and expects loan growth to remain generally consistent with historical performance, suggesting an annualized growth range of 10% to 15%.
Newgard said the bank’s net interest margin rose 17 basis points to 3.95% during the quarter. He said GBank is asset sensitive, with approximately $800 million of assets that reprice and about $300 million of deposits that float, creating what he described as a $500 million difference. He added that SBA loan repricing following changes in the prime rate would be reflected in the following quarter’s margin rather than the reported third-quarter figure.
Credit costs across commercial, SBA and credit-card portfolios have weighed on earnings this year, Newgard said, but management expects those costs to trend toward more normalized levels in 2027. The company has added credit administration and special-assets resources, increased coordination among credit, servicing and workout functions, and emphasized earlier identification of problem loans.
Newgard said nonperforming assets declined by $5 million and early-stage delinquencies fell by more than $10 million from the end of the second quarter, reaching about $2 million. He also said the company has approximately $10 million of other real estate owned that it is working to remove from its books.
- Allowance-related items included $333,000 associated with loan growth, $687,000 related to a legacy retail credit-card program being wound down, $981,000 of specific reserves and a $600,000 CECL adjustment, according to Newgard.
- Salary and benefit expenses included $520,000 of severance payments and higher commissions associated with $171.7 million of loan originations during the quarter.
- Newgard also cited $100,000 of third-party credit-card-related costs and $600,000 tied to contract disputes.
Commercial and SBA Expansion Remain Core Priorities
Newgard said GBank plans to deepen its presence in Las Vegas, where it is the largest independent bank headquartered in the market. The company sees opportunities to expand relationships in legal, healthcare, construction and real estate, professional services, manufacturing and distribution, while increasing lending, treasury-management and deposit services for existing customers.
During the quarter, GBank originated $171.7 million of SBA and commercial loans. The company also services $1.2 billion of loans it has sold, generating recurring servicing income while maintaining customer relationships, Newgard said.
The SBA platform remains central to the company’s growth plans. Newgard said GBank is one of the country’s largest SBA lenders and the leading SBA lender to the hospitality sector. Management intends to protect its hotel-lending franchise while selectively adding industries and using broader banking services to deepen client relationships.
Newgard said the company is seeking a permanent chief financial officer and that he was evaluating three candidates. GBank also expects to add experienced local bankers, payments personnel and additional SBA business-development officers.
Gaming Payments Programs Move From Development Toward Launch
GBank is using BankCard Services’ patented payment technology as sponsor bank for 19 gaming and FinTech clients. Average daily deposits associated with those relationships were $31.2 million in the third quarter, according to Newgard.
Management said its role as sponsor bank includes providing banking infrastructure, account frameworks, payment-rail connectivity and regulatory oversight, while technology and gaming partners handle customer-facing experiences and operator integrations. Newgard said newer programs should be viewed as multistage businesses that are not expected to contribute materially to near-term results.
Todd Nigro, a director of GBank Financial Holdings, said the BoltBetz application was formally launched across all nine Distill neighborhood tavern locations in Las Vegas in September after a limited first-quarter rollout. He said the app has reached 5% adoption among gaming-club patrons using it as their primary loading mechanism, while 10% of the top 10% of gaming-club members have adopted it.
Terrible’s, which operates 3,000 gaming machines across 300 licensed Nevada locations, is scheduled to begin its BoltBetz launch in early November. Nigro said the business processes roughly $1 billion in annual transaction-equivalent value through its machines and that the rollout could provide significant operating data for GBank’s cashless gaming efforts.
The company is also integrating with AXES Casino Management System and BVNKROLL payments infrastructure. Nigro said the AXES technical integration is expected to be completed in December, with an AXES gaming operator launch anticipated in 2027. Each operator will require separate signing, integration and launch processes.
Meanwhile, the LuckyLoads prepaid card has encountered technical delays and is now expected to launch in the second quarter of 2027. Management said it will continue reporting gaming and FinTech deposits, credit-card transactions and net interchange income, while also highlighting milestones such as approvals, integrations, launches and adoption.
Newgard said several online sports-betting operators’ decisions to stop accepting credit cards as a payment method reduced interchange income during the third quarter. He described that change as outside the company’s control but said management remains confident that payments can become a source of low-cost deposits and fee income over time.
The company also said independent IT and cybersecurity audits completed during the quarter received satisfactory ratings, with no high- or moderate-risk findings. GBank has established an enterprise-wide AI governance framework and is expanding the use of AI within its business processes, Newgard said.
About GBank Financial (NASDAQ:GBFH)
GBank Financial Holdings, Inc is the bank holding company for GBank, a Nevada-chartered commercial bank headquartered in Las Vegas. The company provides banking products and financial services to businesses, professionals and individuals, with an emphasis on relationship-based commercial banking.
GBank offers business and personal deposit accounts, commercial and residential real estate loans, business lending, treasury management services and other traditional banking products. Its specialty lending activities include Small Business Administration lending and mortgage warehouse financing, which provides credit facilities to mortgage originators.
Founded in 2007, GBank primarily serves customers in Nevada, including the Las Vegas and Reno markets, while its specialty lending businesses may serve borrowers and financial institutions in broader geographic markets.
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