Hello and welcome to the G-Bank Financial Holdings Inc. Q3 2026 earnings call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. Joining us this afternoon are Jeff Newgard, President and CEO of G-Bank Financial Holdings and G-Bank, and Ed Nigro, Todd Nigro, both Directors of G-Bank Financial Holdings. The related Q3 earnings press release was filed with the U.S. Securities and Exchange Commission today and is available on the News and Media section of our website, gbankfinancialholdings.com. Before we begin, I'd like to remind everyone that any forward-looking statements are subject to risks and other factors that could cause actual results to differ materially from those anticipated future results. Please see our safe harbor statements in our earnings press release. All comments expressed or implied made during today's call are subject to those safe harbor statements. Any forward-looking statements made during this call are made only as of today's date, and we do not undertake any duty to update such forward-looking statements except as required by law. Thank you, and good afternoon, everyone. Thank you for joining us. I'm Ed Nigro.

The engagement of Jeff Newgard in May of 2026 as President and CEO of G-Bank was the first phase of the G-Bank Financial Holdings Succession Plan. Recognizing Jeff's banking experience, we accelerated Phase 2, appointing Jeff as G-Bank Financial Holdings President and CEO, as well as Chairman of the Board of G-Bank. Now with Phase 2 completed, I decided that I would be more productive in my role as CEO of Bank Card Services. So Jeff, I pass on to you the leadership of the bank I founded 20 years ago. But I really look forward to working with you to grow the bank's gaming fintech business. Now to Jeff.

Thank you, Ed. Ed founded GBank. and played a central role in building it into the company it is today, including the development of its national SBA lending franchise and its gaming and payment strategy. On behalf of the board, I want to thank Ed for his vision, his years of service, and the drive he brought to building this company. We look forward to his continued service as a director and a partner as CEO of Bank Card Services. I'm honored that the board has asked me to lead G-Bank Financial Holdings as well as the bank. I've spent more than 20 years growing banks. I led Bank of Idaho's growth from $250 million to $1.3 billion in assets before it sailed the Glacier Bancorp. I'm excited to bring that experience to G-Bank and build on the strong foundation already in place. Today, I'll start with our third quarter results, then share some observations from my first five months with the company and the priorities that will guide our efforts going forward. Rather than rehash all the puts and takes in the quarter, I want to highlight what I think is important for shareholders and the analyst community. First, the earnings power of the bank can be clearly seen in the adjusted numbers which are supported by higher net interest income and improving net NIM and the beginnings of solid expense management. While non-interest income is clearly lower than we would all like, the sequential reduction in gain-on-sale income is simply a timing issue. The 5.57% gain-on-sale margin is a taste The decline in interchange income, though disappointing, was outside of our control, resulting from the decision by several online sports betting operators to disallow credit cards as a payment source. That change had a significant effect on third quarter results. Credit costs have also weighed on earnings this year across our commercial, SBA, and credit card portfolios. We are confident those costs will move back toward more normalized levels as they move into 2027. While the reported numbers are much lower than expectations, I want to emphasize, and our results show, that several areas of the bank are in fact performing well. Further, after detailed review of our loan portfolio and operations, I can assure you that I am comfortable with our processes and approach to underwriting, monitoring, and problem credit resolution. While the last several quarters have been difficult for the bank and shareholders, I believe that GBank is now headed in the right direction. I'm building my team and many of the challenges negatively impacting the bank should be fully addressed by year-end. With that, I'd really like to spend some time discussing my vision for the bank and how our gaming fintech payments initiatives play a crucial role in that vision. Since joining GBank in June, I've spent a lot of time getting to know our team, our customers, and reviewing our operations and loan portfolios. What I found is a franchise with three distinct growth engines. An established commercial bank in Las Vegas, a national SBA lending platform, and a payments business serving the gaming industry. As the largest independent bank headquartered in Las Vegas, we're part of a growing and increasingly diverse commercial market that we know well. Our national SBA business takes that reach well beyond our local markets. We are one of the largest SBA lenders in the country and the number one SBA lender in hospitality. Across our SBA and commercial banking businesses, we originated $171.7 million in loans this quarter. We also service $1.2 billion of loans we sold. allowing us to maintain customer relationships and generate reoccurring servicing income long after the loans are sold. Our payment business is still in its early stages and will take time to develop, but it gives us a third avenue for growth alongside commercial banking and SBA lending. Together, these businesses provide multiple sources of revenue. Specialized expertise and attractive opportunities for growth. With that foundation in place, I have identified four priorities that will guide how we'll build the company going forward. First, and most important, is growing the core bank. That means deepening our presence in the markets we already serve, adding experienced bankers where it makes sense, and continuing to build relationships in customer segments where we see attractive opportunities, including legal, healthcare, construction and real estate, professional services, manufacturing and distribution. It also means doing more for the customers we already have through lending, treasury management and deposit services. Our SBA franchise will remain an important part of that growth through net interest income, gain on loan sales, and reoccurring servicing fees. We will protect our established hotel lending strength while expanding selectively into additional industries and using our broader banking capabilities to deepen customer relationships. We'll do all of this with discipline. and a focus on relationships. In markets where we know how to manage the risk, the goal is a broader, more durable franchise and a deeper customer relationship and more diverse mix of customers and industries. Second is credit. Non-performing assets remain higher than we want them to be and resolving them is a priority. Since I joined G-Bank, we've increased the resources dedicated to credit administration and special assets, strengthened coordination across our credit, servicing, and workout teams, and become more proactive in identifying and addressing problem credits. Those efforts enabled us to bring down early-stage delinquencies by more than $10 million from the end of the second quarter. While there's still work to do, I believe these efforts position us to improve portfolio performance and maximize recoveries over time. Third is growing our payments business. We're excited about that opportunity, and G-Bank is committed to building it for the long term. We are currently using Bank Card Services LLC's patented payment technology to function as the sponsor bank for 19 gaming and fintech clients. Average daily deposits for these relationships in Q3 were $31.2 million. GBank's role is to provide the regulated banking foundation for secure, compliant, and efficient funds flow across the gaming ecosystem. As a sponsor bank, GBank supplies the banking infrastructure, account framework, Payment Relativity and Regulatory Oversight, while technology and gaming partners deliver the patron-facing experience in operator integrations. In an industry where funding, settlement, and cashless wagering often remains fragmented, G-Bank's infrastructure helps us streamline the movement of funds, supporting a better experience for patrons, greater efficiency for gaming operators, and a scalable source of deposits. New FinTech programs should be viewed as multi-stage bank-enabled businesses rather than near-term financial contributors. After a client signs, each program progresses through a deliberate launch process. Technical integration, applicable regulatory approvals, G-Bank compliance review and onboarding, a gaming operator pre-launch audit, accounting setup, marketing, and promotional planning Staff Training, and, ultimately, Go Live. The process is not always linear, but each completed milestone reduces execution risk and brings the program closer to meaningful adoption, deposit growth, and payment volumes for the bank. That opportunity is beginning to take shape through specific customer and partner milestones Distill, a group of neighborhood taverns with gaming machines, formally launched the BoltVest application at all nine of its Las Vegas locations in September, following a limited launch in Q1, and early returns have been positive. Terribles, a Nevada-based gaming operator with 3,000 gaming machines statewide, will go live with the BoltVest application in early November. The integration of the Axis casino management system and the bankroll payments infrastructure is also underway. Once the technical integration is complete and the first Axis gaming operator signs, the launch process described above will begin for that operator. Each subsequent Axis operator will be signed, integrated, and launched separately and will provide updates and material milestones as they are achieved. Not every part of the business is progressing at the same pace. The Lucky Loads prepaid card is taking longer than anticipated and is expected to launch in the second quarter of next year. I cannot express how important gaming and payments are to our long-term strategy. While we do not expect the developing programs to contribute materially to our results in the near term, Gbank already supports a broader portfolio of gaming and fintech clients through its relationship with Bank Card Services, providing an established base of deposits and payment activity as the developing programs move towards scale. We'll continue to report deposits, credit card transactions, and net interchange fee income each quarter. In addition, we'll focus on concrete milestones Such as regulatory approvals, completed integrations, customer launches and adoption. Once those programs are large enough to have a meaningful effect on GBank's results, we'll add revenue measures and metrics that provide insight into the success of each. We remain confident that this business can be a meaningful source of low-cost deposits and fee income over time. Fourth is running the company well. As GBank continues to grow, our processes and operating discipline must keep pace. Our independent IT and cybersecurity audits were completed last quarter with a satisfactory rating, the highest possible rating, and zero high or moderate risk findings. We are implementing the remaining low and best practice recommendations none of which require additional spending. We have also established an enterprise-wide AI governance framework with policies and guardrails governing the use of AI. AI is already being deployed and integrated into G-Bank business processes, and we're accelerating and expanding its use as we identify additional applications, strengthening our leadership team as part of this. We continue to make progress in our search for a Chief Financial Officer and look forward to providing an update when appropriate. We will also continue to build out our broader team with an emphasis on talent that can deepen relationships in existing markets and selectively expand our reach where we see attractive opportunities. I want to assure all shareholders that we will operate this company as efficiently as possible and based on my relatively short time here, I'm confident there are ground to be gained on the expense front. Turning to capital, organic growth remains our top priority. We have a strong capital position and the priority is putting it to work in the core bank and the businesses we've talked about today to enhance shareholder value. That's the plan. Now it's on us to deliver it and I'm looking forward to getting to know all of our analysts and shareholders better over the coming months. I'll be clear about priorities, candid about our progress, and we'll hold ourselves accountable for delivering consistent results over time. With that, we'll open the call up to your questions.

Thank you. At this time, if you would like to ask a question, please click on the Raise Hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. We'll wait one moment to allow the queue to form. Our first question will come from Joe Yancunis with Raymond James. Please unmute your line and ask your question. Hey, guys.

Thanks for having my question.

And I apologize if I missed this as I have a couple going on right now. But you said you expect 27 to be a fresh start and that we should start seeing the gaming initiatives take hold during that year. Can you put some numbers around that for us? Like, what would be considered successful in 2027 in terms of gaming deposits, live machines, or transaction activity in your view?

Hi, Joel. Thank you. Appreciate that question.

Is that what you just asked? There we go.

That's better. Thank you.

I'm still getting some feedback there.

Oh, Joe, I think you're getting some feedback from me there.

I can hear you just fine. Okay. Excellent.

We're just getting some disturbance on our end.

Okay. So, yes, as I described the process, we are going to look at the milestones. that each one goes through, each one of these businesses that we bring on. So there's been a full launch at Distill, and that started in September. And then we have Terribles starting in November, and then Axis is going to be in next year. The integration starts at the end of this year. So how we're going to measure results is growth in deposits. And we're going to bring that to you every quarter. And we're going to show you the milestones that each one is going through. So as far as the dollar amounts, I don't have projected dollar amounts for you, but we will see progress and traction through 2017.

Okay, I appreciate that. And again, I apologize that this was kind of prepared marks in detail. So the NIM improved, what, 17 bits this quarter, which is pretty encouraging. How much of that improvement is structural versus mix? And then I guess, again, as we look into 27, what are some of the biggest levers that could move that NIM higher from the 395, you know, absent the gaining deposit growth?

Yes. Yes, thank you. Yeah, I was very encouraged with the and all those SBA loans are on a they adjust the next month after an adjustment prime. So the prime rate increase is not seen in that NIM. So it will affect next quarter's NIM. And being very asset sensitive, we do better in a rising rate environment. So we feel good about NIM. The other thing is for 2027, some of the levers is here locally in Las Vegas. We have a real opportunity to penetrate this market. We have existing relationships and we are going to bring on experienced bankers to help us penetrate that market and bring in those relationships of loans and deposits. And I've done this before. At Bank of Idaho, we entered many new markets. The benefit here is that we're already here. We're established. We're the largest independent bank in Las Vegas, and it's our home turf. So we have a lot of advantage, and it's the most exciting opportunity, except for our gaming fintech side. I'm pretty jazzed about that, too.

And then, you know, you've mentioned asset sensitivity. What is your asset sensitivity to a 100 basis point increase?

We have $800 million in assets. Okay. that float, so adjustable basically monthly after the adjustment in the prime, and then $300 million deposits that float. Does that help you, $500?

Delta? Yes. Yeah, that's helpful. And then just a couple more for me here. So your allowance, ex-guaranteed loans, is now 1.54%. but specific reserves increased again this quarter. How much additional reserve build should we be contemplating and what would need to happen for you to feel comfortable that the credit cleanup is largely behind you?

Yeah, so the good news, I want to take the opportunity to say that, you know, we went from 2.8 to 2.6, which at least it's moving in the right direction. As part of the allowance, $333,000 was for growth. That legacy retail credit card, $687,000. That number, we are winding down. We are winding down that program and see that number diminishing. The specific reserves of 981, as you mentioned, and then the other part is there was a CECL adjustment of $600,000. So that was a big part of that. NPAs are down $5 million, which, as I mentioned, last quarter we hired a very seasoned special assets manager, and he came in and really made a lot of headway. And that's where you see the reduction in NPAs, and then early-stage delinquencies down by over $10 million. And that's... That's an indication to me that we're moving that in the right direction.

Perfect. That was very helpful. And then last one for me. Jeff, as you continue to put your team in place, can you give us an update on the search for a permanent CFO? And you touched on this a little bit in your prepared remarks. What other key hires or areas of expertise do you think you still need to add to the organization?

Yeah, so definitely on the CFO front. I have three candidates that I'm with right now, and you'll get an update very soon. Believe me, I need a CFO as my partner. Then on the payment side, I think there's opportunity there. and then on the local market side. What I look for is a very seasoned, established banker that has relationships. And then in addition, filling out additional SBA business development officers in order to further diversify that portfolio. So those are the positions, if that makes sense.

That was great. Thank you for taking my questions, and Jeff, congrats on the milestone, and thanks, Dad.

Thanks, Joe.

Our next question will come from Matthew Erdner with Jones Trading. Please unmute your line and ask your question.

Hey, good afternoon, guys. Can you hear me?

Yeah. Hi, man.

Awesome. Thanks for taking the question, Ed and Jeff. Congratulations to you both. Exciting times. But, yeah, I kind of wanted to follow up a little bit on a previous question. You mentioned, you know, the early stage delinquencies, you're down kind of $10 million there. You know, like, how much do you feel like you can really work through in the next quarter? And then, I guess following up on that, is there anything kind of within that between guaranteed versus non-guaranteed? Jeff, you kind of mentioned in your prepared remarks a big focus on credit. Is there anything, I guess, under the hood that you guys are kind of really changing or taking control of in terms of different processes or procedures as you go through this stuff?

Yes, absolutely. My belief on credit is Quicker is better. Early recognition is the whole key for credit quality. Getting on these credits early, before they go past 60, 90 days, before they hit downgrades. I'm very comfortable with how we're managing it now, but that's just the beginning. We are going to continue to Look at past dues and manage those. We're down to about $2 million right now in the early stage delinquencies, and we're going to continue to hit those. And then, you know, the way special assets works, it's kind of a life cycle to itself. It starts with the past due and then downgrades, and then finally at the end you have Oriel, other real estate owned. And We have about $10 million sitting in Oreo that is going to come off. So we're really focusing hard on getting those off our books.

Got it. That's helpful. And then I guess just looking into my model and the gain on sales, I was looking A little high there. Is there any kind of dynamics that were impacted during the quarter? How should we think about the timing of sales going forward?

Yeah, I'm glad you asked that question because there's a dramatic change in the SBA SOP, the operating procedure, and it's a change for all banks, all banks involved in SBA, is that the month that you originate the loan, you cannot sell it. and get that gain on sale in the same month. You have to wait till the next month in order to sell it. So that is going to impact gain on sale in December because those originations that are done in December are then going to get pushed to January. And then it will even out after that, but it will have an impact on fourth quarter. Now, the positive side of that is that we will get and so forth. So, it's a lot of interest income during those days that those are on our books. But, I mean, it's not going to offset the gain on sale. But, and we don't have a good feel for, we have a good pipeline and feel really confident about our pipeline, but until we get closer, not sure how much that will impact that. The other really cool thing is look at our gain on sale margin. I was very pleased with that from 504 to 557. That's a 10% increase, so I'm very pleased with that.

Yeah, that's great. And then, you know, kind of one more follow-up for me, and then I'll step out of the queue. You know, that gain on sale margin, one, how sustainable is that, you know, kind of over the course of 2027? And I know that's kind of looking into a crystal ball, but, you know, where do you think those kind of settle out on a normalized basis? And then from a non-interest expense modeling thing, you know, salaries, wages, and employee benefits, Yeah, increased a little bit quarter over quarter. Should we look at the second quarter or the third quarter as more of a run rate going forward? Thanks.

Yeah, so I'll answer your second question first because it's precious in my mind, is the increase in salaried benefits. We had $520,000 in severance payments, and then the rest of that is... because we had such a robust originations of $171.7 million increase commissions. So, we have to pay for that production. So, that's the increase there. And then we had, if you look on the last page of the press release, you'll notice that the severance is in there in the adjusted numbers as well as the third party Non-related to the credit card, by the way, of $100,000. And then we have, kind of off to the side, $600,000 in contract disputes. And so, however you want to kind of look at that. But that's where expenses are going. And then the first part of the question was gain on sale. Oh, yeah, so... What we have is a really well-oiled machine. Very consistent if you look over the last three quarters. And we see the pipeline still being robust. We have a process that is very tuned as far as selling those guaranteed portions. And I would say, if anything, we're going to spend more energy around getting those sold and making sure those get sold quicker.

Awesome. That's very helpful. Thank you, guys. Appreciate it.

Our next question will come from Tim Coffey with Breen Capital. Please unmute your line and ask your question.

Thanks for the opportunity to ask questions. Jeff, I appreciate you framing the conversation the way you did and lining up the different verticals and what's going on there. One of the things you are, you're inheriting a really good growth engine. So I wonder, what do you think is a normalized level of loan growth on an annualized basis for this company?

I think you're going to see it be pretty consistent with what we've done in the past. It's working well.

What was the percentage you threw out there? I think it annualized at 16% in the quarter.

Yeah, 10 to 15. Okay. Okay.

If we just kind of look at the community bank in Las Vegas, where are the areas that you think the bank can grow loans? Where's the low-hanging fruit in your mind?

Gosh, I think the business community is very robust here. And what's nice is that people around this bank already have relationships. We just haven't... fully cap them. And as I get out in the community, I'm going to make those relationships. And the board, frankly, has already done a lot of work on bringing deposits to the bank. But I want them to make introductions so that we can increase those relationships and deposits. The medical service, Area and Contractors as well is a low-hanging fruit.

Right. Yeah, the company is incredibly well-connected in the community. Yes. And then, yeah, the SBA division is really, really strong. Is there a normalized level of gain on sale on a quarterly basis that you think is reasonable?

Well, we're 557 this quarter. I would say in that five to five and a half, six range is reasonable. Okay.

All right. Great. Those are my questions. Thank you.

This completes our Q&A session. I'll now turn the call back over to Jeff Newgard, President and CEO of G-Bank Financial Holdings and G-Bank, for any closing remarks.

Thank you. I'd like to take this time to have Todd Nigro give a little update on our fintech area.

Thanks, Jeff. We've got a few things to report on, so bear with me. It's been an exciting time. I think the Q3 and Q4 really represents going from development mode with our capabilities in FinTech to launch mode, albeit initially at a smaller scale, but it's still launching in September. We've got all nine locations, as you mentioned, up and running. and that's quite a process to do that as you alluded to in your opening remarks. It starts with signing up a gaming operator and goes all the way through regulatory audit accounting and go live training and approvals. And in just the short two months that we're doing it, I'm going to share just a little bit of data on Distill. We've already achieved 5% adoption on patrons that are using the app as their primary loading mechanism. And when I say 5% adoption, I'm speaking with regards to the gaming club. We've also had a 10% adoption of our top 10% of our gaming club members. So the high end of the market, which is a larger transaction volume customer, seems to be willing to use the app on a more regular basis. And I just want to frame that up with In the casino industry, especially bricks and mortar, if you sat in front of any gaming executive that operates in a casino and said you were going to get to 15% to 20% cashless adoption with a system like ours, they would think that that would be an absolute home run. So the industry has, to our benefit, quite low expectations about cashless, but we're already seeing some numbers that are really encouraging. And I just feel like I want to share that... When I share information about the distil operation, I'm the gaming operator. I'm the owner of that organization. I don't want to imply that as we roll out to gaming operations that are not owned by a Nigro or even a Tim Herbst who sits on our board for Terribles, we're likely not to be able to share confidential information on gaming club numbers and adoption rates and things like that. Hopefully, we'll get to deliver some, but that's really up to the gaming operator to share that information. But I have the benefit of being involved in the ones that I'm reporting on so we can share some additional stuff. Terrible's is really a whole other level as far as complexity. They've also gone through the entire process Jeff explained and have all of the regulatory and internal approvals to launch the product. And it's important to grasp the scope of the Terrible's organization. There's 3,000 gaming machines. They have 300 individually licensed gaming locations across Nevada. That's all the way from northern to southern Nevada. And they do approximately $1 billion in transaction-equivalent value a year going through those machines. So this is a very large, very complex industry. and many more. some of which we will likely be able to share next year. Axis is in an earlier stage. We signed them in July and now we're doing our technical integration with their casino management system. We expect the technical integration to complete in 2027. So that sets us up, I'm sorry, our technical integration is going to be complete in December of this year. That sets us up for Axis signing on a gaming operator which we expect to happen. and us launching one of those in 2027 because the technical integration phase is one of the longer lead time items in the process. So we're still very excited about that product and that launch coming next year with a gaming operator or two. And I also wanted to state that what we're doing right now at GBank, BCS, VoltBets, Bankroll, we're doing multiple integrations with other casino management systems and cashless and cash access payment providers in the gaming industry. And we're having active and ongoing discussions with both online and bricks-and-mortar gaming operators. So there's a lot of activity going on in the organizations right now. And one of the things that we've been doing, which I think we're going to start to see results, is we've been building the infrastructure both in the bank, at BCS, at Bankroll, at Volpex, in order to start delivering on deposit growth for the organization going forward. The Lucky Loads prepaid card has hit some technical delays. It seems like technical delays are the commonplace in the gaming fintech world that we live in. However, we still remain very enthusiastic about the product. It's going to do really well out there in the marketplace because it's being built on all of the systems that we're currently using at both bets and bankroll. So that's going to happen in 2027, and I also think that that's going to generate some material data for us on how fintech can deliver for the bank. So unless I missed anything, Jeff, that's it in a nutshell.

Thank you. Thank you. We're very excited about it. Well, before we conclude, I'd like to thank our board, our employees, and our shareholders for their continued support. We remain focused on executing against the priorities I've outlined today, and we look forward to updating you on our progress. Thank you.

Thank you for joining the G-Bank Financial Holdings Inc. Q3 2026 earnings call. You may now disconnect.