GBank Financial Holdings Inc(US:GBFH)2026-01-28 23:00Financial Data and Key Metrics Changes - The company reported record quarterly earnings of $7.4 million or $0.52 per diluted share, an increase of $3.1 million compared to the prior quarter earnings of $4.3 million [43] - The net interest margin was 4.33% for 2025, compared to an industry average of approximately 3.7% [44] - The GAAP gain on sale increased from 3.24% to 3.98% in the fourth quarter, with expectations to trend above 4% in 2026 [45] Business Line Data and Key Metrics Changes - The credit card program experienced a transaction volume of approximately $99 million in the fourth quarter, down from $130 million in the previous quarter due to fraud prevention measures [6][11] - The SBA division had a record year for production, with a healthy pipeline going into the new year [45] - The company anticipates significant growth in non-interest-bearing deposits from the Bold Bets PPA product, which is now launched [44] Market Data and Key Metrics Changes - Credit cards account for about 30% of all payments in the U.S., which amounts to approximately $6 trillion annually [15] - The company noted that there are about 28 legal sports betting apps across the country, with customers using 20 of them [13] Company Strategy and Development Direction - The company is focusing on enhancing its gaming fintech operations, particularly through the Bold Bets and PPA product, which allows players to create and fund wagering accounts via a mobile app [18][19] - A significant reorganization of the credit card operations has been undertaken to improve efficiency and customer engagement [41] - The company aims to replace $400 million in deposits with more SBA originations and guaranteed loan sales [38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to handle growth in the credit card program, projecting potential growth from $400 million to $800 million in originations within a year [59] - The company is optimistic about the future of the Bold Bets app, noting that it has received positive feedback from users [76] - Management highlighted the importance of fraud prevention measures and the successful implementation of new systems to enhance customer onboarding [46] Other Important Information - The company sold off about $52 million in investment securities during the quarter, which included both available for sale and held to maturity investments [47] - Recent interest rate changes have tightened spreads, prompting management to move into securities that better protect the organization in a declining rate environment [48] Q&A Session Summary Question: Can you provide insight into the potential for credit card interchange volumes this year? - Management indicated that while they are not providing specific guidance, they expect significant growth, potentially doubling from $400 million to $800 million in originations [59][60] Question: Should we expect continued improvement in gain on sale margins for the SBA platform? - Management confirmed that they expect growth to continue, supported by incentivizing their team with stock options to achieve higher GAAP gain on sale [62] Question: Was there any change in the Q factor for the ACL that drove the negative provision? - Management noted adjustments to the Q factors based on historical analysis, which indicated that additional reserves on the SBA portfolio were no longer necessary [65][66]