GBank Financial Holdings reported lower third-quarter earnings, as weaker interchange income and fewer loan sales outweighed improvement in core interest income. The Las Vegas-based bank parent said net income was $3.9 million, or 27 cents per diluted share, for the three months ended Sept. 30.
Management pointed to stronger net interest income, a wider margin than in the prior quarter and increased Small Business Administration lending as positives. It also said legacy retail credit-card losses and reduced card use by sports-betting customers continue to weigh on results.
Key details
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Earnings declined from both comparison periods. Third-quarter net income was $3.9 million, down from $5.5 million in the second quarter of 2026 and $4.3 million in the third quarter of 2025. Diluted earnings per share were 27 cents, compared with 38 cents and 30 cents, respectively.
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Adjusted earnings were also lower. Excluding non-core items, adjusted net income was $4.3 million, or 30 cents per diluted share. That compares with $5.5 million, or 38 cents, in the prior quarter and $6.3 million, or 44 cents, a year earlier.
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Nine-month results trailed last year. For the first nine months of 2026, net income was $10.6 million, or 73 cents per diluted share, versus $13.5 million, or 93 cents, in the same period of 2025. Adjusted net income was $14.4 million, or 99 cents per share, compared with $16.4 million, or $1.13, a year earlier.
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Interest income improved from the prior quarter. Net interest income rose 6.4% to $13.6 million from $12.8 million in the second quarter, and was up 4.7% from a year earlier. The increase reflected growth in average loans and investments, which more than offset higher interest costs on deposits and borrowings.
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The net interest margin widened sequentially but remained below its year-earlier level. The margin increased to 3.95% from 3.78% in the second quarter, but was below 4.35% in the third quarter of 2025. The quarterly improvement reflected higher yields on earning assets and a lower cost of interest-bearing liabilities.
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Total net revenue fell. Net revenue was $20.3 million, down $1.6 million, or 7.3%, from the second quarter’s $22.0 million. Non-interest income decreased to $6.7 million from $9.1 million. The main pressures were a $1.5 million drop in net interchange fees and an $0.8 million decline in gains from loan sales.
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Sports-betting payment changes affected card income. Several large sports-betting operators stopped accepting credit cards as a funding source, reducing GBank’s interchange income. The company also sold fewer guaranteed loans during the quarter, though its gain-on-sale margin improved.
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Loan-sale volume was lower, while the margin on sales increased. GBank recorded $4.7 million in gains on $84.5 million of loans sold, compared with $5.5 million in gains on $110.1 million of loans sold in the second quarter. The gain-on-sale margin rose to 5.57% from 5.04%.
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SBA originations increased. The bank originated $171.7 million of SBA loans, up from $131.4 million in the second quarter.
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Credit-loss provision remained significant. The provision for loan credit losses was $2.6 million, down from $2.8 million in the prior quarter but above $2.2 million a year earlier. It included $687,000 related to the legacy non-gaming retail credit-card program. The allowance for credit losses increased to 1.30% of total loans from 1.19% at the end of June; quarterly net charge-offs were $1.1 million, compared with $1.2 million in the prior quarter.
Plain-English implications
The quarter showed a split between improving interest performance and weaker fee income: net interest income and margin rose from the prior quarter, but lower card interchange and fewer loan sales reduced revenue and earnings. CEO Jeff Newgard said the legacy retail credit-card portfolio is expected to keep affecting provision expense in the near term as it runs off, with that impact expected to diminish over time. He said his priorities include strengthening the core bank, completing team-building by year-end and positioning the company’s gaming-fintech initiatives to contribute as 2027 progresses.