GBank Net Interest Income Rebounds as Margin Recovers

The Tip Desk · October 28, 2026 · 5 min read

Net interest income rose 6.4% to $13.6 million and the margin widened 17 bps to 3.95% as net revenue fell 7.3% to $20.3 million.

GBank Financial Holdings Inc. (GBFH), the Las Vegas commercial bank holding company, reported net interest income of $13.6 million for the third quarter ended September 30, 2026, up 6.4% from $12.8 million in the second quarter, as the net interest margin recovered after a prior-quarter compression.

The margin widened 17 basis points to 3.95% from 3.78%. The company said the lift came from a 15 basis point rise in the yield on average earning assets to 6.87% and a 5 basis point drop in the cost of average interest-bearing liabilities to 3.86%. Average loans rose $34.6 million to 83.1% of average earning assets, from 81.2%, at a 7.34% yield, while lower-yielding interest-bearing deposits with banks fell $26.9 million. Investment securities yield ticked to 4.73% from 4.64% on a full quarter of $7.9 million of available-for-sale purchases made in the second quarter. The company attributed the net interest income increase to volume from higher average loans and investments more than offsetting higher deposit and borrowing costs.

Net revenue fell 7.3% to $20.3 million from a record $22.0 million in the second quarter. Non-interest income dropped $2.4 million to $6.7 million, primarily on a $1.5 million decline in net interchange fees and a $0.8 million drop in gain on sale of loans. Gaming-related credit card transaction volume fell to $19.5 million from $84.2 million, and net interchange fee income declined 84.6% to $0.3 million after several large sports-betting operators discontinued credit cards as a funding source. The company said it remains committed to its gaming payments strategy and does not expect it to contribute materially to financial results in the near term.

Gain on loan sales was $4.7 million on $84.5 million of loans sold, down from $5.5 million on $110.1 million sold. The pretax gain-on-sale margin improved to 5.57% from 5.04%, a 53 basis point lift that did not offset a $26 million volume decline. SBA originations were $171.7 million, up from $131.4 million in the second quarter. Guaranteed loans held for sale rose $19 million from June 30, with the majority of those plus new originations expected to be sold during the fourth quarter.

Net income was $3.9 million, or $0.27 a share, versus $5.5 million, or $0.38, in the second quarter. Excluding $0.6 million of pre-tax non-core items, including $0.5 million of severance, adjusted net income was $4.3 million, or $0.30 a share. Non-interest expense rose to $12.8 million from $12.0 million, principally a $1.1 million increase in salaries and benefits including the severance. The efficiency ratio widened to 63.0% from 54.7%.

The provision for credit losses on loans was $2.6 million, down from $2.8 million, on a smaller allowance build of $1.5 million versus $1.7 million. Net charge-offs were $1.1 million, or 0.38% of average net loans annualized, versus $1.2 million, or 0.42%, in the second quarter. The provision included $687 thousand for the legacy non-gaming retail credit card program. The allowance for credit losses totaled $13.9 million, or 1.30% of total loans, as of September 30, versus $12.4 million, or 1.19%, at June 30. Excluding government-guaranteed portions, the ratio was 1.54%, driven largely by specific reserves on collateral-dependent non-performers.

Other real estate owned increased to $10.9 million from $5.7 million after foreclosures on three non-owner-occupied commercial real estate properties totaling $6.9 million, partly offset by a $1.6 million sale. Non-performing assets fell $3.9 million to $54.2 million, or 3.72% of assets, from $58.2 million, or 4.06%, on an $8.8 million drop in nonaccrual loans, partly offset by the OREO increase. Excluding guaranteed balances, at-risk non-performing assets were $28.8 million, or 1.97% of assets, versus $21.3 million, or 1.49%, at June 30.

Total loans, net of deferred fees, increased $24.5 million to $1.1 billion, led by a $28 million rise in non-owner-occupied commercial real estate. Government-guaranteed loans were 15.3% of total loans. Deposits fell $41.8 million to $1.2 billion, with non-interest-bearing demand down $36.9 million and savings and money market down $77.4 million, partly offset by a $79.4 million increase in certificates of deposit. Loans-to-deposits rose to 92.1% from 86.9%. The company took on $60 million of short-term borrowings, versus none at June 30. Common equity to total assets was 12.04% and the Bank’s Tier 1 leverage ratio was 13.4%.

President and Chief Executive Officer Jeff Newgard said the core banking franchise performed well, with higher net interest income, an improved net interest margin, and strong SBA production and gain-on-sale margin. He said the legacy retail credit card portfolio will continue to affect provision expense in the near term and that the company expects that impact to diminish as the portfolio runs off. Distill Taverns fully launched the BoltBetz application across nine Las Vegas locations in September; Terrible’s is expected to launch BoltBetz in early November at three locations, with a full rollout planned during 2027. BVNKROLL integration with the AXES digital casino management system should be completed by year-end 2026. The LuckyLoads prepaid card is now expected to launch in the second quarter of 2027.