GBFH - Earnings call transcript Q3 2024 | GBank Financial Holdings Inc.

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Edward Nigro

Well, welcome to GBank Financial Holdings third quarter earnings call. And this time we are not going to have it on Zoom for convenience of Ryan and Jeff and I because we're in each [ at ] -- I'm in a different location this particular call, and also, I think it gives us a little more freedom to move around while we're having the call. But I'd like to start off, and, of course, Ryan, our President and CEO, is with us; as is Jeff Whicker, who is our Chief Financial Officer, and they'll be giving you the much more in-depth look at what our quarter was about and what our year-to-date was about. But I'd like to focus on a few things. And I always like to say, I love the 30,000-foot level.

As you can tell, I like to fly. But the third quarter was very busy for us, both in operations as well as an extraordinary capital raise that we embarked upon, started and completed in the third quarter. But I want to point out a few things that I think tell our story very succinctly. income XX.X% interest quarter the net year. last our grew from by third Year-over-year look because past at better to like I year-over-year what's occurring breadth it's been for months. the X at little a $XX.X $XX.X from mean, million increase. -- We million, went XX.X% million a to I $XX.X from

from XX% Our [ to from million. million $XX.X income And our year-over-year to increased million net million. XX.X% net ] $XX.X interest $X.X income increased $X.X

and have kept asked [ we start why have deal the growth for a increased Ed, wanted forever raise, always you we them growth it that prepared XX% is powder had demanding our environment, that been, great that people capital share a to be powder. could in we regulators when always growth. to see we our tease we capital, or growth fast significant often by philosophy are want be we but when we've or and environment. XX% dry too. know to a And we sure know we We ] a factors, in well used growth that So make growth, happen dry to of And FDIC, any the as the fast received

production $XXX.X and quite ended the in has existing Now, is from SVP, capital? which course, a originated year, but this And been our our $XXX.X have in key instrumental York, XXX% million -- fiscal the as as up group, at very in of and of million a fiscal loans the Senior September the her existing in not our team our factor. fiscal last -- amazing. But increase. Why that's that Nancy September Samir, grew Vice just 'XX. when standpoint division. another has or we to of before the production. are And during growth important been well year, September, from last our additional generators SBA year important occurred brought New SBA of we growth year the last SBA look what year, the year-over-year who has growth a just We just from elements, one finished of of and very part there's in the [ been in producers. up ] President, We

generation asked million broker network be network. able Someone have have broker are that come enormous grow $XXX is, And we our significant dedicated But "You to our that and or said, that me, he network shareholders, from answer the a an of must fast." to that employees. develop no. of X/X to shareholders either

very identified dedicated. that's internal and very and So very

it's very We are not very really over thing us. it, the to when dedicated we one are you them because all and look it's to the at us that's I us. years, and from And Ryan inside. that of on and they focused build dedicated everything them, And have that

we to And have them don't us do. anything want relationship in so, we and a

continue I'll to and about growth, growth, end with -- a of be it credit I'm because of was very you that the can not why to pipeline end. But last division these our we very think going And Gaming by good this quarter, growth our our not see good about we XXX% And card business I'm point to that FinTech they deposits at more all bit our a during grow. pipeline. And to pipeline a and very business think, have and at little to results, course, FinTech that strength, or to this are and talk talk So and year suffice division raise the look call have at ability foundation I'm good to a I look we a yet it they not those it. for Gaming and our grow, begun saying towards and of capital monetize, very we towards our monetize. we just this have, beginning say, metrics just to but we I'll did a important

those our our granted, we gets continue many, measurement, all that now a X in dry we Tier growth, capital have is to balance for raise definitive for and Now concentrations, want right used. capital sheet that at our as balance expect in gets used it of we we it used round numbers. make to and powder capital gets gets without our solid XX% many sure in It -- growth, arenas. the used But areas know explainable balance,

this Now I in results we after briefly cover press We million ] we want because shares release, $XX.X the and $XX rounded did, our in in what expenses, [ million. just issued for to commissions, -- realized everything. X,XX,XXX legal, didn't we all

to XX.XX fully to -- shares. Now about XX.X that rounded shares from diluted million us brings million

] of we the and transaction we any are there announced, NASDAQ we also -- earlier registered. But to price, committing to on because how October -- what going close has in I has set our date, they Gaming the we in in we precisely a that's to because we the arrived that did, at are we $XX.XX social said the the history XXth. And the changed we that quite last September XX, were having expect is issued reacted that next and set to in shares brought in not many there dramatically them accordance it more per discussed stock shares growth were XX turn price. within September and we instead Ryan. attention -- that, control. our transaction we with intend, stock be at month, our at but believe solid those up with rather how it days, with our we you of and they're And -- tradable the And are GBank lockup, Now the on registration we our same that was we though, and was. contracts share, I we the a price probably shares including already to they the so by was [ our seems realm on issued mid-XXs and register been set the this which, wanted year, Financial division. But and to course, the XX It's as and to issuing event arenas, we more spring, and price, developing excuse it $XX FinTech to on in GBank once rights the because set have been the this on are at it I'm to uplist to on to the stock have credit transaction card remarkable as for much for although me-- price of that, media, have and the XX, locked were X closed going platform. And over time, price that would last our has

T. Sullivan

to is net particular drivers, consider year-to-date terms assets record Thank posted, ] results at you, was When of certainly, everyone revenue that ended big good where of year-over-year also we've that $X.XXX pleased by 'XX. A a calls record the up many lush look highlighted at year-over-year discussing key quarters. give comparisons, A the XX% quarters that's production obviously, kind in course big continue expanded Ed, on the that relation for year-over-year increase I'll quarter important and and a our divisions. new and the another to Ed the [ Commercial we've our Certainly and over driver three day to 'XX activity. of year-to-date we financial from that with the these year-over-year of compared number and top and significantly the loan initiatives some a total to quarterly number story, of of in earnings driven to that part very first revenue of of our of balance sheet loan been of comparisons, billion, call. on ] on robust I SBA yet [ XX%. a a basis. quarterly you the initiatives certainly it's think quarter increase

gross total XX% So by loans year-over-year. increased

deposits interest our total side, to line and shareholders, increased million year-over-year liability increase saw special of and nearly our by equity XX%, the us of then $XX by or XX%. year-over-year increase certainly we On an

key to very earning and component at margins really to success. generate interest at that asset are maintaining strong is continue net our levels industry a ability above our to base very time strong growth the So averages well same

Another component, year-over-year. XX%, well, noninterest obviously, as nearly mentioned, XX% Ed increase revenue as

and seen about our we as sell a the largely SBA in activity to back talked we're in we've past, have -- position. We migrating have

on quarters gain one-line has by increased nearly million. three year-over-year So first that $X.X sale

overall. was seeing We're million below which grow revenue component. continue that's mentioned, revenue some revenue to three our that to significant focus not and talking sale, business our multiple ahead been look and -- we've credit totality we approximately that growth our card, initiatives income, anticipate income, QX a a component is broaden them the $X.X and important interchange expect financial culmination key then Gain servicing just through revenue as other meaningful streams. Certainly, significant interest for been our as in is million. And in of for meaningful ] total over is income key income newer [ $X.X go we only that. lines, the And and company contribution namely the the of of XXXX a net across the as drivers, we improve of One first in on into but about quarters initiatives. quarters we loan of

us you QX, all generate very position results put continuation that XXXX. those of a strong and So of QX that to in the into things combined a see in

financial well. the lot efficiency and initiative side calls in key talked been a about prior as Another has efficiency, on we've

building continue part, we growth balance may alluded look highlighted, that, starting into and the as significant some seen, growth. In XXXX, expenses company You we a of and capacity increases significant result growth that the to strong will noninterest, be mindset, expect the -- to, just future year-over-year, Ed we operating to as back saw other I remember with as as over made in investments we've really sheet quarters. the that for rates in

robust. Specifically that technology. in maps can are our are as credit the road and important we've and quite initiatives made lines FinTech investments technology our imagine, for And card you Gaming

is Chief incredible who Technology Chief initiatives Information Shouvik, an Officer, and those have managing We brilliantly.

ones to capacity is Gaming about lines we card our data. started you of grow, to hold was -- that and wanted initiative that important an our credit I specifically, and really highlight specifically XXXX control think out if and the building FinTech One in

card, credit a about lines think part all And you ability GBank our of manage, of growth and and then monetize warehouse important of data now data growing our if and So key in our ultimately will success. component continuing that of been the very the be our development success. fintech a has data in to monitor control, our a

a and efficiency XX% ways. heard about goals have our XX% side, by the to of ratio many for the year-to-date of the to for quarters And better in for compared of you the three On efficiency of prior the year. our it's measured number report ratio. being us XX% long-term efficiency Happy of that's talk XX% quarter company a basis, first or on

As the mitigate about we've asset to our taken significant NIM think sensitivity. we strides sheet, balance and overall

quarters, Now strong a in margin. to five interest net asset that been contributor six going has growth back and our four, sensitivity

margin note at consolidated QX was X.XX% actually You'll X%, our bank. the that

combined We been way long loan been to components still SBA the So and with book, variable prime, CDs part of consider those our the a balance funding mitigation variable rate securities. in significant gone as a of in remain million. we've variable obviously, sheet, rate, margin. But very we've did when specifically, asset intentional the maintaining you cash million expanding the loans sensitive reset quarterly efforts are $XXX of about, and our end when rate $XXX base. We categories also translate in over assets. Those three optimizing quarter talking have

a portfolio. very mentioned short though, As that previously, is

CDs weighted approximate and March matures XX, approximately of look on book now the X.XX%. those million as CD is or between reprices. So $XXX rate we The XXXX, out

million In we about in to callable at CDs X%. have rate addition $XX that portion all-in on that, of a

quarters. the our important what to decisions, manage in the a will future be makes an So Fed is as our its NIM ability in rate to environment supporting contributor now down

addition had In interest-bearing million those on balance already $XXX non-maturity in that, and down. are deposits, the sheet pricing we to

compared cost to we're at On XX maturing of we the of CD cost and CDs lower specifically, all-in seeing book, what above today, And an replace CDs we're have points. what's XXX the books an average still in -- current have ability of the for environment basis on funds we originate to to X%. is, the

going our our forward So continuing going of funding important an part is of strategy. cost to be managing

obviously, production, more of production. having very SBA long-term about loan division. of in in to $XXX goals a regard total generate operational million or was terms SBA $XXX the In million production talked approximately we've and QX that strong our performer capacity Lending in commercial and at

Just of ability by real our our quickly, also manage number to encouraged assets. nonperforming limited

in saw $X.X nonperforming So assets to million. decline a the overall, you down

special a a to past in disposition So so obviously, ] more if for [ that XX. loans -- $XXX,XXX increased highlighting, provision, was $X.X is that's event asset guarantee. interest and report million, quarter, in the $X.X of SBA the accompanied bears to provisioning million. reduction. A which banking, unique I'll It's in rare. I September it And by a production. disposition high hospitality in in also a deferred a quarterly single was recovery quarter and million of with was it a growth that's been the recovery of SBA XX% XXX% nonperforming $X.X part principal -- as million in of it's during level $XX that hospitality indeed. Included think full assets of that. Also biggest the asset There of approximately big particular, one that was asset and you've rare -- August was because a highlight of fees, contributor contributor we what by ever gross, At-risk tune the was one happened about to frankly that and that single -- and in the recovery there than growth single biggest very asset of

disposed that, is that specific $XXX,XXX be disposal provision the $XXX,XXX reserves anticipate included approximately will million ] fully that and current allows in we QX, [ during $X.X So ] in [ in that us that quarter. quarterly to

terms with results, as also company quarterly over we and of our the go that promised, overall, of meaningful into to establishes So of just in terms the baseline details. into in that, hand some in quarters successful for be Jeff a fantastic it to quarter I'll head the to as it XXXX. And future

Jeffery Whicker

good morning, and Ryan, you, Thank everyone.

on As and the execute gain with its Ryan described, bank significant consistent asset loan volume sale low strategies core on nonperforming growing continues margins, healthy to revenue, assets. growth, strong and

national million quarter net securities when or a million million repriced is -- of balances X% currently X%, diluted increased of higher-yielding is the increased XXXX strong $XX.X XXXX. card was as a seeing XXXX. increased increase million are growth, by the early lower-yielding the contribution $X.XX for fourth share. Net into the interest and quarter $X.XX remained we to of of increasing billion in margin interest bank's compared record $X X.XX%. Quarter-over-quarter have as of pre-provision again $XX addition, rates of from to of The In diluted assets. XXXX. interest area loan credit prior per a is quarter mainly be $X X.XX% maturing compared of in to $XX.X third income the a third $XXX,XXX the as maturing to up income which that continue will revenue positive per product, income interest the reported trending net net $XX.X in which The and share asset to the and GBank increase driven earnings and quarterly were over average decline. margin earnings cash compared QX of interest between bank company's to This billion at short-term focus quarter quarter. and is in This prior million $X.X or banks

quarter. onetime a a disposition the prior X.XX% recovery and from addition, the would bank margin of X.XX%. Net on million that interest $XXX,XXX quarter in net workout the X.XX% during adjustment, the receive one have onetime an impressive the produced the asset, loans this $X.X yield, troubled been Ryan In Without interest did described. up

of to the -- remix securities the on yields investment portfolio, was quarter in X.XX% of bank prior to the X.XX% in the With securities from increase QX. securities able

This securities over rates This in rate XX% were QX. commercial lending currently. SBA a in the the million the $XXX and a down, SBA we has a the has While year and $XXX,XXX risk card contribution down end rate almost loan the while This the growth anticipate by quarter. from SBA will and sales XX% this related expected higher process to $XXX,XXX to to We be increase fourth record revenue purchasing quarter-over-quarter These quarter. Noninterest the a $XXX,XXX million QX fixed sales XXX prior for interest grow we approximately $XX to to and credit working true-up the the gain quarter, million the by the providing credit on $XX as prior the quarter. bank strong. The from was that down decrease to sale be XX% last commercial $X.X loans. Noninterest of continues loan prices. margin held include to lower quarterly compared ]. With when bank's as This sensitivity X.X% activity to is the by $X.X million trajectory, change during in margin and decrease selling a quarter with diligently in do the in positive loans risk. million bank slight pre-provision the reduced loans during decreased been short-term QX interest the come anticipate for or point variable $XXX,XXX loan remains loan $XX.X of card XX% to a repurchase year the was pre-provision translate in ago accrued over million, primarily income product anticipate totaled $XXX,XXX to approximately compensation to million. SBA originations year in volume rates in rate income related expect expense brings volume to net sales fixed bank's the for scenario that effort to increased during the decrease the and rate we sales the remain strong QX. to decrease strong over with a basis will sales due the during increased XX% mainly total [ producing calculation. pipelines $XX to the to decreased balances efforts XX% $XXX.X million the million a delayed $XXX.X loan an almost This mainly $X.X to in increasing sale in due of and during in lower due million sales quarter. loans from incentive

continues increase resulted addition, hold to $XXX,XXX earnings In net decrease average peers on for to to through in year-to-date, to quarter flat expense which while top the had processing bank's of revenue X.XX% strong in that the to continue was in quarter. decile in to was [ the return due The true-up QX expense incentives. Consolidated strategic in increase of results. expense and the X.XX% XXXX, an data for its when year-to-date. its equity compared while bank XX.XX% and consolidated demonstrates for favorably quarter and This returns for accrual the the produce a put prior to the to the the ratio the from bank from to improved bank ] quarter efficiency ROA quarter XX.XX% as the ability levels for continuing XX.XX% been able has in same decreased prior to the XX.XX% XXXX continue to QX XX.XX% and the year a

mainly quarter. payback over Looking in quarter assets due $XX.X increased was at a the $XX offset a increase of short-term during major deposits during deposit quarter-over-quarter X.X% by $XX borrowings the the This spread with sheet, every increases million million by or million category. to balance

a million purchase total company fixed in portfolio. described, securities future total loan on All $XX.X liquidity million, being the driver securities X.X%. of approximately rate reduce in experienced the of the strong provide XXX% as borrowing bank quarter of the primary borrowings, capacity I while October increase of the rate down for yields cash maturing a other mitigant Additionally, million the due just to in million paid continues bank XXXX, investment government-guaranteed with risk end. The XX.X% available overlapped needs. early the mortgage-backed This balances risk of interest bank's settlement government-guaranteed assets at incremental approximately $XX security leaving to bank. $XXX million loan producing short-term decreased help were $XXX that a $X.X which to A represents the to

group. is losses which $XXX,XXX a in Asset $X.X [ million allowance quality, credit specific as allowance reflecting increased gross portfolio This for million the a resolved relatively quarter when the classified $X.X the of growth and at-risk loans, impaired loans loan, reporting. to strong quarter, loans fully government losses such. reserve within to during balances. ] Relating was loans loan $XXX,XXX with anticipated X.XX% of million. Nonperforming the QX. compared remains with quarter-over-quarter of only $X.X balances Ryan to ] overall at-risk a for decreased to, peer The credit be $X.X loss which million talked as credit provision of the [ guaranteed loans, recorded with related to disposition the prior for bank's currently and is X.XX% net consistent of The was is

coming million total from deposits $X.X prior the of quarter. Uninsured deposits. are quarter the XX.X%, us the as decreased Noninterest-bearing in bank ratio total XX% wholesale and down XX and to as securities currently points future. comprehensive $XX,XXX, loss in from started $XXX,XXX New to group. Overall, on XX.X% expectations. Capital deposits reducing outperform year-to-date, is down unrealized of the quarter is is ratio is capital compared quarter. dependence rate increased is the basis come XX.X% portfolio to when quarter year. we investment down prior lower down on to funds up is future its QX total to the loan-to-deposit current post funding prior at the which XX.X% The to the assist X.X% allowing X has decrease overall Wholesale funding, the from which the rates will levels reduce was in at continue to estimated tax, XX% deposit assets of strong in The XX.XX%. XX% ended investment The bank. from due yield on slightly the peer income the from cost remain which the the continues Tier total in at generation to to decrease quarter. portfolio prior portfolio increased be represents as prior has down XX.X% Other rates deposits. to

base, the revenue the This back will that, borrowing while for has Gaming needed. The addition, to puts mainly to The continue provided in position of from XX% and including replace the company. successful during value during In support to borrowing on continues the has as the robust increased and a if has and bank the our new related liquidity capacity the October the have it of as availability, its you, million. to I million sheet division sheet month growth development provide future in company share book September holding $XX credit the it bank the production products turn execute immediately and raised past, and developing bank QX, deposit the new XX support to quarter-over-quarter. With announced, the the to this ] in capital earnings liquidity $X.XX to growth revenue that the growth for finally, strong of over liquidity, of us $X.XX initiatives million strategies Ed. Tangible liquidity of $XXX bank's in quarter. And made grow of on-balance adequately total $XXX of to on-balance [ to the forecast opportunity income continued card. in the and With organization. per FinTech

Edward Nigro

believe mute. I you. off I'm thank Well,

Jeffery Whicker

Yes. Yes.

Edward Nigro

before, to [ but to get XX this it's do are has days. to with quarter failure or I'm the in very has could that the to I I programs, launch program. back in beginning to that want has an deep, interested prepaid our and headlines pulling -- business, from wants what time, Mastercard many XX have quarter with with to to together we -- and much digging many important. And to generally that you own of carried over some They want Mastercard that talking compliance strictly for other because there wants discussed. I have on maybe back that or focused let because program the would for and process ] to agreements meet to Ryan support takes get into and think, I in to would Gaming our months own authorized worldwide that several round talk I entered executed are but and and me be Well, that second because programs a hope in needs of quarter, and their thank and out one to third to a cards. Right start of announced fintechs their and by and launch this the risk. But to and not that. we of their very prepaid recognized have launch process, card company product, going that banks developed and on, Good. -- Synapse of it their for Mastercard now to sure banking the to a agreement. issues our want approval has myself, certain that requisites prepaid I make card they especially we Boards want division fintech order been required plenty of are network accelerated desire X networks trouble has an take reduce Jeff to FinTech for a go their that be know And wish be our most their what is X building said the in their Express we to of much Mastercard Express have to a -- that having that seen been items. the -- agreements program, of are going and companies few companies about to issue that an have now it all the Mastercard October, you week, we may been shareholders One have by is next third on or

they vetting some that Now, at properly [ companies licensed companies to we in and we And very licensed, the bring every on certain we it sure operate. of BCS are our have companies ]. bring making requires course, that XX state spent years last and the important are are GBank that that properly the on bring on legal, we plan

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gaming processes we iXc and we and areas: care. know are and companies; know in understand three have on understand specific because Now emphasized and to health to gaming only the and license Mastercard that regulatory focus going gaming, we gaming

government. for are also, receiving We care health however, in issuing care, we certain cards. And inquiries industry haven't been the in health prepaid

program, to has BCS. for Of with we their of particular gaming are prepaid them but of the [ and state that lottery one the their vetting for with of ] and with we in in were government and fintech are payment that engaged is course, GBank have contract lottery the we process with involved fees Oregon there state -- going a or contract a winnings, are issue cards to lotteries

with, the that would consumers, are consumers to we an in kind do only to are many of are prepaid we in products any that's different than that get because We we have not if that being that And be exciting we that this Banking-as-a-Service the not could very indicated. exist, that the would provide applicants of that emphasizing those program we Banking-as-a-Service. can a in. indeed we not work participate I industries Now the products products

applicants the Mastercard or Now we one two have already through program.

with cards payments to [ across them of wants gaming is which company that the certain operators One interesting country. is ], prepaid Passport issue an

fit vetting, to would in final it's the have are contract, know divisions undergo focused declining go business of vendor is thing the we their unfortunately a of extraordinary Everyone amount the that We because is and business important and through three note we in And we of a final we has and sure their quite within an the vetting doesn't then these that management dual stages divisions process. And vetting of stay there interesting business process. to our GBank, stages have BCS to is, programs. that they the bit of are we want make mentioned. within to I understand our

it's app -- Todd's we going the slot really We ] is about, access also for and machines. executed -- to BCS gaming gaming BoltBetz, system. And executed which talked program BoltBetz management the machines. cashless The first in is the first not it casino be bank that But first bricks-and-mortar be Vegas. first with Distill is it's company. the the integrated will app program for Konami [ submitted Las BoltBetz contract is our at and Taverns to our slot the with And to

program prepaid you agreement difficulties program and your back, to about mean launched, talked payments had to that full onloading use had bank or we a in going issued World our with to Well, for which it's account Payments expanding. This instantly. to banking Pooled launching. it back real-time slot been had going particular Player Resorts offloading app ] It's RTP, have your It's your it, with bank with payments and a use involves our And account account. before. has We Trice difficulty Sightline cards solutions but in [ machines. has gaming app particular that real-time

to solutions has is and about banking with Konami, believe we're excited it we ] full it as program respect it, and with launching Distill. So [ this

So fourth launched will the be we -- that hope we quarter. that believe in

days [ We've other branching applications many have client [ in ours should They and bricks-and-mortar about in casinos, pipeline our with is it We program. a acquirer are for they're very that paying deposit be of various or with some involve over hope very to and and amount ]. as fourth first wonderful we card, This a ] well. The a say in prepaid with of talked up us. interesting the for talked They're years, at has issued anywhere active FABI we XX about launch ones a one to before. an many about quarter program FABI locations. to out million government by winners have that could more I lottery by the government pay would them certain card pay check their lottery because into lotteries prepaid GBank.

bank not with There finding issues their we unfortunately, there we they're time be at -- And pipeline now in it. activities their are not more. think there vetting actual bring great early clients are much a with not we muster comfortable that approach that -- or will. either their of their are us. business. The part will we and the feel is they are very we and will what the good which that But because tech is they will because have the with that -- We're losing us a deal are and more I pipeline, and of comfortable grow those knowing they're stages. or those of of with, with very it that same are our there that is will new pass of that a but that seeing but And eventually flow mentioned, is we will participate. process are identifying right all companies relationships in bank business activity, there various more are Now, out ones

process, that one. an ongoing is an So exciting

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at a growing quarter. XXX% we're a So

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how plus this you most about don't to wanted card. viewers to know explained and and he XXX,XXX he usually want card, them of went how X,XXX can they really his this believe had viewing we So because audience credit get

is media, think social a obviously, us. we So marketing opportunity for

up be opportunity but believe little window, media here. social a this certain and had opened there may that marketing we have interesting an activity, We

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time, your they used use of paid to the -- -- transactions credit and for order and card. Yet the fairly apps, the every manifested has score So are itself get that over XX% loading month. in to we this same have is in at gaming be card resulting which it's has high the XX%

$X have a We million or I think, small credit Ryan, so. only very balance, what, about

T. Sullivan

$X.X Its million.

Edward Nigro

$X.X million million in with transactions. $XX

So you used can payment possible. what over pay we exactly as as for. down is much which want see want used that it card every a it month, it We as XX%

able cards government it although yet. account with our our believe programs ] look want PPA like today, with when some we talked get to founding deposit simply the it's founding do, as SBA and to and of we say it back, back a But pipeline to that, and are When want by every and we our never We everything to do Mastercard ask issue don't and principle internal and and want program the our for want of strength holding company influencer members, want influence and want our card. want there in We our would or as we'll of things to had to do bank. ourselves. prepaid potential when out FinTech, And I we monetized conversations, the because the The by APIs to credit otherwise, issue there really our we to founded as in XXX lottery and haven't we're get you history. vote his said, ourselves. that our shareholders. bank and were monetization shareholders and -- didn't deposits I we with and with yet. But hold as Board our back the our internally, were prepaid founded have on and year our our to own when of our Gaming one FABI of our significant our just is XX of when reduction and credit to [ in So start see XX% we reason pick create in and We [ many they today. costs from with tied be our manufacture shareholders started I I haven't potential the well division. And thought. about vote the BoltBetz out to -- and were beginning, and want We ] today the independent our X on develop but balances kind through I believe and function. XXXX. With technology settle often we as seeing growth, cards, that story funds, We of a and to to company. And own throughout want strategy. PPAs and at to we our lies part we over own is, be as Board want one earth we consequential growth strength deposits and in we conclude Ryan grow our and one-on-ones about shareholder her outcome our the we our growth and X up X XXXX independent

went at Now [ way that off SEC with -- you of excuse the independent. but independent majority about the my little look are shares we bit still was structure, about this wasn't change our the offering. by institutions, XX% rest only significantly ]. about shareholders, our a score a you It a at And counts, recent But will Boards amount sound was equity look offering XX% and have me, and when or our XX% our the X% large dilutive. have. for recent before offering individual by by the that XX% we to owned of -- When

shareholders down. hard questions. up our for are and because would being ]. us. And this to you all and and shareholders, much our this We $XX call it. last with you has thank let our We're want Boards, in going I to shareholders [ individual I it that, won't and our work remain institutions Boards participated in of always will any million on strength open our been us, to Our very who for our thank you you very

Bradley Rinschler

Down Brad Hey, from Ed. Range. It's

spoke year quote out is of we we great look put you when the -- So to and the last you this this so this the -- there back said at about first time pivot. all, shareholders

shareholders, impactful, So give you how believe but -- quarters? in kind What that that's gone the as last the of was statement for changes would some existing of company made you you four guys here. I do think, terms in has

leaps of you done? think So the last what has about company quarters the do this four over kind

Edward Nigro

those pivot enormous ] Ryan, think I our Well, last it, front was right specifics the at it? haven't as great was grew the over our in in what numbers sheet balance sheet year. I'm [ that of the but looking balance growth I the me on extraordinarily...

T. Sullivan

total XX%, assets. million by so in grew year-over-year $XXX we

Edward Nigro

And about a and said, we take. want so great series we to balance we and take And going these want of when we're actions that, pivot, in we to talked the well, we grow base. listed grow our our we're moves, to sheet to order do to going

growth and see we that so, of we levels, numbers believe last in fourth third XXX% the the when mentioned you the fourth XXs XXs towards that. towards pivot year talked when -- end -- quarter year last I And the and and that's about quarter the of

part Brad. this the industry developed metrics that how The manifested it's and industry. manifested, are payments gaming believe launching are pivot that way. have our been And upon that's paying importance I the We I think been our believe -- think it's the growth future, I for and the through pivot. we stress that of we we So was card credit the of the

Bradley Rinschler

use causing in yours something banks. there on And big Obviously, we was now. see like last real doesn't saw looks and we machines year of So may as business seem companies a Evolve one Is things as BCS, ahead of Banking-as-a-Service ] concern didn't investors 'XX? any other that fail some you this slot that there Evolve some Bank is licensing aren't Bank or ] initiatives said [ it Banking-as-a-Service is was and you this of problems that any of speak stuff potential [ excited about biggest there radar. the that pickup this that like got there or that fintech for this and more massive there that, and it's growth the 'XX

Edward Nigro

we've there are to going or they're believe because licensing be to of is offer from there's consumer accounts this our going not big because in accounts the of the to now way Federal all that ability how in the in of things, One Banking-as-a-Service with licensing looking the pressures -- OCC the think, all on our I them, away. The still and protection we the notational PPA. but CFPB into consumer these which licensing it bank is players We the enormous FDIC, of not the of fact with Brad, the the architecture and that that just create something opportunities an important PPA a they at talked these. Reserve, for go under banks the in regulators,

to elements have don't utilized to in So the change because smaller too And their them will not at one that of but until besides when going they believe are -- -- they payments going absolutely have normal there's someone stake they're of important are I change. be to much any operations. change the -- funds to entities that

important We couple wants the up it how process. are deep program them, other because table, operator [ the too. So we're we thing And knowing important the any some their -- we and not have go, taking ] very think gaming aware today going in it -- that's not one it's is not into works use BoltBetz -- taken been really to off exists work. models there's the good the is banking of works And dig And of why but be them. They them, but really the aware sign working of casino really we entire and first app. way really working for and to we is we very the a to very we the small, that them. they We be pleased operators the are able be process to scale only a solution demonstrate really understanding you of I know because And working, model very understand will not and say dig how them going none able deep casino when that with

BCS an we like their be banks been to this it. comes So there's there's because one and It's -- point a customer we'll this. wants and their large we and We not going wants to of to and this, another. in lot the process bank continues, them has country one at of major bank -- very with think do it's need every opportunity mean, work it, be to to the this the know to our says, is I "I touch that in if the going you the because wants because finds do. has to company And customer need solutions." share. And as do get someone or

and there we see. out we're So shall

Bradley Rinschler

that in So terms would to of relief know you or take of another one in question it you was Would regulatory some investors, let's with I XXXX, pressure keep getting get from it M&A. didn't seriously. say the I like disappointing XXX% the don't take how was Obviously, at answer buying if us BCS? regulatory is, we as XXXX felt run off, regulators a

Edward Nigro

pressure you but company. about failures fintech it size we when think talked Here's before Cromwell gave And attorney classified to BCS, we've do When almost look on a learned. are asked also bank it a for the to & our Cohen, some company, because answered that very -- much a that that it buy banks your as the advice. at technology retrospect, and you is with like getting it the to problem Sullivan it. question the unfortunately, smart you've and that, fintech -- financial XX.XX% gets sound Synapse I a brilliant And Rodge with was in who us a so

that -- fits, are anymore. although becoming is not label starting that fintech guess I So to people use word

that we the to thing. of that effort the really think buy entire out find that were two I came things it's -- there last

the first regulators. do you governance because because would like the a be coming place -- institution. we'd stress your to from to mean, we The in financial I right operate was of have the to have have that's see BCS governance now

Directors, to more issues think it So financial BCS if the institution the would to function employee of function of Board have slow for have to it entrepreneurial standpoint like internal -- have if with company, like we -- kind of from less of a compliance having and a to controls standpoint had respect real of having create -- from the would company. to committee, three had to an standpoint internal having technology BCS I from a a

-- of whatever where the a interesting now become little to is the starts right overwhelming interest course because X/X. of it So -- is happens course, bank, the to of company, holding our XX.XX%, owns valuation

will. I'm go not it. Would look or -- not Of course, again? ever So rest it we're deal the at look we of to rushing do at the we

that's just events, think radar a 'XX the or not I our normal but for on of it's course in short-term.

Timothy Coffey

I a got questions. Janney. Tim from couple of Coffey

Just -- we've got I lot I square product here. the of and do on great a the profitable to call, expectation to My line by different all details card the credit be you of going mean, could want with question that really here kind credit the through had card. guys year-end? Is just this I appreciate circle the items.

Edward Nigro

his he's Ryan Yes, that I'm do. I than going on numbers because answer fingers more let to those got

T. Sullivan

end think that division year-end, we QX. of by stated, Jeff as achievable Yes, Yes. profitability for of

our a we've of much than is, there increase but So we're card, in higher utilization sheet what significant it's the original about, receivables, as talked is modeling. seeing though not even the balance

in big a that driver is So anticipated growth of specifically. interchange income

Timothy Coffey

since I then, All Where right? exiting And mean, at? would Great. margin pretty margin, I right. in rate down environment. optimistic on you see sound you, you a it got XXXX Ryan,

T. Sullivan

Tim. consolidated the we tailwinds to ask that as had you question, to still we up helped this we're waiting QX to get was -- some sensitive. in for X%. indicated, I asset Certainly, We

the sellable of year, QX likely loans, the we some I on assets backlog think of we side. around to good on And see as expect the be will with but X.XX% Xs the kind to reprice But of remain most counteract. -- then [ numbers funding somewhere in the going there. gain to cost somewhere range, we remainder obviously, of sale high ] then the pretty offset see for in we're the think the

Timothy Coffey

SBA. volumes expectation really XXXX? you your That with guys better Yes. than doing What's you other question clearly probably was for are expected. in Obviously, my well,

T. Sullivan

Well, that's pipeline We is don't a of talked good is past. right in portion the on We a slowing. that question. now, closed see the What currently significant really this I in QX. about And pipeline can obviously you we've a tell significant strong.

secured our a types, commercial year overall key estate, SBA $XXX nominally fiscal materially, in number to SBA the up at million X(a). expect we in but progress for competency I don't is necessarily and real go focus of pipeline Obviously, think of specifically terms that do hospitality we product additional of ], [ as expect look some production, ours. that we

not. -- continue in going But other that's if in diversify But terms your are focus -- production our grow. really, XXXX of So types CRE. that to question to for we is, is of stay the generate, to production SBA just again grow going XXX% we to pretty to able but do probably composition to expect probably next we close were It's what to year, change.

Timothy Coffey

that think margins? you gain have would or margins do impact what on on And Okay. on sale

T. Sullivan

we premium. on we kind the of we average, overall X% has typically much loans being numbers higher period. the as similar in volume significant our On percentage Gain for see CRE sale give for structured year-to-date GAAP as potential than... and of our And release generating see aggregate that in obviously, sales non-hospitality

Edward Nigro

Yes. our Ryan, XX% our year, ]? gain on When back, at highest look wasn't years, that sale one of [ you

T. Sullivan

Yes.

Edward Nigro

had And those gain close -- volume results. if with even it's on we have today, amazing would to numbers sale the be we quite

T. Sullivan

that'd material number. a be Yes,

Edward Nigro

want no if I questions. additional everyone Well, to thank there are

Unknown Analyst

you XXXX, in quarter? the perhaps I revenue the Ed, Can of in quick we an this how talk deposit a question about on slot we kind what [indiscernible]. Can implementing it's generate business. idea it, get Can Dave looking? just fourth that's could about

Edward Nigro

on basis a [ PPA using a small going and RTP. process in deposits business $X.X the per first with what because very that and of it's that in could month and believe components we're it's of relatively we because rather we've the participation -- the deposits Distill a going first million important have small analytics it's obviously about -- we done We million from ] But slot might to be number and relatively generate these machines. with know. $XX that BoltBetz here's this Well, the

know also people signing getting participants words, going Now, the still process other that is -- we new. and you to to hear a is it's also what be be of In me? going can

Unknown Analyst

Yes.

Edward Nigro

lost -- thought and I maybe dark, went phone looking was I signal. I My

So there's are there And going marketing utilization. know the developing to the to developing developing very be I a process do good that. customer participation, programs participants, of the

really So the it Was in there X,XXX they, or will big with where user to or see many we're that more deposit 'XX, we'll that ones -- year. whether how it with it what than larger to our for But we out of then were will audience, takes to Ryan? the we -- core is not or additional we deposits are the people going whether of it's process and however and be much develop grow. our projections pretty gaming of people at may the believe $XXX little XX,XXX about millions. going Distill in soon their Well, as the is, occurs a put believe has, programs What of where as X,XXX the that like growth a happens and million our users. bring But versus a time convert slot end other or we a be Todd's, with estimates, it people, machines sign operation X,XXX it that? be it, start utilization. core, are in to sticking the or or XX,XXX to we XX,XXX -- still to surely if fintech 'XX. And terms We major

T. Sullivan

Yes, think bricks-and-mortar casino about as that. Konami highlight important more we're and excited why it's And I to a management system. talking about opportunity the think with so partnership than we're I

X,XXX XXX,XXX on systems GBank. A probably are of the and cash there at in you million for lot give not midsize Ed environment, could in how CMS. $XX floor. of any the an deposits cash and of casinos, the shared ] bricks-and-mortar indication in of understand you're you American machines be those significant third a -- the gaming, native But some those between casino in is how Their of their X,XXX is universe to and time, If American don't a metrics. kind midsized in much [ really is provider machines. Konami U.S. largest just

So when those deposits that provides that instead really the you the us replacing think the gaming market now pretty fintech, to in a to about grow low XXXX. we replacing story. noninterest-bearing that's X%, but begin for with powerful of penetrate it in ability And to degree CDs

Edward Nigro

Right.

I million... think bit misled we $X.X deposits expect you -- I because a each little million saying $X.X just of I develop that have machine may about can was

T. Sullivan

That local. just sell

Edward Nigro

I'm sorry, I'm a little breaking bit. up

that, deposits. in that develop could program I $XX think million

going larger other way, But with develop. So the existence. larger can to quickly to take and that are programs, programs time are platforms monetize several remember, I -- programs very in it which are failed but mentioned program starting new I mention, now at the Sightline within by that Sightline, grow up now signed GBank. that booking actually our three are to see to clients business --

now. average So them, right when deposits $XX monthly we in all running still look around we're at of million

to fourth $XXX think We $XXX we -- pipeline. And that's quarter, can those Jeff, next have start call. of can't -- to the you just on And million grow all expect part to in for to the in And that terminate nothing say Thank achievable and the of all think much I I and think year. have we for those so we third this to think of to but you else anything if further, the the some being programs growing earnings thank I for call Ryan we see participating, you you particular again million with on quarter. us.

T. Sullivan

Thank you, everyone.

GBank Financial (GBFH) 23 Oct 242024 Q3 Earnings call transcript