GBank Financial Holdings Inc. Announces Third Quarter 2024 Financial Results
LAS VEGAS, Oct. 22, 2024 /PRNewswire/ -- GBank Financial Holdings Inc. (the "Company") (OTCQX: GBFH), the parent company of GBank (the "Bank"), today reported record net income for the quarter ended September 30, 2024, of $5.0 million, or $0.37 per diluted share. This represents an increase from $1.8 million, or $0.14 per diluted share, compared to the third quarter of 2023. For the nine months ended September 30, 2024, net income was $13.4 million, or $1.00 per diluted share, compared to $7.4 million, or $0.57 per diluted share, for the same period in 2023.
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Third Quarter 2024 Financial Highlights
Record net income of $5.0 million and diluted earnings per share of $0.37
Record net revenue of $16.1 million
Record SBA Lending and Commercial Banking loan originations of $156.4 million, compared to $126.9 million for the second quarter of 2024, and $91.1 million, compared to the third quarter of 2023
Gain on sale of loans of $2.8 million on loans sold of $71.4 million, compared to gain on sale of loans of $3.1 million on loans sold of $77.9 million for the second quarter of 2024 and gain on sale of loans of $763 thousand on loans sold of $22.7 million, compared to the third quarter of 2023
Net interest margin of 5.00%
Gross loan growth of $35.4 million, or 4% sequentially
Total on-balance sheet guaranteed loans of $267.0 million, compared to $252.2 million as of June 30, 2024
Total non-performing assets of $5.4 million, representing 0.52% of total assets
Non-performing assets, excluding guaranteed portions, of $1.6 million, representing 0.15% of total assets
Edward M. Nigro, Executive Chairman, stated, "The record revenues and earnings for the third quarter and year-to-date of $0.37 and $1.00, respectively, are a reflection upon the continued expansion of our GBank business model; and, with the recently completed $20 million capital raise, we believe we are well-positioned to continue our growth."
Private Placement of Common Stock
The Company announced the completion of its $20.0 million Private Placement Offering on October 16, 2024. Raymond James & Associates, Inc. and Janney Montgomery Scott LLC served as financial advisors on the private placement (presentation link). After deducting offering related expenses, net proceeds to the Company will be approximately $19.2 million.
Financial Results
Income Statement
Net interest income totaled $12.3 million for the third quarter of 2024, an increase of $911 thousand, or 8.0%, compared to $11.3 million for the second quarter of 2024, and an increase of $2.7 million, or 27.9%, compared to the third quarter of 2023. The increase in net interest income from the second quarter of 2024 was primarily due to higher average loan balances, partially offset by an increase in interest bearing deposit balances and rates. The increase in net interest income from the third quarter of 2023 was driven by increases in average loan balances and yields as well as increases in average investment security balances and yields. These favorable increases were partially offset by higher balances and rates on interest bearing deposits. The increase in investment yields through September 30, 2024, was the result of the purchase of $37.2 million of investment securities during the quarter to replace certain lower-yielding U.S. Treasury securities that matured during the first nine months of 2024.
The Company recorded a provision for credit losses on loans of $570 thousand for the third quarter of 2024, an increase of $287 thousand, compared to $283 thousand for the second quarter of 2024, and an increase of $344 thousand, compared to $226 thousand for the third quarter of 2023. The provision for credit losses on loans recorded in the third quarter of 2024 primarily reflects quarterly growth in non-guaranteed loans of $20.5 million, specific reserves on non-performing loans, as well as the impact of certain model adjustments relating to projected economic conditions.
The Company's net interest margin for the third quarter of 2024 increased to 5.00%, compared to 4.82% for the second quarter of 2024, and decreased from 5.71%, compared to the third quarter of 2023. The increase in net interest margin from the second quarter of 2024 was primarily due to improved yields on loans and investment securities, partially offset by higher balances and rates on interest-bearing deposits. The decrease in net interest margin from the second quarter of 2023 was driven by higher balances and rates on interest-bearing deposits, which offset higher balances and rates on total earning assets.
Non-interest income was $3.9 million for the third quarter of 2024, compared to $4.2 million for the second quarter of 2024, and $1.2 million for the third quarter of 2023. The $307 thousand decrease in non-interest income from the second quarter of 2024 was primarily due to a $325 thousand decrease in income from gain on sale of loans resulting from a reduction in average pretax gain on sale margin and slightly lower sales volume quarter-over-quarter. The $2.7 million increase in non-interest income, compared to the third quarter of 2023, was driven by (i) a $2.1 million increase in income from gain on sale of loans, (ii) a $332 thousand increase in loan servicing income as the third quarter of 2023 reflected the write-off of certain loan servicing assets totaling $156 thousand relating to the repurchase of the guaranteed portion of previously sold SBA loans, and (iii) a $245 thousand increase in other income, primarily due to an increase in credit card net interchange fees of $230 thousand, compared to the third quarter of 2023.
Net revenue totaled $16.1 million for the third quarter of 2024, representing an increase of $604 thousand, or 3.9%, compared to $15.5 million for the second quarter of 2024. This also marks an increase of $5.3 million, or 49.4%, compared to $10.8 million for the third quarter of 2023.
Non-interest expense was $9.0 million for the third quarter of 2024, compared to $9.1 million for the second quarter of 2024 and $8.3 million for the third quarter of 2023. The Company's efficiency ratio was 55.9%, compared to 58.9% for the second quarter of 2024 and 76.7% for the third quarter of 2023. The decrease in non-interest expense from the second quarter of 2024 is primarily due to a decrease of $257 thousand in employee compensation costs. The increase in non-interest expense from the third quarter of 2023 was driven by a $478 thousand increase in other expenses, primarily due to higher loan origination costs commensurate with the volume increase of loan originations.
Income tax expense was $1.5 million for the third quarter of 2024, compared to $1.4 million for the second quarter of 2024 and $516 thousand for the third quarter of 2023. The increase in income tax expense from both the second quarter of 2024 and the third quarter of 2023 is primarily due to increased earnings. ...
