# GBank Financial Holdings Inc.: Form 10-Q for the period ended Jun 30, 2025

- Company: [GBank Financial Holdings Inc.](/companies/gbfh.md) (CIK 1791145)
- Form: 10-Q
- Filed: 2025-08-12
- Accepted by EDGAR: Aug 12, 2025, 16:22 ET
- Period: 2025-06-30
- Accession: 0000950170-25-107361
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1791145/000095017025107361/gbfh-20250630.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1791145/000095017025107361/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Income tax | 3 months, 2025-04-01 to 2025-06-30 | $1.5m | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 6 months, 2025-01-01 to 2025-06-30 | $2.7m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-04-01 to 2025-06-30 | $4.8m | us-gaap:NetIncomeLoss |
| Net income | 6 months, 2025-01-01 to 2025-06-30 | $9.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.33 | us-gaap:EarningsPerShareDiluted |
| Diluted EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.63 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-04-01 to 2025-06-30 | $0.33 | us-gaap:EarningsPerShareBasic |
| Basic EPS | 6 months, 2025-01-01 to 2025-06-30 | $0.65 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-04-01 to 2025-06-30 | 14,551,123 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 6 months, 2025-01-01 to 2025-06-30 | 14,535,891 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 6 months, 2025-01-01 to 2025-06-30 | −$4.8m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 6 months, 2025-01-01 to 2025-06-30 | $51.0k | us-gaap:PaymentsToAcquireProductiveAssets |
| Total assets | at 2025-06-30 | $1.23bn | us-gaap:Assets |
| Total liabilities | at 2025-06-30 | $1.08bn | us-gaap:Liabilities |
| Shareholders' equity | at 2025-06-30 | $151.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 56,767 characters.

The following presents management’s discussion and analysis of the financial condition and results of operations of GBank Financial Holdings Inc. (individually, “GBFH” and collectively with its subsidiaries including GBank, the “Company”). This discussion should be read in conjunction with the unaudited consolidated financial statements and related notes included elsewhere in this quarterly report on Form 10-Q and with the Company's Registration Statement on Form S-1 and S-1/A. Results of operations for the periods included in this quarterly report on Form 10-Q are not necessarily indicative of results to be obtained during any future period.

### General

GBank Financial Holdings Inc. is a bank holding company headquartered in Las Vegas, Nevada and registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). Through our wholly owned bank subsidiary, GBank, we operate two full-service commercial branches in Las Vegas, Nevada to provide a broad range of business, commercial and retail banking products and services to small businesses, middle-market enterprises, public entities and affluent individuals in Nevada, California, Utah, and Arizona. Our founding members, including our Executive Chairman of the Board, Edward M. Nigro, recognized a need in the greater Las Vegas area for a solutions-oriented, relationship bank focused on middle market companies and real estate entrepreneurs who generally require loans of $200 thousand to $20 million, a size often overlooked or deprioritized by larger financial institutions. GBank was established in 2007 with the goal of helping these underserved clients build and sustain wealth. By combining the relationship-based focus of a community bank with the extensive suite of financial products and services offered by our largest competitors, we believe that we are well-positioned to continue to capitalize on the significant growth opportunities available not only in the greater Las Vegas and Clark County area, but regionally and nationally through our SBA lending, Gaming Fintech, and credit card initiatives. These activities, together with our two strategically located banking centers, generate a stable source of low-cost core deposits and a diverse loan portfolio with attractive risk-adjusted yields.

### Recent Events

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law by President Trump, which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain key provisions from the Tax Cuts and Jobs Act of 2017 and expanding certain incentives from the Inflation Reduction Act of 2022 while accelerating the phase-out of others. The Company continues to evaluate the OBBBA but does not anticipate that the OBBBA will have a material impact on the Company’s Consolidated Financial Statements. As the legislation was signed into law after the close of the second quarter of 2025, the impacts are not included in the Company’s operating results for the three and six months ended June 30, 2025.

### Available Information

The Company maintains an Internet web site at www.gbankfinancialholdings.com. The Company makes available, free of charge, on its web site (under www.gbankfinancialholdings.com/secfilings) the Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or Section 15(d) of the Exchange Act as soon as reasonably practicable after the Company files such material with, or furnishes it to, the SEC. The Company also makes available, free of charge, through its web site (under www.gbankfinancialholdings.com/corporate-governance) links to the Company’s Code of Ethics Policy and the charters for its board committees. In addition, the SEC maintains an Internet site (at www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.

The Company routinely posts important information for investors on its web site (at www.gbankfinancialholdings.com and, more specifically, under the News & Media tab at www.gbankfinancialholdings.com/press-releases). The Company intends to use its web site as a means of disclosing material non-public information and for complying with its disclosure obligations under SEC Regulation FD (Fair Disclosure). Accordingly, investors should monitor the Company’s web site, in addition to following the Company’s press releases, SEC filings, public conference calls, presentations and webcasts.

The information contained on, or that may be accessed through, the Company’s web site is not incorporated by reference into, and is not a part of, this Form 10-Q.

### Nature of Operations

The Company generates the majority of its revenue through net interest income, calculated as the difference between interest earned on loans and investments and interest paid on deposits and borrowings. Growth in net interest income is dependent upon balance sheet growth and maintaining or increasing the net interest margin, which is calculated as net interest income as a percentage of average interest-earning assets. The Company also generates revenue through gains on sales of assets, generally the guaranteed portion of SBA and USDA loans, net interchange fees earned on its credit card product, and fees earned on the various services and products offered to its customers. Offsetting these revenue sources are provisions for credit losses, non-interest expenses and income taxes.

The following table presents a summary of the Company's earnings and selected performance ratios for the three- and six-month periods presented:

*(Dollars in thousands, except per share data)*

|  | Three Months Ended June 30, 2025 | 2024 | Six Months Ended June 30, 2025 | 2024 |
| --- | ---: | ---: | ---: | ---: |
| Net Income | $4,755 | $4,676 | $9,225 | $8,376 |
| Diluted Earnings Per Share | $0.33 | $0.36 | $0.63 | $0.65 |
| Return on Average Assets | 1.59% | 1.90% | 1.60% | 1.75% |
| Return on Average Equity | 12.62% | 17.59% | 12.61% | 16.17% |
| Net Interest Margin (annualized) | 4.31% | 4.82% | 4.39% | 4.83% |
| Non-Performing Assets to Total Assets | 1.49% | 0.75% | 1.49% | 0.75% |
| Net Charge-Off to Average Loans (annualized) | 0.38% | 0.01% | 0.39% | 0.01% |

Financial highlights for the three months ended June 30, 2025 are presented below:

- Net income of $4.8 million and diluted earnings per share of $0.33, compared to $4.7 million and diluted earnings per share of $0.36 for the second quarter of 2024.
- Loan growth of $55.6 million, or 7% since December 31, 2024.
- Principal balances of loans sold of $82.1 million compared to principal balances of loans sold of $77.9 million of during the three months ended June 30, 2024.
- Net interchange fees of $1.5 million compared to $146 thousand during the second quarter of 2024.
- On-balance sheet guaranteed loans totaled $237.6 million as of June 30, 2025 compared to $233.9 million at December 31, 2024.
- Non-performing assets of $18.4 million at June 30, 2025 representing 1.49% of total assets compared to $14.2 million of non-performing assets at December 31, 2024, representing 1.26% of total assets.

### Critical Accounting Policies

In preparing the Company’s Consolidated Financial Statements, accounting policies are applied that require significant judgment and estimates, which can materially impact the Company’s financial position and results of operations. The following are the critical accounting policies that have the most significant impact on the Company’s financial statements because they require significant judgments and assumptions about highly complex and inherently uncertain matters. The use of reasonably different estimates and assumptions could have a material impact on our results of operations or financial condition.

#### Allowance for Credit Losses

The allowance for credit losses reflects management’s best estimate of credit losses over the remaining life of the loan portfolio and is presented as a valuation account deducted from the loan portfolio’s amortized cost basis to present the net amount expected to be collected on the loans.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. GBank has segregated its held-for-investment loan portfolio into segments based on federal call report codes which classify loans based on the primary collateral supporting the loan. The segments are reviewed by management no less than annually to ensure instruments are properly segregated into groups having similar risk characteristics and new segments may be required as the Company offers new loan products.

The Company’s loan portfolio includes certain loans which are partially guaranteed by the U.S. Small Business Administration. The Current Expected Credit Losses (“CECL”) model does not require an entity to measure expected credit losses on an instrument, or pool of instruments, if historical information adjusted for current conditions and reasonable and supportable forecasts result in zero expected credit losses in all scenarios. The guaranteed portion of the loan pools range from 75 percent to 90 percent. For purposes of the assessment of credit losses, Company management ascertains the guaranteed portion of these loans has zero repayment risk due to the full guarantee of the U.S. government.

The Company measures the allowance for credit losses using the average charge-off method and calculates an estimate of expected credit losses based on actual losses incurred during a historic look-back period. The Company has chosen to use the historic losses of similarly insured institutions for each of its loan segments with the exception of commercial real estate loans for which Company management has defined a custom peer group of institutions having a large focus on government guaranteed lending.

To account for the model’s quantitative limitations when estimating credit losses, management also considers certain qualitative adjustments, including considerations of:

- changes in lending policies, underwriting standards, and collection practices
- changes in economic and business conditions
- changes in volume and severity of past due and adversely classified loans, including nonaccrual volume
- changes in nature, volume, and terms of loans
- changes in the experience, ability, and depth of lending management and staff
- changes in underlying collateral values
- effect of concentrations (loan types) as a percentage of capital
- changes in the quality of the loan review system
- effects of other factors (unemployment, loss of benefits, depreciation, loss of net worth, etc.)

GBank considers financial assets on an individual basis when the financial asset has unusual risk characteristics not matching an existing segment and may assign a specific reserve to the financial asset having unusual risk characteristics. The specific reserve component is calculated as the Company's evaluation of credit loss on individually evaluated loans based on the fair value of the collateral less estimated selling costs if collateral dependent or based on the present value of expected future cash flows discounted at the loan's initial effective interest rate if not collateral dependent. The majority of the Company's loans subject to individual evaluation are considered collateral dependent. The Company uses the practical expedient as permitted under ASC 326 to measure individually evaluated loans as collateral dependent and/or when repayment is expected to be provided substantially through the operation or sale of the collateral. Expected credit losses are based on the fair value at the reporting date, adjusted for selling costs as appropriate. For collateral dependent loans, credit loss is measured as the difference between the amortized cost basis in the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale (rather than only on the operation) of the collateral.

#### Emerging Growth Company

Pursuant to the JOBS Act, an emerging growth company is provided the option to adopt new or revised accounting standards that may be issued by the Financial Accounting Standards Board (“FASB”) or the SEC either (i) within the same periods as those otherwise applicable to non-emerging growth companies or (ii) within the same time periods as private companies. We have elected to use the extended transition period for complying with new or revised accounting standards affecting public companies, which means that our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards on a non-delayed basis.

We may take advantage of some of the reduced regulatory and reporting requirements that are available to it so long as we qualify as an emerging growth company, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation, and exemptions from the requirements of holding non-binding advisory votes on executive compensation and golden parachute payments.

#### Net Interest Income and Net Interest Margin

Net interest income is calculated as the excess of interest earned from the Company’s interest-bearing assets, such as loans and investments, and the interest expense incurred on interest-bearing liabilities, like deposits and borrowed funds. Net interest income represents the core earnings of the Company’s primary activities of lending and investing, less the costs of obtaining funds.

Net interest margin is expressed as net interest income as a percentage of average earning assets and reflects the Company's ability to generate income from its interest-earning assets relative to the costs of funding those assets. Net interest income is affected by changes in interest rates, as well as composition and volume fluctuations in the average balances of interest-earning assets and interest-bearing liabilities.

Average balances, interest income or expense, and the interest yield or rate for the Company’s interest-sensitive assets and liabilities are presented in the tables below for the three- and six-month periods presented. Average balances are calculated on a daily basis. The Company had no tax equivalent adjustments for the three and six months ended June 30, 2025 and 2024.

*(Dollars in thousands)*

| ASSETS: | For the Three Months Ended June 30, 2025 Average Balance | Interest | Yield/ Rate(2) | June 30, 2024 Average Balance | Interest | Yield/ Rate(2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest Bearing Deposits With Banks | $115,974 | $1,365 | 4.72% | $80,062 | $1,165 | 5.85% |
| Investment Securities: |  |  |  |  |  |  |
| Taxable | 119,880 | 1,414 | 4.73% | 73,696 | 868 | 4.74% |
| Loans, Net (1) | 911,028 | 17,659 | 7.77% | 789,516 | 16,360 | 8.33% |
| Federal Home Loan Bank Stock | 5,362 | 117 | 8.75% | 4,400 | 96 | 8.78% |
| Total Earning Assets | 1,152,244 | 20,555 | 7.16% | 947,674 | 18,489 | 7.85% |
| Cash and Due From Banks | 6,782 |  |  | 6,302 |  |  |
| Other Assets | 41,894 |  |  | 33,607 |  |  |
| Total Assets | 1,200,920 |  |  | 987,583 |  |  |
| LIABILITIES & SHAREHOLDERS' EQUITY: |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| Interest-bearing Demand | $60,320 | 316 | 2.10% | $67,038 | 395 | 2.37% |
| Money Market and Savings | 303,814 | 2,929 | 3.87% | 217,081 | 2,137 | 3.96% |
| Certificates of Deposit | 413,940 | 4,660 | 4.52% | 330,271 | 4,316 | 5.26% |
| Total Interest-Bearing Deposits | 778,074 | 7,905 | 4.08% | 614,390 | 6,848 | 4.48% |
| Short-Term Borrowings | - | - | 0.00% | 517 | 7 | 5.45% |
| Subordinated Debentures | 26,113 | 262 | 4.02% | 26,040 | 286 | 4.42% |
| Total Interest-Bearing Liabilities | 804,187 | 8,167 | 4.07% | 640,947 | 7,141 | 4.48% |
| Noninterest-bearing Deposits | 223,201 |  |  | 220,842 |  |  |
| Other Liabilities | 22,404 |  |  | 18,849 |  |  |
| Shareholders' Equity | 151,128 |  |  | 106,945 |  |  |
| Total Liabilities & Shareholders' Equity | $1,200,920 |  |  | $987,583 |  |  |
| Net Interest Income |  | $12,388 |  |  | $11,348 |  |
| Total Yield on Earning Assets |  |  | 7.16% |  |  | 7.85% |
| Cost on Interest-Bearing Liabilities |  |  | 4.07% |  |  | 4.48% |
| Average Interest Spread |  |  | 3.08% |  |  | 3.37% |
| Net Interest Margin |  |  | 4.31% |  |  | 4.82% |

(1) For the three months ended June 30, 2025 and 2024, the average balance of loans, net includes average non-accrual loan balances of $20.5 million and $6.2 million, respectively.

(2) Annualized on an actual/actual basis.

*(Dollars in thousands)*

| ASSETS: | For the Six Months Ended June 30, 2025 Average Balance | Interest | Yield/ Rate(2) | June 30, 2024 Average Balance | Interest | Yield/ Rate(2) |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest Bearing Deposits With Banks | $109,338 | $2,557 | 4.72% | $73,081 | $2,137 | 5.88% |
| Investment Securities: |  |  |  |  |  |  |
| Taxable | 112,591 | 2,695 | 4.83% | 85,890 | 1,882 | 4.41% |
| Loans, Net(1) | 888,982 | 34,495 | 7.82% | 758,651 | 31,690 | 8.40% |
| Federal Home Loan Bank Stock | 5,009 | 217 | 8.74% | 3,811 | 170 | 8.97% |
| Total Earning Assets | 1,115,920 | 39,964 | 7.22% | 921,433 | 35,879 | 7.83% |
| Cash and Due From Banks | 6,501 |  |  | 6,119 |  |  |
| Other Assets | 40,543 |  |  | 33,604 |  |  |
| Total Assets | 1,162,964 |  |  | 961,156 |  |  |
| LIABILITIES & SHAREHOLDERS' EQUITY: |  |  |  |  |  |  |
| Deposits: |  |  |  |  |  |  |
| Interest-bearing Demand | $62,992 | 672 | 2.15% | $66,170 | 788 | 2.39% |
| Money Market and Savings | 284,060 | 5,340 | 3.79% | 201,727 | 3,897 | 3.88% |
| Certificates of Deposit | 399,899 | 9,123 | 4.60% | 319,746 | 8,361 | 5.26% |
| Total Interest-Bearing Deposits | 746,951 | 15,135 | 4.09% | 587,643 | 13,046 | 4.46% |
| Short-Term Borrowings | - | - | 0.00% | 4,049 | 111 | 5.51% |
| Subordinated Debentures | 26,104 | 547 | 4.23% | 26,031 | 571 | 4.41% |
| Total Interest-Bearing Liabilities | 773,055 | 15,682 | 4.09% | 617,723 | 13,728 | 4.47% |
| Noninterest-bearing Deposits | 221,050 |  |  | 220,804 |  |  |
| Other Liabilities | 21,278 |  |  | 18,427 |  |  |
| Shareholders' Equity | 147,581 |  |  | 104,202 |  |  |
| Total Liabilities & Shareholders' Equity | $1,162,964 |  |  | $961,156 |  |  |
| Net Interest Income |  | $24,282 |  |  | $22,151 |  |
| Total Yield on Earning Assets |  |  | 7.22% |  |  | 7.83% |
| Cost on Interest-Bearing Liabilities |  |  | 4.09% |  |  | 4.47% |
| Average Interest Spread |  |  | 3.13% |  |  | 3.35% |
| Net Interest Margin |  |  | 4.39% |  |  | 4.83% |

(1) For the six months ended June 30, 2025 and 2024, the average balance of loans, net includes average non-accrual loan balances of $19.1 million and $5.0 million, respectively.

(2) Annualized on an actual/actual basis.

The following table presents the effects of changing rates and volumes on net interest income for the three- and six-month periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The net column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated to volume.

*(Dollars in thousands)*

| INTEREST INCOME: | Three Months Ended June 30, 2025 vs. June 30, 2024 Increase (Decrease) Volume | Rate | Net | Six Months Ended June 30, 2025 vs. June 30, 2024 Increase (Decrease) Volume | Rate | Net |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| Interest Bearing Deposits With Banks | $523 | $(323) | $200 | $1,060 | $(640) | $420 |
| Investment Securities: |  |  |  |  |  |  |
| Taxable | 544 | 2 | 546 | 585 | 228 | 813 |
| Loans, Net | 2,518 | (1,219) | 1,299 | 5,444 | (2,639) | 2,805 |
| Federal Home Loan Bank Stock | 21 | - | 21 | 53 | (6) | 47 |
| Total Interest Income | 3,606 | (1,540) | 2,066 | 7,142 | (3,057) | 4,085 |
| INTEREST EXPENSE: |  |  |  |  |  |  |
| Interest Bearing Deposits: |  |  |  |  |  |  |
| Interest-bearing Demand | (40) | (39) | (79) | (38) | (78) | (116) |
| Money Market and Savings | 854 | (62) | 792 | 1,591 | (148) | 1,443 |
| Certificates of Deposit | 1,093 | (749) | 344 | 2,096 | (1,334) | 762 |
| Total Interest-Bearing Deposits | 1,907 | (850) | 1,057 | 3,649 | (1,560) | 2,089 |
| Short-Term Borrowings | (7) | - | (7) | (111) | - | (111) |
| Subordinated Debentures | 1 | (25) | (24) | 2 | (26) | (24) |
| Total Interest Expense | 1,901 | (875) | 1,026 | 3,540 | (1,586) | 1,954 |
| NET INTEREST INCOME | $1,705 | $(665) | $1,040 | $3,602 | $(1,471) | $2,131 |

For the six months ended June 30, 2025, interest income was $40.0 million, an increase of $4.1 million compared to $35.9 million for the six months ended June 30, 2024. For the three months ended June 30, 2025, interest income was $20.6 million, an increase of $2.1 million compared to $18.5 million for the three months ended June 30, 2024. The increases in interest income when comparing the three- and six-month periods ended June 30, 2025 to the same periods in 2024 are primarily due to increases in average interest-earning assets, partially offset by yield reductions on adjustable-rate loans, securities, and other liquid assets as a result of the 100 basis point decrease in the target federal funds rate by the Federal Reserve during the second half of 2024.

Interest expense was $15.7 million for the six months ended June 30, 2025, an increase of $2.0 million compared to $13.7 million for the six months ended June 30, 2024. Interest expense was $8.2 million for the three months ended June 30, 2025, an increase of $1.1 million compared to $7.1 million for the three months ended June 30, 2024. The increase in interest expense when comparing the three and six months ended June 30, 2025 to the same periods in 2024 was driven by increases in average interest-bearing liabilities to fund asset growth.

For the second quarter of 2025, the Company’s net interest margin decreased to 4.31%, compared to 4.82% for the second quarter of 2024. For the six months ended June 30, 2025, the Company's net interest margin decreased to 4.39%, compared to 4.83% for the six months ended June 30, 2024. The decrease in net interest margin for the three and six months ended June 30, 2025 when compared to the same periods in 2024 is reflective of the lower market interest rate environment as explained in the above paragraphs.

#### Provision for Credit Losses

The provision for credit losses in each period is reflected as a reduction in earnings for that period and includes amounts related to funded loans and unfunded loan commitments. The provision is equal to the amount required to maintain the ACL at a level that is adequate to absorb estimated lifetime credit losses inherent in the loan portfolio based on remaining contractual maturity, adjusted for estimated prepayments as of each period end. The Company's CECL models incorporate historical experience, current conditions, and reasonable and supportable forecasts in measuring expected credit losses. For the three and six months ended June 30, 2025, the Company recorded a provision for credit losses of $1.1 million and $1.8 million, respectively, compared to $295 thousand and $315 thousand for the three and six months ended June 30, 2024, respectively. The provision for credit losses for the three and six months ended June 30, 2025 is primarily reflective of net charge-offs of $870 thousand and $1.7 million, respectively, and loan growth.

#### Noninterest Income

The following table presents the components of total noninterest income.

*(Dollars in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Gain on sale of loans | $2,593 | $3,163 | $(570) | (18.0) |
| Loan servicing income | 750 | 534 | 216 | 40.4 |
| Service charges and fees | 54 | 41 | 13 | 31.7 |
| Net interchange fees | 1,535 | 146 | 1,389 | 951.4 |
| Other income | 452 | 282 | 170 | 60.3 |
| Total Noninterest Income | $5,384 | $4,166 | $1,218 | 29.2 |

*(Dollars in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Gain on sale of loans | $5,130 | $5,246 | $(116) | (2.2) |
| Loan servicing income | 1,453 | 594 | 859 | 144.6 |
| Service charges and fees | 111 | 82 | 29 | 35.4 |
| Net interchange fees | 3,538 | 167 | 3,371 | 2,018.6 |
| Other income | 615 | 482 | 133 | 27.6 |
| Total Noninterest Income | $10,847 | $6,571 | $4,276 | 65.1 |

For the three months ended June 30, 2025, noninterest income totaled $5.4 million compared to noninterest income $4.2 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, noninterest income totaled $10.8 million compared to noninterest income $6.6 million for the six months ended June 30, 2024.

Net interchange fees totaled $1.5 million for the three months ended June 30, 2025 compared to $146 thousand for the three months ended June 30, 2024. Net interchange fees totaled $3.5 million for the six months ended June 30, 2025, compared to $167 thousand for the same period in 2024. The increase in net interchange fees when comparing the three months and six months ended June 30, 2025 to the same periods in 2024 was attributable to transaction volume growth within GBank’s Visa Signature® Card product.

Loan servicing income increased $216 thousand from $534 thousand for the three months ended June 30, 2024 to $750 thousand for the three months ended June 30, 2025. Loan servicing income increased $859 thousand from $594 thousand for the six months ended June 30, 2025 to $1.5 million for the six months ended June 30, 2025. The increase in loan servicing income when comparing the three and six months ended June 30, 2025 to the same periods in 2024 was the result of both (i) higher average balances of loans serviced by GBank during 2025, and (ii) the first quarter of 2024 reflecting loan servicing asset writeoffs of $401 thousand due to the repurchase of the guaranteed portion of previously sold SBA loans.

Gain on sale of loans totaled $2.6 million for the second quarter of 2025 compared to $3.2 million for the second quarter of 2024. Gain on sale of loans totaled $5.1 million for the six months ended June 30, 2025 compared to $5.2 million for the same period in 2024. The decrease in gain on sale of loans for the three- and six-month periods ended June 30, 2025 was due to less favorable secondary market pricing during the six months ended June 30, 2025 compared to the same period of 2024.

#### Noninterest Expense

The following tables present the components of total noninterest expense.

*(Dollars in thousands)*

|  | Three Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $6,235 | $5,752 | $483 | 8.4 |
| Data processing | 1,333 | 706 | 627 | 88.8 |
| Occupancy expense | 400 | 417 | (17) | (4.1) |
| Legal and professional fees | 571 | 750 | (179) | (23.9) |
| Loan related costs | 330 | 434 | (104) | (24.0) |
| Audits and exams | 397 | 153 | 244 | 159.5 |
| Advertising and marketing | 371 | 84 | 287 | 341.7 |
| FDIC insurance | 129 | 108 | 21 | 19.4 |
| Other | 630 | 728 | (98) | (13.5) |
| Total Noninterest Expense | $10,396 | $9,132 | $1,264 | 13.8 |

*(Dollars in thousands)*

|  | Six Months Ended June 30, 2025 | 2024 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Salaries and employee benefits | $12,635 | $11,042 | $1,593 | 14.4 |
| Data processing | 2,738 | 1,540 | 1,198 | 77.8 |
| Occupancy expense | 792 | 865 | (73) | (8.4) |
| Legal and professional fees | 1,271 | 1,147 | 124 | 10.8 |
| Loan related costs | 714 | 836 | (122) | (14.6) |
| Audits and exams | 894 | 238 | 656 | 275.6 |
| Advertising and marketing | 735 | 213 | 522 | 245.1 |
| FDIC insurance | 251 | 226 | 25 | 11.1 |
| Other | 1,273 | 1,401 | (128) | (9.1) |
| Total Noninterest Expense | $21,303 | $17,508 | $3,795 | 21.7 |

For the three months ended June 30, 2025, noninterest expense increased 14% to $10.4 million, compared to $9.1 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, noninterest expense increased 22% to $21.3 million, compared to $17.5 million for the six months ended June 30, 2024.

Salaries and employee benefits expense totaled $6.2 million for the three months ended June 30, 2025, an increase of $483 thousand or 8% when compared to $5.7 million for the second quarter of 2024. Salaries and benefits expense totaled $12.6 million for the six months ended June 30, 2025, an increase of $1.6 million or 14% when compared to $11.0 million for the six months ended June 30, 2024. These increases are attributable to both (i) increases in employee salaries and benefits expenses resulting from an increase in full-time equivalent employees from 155 at June 30, 2024 to 188 at June 30, 2025, and (ii) higher stock-based compensation expense due to increases in grant date fair value of recent stock awards.

Data processing expense increased $627 thousand, or 89%, from $706 thousand for the three months ended June 30, 2024 to $1.3 million for the three months ended June 30, 2025. Data processing expense increased $1.2 million, or 78%, from $1.5 million for the six months ended June 30, 2024 to $2.7 million for the six months ended June 30, 2025. The year over year increases were due to both (i) higher costs from transactional-based charges given the volume increases in loans and deposits over the last twelve months, and (ii) investments to enhance data management and security capabilities responsive to both the larger company profile and the increasing complexity of information technology management.

Audits and exams expense totaled $397 thousand for the three months ended June 30, 2025, an increase of $244 thousand when compared to $153 thousand for the second quarter of 2024. Audits and exams expense totaled $894 thousand for the six months ended June 30, 2025, an increase of $656 thousand when compared to $238 thousand during the same period of 2024. The increases in audits and exams expense reflects certain non-recurring professional, legal and audit fees associated with the preparation of filings made with the U.S. Securities and Exchange Commission for the registration of its shares of common stock and listing on the Nasdaq Capital Market, which totaled $290 thousand and $1.0 million for the three and six months ended June 30, 2025, respectively.

Advertising and marketing expense increased $287 thousand to $371 thousand during the second quarter of 2025, compared to $84 thousand during the second quarter of 2025. Advertising and marketing expense increased $522 thousand to $735 thousand during the six months ended June 30, 2025, compared to $213 thousand during the same period in 2024. The increase in advertising and marketing expense was largely attributable to advertising, marketing, and referral campaigns associated with the credit card program.

### Income Taxes

Income tax expense was $1.5 million for the three months ended June 30, 2025, an increase of 5% or $75 thousand compared to $1.4 million for the three months ended June 30, 2024. Income tax expense was $2.7 million for the six months ended June 30, 2025, an increase of 7% or $187 thousand compared to $2.5 million for the six months ended June 30, 2024. The increase in income tax expense during the three and six months ended June 30, 2025 was primarily due to higher pre-tax earnings.

The effective tax rate for the three and six months ended June 30, 2025 was 23.6% and 22.6%, respectively compared to 23.2% and 23.1% for the three and six months ended June 30, 2024, respectively. The fluctuations in the effective tax rate are largely driven by the timing and volume of certain stock-based compensation transactions resulting in tax benefits to the Company, as well as the timing and volume of state tax adjustments.

### Comparison of Financial Condition – June 30, 2025 and December 31, 2024

#### Total Assets

Total assets increased 10% to $1.23 billion at June 30, 2025 compared to $1.12 billion at December 31, 2024, primarily due to increases in net loans of $55.7 million as well as cash and equivalents of $19.1 million.

#### Cash and Cash Equivalents

Cash and cash equivalents increased 15% from $124.1 million at December 31, 2024 to $143.2 million at June 30, 2025 as cash inflows from deposit growth more than offset cash outflows to fund loan growth during the first six months of 2025.

#### Investments

The Company maintains an investment security portfolio to generate income through interest and potential sales, manage liquidity for funding needs, support interest rate risk management, and meet regulatory requirements for high-quality liquid assets.

The investment security portfolio is comprised of held to maturity securities recorded at amortized cost and available for sale securities recorded at fair value. Held to maturity securities decreased by $1.1 million to $39.5 million as of June 30, 2025, as compared to $40.6 million as of December 31, 2024. Available for sale securities increased $17.3 million from $65.6 million at December 31, 2024 to $82.9 million at June 30, 2025.

The following table presents the maturity composition and the weighted average yields of the investment portfolio as of June 30, 2025. Mortgage-backed security maturities are based on paydown trends in the most recent three-month period. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Weighted-average yield is calculated based on the amortized cost of each security.

*(Dollars in thousands)*

| As of June 30, 2025 Available for sale securities, at fair value: | Maturing One Year or Less Amount | Weighted Average Yield | After One Year Through Five Years Amount | Weighted Average Yield | After Five Years Through Ten Years Amount | Weighted Average Yield | After Ten Years Amount | Weighted Average Yield |
| --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: |
| Residential mortgage-backed securities | $3,737 | 1.78% | $21,626 | 5.25% | $45,574 | 4.42% | $11,949 | 4.07% |
| Held to maturity securities, at amortized cost: |  |  |  |  |  |  |  |  |
| Residential mortgage-backed securities | $1,045 | 7.69% | $2,377 | 5.14% | $36,093 | 4.81% | $- | 0.00% |

#### Loans

Total loans, net of deferred loan costs and unamortized discounts, increased 7% to $871.6 million at June 30, 2025, compared to $816.0 million at December 31, 2024. Loan originations, including government guaranteed and non-guaranteed commercial loans, totaled $293.5 million during the first six months of 2025, compared to $263.6 million for the same period in 2024.

The following table presents the ending balance of loans outstanding, by type, as of the dates indicated.

*(Dollars in thousands)*

|  | June 30, 2025 Balance | Percent of Total Loans | December 31, 2024 Balance | Percent of Total Loans |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $59,021 | 6.8% | $64,000 | 7.8% |
| Commercial real estate - non-owner occupied | 682,021 | 78.2 | 630,551 | 77.3 |
| Commercial real estate - owner occupied | 96,526 | 11.1 | 88,802 | 10.9 |
| Construction and land development | 4,371 | 0.5 | 2,934 | 0.4 |
| Multifamily | 18,987 | 2.2 | 17,374 | 2.1 |
| Single Family Sr. Lien | 3,023 | 0.3 | 5,992 | 0.7 |
| Single Family Jr. Lien | 3,369 | 0.4 | 3,203 | 0.4 |
| Single Family HELOC | 418 | 0.0 | 1,389 | 0.2 |
| Consumer | 3,894 | 0.5 | 1,713 | 0.2 |
| Loans, net | 871,630 | 100.0% | 815,958 | 100.0% |
| Allowance for credit losses | (9,205) |  | (9,114) |  |
| Loans, net of allowance | $862,425 |  | $806,844 |  |

Beginning in the third quarter of 2023, and continuing into the first quarter 2024, the Company repurchased previously sold guaranteed SBA loans by initiating a change in loan terms with certain borrowers, at the borrowers’ option, to convert variable loans to five-year fixed rate loans at lower current interest rates. The repurchase program was initiated in response to a rapid rise in the *Wall Street Journal* Prime Rate which has the potential to significantly impact our borrowers, the majority of whom are in variable rate loans. The Prime Rate increased from 3.25% to 8.50% between March 2022 and July 2023, an increase of 525 basis points. The Company received requests from borrowers due to the higher payments affecting borrowers’ cash flow and operations. Given the predicted economic outlook and anticipated interest rate reductions likely being delayed until late 2024, the Company decided to evaluate converting the variable rate structure to a fixed-rate based on a current credit evaluation. In response, GBank reached out to request annual tax returns and updated financial information from borrowers. The Company began to repurchase previously sold guaranteed SBA loans by initiating a change in loan terms with certain borrowers, at the borrowers’ option, to convert variable loans to five-year fixed rate loans at the current market terms.

The process for evaluating, approving, and submitting repurchase packages to the SBA was consistent with SOP 50 57 (3) and Section 7.6 of the Secondary Participation Guaranty Agreement. Updated financials from each borrower were reviewed to assess the viability of the business before preparing an interest rate modification document. Once the interest rate modification was approved internally, GBank sought approval for modifications, and submitted requests to the SBA to repurchase these SBA loans. According to the SOP, SBA shall review the repurchase request package, and based on the financial and other information provided determine whether an emergency repurchase of the SBA loan is appropriate for that specific borrower. This activity resulted in the repurchase of $106.1 million of United States government guaranteed loan balances within the commercial and industrial and commercial real estate segments during the year ended December 31, 2023. This program continued through the end of the first quarter of 2024, during which $44.2 million of the guaranteed portion of previously sold loans were repurchased. The balance of guaranteed loans at June 30, 2025 was $237.6 million, representing 22.1% of loans. Comparatively, at December 31, 2024, the Company had $233.9 million of guaranteed loan balances representing 24.7% of loans. Given the stabilization of the interest rate environment the Company is not anticipating any material repurchases in the foreseeable future.

Net deferred loan costs totaled $9.5 million at June 30, 2025 and $8.2 million at December 31, 2024. Net deferred loan costs represent the costs incurred to originate loans, net of fees paid by the borrower, which are measured and recorded at the date the loan is originated. Unamortized discount totaled $9.6 million at June 30, 2025 and $8.9 million at December 31, 2024. The unamortized discount relates to the retained portion of government guaranteed loans and is based on the relative fair value of the retained loan as calculated by an independent consulting firm. Loan costs and discount are amortized over the life of the loan and are recorded as an adjustment to interest income on the loan.

Loans held for sale totaled $45.2 million at June 30, 2025 and consisted of commercial real estate – non-owner occupied, commercial real estate – owner occupied, and commercial and industrial loans. Loans held for sale totaled $32.6 million at December 31, 2024 and consisted of commercial real estate – non-owner occupied, commercial real estate – owner occupied, and commercial and industrial loans. The balance of unguaranteed portions to be retained are reported as held for investment.

The following table sets forth the dispersion of loan principal balances with amounts and the percentage of the total balances in the states with five percent of total loans as of June 30, 2025:

*(Dollars in thousands)*

|  | June 30, 2025 Amounts | Percentage |
| --- | ---: | ---: |
| Nevada | $193,090 | 22.15% |
| North Carolina | 146,357 | 16.79% |
| Ohio | 61,829 | 7.09% |
| Illinois | 54,372 | 6.24% |
| Indiana | 47,446 | 5.44% |
| Other | 368,536 | 42.28% |
|  | $871,630 | 100.00% |

#### Credit Quality, Credit Risk, and Allowance for Credit Losses

In accordance with CECL guidance, the Company has grouped its loan portfolio into segments with similar risk characteristics based on factors such as loan type, credit risk profile, borrower characteristics, and other relevant attributes that influence the risk of default. By dividing loans into these segments, the Company can apply more tailored loss estimation techniques that reflect the specific credit risks associated with each segment.

Evaluations of the Company’s loan portfolio, its segments, and individual credits are inherently subjective and require significant judgments dependent on the circumstances at the time of the evaluation. As such, current period results are not an indication of future performance, and future evaluations may result in substantial changes to the allowance for credit losses and related provision expense as a result of changing economic conditions, asset quality, or loan portfolio composition in future periods.

For more information on the Company’s allowance for credit losses methodology, including the quantitative and qualitative factors used in the calculation, please see "Note 3 – Loans and Allowance for Credit Losses – Loans" within Notes to Consolidated Financial Statements.

The following table presents the allowance for credit loss as a percentage of total loans as of the dates indicated:

*(In Thousands)*

| As of June 30, 2025 | Total ACL - Loans | Total Loans | % of Total Loans Outstanding | Allowance as a % of Loan Category |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $365 | $59,021 | 6.8% | 0.6% |
| Commercial real estate - non-owner occupied | 7,701 | 682,021 | 78.2 | 1.1 |
| Commercial real estate - owner occupied | 678 | 96,526 | 11.1 | 0.7 |
| Construction and land development | 100 | 4,371 | 0.5 | 2.3 |
| Multifamily | 60 | 18,987 | 2.2 | 0.3 |
| Single Family Sr Lien | 4 | 3,023 | 0.3 | 0.1 |
| Single Family Jr Lien | 7 | 3,369 | 0.4 | 0.2 |
| Single Family HELOC | 4 | 418 | 0.0 | 1.0 |
| Consumer | 286 | 3,894 | 0.5 | 7.3 |
| Total | $9,205 | $871,630 | 100.0% | 1.1% |

*(In Thousands)*

| As of December 31, 2024 | Total ACL - Loans | Total Loans | % of Total Loans Outstanding | Allowance as a % of Loan Category |
| --- | ---: | ---: | ---: | ---: |
| Commercial and industrial | $496 | $64,000 | 7.8% | 0.8% |
| Commercial real estate - non-owner occupied | 7,837 | 630,551 | 77.3 | 1.2 |
| Commercial real estate - owner occupied | 537 | 88,802 | 10.9 | 0.6 |
| Construction and land development | 49 | 2,934 | 0.4 | 1.7 |
| Multifamily | 39 | 17,374 | 2.1 | 0.2 |
| Single Family Sr Lien | 33 | 5,992 | 0.7 | 0.6 |
| Single Family Jr Lien | 14 | 3,203 | 0.4 | 0.4 |
| Single Family HELOC | 11 | 1,389 | 0.2 | 0.8 |
| Consumer | 98 | 1,713 | 0.2 | 5.7 |
| Total | $9,114 | $815,958 | 100.0% | 1.1% |

36

The allowance for credit losses increased from $9.1 million at December 31, 2024 to $9.2 million at June 30, 2025. The allowance as a percentage of loan balances decreased from 1.12% at December 31, 2024 to 1.06% at June 30, 2025. The Company continues to closely monitor credit quality in light of the ongoing economic uncertainty caused by, among other factors, the prolonged elevated interest rate environment, stronger than expected employment data in recent periods, continued uncertainty regarding U.S. trade and tariff policy and the lingering inflationary pressures, and the risk of the resurgence of elevated levels of inflation, in the United States and our market areas. Accordingly, additional provisions for credit losses may be necessary in future periods.

The following table presents non-performing assets and related ratios as of the periods presented.

*(Dollars in thousands)*

| Non-performing assets: | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Total nonaccrual loans | $18,227 | $14,128 |
| Loans 90 days past due and accruing | 146 | 40 |
| Total non-performing loans | 18,373 | 14,168 |
| Other real estate owned | - | - |
| Total non-performing assets | $18,373 | $14,168 |
| Non-performing loans to net loans | 2.11% | 1.74% |
| Nonaccrual loans to net loans | 2.09% | 1.73% |
| ACL to nonaccrual loans | 50.50% | 64.51% |
| ACL to gross loans | 1.06% | 1.12% |

The Company had $18.4 million of non-performing loans as of June 30, 2025, compared to $14.2 million of non-performing loans as of December 31, 2024. As of June 30, 2025, the balance of non-performing loans was comprised of certain commercial real estate – non-owner occupied, commercial real estate – owner occupied, commercial and industrial loans, and consumer loans, of which $13.8 million is guaranteed by the SBA. Included in the balance of non-performing assets as of June 30, 2025 are $6.8 million of individually evaluated loans with specific credit loss reserves of $784 thousand assigned. As of December 31, 2024, the balance of non-performing loans was comprised of certain commercial real estate – non-owner occupied, commercial real estate – owner occupied, commercial and industrial loans, and consumer loans totaling $14.2 million, of which $9.3 million is guaranteed by the SBA. Included in the balance of non-performing assets as of December 31, 2024 are $12.5 million of individually evaluated loans with specific credit loss reserves of $1.4 million assigned.

The Company had no other real estate owned as of June 30, 2025 or December 31, 2024.

#### Operating Lease Right of Use Asset

The operating lease right of use asset increased $1.2 million from $4.5 million at December 31, 2024 to $5.7 million at June 30, 2025, due to the modification of two leased locations during the first quarter of 2025 resulting in a five year extensions of the lease terms.

#### Loan Servicing Assets

Loan servicing assets increased $760 thousand from $9.0 million at December 31, 2024 to $9.7 million at June 30, 2025, primarily due the addition of servicing rights of $3.4 million relating to loans sold during the six months ended June 30, 2025. This increase was partially offset by loan servicing asset amortization of $2.6 million during the quarter.

#### Federal Home Loan Bank Stock, At Cost

FHLB stock increased $861 thousand from $4.7 million at December 31, 2024 to $5.5 million at June 30, 2025. As a member of the FHLB, GBank is required to hold capital stock with this balance dependent upon GBank’s borrowing capacity with the FHLB.

#### Other Assets

Other assets totaled $22.9 million at June 30, 2025, an increase of $3.6 million, or 18%, when compared to $19.4 million at December 31, 2024, with this increase largely attributable to growth of the organization driving increases in other miscellaneous receivables.

#### Total Liabilities

The Company’s total liabilities increased $99.0 million, or 10%, to $1.08 billion at June 30, 2025 compared to $981.7 million at December 31, 2024. The increase in total liabilities was primarily attributable to an increase in total deposits of $97.4 million with the largest increases within time deposits and savings accounts.

#### Deposits and Other Funding Sources

Total deposits increased 10% to $1.03 billion at June 30, 2025, compared to $935.1 million at December 31, 2024. The year-to-date decreases in non-interest bearing and interest bearing demand deposits were offset by increases in time deposits and savings deposits. Contributing to the increase in time deposits was a net increase of $8.0 million of brokered deposits since December 31, 2024.

The following table presents the average balances of deposits by type and the related average interest rates for the three months ended June 30, 2025 and 2024:

*(Dollars in thousands)*

|  | June 30, 2025 Balance | Rate | June 30, 2024 Balance | Rate |
| --- | ---: | ---: | ---: | ---: |
| Noninterest-bearing Deposits | $223,201 | -% | $220,842 | -% |
| Interest-bearing Demand | 60,320 | 2.10 | 67,038 | 2.37 |
| Money Market and Savings | 303,814 | 3.87 | 217,081 | 3.96 |
| Certificates of Deposit | 413,940 | 4.52 | 330,271 | 5.26 |
|  | $1,001,275 | 0.79% | $835,232 | 0.82% |

Federal Deposit Insurance Corporation (“FDIC”) deposit insurance covers $250 thousand per depositor, per FDIC-insured bank, for each account ownership category. As of June 30, 2025, uninsured deposits were approximately $402.3 million, or 38.9% of total deposits, compared to $385.7 million, or 41.2% of total deposits, as of December 31, 2024.

As of June 30, 2025 the maturities of time deposits having balances over $250 thousand were as follows:

*(Dollars in thousands)*

|  |  |
| --- | ---: |
| 2025 | $29,410 |
| 2026 | 15,668 |
| 2027 | - |
| 2028 | - |
| 2029 | 3,144 |
| Maturing thereafter | 250 |
|  | $48,472 |

#### Short-term Borrowings and Subordinated Debt

The Company had no short-term borrowings as of June 30, 2025 or December 31, 2024.

Subordinated debt totaled $26.1 million as of both June 30, 2025 and December 31, 2024. See "Note 7 - Subordinated Debt, Other Borrowings, and Available Lines of Credit", within Notes to Consolidated Financial Statements.

#### Operating Lease Liability

Operating lease liability increased $1.3 million, from $4.8 million at December 31, 2024 to $6.1 million at June 30, 2025 reflecting the modification of two leased locations during the first quarter of 2025 resulting in five year extensions of the lease terms.

#### Other Liabilities

Other liabilities totaled $16.0 million at June 30, 2025, an increase of $307 thousand, or 2%, when compared to $15.7 million at December 31, 2024. This decrease was driven by a reduction in accrued interest payable due to an overall decline in the cost of interest-bearing deposits during the first six months of 2025.

#### Stockholders’ Equity and Capital

Stockholders' equity increased 8% to $151.7 million at June 30, 2025 compared to $140.7 million at December 31, 2024 with this increase driven primarily by the net income generated during the six months of 2025.

The sufficiency of a bank's capital to cover its risk exposures and absorb potential losses, and thus ensuring stability and solvency, is a key element of capital adequacy. Regulatory frameworks set minimum capital requirements that are typically expressed as a percentage of the bank's risk-weighted assets and include common equity tier 1, tier 1, and total capital ratios. These minimum capital requirements have been established so that banks maintain a buffer of capital to protect against financial shocks, sustain operations during economic downturns, and safeguard depositors and the financial system as a whole.

On September 17, 2019, the federal banking agencies jointly finalized a rule that became effective July 1, 2020 and was intended to provide for an optional, simplified measure of capital adequacy, the community bank leverage ratio (“CBLR”) framework, for qualifying community banking organizations, consistent with Section 201 of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The final rule was effective on January 1, 2020 and allows qualifying community banking organizations to calculate a leverage ratio to measure capital adequacy beginning with their March 31, 2020 Call Reports. . The Company opted into the CBLR framework with its Call Report filed with the federal banking agencies for the quarter ended September 30, 2020.

Under the final rule, if a qualifying community banking organization opts into the CBLR framework and meets all requirements under the framework, it will be considered to have met the well-capitalized ratio requirements under the “prompt corrective action” regulations described above and will not be required to report or calculate risk-based capital.

The main components and requirements of the community bank leverage ratio framework are as follows:

- Tier 1 Capital Leverage ratio greater than 9.00%;
- Less than $10.0 billion in average total consolidated assets;
- Off-balance-sheet exposures of 25% or less of total consolidated assets;
- Trading assets plus trading liabilities of 5% or less of total consolidated assets; and
- Not an advanced approaches banking organization.

As of June 30, 2025 and December 31, 2024, the Company and GBank were in compliance with the CBLR requirements.

The table below presents a summary of the main components and requirements of the CBLR as of the dates indicated:

*(Dollars in thousands)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Bank Tier 1 Capital Leverage Ratio | 13.82% | 12.90% |
| Average Total Consolidated Assets | $1,198,069 | $1,076,785 |
| Off-Balance-Sheet Exposures | $45,517 | $38,762 |
| Ratio of Off-Balance-Sheet Exposures to Total Assets | 3.71% | 3.47% |
| Trading Assets | None | None |
| Advances Approaching Banking Organization | No | No |

The Company's common equity to assets ratio was 12.3% as of June 30, 2025, compared to 12.5% as of December 31, 2024. The Company's book value per share was $10.63 as of June 30, 2025, an increase of 8% from $9.87 as of December 31, 2024.

#### Liquidity

Liquidity management encompasses the Company’s ability to meet its funding obligations at a reasonable cost. Maintaining an adequate level of liquidity depends on the Company’s ability to efficiently meet both expected and unexpected funding events without adversely affecting the daily operations or the financial condition of the Company.

The Company’s primary sources of funding are deposits, proceeds from the sale or maturity of investment securities, payments received on loans and mortgage-backed securities, loan sales, and borrowing capacity available from various correspondent banks.

A summary of the Company's on-balance-sheet primary liquidity sources is presented in the table below as of the dates indicated:

*(Dollars in thousands)*

|  | June 30, 2025 | December 31, 2024 |
| --- | ---: | ---: |
| Cash and due from banks | $11,877 | $9,262 |
| Interest-bearing deposits with other financial institutions | 131,352 | 114,860 |
| Investment securities, available for sale | 82,886 | 65,609 |
| Loans held for sale | 45,242 | 32,649 |
| Total primary liquidity sources | $271,357 | $222,380 |

The Company has a line of credit available from the FHLB. The unused borrowing capacity with the FHLB, as collateralized by qualifying securities and pledged loans, was approximately $100.1 million and $85.0 million, at June 30, 2025 and December 31, 2024, respectively. No draws have been made on the line and no balances were outstanding as of June 30, 2025 and December 31, 2024.

GBank participates in the Federal Reserve Bank of San Francisco’s BIC Program and, as of June 30, 2025 and December 31, 2024, the Company had pledged loans and investment securities with an approximate carrying value of $645.8 million and $590.5 million, respectively, to the BIC Program. Unused borrowing capacity at the Federal Reserve Bank of San Francisco totaled $380.1 million and $362.6 million as of June 30, 2025 and December 31, 2024, respectively.

The Company also has unsecured lines of credit with other correspondent banks totaling $40.0 million at June 30, 2025. No draws have been made on these lines of credit and no balances were outstanding as of June 30, 2025 and December 31, 2024.

The Company’s Consolidated Statement of Cash Flows presents additional information regarding the sources and uses of cash for the six months ended June 30, 2025. Operating activities resulted in a net decrease in cash of $4.8 million, as cash inflows from loan sales were more than offset cash outflows for the origination of loans held for sale. Investing activities resulted in a net decrease in cash of $74.0 million primarily due to loans originated and held for investment, as well as purchases of available for sale securities. Financing activities resulted in a net increase to cash of $98.0 million, primarily due to a net increase in deposits during the six months ended June 30, 2025.

## Market risk

As filed, 204 characters.

As a smaller reporting company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), we are not required to provide the information called for by this Item 3.

## Controls and procedures

As filed, 1,466 characters.

#### Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this Form 10-Q, the Company carried out an evaluation, under the supervision and with the participation of its management, including its Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of its disclosure controls and procedures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management was required to apply judgment in evaluating its controls and procedures. Based on this evaluation, the Company’s Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act) were effective as of the end of the period covered by this Form 10-Q.

#### Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and

15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2025 that have materially affected, or are

reasonably likely to materially affect, the Company’s internal control over financial reporting.

## Risk factors

As filed, 595 characters.

In evaluating an investment in any of our securities, investors should consider carefully, among other things, information under the heading “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q and the risk factors previously disclosed under the heading “Risk Factors” in our Registration Statement on Form S-1 filed with the SEC on March 12, 2025 pursuant to Rule 424(b) of the Securities Act, in connection with the registration of our common stock. There have been no material changes in the risk factors disclosed by the Company in its Registration Statement on Form S-1.

Filed Aug 12, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-107361. Last ingested by Listed: Nov 3, 2026, 18:22 ET. No prices; not investment advice.