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GBank Financial Holdings Inc. (GBFH)

CIK: 0001791145. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-30.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1791145. Latest filing source: 0001193125-26-129567.

Selected Fundamentals

MetricValueUnitFYFiled
Revenue1,235,000,000USD20252026-03-30
Net income20,929,000USD20252026-03-30
Assets1,359,491,000USD20252026-03-30

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001791145.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric202320242025
Revenue1,235,000,000
Net income18,636,00020,929,000
Diluted EPS1.391.44
Operating cash flow26,482,0009,639,000
Capital expenditures194,000496,000
Assets1,122,364,0001,359,491,000
Liabilities981,664,0001,193,736,000
Stockholders' equity98,427,000140,700,000165,755,000
Free cash flow26,288,0009,143,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric202320242025
Net margin1.69%
Return on equity13.25%12.63%
Return on assets1.66%1.54%
Liabilities / equity6.987.20

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001791145.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

QuarterEnd DateRevenueNet IncomeDiluted EPSMethod
2025-Q12025-03-3119,409,0004,470,0000.31reported discrete quarter
2025-Q22025-03-314,470,000reported discrete quarter
2025-Q22025-06-3020,555,0000.33reported discrete quarter
2025-Q32025-06-304,755,000reported discrete quarter
2025-Q32025-09-3021,622,0000.30reported discrete quarter
2025-Q42025-12-3122,740,0007,396,000derived Q4 = FY annual - nine-month YTD
2026-Q12026-03-3121,594,0001,315,0000.09reported discrete quarter

Quarterly Charts

Macro Cross-References

Latest quarter (10-Q)

Latest 10-Q source: 0001193125-26-226363.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-15. Report date: 2026-03-31.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 Annual Report on Form 10-K for the year ended December 31, 2025. 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 and Gaming Fintech 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.

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.

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

Three Months Ended March 31,

(Dollars in thousands, except per share data)

2026

2025

Net Income

$

1,315

$

4,470

Diluted Earnings Per Share

$

0.09

$

0.31

Return on Average Assets

0.39

%

1.61

%

Return on Average Equity

3.12

%

12.59

%

Net Interest Margin (annualized)

3.86

%

4.47

%

Non-Performing Assets to Total Assets

3.17

%

1.71

%

Net Charge-Off (Recoveries) to Average Loans (annualized)

0.57

%

0.39

%

Financial highlights for the three months ended March 31, 2026 are presented below:

•
Net income of $1.3 million and diluted earnings per share of $0.09, compared to $4.5 million and diluted earnings per share of $0.31 for the first quarter of 2025.

•
Loan growth of 7% since December 31, 2025, resulting in $1.0 billion in on-balance sheet loans as of March 31, 2026, a milestone for the Company.

•
Principal balances of loans sold of $79.0 million compared to principal balances of loans sold of $68.7 million during the three months ended March 31, 2025.

•
Net interchange fees were $2.2 million and $2.0 million for the three months ended March 31, 2026 and 2025, respectively.

•
On-balance sheet guaranteed loans, including loans held for sale and loans held for investment, totaled $252.1 million as of March 31, 2026 compared to $229.7 million at December 31, 2025.

•
Non-performing assets of $44.1 million at March 31, 2026 representing 3.17% of total assets compared to $37.4 million of non-performing assets at December 31, 2025, representing 2.75% of total assets.

Critical Accounting Policies

The 2025 Annual Report on Form 10-K includes a summary of critical accounting estimates that the Company considers to be most important to the presentation of its financial condition and results of operations. These estimates require management’s most difficult judgments as a result of the need to make estimates about the effects of matters that are inherently uncertain.

Management considers the accounting judgments relating to the allowance for credit losses to be the accounting area that requires the most subjective and complex judgments.

There have been no material changes to the Company's critical accounting estimates as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2025.

Results of Operations

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.

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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-month periods presented. Average balances are calculated on a daily basis. The Company had no tax equivalent adjustments for the three months ended March 31, 2026 and 2025.

For the Three Months Ended

March 31, 2026

March 31, 2025

Average

Yield/

Average

Yield/

(Dollars in thousands)

Balance

Interest

Rate(2)

Balance

Interest

Rate(2)

ASSETS:

Interest Bearing Deposits With Banks

$

132,062

$

1,257

3.86

%

$

102,628

$

1,192

4.71

%

Investment Securities:

Taxable

101,725

1,102

4.39

%

105,222

1,281

4.94

%

Loans, Net (1)

1,041,831

18,958

7.38

%

866,690

16,836

7.88

%

Federal Home Loan Bank Stock

5,513

277

20.38

%

4,652

100

8.72

%

Total Earning Assets

1,281,131

21,594

6.84

%

1,079,192

19,409

7.29

%

Cash and Due From Banks

6,109

6,216

Other Assets

68,980

39,177

Total Assets

1,356,220

1,124,585

LIABILITIES & SHAREHOLDERS' EQUITY:

Deposits:

Interest-bearing Demand

$

73,172

521

2.89

%

$

65,693

355

2.19

%

Money Market and Savings

275,878

2,545

3.74

%

264,085

2,411

3.70

%

Certificates of Deposit

569,474

5,827

4.15

%

385,704

4,464

4.69

%

Total Interest-Bearing Deposits

918,524

8,893

3.93

%

715,482

7,230

4.10

%

Short-Term Borrowings

14

-

0.00

%

-

-

0.00

%

Subordinated Debt

29,008

510

7.13

%

26,095

285

4.43

%

Total Interest-Bearing Liabilities

947,546

9,403

4.02

%

741,577

7,515

4.11

%

Noninterest-bearing Deposits

212,683

218,874

Other Liabilities

25,099

20,139

Shareholders' Equity

170,892

143,995

Total Liabilities & Shareholders' Equity

$

1,356,220

$

1,124,585

Net Interest Income

$

12,191

$

11,894

Total Yield on Earning Assets

6.84

%

7.29

%

Cost on Interest-Bearing Liabilities

4.02

%

4.11

%

Average Interest Spread

2.81

%

3.18

%

Net Interest Margin

3.86

%

4.47

%

(1)
For the three months ended March 31, 2026 and 2025, the average balance of loans, net includes average non-accrual loan balances of $36.7 million and $17.9 million, respectively.

(2)
Annualized on an actual/actual basis.

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The following table presents the effects of changing rates and volumes on net interest income for the three-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.

Three Months Ended

March 31, 2026 vs. March 31, 2025

Increase (Decrease)

(Dollars in thousands)

Volume

Rate

Net

INTEREST INCOME:

Interest Bearing Deposits With Banks

$

342

$

(277

)

$

65

Investment Securities:

Taxable

(43

)

(136

)

(179

)

Loans, Net

3,402

(1,280

)

2,122

Federal Home Loan Bank Stock

19

158

177

Total Interest Income

3,720

(1,535

)

2,185

INTEREST EXPENSE:

Interest Bearing Deposits:

Interest-bearing Demand

40

126

166

Money Market and Savings

108

26

134

Certificates of Deposit

2,127

(764

)

1,363

Total Interest-Bearing Deposits

2,275

(612

)

1,663

Short-Term Borrowings

-

-

-

Subordinated Debt

32

193

225

Total Interest Expense

2,307

(419

)

1,888

NET INTEREST INCOME

$

1,413

$

(1,116

)

$

297

For the three months ended March 31, 2026, interest income was $21.6 million, an increase of $2.2 million compared to $19.4 million for the three months ended March 31, 2025. The

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-30. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Introduction

The objective of this section is to provide an overview of our results of operations and financial condition by focusing on changes in certain key measures from year to year. It should be read in conjunction with our consolidated financial statements and the related Notes thereto (our “Consolidated Financial Statements”) and other financial data presented elsewhere in this Annual Report on Form 10-K, particularly the information regarding our business operations described in Item 1. A detailed discussion comparing 2024 and 2023 results is incorporated herein by reference to our Company’s Registration Statement on Form S-1/A filed with the SEC on April 1, 2025.

Executive Summary

We generate the majority of our 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 our net interest margin, which is calculated as net interest income as a percentage of average interest-earning assets. We also generate non-interest income through fees earned on the various services and products offered to our customers, net interchange fees earned on credit card transaction volume, and through gains on sales of the guaranteed portion of SBA and USDA loans. Offsetting these revenue sources are provisions for credit losses, non-interest expenses, and income taxes.

The following table presents a summary of our earnings and selected performance ratios:

Year Ended December 31,

(Dollars in thousands, except per share data)

2025

2024

Net Income

$

20,929

$

18,636

Diluted Earnings Per Share

$

1.44

$

1.39

Return on Average Assets

1.70

%

1.85

%

Return on Average Equity

13.61

%

16.14

%

Net Interest Margin

4.33

%

4.79

%

Non-Performing Assets to Total Assets

2.75

%

1.26

%

Net Charge-Off (Recoveries) to Average Loans

0.33

%

0.02

%

For the years ended December 31, 2025 and 2024, we experienced strong balance sheet growth, primarily driven by increases in loans, cash equivalents and interest-bearing deposits. We experienced favorable volume-driven increases in net interest income as well as a 56% increase in noninterest income driven by a significant increase in credit card net interchange fees.

Financial highlights for the year ended December 31, 2025 are presented below:

·

Net income of $20.9 million and diluted earnings per share of $1.44

·

Net interest margin of 4.33%

·

Loan growth of $143.3 million, or 18% year over year

·

Credit card transaction volume of $420.5 million and net interchange fees of $7.8 million, compared to $73.8 million and $1.4 million, respectively, for the year ended December 31, 2024

·

Principal balances of loans sold of $353.9 million, an increase of $37.5 million, or 12%, compared to principal balances of loans sold of $316.4 million during the year ended December 31, 2024

·

Gain on sale of loans of $12.3 million, an increase of $265 thousand, or 2%, compared to $12.1 million of gain on sale of loans for the year ended December 31, 2024

·

Guaranteed loans, including loans held for sale and loans held for investment, totaled $229.7 million as of December 31, 2025, compared to $233.9 million as of December 31, 2024

·

Non-performing assets of $37.4 million as of December 31, 2025, representing 2.75% of total assets, compared to $14.2 million of non-performing assets as of December 31, 2024

34

Business Strategy

Our primary business strategy is to be a forward-thinking provider of tailored financial solutions designed to create opportunities and meet the needs of our customers and communities while creating lasting value for our stockholders through the operation of a successful, people-focused institution. We believe that we are able to differentiate ourselves from our competitors by striving to provide a banking experience that focuses on personalized service, priority service, availability, and innovative solutions. Highlights of our current business strategy include:

·

Continued focus on growth and enhancement of government guaranteed lending. Historically, our primary lending focus has been the origination of commercial real estate loans partially guaranteed by the U.S. Small Business Administration. We intend to continue to expand this portfolio of loans by hiring and developing experienced lending personnel to increase our presence not only within our market area, but also nation-wide, while maintaining a high level of asset quality through the utilization of conservative underwriting standards.

·

Targeted expansion of our Gaming FinTech relationships.  The Bank, in partnership with BankCard Services, LLC (“BCS”), will continue to identify and develop tools and resources necessary to scale and innovate within the payments industry.

·

Maintaining a strong emphasis on the continued development of our Credit Card portfolio. The Bank will continue to market its GBank Visa Signature ® card throughout the local market area and nationwide through marketing referral agreements and other strategic partnerships.

·

Increase core deposits with an emphasis on non-interest bearing deposits. As the main source of funding for lending and investment, we are committed to increasing low-cost deposits while minimizing reliance on higher-cost certificates of deposit to facilitate margin expansion. We are dedicated to growing core deposits by utilizing our business development officers and fostering our commercial lending and retail relationships.

·

Recruiting, retaining, and investing in top talent and personnel. During the periods presented, our Company has appointed a General Counsel to the Executive Management Team to support and facilitate our growth. Given our strong capital levels and expansion strategy, we believe that we have the ability to continue to opportunistically hire talented individuals and develop top performers to facilitate our future success.

Critical Accounting Policies

In preparing our Consolidated Financial Statements, accounting policies are applied that require significant judgment and estimates, which can materially impact our results of operations and financial position. The following are the critical accounting policies that have the most significant impact on our 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.

For further information about our accounting policies, see “Note 2. Summary of Significant Accounting Policies” in the Notes to our Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K.

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. The Bank 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 at least annually to ensure instruments are properly segregated into groups having similar risk characteristics, and new segments may be required as the Bank offers new loan products.

The Bank’s loan portfolio includes certain loans which are partially guaranteed by the U.S. Small Business Administration. The Current Expected Credit Losses 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% to 90%. For purposes of the assessment of credit losses, management has determined that the guaranteed portions of these loans have nearly zero repayment risk due to such portions being fully guaranteed by the U.S. government.

35

Methodology and Key Inputs

We estimate expected credit losses using the average charge-off method, which combines quantitative modeling with qualitative adjustments. The quantitative component incorporates historical loss experience, current asset-level characteristics, and reasonable and supportable forecasts of future economic conditions. Key model inputs include historical loss data, current portfolio characteristics, qualitative factors, forward-looking expectations, and reversion assumptions.

A critical input to the estimate is our forecast of macroeconomic variables, which may include, among others, national unemployment rates, gross domestic product changes, interest rates, and other relevant indicators. Assumptions related to these inputs are developed using a combination of internal analyses and external sources. We apply a reasonable and supportable forecast period, after which loss estimates revert to historical averages over a defined reversion period.

Forecast Assumptions

Forecast assumptions are updated periodically and reflect management’s view of the most likely economic scenario as of the reporting date. Given the inherent uncertainty in economic forecasting, actual results may differ from these estimates. We may also consider alternative scenarios and apply probability weightings when deemed appropriate. The sensitivity of the allowance to changes in economic forecasts is evaluated periodically.

Prepayment Speeds and Behavioral Assumptions

Expected credit losses are also influenced by assumptions regarding borrower prepayment behavior, which affects the estimated life of the assets. Prepayment speeds are estimated based on historical experience, current market conditions, interest rate expectations, and borrower characteristics. Faster prepayment speeds generally reduce the expected life of assets and, consequently, the exposure to credit losses, while slower prepayments extend the exposure period and may increase the allowance.

In addition to prepayment assumptions, we consider other behavioral factors, such as utilization rates for revolving products and curtailment activity, which can affect exposure at default.

Qualitative Adjustments

Management applies qualitative adjustments to the modeled results to account for factors not fully captured in the quantitative framework. These may include changes in underwriting standards, portfolio composition, concentrations of credit risk, regulatory or legal developments, and other environmental factors. The determination of qualitative adjustments requires significant judgment.

Uncertainty and Sensitivity

Due to the use of significant estimates and assumptions, the allowance for credit losses is sensitive to changes in economic conditions and other key inputs. A deterioration in forecasted economic conditions, slower prepayment speeds, or adverse changes in borrower performance could result in an increase in the allowance, while improvements in these factors could lead to a reduction. Management regularly reviews and updates its assumptions and methodologies to ensure they remain appropriate in light of current conditions.

Accordingly, the allowance for credit losses may vary materially from period to period, and actual credit losses may differ from current estimates.

Emerging Growth Company Accounting Elections

We qualify as an “emerging growth company,” as defined in Section 2(a)(19) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, as amended (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our SEC periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

36

Additionally, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with such new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. We have elected to use the extended transition period for complying with new or revised accounting standards that have different effective dates for public companies and private companies until the earlier of the date that we (i) are no longer an emerging growth company, or (ii) affirmatively and irrevocably opt out of the extended transition period provided by the JOBS Act.

As a result, our Consolidated Financial Statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates. We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of $1.235 billion or more, (ii) the end of the 2030 fiscal year, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt, and (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.

Results of Operations – Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Overview

Net income was $20.9 million, or $1.44 per diluted share, for the year ended December 31, 2025, compared to net income of $18.6 million, or $1.39 per diluted share, for the year ended December 31, 2024.

Net interest income increased 10% to $50.7 million for the year ended December 31, 2025, compared to $46.2 million for the year ended December 31, 2024. The positive growth within net interest income was primarily volume driven, as average loans increased to $945.6 million for the year ended December 31, 2025, an increase of $153.3 million, or 19%, when compared to average loans of $792.4 million for the year ended December 31, 2024.

The provision for credit losses was $3.9 million for the year ended December 31, 2025, compared to $2.2 million for the year ended December 31, 2024. The allowance for credit losses was $9.9 million at December 31, 2025, compared to $9.1 million at December 31, 2024. See “—Provision Expense and Allowance for Credit Losses — Loans” below for a further description of the provision for credit losses.

Noninterest income increased $9.1 million, or 56%, to $25.3 million for the year ended December 31, 2025, compared to $16.2 million for the year ended December 31, 2024. The increase was largely attributable to a $6.4 million increase in net interchange fees on credit cards, driven by increases in credit cards issued and credit card transaction volume when comparing the year ended December 31, 2025 to the year ended December 31, 2024.

Noninterest expense increased $8.8 million, or 24%, to $45.1 million for the year ended December 31, 2025, compared to $36.2 million for the year ended December 31, 2024. The increase was largely driven by higher salaries and benefits expense resulting from (i) an increase in full-time equivalent employees at our Company and the Bank to 184 as of December 31, 2025, compared to 169 full-time equivalent employees as of December 31, 2024, (ii) incurrence of certain severance-related payouts during the year ended December 31, 2025, (iii) incurrence of non-recurring legal, professional, and audit fees associated with the preparation of filings made with the U.S. Securities and Exchange Commission (the “SEC”) for the registration of offers and sale of shares of our Common Stock, and the listing of our Common Stock on the Nasdaq Capital Market, and (iv) the termination of an early generation third-party non-gaming credit card marketing agreement which resulted in certain credit card promotion and other expenses.

As of December 31, 2025, total assets were $1.4 billion, an increase of $237.1 million, or 21%, compared to total assets of $1.1 billion as of December 31, 2024. The increase in total assets was primarily driven by increases in loans, interest bearing deposits with banks, Bank owned life insurance, and other assets. Total assets under management, including $1.0 billion of sold loans for which servicing is retained, totaled $2.4 billion as of December 31, 2025.

Return on average assets for the years ended December 31, 2025 and 2024 was 1.70% and 1.85%, respectively. Return on average equity for the years ended December 31, 2025 and 2024 was 13.61% and 16.14%, respectively.

Net Interest Income and Net Interest Margin

Net interest income is calculated as the excess of interest earned from our 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 Bank’s primary activities of lending and investing, less the costs of obtaining funds.

37

Net interest margin is expressed as net interest income as a percentage of average earning assets, and reflects our ability to generate income from our 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 our interest-sensitive assets and liabilities are presented in the table below. Average balances are calculated on a daily basis. We had no tax equivalent adjustments for the years ended December 31, 2025 and 2024.

For the Year Ended

December 31, 2025

December 31, 2024

Average

Yield/

Average

Yield/

(Dollars in thousands)

Balance

Interest

Rate(2)

Balance

Interest

Rate(2)

ASSETS:

Interest Bearing Deposits With Banks

$

103,230

$

4,737

4.59

%

$

81,479

$

4,604

5.65

%

Investment Securities:

Taxable

117,735

5,520

4.69

%

85,799

3,983

4.64

%

Loans, Net(1)

945,611

73,609

7.78

%

792,360

66,267

8.36

%

Federal Home Loan Bank Stock

5,263

460

8.74

%

4,234

375

8.86

%

Total Earning Assets

1,171,839

84,326

7.20

%

963,872

75,229

7.80

%

Cash and Due From Banks

6,723

6,043

Other Assets

49,472

35,834

Total Assets

1,228,034

1,005,749

LIABILITIES & SHAREHOLDERS' EQUITY:

Deposits:

Interest-bearing Demand

$

63,504

1,406

2.21

%

$

65,776

1,594

2.42

%

Money Market and Savings

291,167

10,993

3.78

%

224,037

8,797

3.93

%

Certificates of Deposit

451,401

20,073

4.45

%

332,816

17,383

5.22

%

Total Interest-Bearing Deposits

806,072

32,472

4.03

%

622,629

27,774

4.46

%

Short-Term Borrowings

1

-

0.00

%

2,046

113

5.52

%

Subordinated Debt

26,123

1,119

4.28

%

26,049

1,142

4.38

%

Total Interest-Bearing Liabilities

832,196

33,591

4.04

%

650,724

29,029

4.46

%

Noninterest-bearing Deposits

219,009

219,395

Other Liabilities

23,078

20,139

Shareholders' Equity

153,751

115,491

Total Liabilities & Shareholders' Equity

$

1,228,034

$

1,005,749

Net Interest Income

$

50,735

$

46,200

Total Yield on Earning Assets

7.20

%

7.80

%

Cost on Interest-Bearing Liabilities

4.04

%

4.46

%

Average Interest Spread

3.16

%

3.33

%

Net Interest Margin

4.33

%

4.79

%

(1)

For the years ended December 31, 2025 and 2024 the average balance of loans, net includes average non-accrual loan balances of $26.1 million and $6.0 million, respectively.

Net interest income increased $4.5 million, or 10%, to $50.7 million for the year ended December 31, 2025, compared to $46.2 million for the year ended December 31, 2024.

Interest income increased $9.1 million as the result of a $208.0 million increase in average interest-earning assets over the twelve month period ending December 31, 2025. This increase was partially offset by lower loan yields due to yield reductions on adjustable-rate loans, securities, and other liquid assets as a result of the full-year impact of three federal funds rate decreases totaling 100 basis points initiated by the Federal Open Market Committee (“FOMC”) during the second half of 2024, and the partial-year impact of three federal funds rate decreases totaling 75 basis points initiated by the FOMC during the second half of 2025.

38

Investment yield increased to 4.69% for the year ended December 31, 2025, compared to 4.64% for the year ended December 31, 2024. The increase in the investment yield when compared to the previous year was the result of a changing investment mix designed to address asset-liability management objectives.

Net interest income was impacted by an increase in interest expense from $29.0 million for the year ended December 31, 2024 to $33.6 million for the year ended December 31, 2025. The increase in interest expense was driven by higher volumes of interest bearing liabilities, primarily within time deposits. This increase was partially offset by a decrease in the cost of funds from 4.46% during the year ended December 31, 2024 to 4.04% for the year ended December 31, 2025.

For the year ended December 31, 2025, net interest margin was 4.33%, compared to 4.79% for the year ended December 31, 2024. The decrease in net interest margin was primarily due to yield reductions on adjustable-rate loans, securities, and other liquid assets due to the previously mentioned decreases in the federal funds rate, which offset volume-driven increases in interest income during the year ended December 31, 2025.

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

Year Ended

December 31, 2025 Compared To December 31, 2024

Increase (Decrease)

(Dollars in thousands)

Volume

Rate

Net

INTEREST INCOME:

Interest Bearing Deposits With Banks

$

1,229

$

(1,096

)

$

133

Investment Securities:

Taxable

1,483

54

1,537

Loans, Net

12,817

(5,475

)

7,342

Federal Home Loan Bank Stock

91

(6

)

85

Total Interest Income

15,620

(6,523

)

9,097

INTEREST EXPENSE:

Interest Bearing Deposits:

Interest-bearing Demand

(55

)

(133

)

(188

)

Money Market and Savings

2,636

(440

)

2,196

Certificates of Deposit

6,194

(3,504

)

2,690

Total Interest-Bearing Deposits

8,775

(4,077

)

4,698

Short-Term Borrowings

(113

)

-

(113

)

Subordinated Debt

3

(26

)

(23

)

Total Interest Expense

8,665

(4,103

)

4,562

NET INTEREST INCOME

$

6,955

$

(2,420

)

$

4,535

Provision Expense and Allowance for Credit Losses - Loans

For the year ended December 31, 2025, we recorded a $3.9 million provision for credit losses, compared to $2.2 million for the year ended December 31, 2024. The allowance for credit losses was $9.9 million at December 31, 2025, compared to $9.1 million at December 31, 2024. The allowance for credit losses to total net loans was 1.03% at December 31, 2025, compared to 1.12% at December 31, 2024.

Net charge-offs of $3.1 million were recorded during the year ended December 31, 2025, compared to $164 thousand for the year ended December 31, 2024. Charge-offs recorded during 2025 were comprised of (i) commercial real estate – non-owner occupied loan charge-offs of $2.0 million, (ii) commercial real estate – owner occupied loan charge-offs of $312 thousand, (iii) commercial and industrial loan charge-offs of $527 thousand, and (iv) credit card charge-offs of $384 thousand. These charge-offs were partially offset by (i) commercial real estate – non-owner occupied loan recoveries of $104 thousand, (ii) commercial and industrial loan recoveries of $34

39

thousand, and (iii) credit card recoveries of $5 thousand. The net charge-offs recorded during 2024 were comprised of $132 thousand of charge-offs related to certain commercial real estate – non-owner occupied loans as well as $108 thousand of credit card charge-offs. These charge-offs were partially offset by $76 thousand of recoveries attributable to certain commercial real estate – non-owner occupied loans.

A summary of the ratio of net charge-offs (recoveries) to total average gross loans outstanding is presented in the table below.

(Dollars in thousands)

Net Charge-Offs (Recoveries)

Average Gross Loans Outstanding (1)

Ratio of Net Charge-Offs to Total Average Loans Outstanding

Year Ended December 31, 2025

Commercial and industrial

$

493

$

69,071

0.71

%

Commercial real estate - non-owner occupied

1,906

626,687

0.30

Commercial real estate - owner occupied

312

215,839

0.14

Construction and land development

-

3,133

0.00

Multifamily

-

18,855

0.00

Single Family Sr. Lien

-

2,677

0.00

Single Family Jr. Lien

-

2,495

0.00

Single Family HELOC

-

470

0.00

Consumer

380

5,850

6.50

Total

$

3,091

$

945,077

0.33

%

Year Ended December 31, 2024

Commercial and industrial

$

-

$

53,830

0.00

%

Commercial real estate - non-owner occupied

56

544,150

0.01

Commercial real estate - owner occupied

-

161,600

0.00

Construction and land development

-

1,113

0.00

Multifamily

-

17,347

0.00

Single Family Sr. Lien

-

8,177

0.00

Single Family Jr. Lien

-

3,206

0.00

Single Family HELOC

-

674

0.00

Consumer

108

1,037

10.41

Total

$

164

$

791,134

0.02

%

(1) Average balances do not include deferred fees and costs or unamortized discount.

Noninterest Income

The following table presents the components of total noninterest income for the years ended December 31, 2025 and 2024.

Year Ended December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Gain on sale of loans

$

12,347

$

12,082

$

265

2.2

Loan servicing income

3,178

1,757

1,421

80.9

Service charges and fees

228

184

44

23.9

Net interchange fees

7,750

1,344

6,406

476.6

Net gain on sales of investment securities

426

-

426

nm

Other income

1,357

818

539

65.9

Total Noninterest Income

$

25,286

$

16,185

$

9,101

56.2

nm - not meaningful

Gain on sale of loans increased 2% to $12.3 million for the year ended December 31, 2025, compared to $12.1 million for the year ended December 31, 2024. Average pretax gain on loan sales as a percentage of the loans originated decreased to 3.49% for the year ended December 31, 2025, compared to 3.82% for the year ended December 31, 2024. SBA loan originations, and the subsequent sales of the government guaranteed portions of these loans, require SBA approval, which could not be obtained during the federal government shut down in effect from October 1, 2025 to November 15, 2025.

40

For the year ended December 31, 2025, loan servicing income increased 81% to $3.2 million, compared to $1.8 million for the year ended December 31, 2024, primarily due to an increase in the principal balance of loans serviced during 2025. Loan servicing income for the year ended December 31, 2024 was impacted by the write-off of certain servicing assets relating to the repurchase of the guaranteed portions of previously sold SBA loans totaling $401 thousand during 2024. Similar write-offs did not occur during 2025.

Net interchange fees totaled $7.8 million for the year ended December 31, 2025, compared to $1.3 million for the year ended December 31, 2024. The increase in net interchange fees is attributable to transaction volume growth within the Bank’s Visa Signature® Card product.

During the fourth quarter of 2025, we sold $52.0 million of investment securities and realized a collective pre-tax gain on the sales of $426 thousand, as part of a balance sheet repositioning to address asset-liability management objectives given the recent changes in the interest rate environment. The investment securities sold consisted of (i) available-for-sale securities with an aggregate amortized cost of $13.6 million, and (ii) the entire portfolio of held-to-maturity securities with an aggregate amortized cost of $38.4 million. No investment securities were sold during the year ended December 31, 2024.

Noninterest Expense

The following table presents the components of total noninterest expense for the years ended December 31, 2025 and 2024.

Year Ended December 31,

(Dollars in thousands)

2025

2024

$ Change

% Change

Salaries and employee benefits

$

25,460

$

22,349

$

3,111

13.9

Data processing

6,076

3,674

2,402

65.4

Occupancy expense

1,620

1,667

(47

)

(2.8

)

Legal and professional fees

2,332

2,240

92

4.1

Loan related costs

2,058

1,678

380

22.6

Audits and exams

1,345

659

686

104.1

Advertising and marketing

2,773

562

2,211

393.4

FDIC insurance

520

454

66

14.5

Other

2,894

2,949

(55

)

(1.9

)

Total Noninterest Expense

$

45,078

$

36,232

$

8,846

24.4

For the year ended December 31, 2025, noninterest expense increased 24% to $45.1 million, compared to $36.2 million for the year ended December 31, 2024.

For the year ended December 31, 2025, salaries and employee benefits increased 13.9% to $25.5 million, compared to $22.3 million for the year ended December 31, 2024. The increase was driven by (i) an increase in full-time equivalent employees at our Company and the Bank to 184 as of December 31, 2025, compared to 169 full-time equivalent employees as of December 31, 2024, (ii) the incurrence of certain severance-related payouts totaling $1.3 million during the year ended December 31, 2025.

Data processing expense increased by $2.4 million, or 65%, to $6.1 million for the year ended December 31, 2025, compared to $3.7 million for the year ended December 31, 2024. This increase reflects higher costs from transactional-based charges given the increase in the volume of loans, including significant increases in credit card transaction volume, and deposits during the year ended December 31, 2025.

Loan related costs were $2.1 million for the year ended December 31, 2025, an increase of $380 thousand, or 23%, compared to $1.7 million during the year ended December 31, 2024. This increase corresponds with the 23% increase in loan originations year over year from $539.9 million in loan originations during 2024 to $662.1 million in loan originations during 2025.

For the year ended December 31, 2025, audits and exam expense totaled $1.3 million, an increase of $686 thousand, or 104%, compared to $659 thousand for the year ended December 31, 2024. This increase was largely driven by the non-recurring audit fees associated with the preparation of filings made with the SEC for the registration of offers and sales of shares of our Common Stock, and the listing of our Common Stock on the Nasdaq Capital Market in April 2025, as well as the audit fees associated with quarterly reviews and ad hoc SEC filings.

For the year ended December 31, 2025, advertising and marketing expense totaled $2.8 million, an increase of $2.2 million, compared to $562 thousand for the year ended December 31, 2024. During the year ended December 31, 2025, we incurred additional advertising and promotional item expenses in order to increase recognition and knowledge of the Bank’s Visa Signature® Card product, as well as certain credit card promotion expenses related to the termination of an early generation third-party non-gaming credit card marketing agreement.

41

Income Taxes

Income tax expense was $6.0 million for the year ended December 31, 2025, an increase of $745 thousand, or 14%, compared to $5.3 million for the year ended December 31, 2024. The increase in income tax expense was primarily due to higher pre-tax earnings and additional tax expense related to increased state tax liabilities as the Bank continues to expand its lending footprint. The effective tax rate for the year ended December 31, 2025 was 22.2%, compared to 22.1% for the year ended December 31, 2024. The increase in the effective tax rate is attributable to income tax rates for the states in which the Bank has operations, offset by favorable discrete items related to excess tax benefits from stock-based compensation.

Financial Condition – December 31, 2025 Compared to December 31, 2024

Total Assets

Total assets increased 21% to $1.4 billion at December 31, 2025, compared to $1.1 billion at December 31, 2024, primarily due to an increase in net loans of $142.5 million and an increase in cash and equivalents of $73.7 million during the year ended December 31, 2025.

Cash and Cash Equivalents

Cash and cash equivalents increased 59% to $197.9 million at December 31, 2025, compared to $124.1 million at December 31, 2024, as cash inflows from deposit growth and investment security sales offset cash outflows to fund loan growth during the year ended December 31, 2025.

Investments

We maintain an investment security portfolio to (i) generate income through interest and potential sales, (ii) manage liquidity for funding needs, (iii) support interest rate risk management, and (iv) meet regulatory requirements for high-quality liquid assets. As of December 31, 2025, our investment security portfolio is comprised of available for sale securities recorded at fair value. As of December 31, 2024, our investment security portfolio was comprised of available for sale securities recorded at fair value and held-to-maturity securities recorded at amortized cost.

During the fourth quarter of 2025, we sold $52.0 million of investment securities and realized a collective pre-tax gain on such sales of $426 thousand, as part of a balance sheet repositioning to address asset-liability management objectives given the recent changes in the interest rate environment. The investment securities sold consisted of (i) available-for-sale securities with an aggregate amortized cost of $13.6 million, and (ii) the entire portfolio of held-to-maturity securities with an aggregate amortized cost of $38.4 million.

As a result of these sales, we held no held-to-maturity securities as of December 31, 2025, compared to $40.6 million of held-to-maturity securities as of December 31, 2024. Available-for-sale securities increased by $5.4 million to $71.0 million at December 31, 2025, compared to $65.6 million at December 31, 2024.

The following table presents the maturity composition and the weighted average yields of our investment portfolio as of December 31, 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.

Maturing

(Dollars in thousands)

One Year

After One Year

After Five Years

After

or Less

Through Five Years

Through Ten Years

Ten Years

Weighted

Weighted

Weighted

Weighted

Average

Average

Average

Average

As of December 31, 2025

Amount

Yield

Amount

Yield

Amount

Yield

Amount

Yield

Available for sale securities, at fair value:

Residential mortgage-backed securities

$

848

-0.36

%

$

16,473

4.50

%

$

38,295

4.49

%

$

15,422

3.65

%

Loans

The Bank’s lending operations are carried out in its local market area, comprised of Nevada, California, Utah, and Arizona, and across the United States through both (i) its GBank Visa Signature® Card, and (ii) the origination, sale, and servicing of SBA and USDA loans which are partially guaranteed by the U.S. government. The Bank generally sells the guaranteed portions of these loans.

42

Loans held for sale totaled $46.0 million at December 31, 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 the unguaranteed portions of the loans to be retained are reported as held for investment.

Total loans, net of deferred loan costs and unamortized discounts, increased 18% to $949.4 million as of December 31, 2025, compared to $806.8 million as of December 31, 2024. For the year ended December 31, 2025, total loan originations, including government guaranteed and non-guaranteed commercial loans, increased 23% to $662.1 million, compared to $539.9 million for the year ended December 31, 2024.

The following table presents the ending balance of gross loans outstanding, by type, as of December 31, 2025 and December 31, 2024.

December 31, 2025

December 31, 2024

(Dollars in thousands)

Percent of

Percent of

Balance

Total Loans

Balance

Total Loans

Commercial and industrial

$

80,216

8.4

%

$

64,000

7.8

%

Commercial real estate - non-owner occupied

750,565

78.2

630,551

77.3

Commercial real estate - owner occupied

94,576

9.9

88,802

10.9

Construction and land development

2,288

0.2

2,934

0.4

Multifamily

18,950

2.0

17,374

2.1

Single Family Sr. Lien

726

0.1

5,992

0.7

Single Family Jr. Lien

131

0.0

3,203

0.4

Single Family HELOC

459

0.0

1,389

0.2

Consumer

11,358

1.2

1,713

0.2

Loans, net

959,269

100.0

%

815,958

100.0

%

Allowance for credit losses

(9,890

)

(9,114

)

Loans, net of allowance

$

949,379

$

806,844

Beginning in the third quarter of 2023, and continuing into the first quarter 2024, we 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 loans at lower then-current interest rates. This resulted in the repurchase of $44.2 million of government guaranteed loan balances within the commercial real estate segment and industrial and commercial real estate segment during the first quarter of 2024. There were no such repurchases in 2025. The balance of guaranteed loans held for investment at December 31, 2025 was $183.7 million, representing 19.2% of held for investment loans, compared to a balance of guaranteed loans held for investment at December 31, 2024 of $201.3 million, representing 24.7% of held for investment loans. We do not anticipate conducting any material loan repurchases in the foreseeable future.

Net deferred loan costs totaled $10.0 million at December 31, 2025, compared to $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 $10.9 million at December 31, 2025, compared to $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.

The following table sets forth, as of December 31, 2025, the dispersion of loan principal balances with amounts and the percentage of the total balances in the States with at least five percent of the total gross loans:

(Dollars in thousands)

December 31, 2025

Amounts

Percentage

Nevada

$

186,627

19.46

%

North Carolina

149,863

15.62

Ohio

71,269

7.43

Illinois

70,252

7.32

Indiana

61,740

6.44

Texas

56,713

5.91

Other

362,805

37.82

$

959,269

100.00

%

43

Maturity distribution by contractual maturity date and rate sensitivity information related to the loan portfolio is reflected in the table below.

(Dollars in thousands)

One Year and Less

One to Five Years

Five to Fifteen Years

Over Fifteen Years

Total

As of December 31, 2025

Commercial and industrial

$

37,629

$

19,545

$

23,042

$

-

$

80,216

Commercial real estate - non-owner occupied

12,927

19,562

255,515

462,561

750,565

Commercial real estate - owner occupied

836

24,995

61,272

7,473

94,576

Construction and land development

-

-

1,898

390

2,288

Multifamily

7,266

11,684

-

-

18,950

Single Family Sr. Lien

-

726

-

-

726

Single Family Jr. Lien

131

-

-

-

131

Single Family HELOC

-

-

453

6

459

Consumer

11,358

-

-

-

11,358

Total loans held in portfolio

$

70,147

$

76,512

$

342,180

$

470,430

$

959,269

Predetermined (fixed) interest rates:

Commercial and industrial

$

17,407

$

14,065

$

661

$

-

$

32,133

Commercial real estate - non-owner occupied

12,694

4,721

7,252

-

24,667

Commercial real estate - owner occupied

-

13,717

6,810

-

20,527

Construction and land development

-

-

1,097

-

1,097

Multifamily

7,266

11,373

-

-

18,639

Single Family Sr. Lien

-

-

-

-

-

Single Family Jr. Lien

-

-

-

-

-

Single Family HELOC

-

-

-

-

-

Consumer

-

-

-

-

-

Total predetermined (fixed) interest rates

$

37,367

$

43,876

$

15,820

$

-

$

97,063

Floating interest rates:

Commercial and industrial

$

20,222

$

5,480

$

22,381

$

-

$

48,083

Commercial real estate - non-owner occupied

233

14,841

248,263

462,561

725,898

Commercial real estate - owner occupied

836

11,278

54,462

7,473

74,049

Construction and land development

-

-

801

390

1,191

Multifamily

-

311

-

-

311

Single Family Sr. Lien

-

726

-

-

726

Single Family Jr. Lien

131

-

-

-

131

Single Family HELOC

-

-

453

6

459

Consumer

11,358

-

-

-

11,358

Total floating interest rates

$

32,780

$

32,636

$

326,360

$

470,430

$

862,206

Credit Quality, Credit Risk, and Allowance for Credit Losses

In accordance with Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, we have grouped our 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, we can apply more tailored loss estimation techniques that reflect the specific credit risks associated with each segment.

Evaluations of our 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 our allowance for credit losses methodology, including the quantitative and qualitative factors used in the calculation, see “Note 2. Summary of Significant Accounting Policies” and “Note 4. Loans and Allowance for Credit Losses–Loans” within the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

44

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

(In Thousands)

As of December 31, 2025

Total ACL - Loans

Total Loans

% of Total Loans Outstanding

Allowance as a %

of Loan Category

Commercial and industrial

$

378

$

80,216

8.4

%

0.5

%

Commercial real estate - non-owner occupied

7,214

750,565

78.2

1.0

Commercial real estate - owner occupied

628

94,576

9.9

0.7

Construction and land development

164

2,288

0.2

7.2

Multifamily

42

18,950

2.0

0.2

Single Family Sr Lien

2

726

0.1

0.3

Single Family Jr Lien

1

131

0.0

0.8

Single Family HELOC

4

459

0.0

0.9

Consumer

1,457

11,358

1.2

12.8

Total

$

9,890

$

959,269

100.0

%

1.0

%

(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

%

Our allowance for credit losses increased to $9.9 million at December 31, 2025, compared to $9.1 million at December 31, 2024, due to increases in non-government guaranteed loan balances year-over-year. Our allowance for credit losses as a percentage of loan balances decreased to 1.03% at December 31, 2025, compared to 1.12% at December 31, 2024.

The following table presents non-performing assets and related ratios as of December 31, 2025 and December 31, 2024.

(Dollars in thousands)

December 31, 2025

December 31, 2024

Non-performing assets:

Total nonaccrual loans

$

32,141

$

14,128

Loans 90 days past due and accruing

854

40

Total non-performing loans

32,995

14,168

Other real estate owned

4,401

-

Total non-performing assets

$

37,396

$

14,168

Non-performing loans to net loans

3.90

%

1.74

%

Nonaccrual loans to net loans

3.35

%

1.73

%

ACL to nonaccrual loans

30.77

%

64.51

%

ACL to gross loans

1.03

%

1.12

%

We had $33.0 million of non-performing loans as of December 31, 2025, compared to $14.2 million of non-performing loans as of December 31, 2024. As of December 31, 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 totaling $33.0 million, of which $24.8 million is guaranteed by the SBA and specific credit loss reserves of $1.2 million have been 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 and specific credit loss reserves of $1.4 million have been assigned.

45

Other Real Estate Owned

As of December 31, 2025, we had other real estate owned totaling $4.4 million, comprised of four commercial real estate properties obtained through foreclosure proceedings during 2025. We did not have any other real estate owned as of December 31, 2024.

Operating Lease Right of Use Asset

Our operating lease right of use asset increased by $779 thousand to $5.3 million at December 31, 2025, compared to $4.5 million at December 31, 2024. The increase was primarily attributable to certain lease amendments, executed during 2025, that extended the terms of two leased locations by five years.

Bank-owned Life Insurance

Bank-owned life insurance increased by $15.8 million to $30.0 million at December 31, 2025, compared to $14.2 million at December 31, 2024, due to a Bank owned life insurance investment of $15.0 million during the third quarter of 2025.

Loan Servicing Assets

Loan servicing assets increased by $2.2 million to $11.1 million at December 31, 2025, compared to $9.0 million at December 31, 2024, primarily due to the addition of servicing rights of $7.8 million relating to loans sold during the year ended December 31, 2025, partially offset by loan servicing asset amortization of $5.6 million.

Federal Home Loan Bank Stock, At Cost

Federal Home Loan Bank (“FHLB”) stock increased by $861 thousand to $5.5 million at December 31, 2025, compared to $4.7 million at December 31, 2024. As a member of the FHLB, the Bank is required to hold capital stock with this balance directly correlated to the Bank’s borrowing capacity with the FHLB.

Other Assets

Other assets were $37.8 million at December 31, 2025, an increase of $18.4 million, or 95%, compared to $19.4 million at December 31, 2024. The largest contributors to this increase were (i) cash in-transit related to certain investment security sales occurring during the fourth quarter of 2025 totaling $10.2 million, and (ii) an increase in balances due from the SBA, related to the workout of certain government guaranteed loans totaling $5.1 million.

Total Liabilities

Our total liabilities increased $212.1 million, or 22%, to $1.2 billion at December 31, 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 $207.6 million, with the largest increases within time deposits and savings accounts.

Deposits and Other Funding Sources

Total deposits increased 22% to $1.1 billion at December 31, 2025, compared to $935.1 million at December 31, 2024. Year-to-date decreases in noninterest-bearing demand deposits were offset by increases in time deposits, savings deposits, and interest bearing demand deposits.

The following table presents the average balances of deposits by type and the related average interest rates as of December 31, 2025 and December 31, 2024:

December 31, 2025

December 31, 2024

(Dollars in thousands)

Balance

Rate

Balance

Rate

Noninterest-bearing Deposits

$

219,009

-

%

$

219,395

-

%

Interest-bearing Demand

63,504

2.21

65,776

2.42

Money Market and Savings

291,167

3.78

224,037

3.93

Certificates of Deposit

451,401

4.45

332,816

5.22

$

1,025,081

3.17

%

$

842,024

3.30

%

46

FDIC deposit insurance covers $250 thousand per depositor, per FDIC-insured bank, for each account ownership category. As of December 31, 2025, uninsured deposits were $417.4 million, compared to $385.7 million as of December 31, 2024.

The maturities of time deposits over $250 thousand as of December 31, 2025 were as follows:

(Dollars in thousands)

December 31, 2025

Three months or less

$

10,168

Three to six months

3,655

Six to twelve months

14,549

Over 12 months

13,341

$

41,713

Short-term Borrowings and Subordinated Debt

We had short-term borrowings of $371 thousand as of December 31, 2025, compared to no short-term borrowings as of December 31, 2024.

Subordinated debt totaled $26.2 million as of December 31, 2025, compared to $26.1 million as of December 31, 2024. See “Note 8. Subordinated Debt, Other Borrowings, and Available Lines of Credit” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K.

Operating Lease Liability

Operating lease liability increased by $918 thousand to $5.8 million at December 31, 2025, compared to $4.8 million at December 31, 2024. The increase was primarily attributable to certain lease amendments, executed during 2025, that extended the terms of two leased locations by five years.

Other Liabilities

Other liabilities totaled $18.8 million at December 31, 2025, an increase of $3.1 million, or 20%, compared to $15.7 million at December 31, 2024. This increase was driven by (i) higher accrued interest payable due to volume and rate increases within interest-bearing deposits, and (ii) increases in accrued expenses and other liabilities to support growth within the organization.

Stockholders’ Equity and Capital

Stockholders’ equity increased 18% to $165.8 million at December 31, 2025, compared to $140.7 million at December 31, 2024, primarily driven by net income generated during the year ended December 31, 2025.

The sufficiency of a bank’s capital to cover its risk exposures and absorb potential losses, in order to ensure 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 November 4, 2019, the federal banking agencies jointly issued a final rule that provides 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 became effective on January 1, 2020 and allows qualifying community banking organizations to calculate a leverage ratio to measure capital adequacy. Banks opting into the CBLR framework are not required to calculate or report risk-based capital. We adopted the CBLR framework and standards with our Call Report filed with the federal banking agencies for the quarter ended September 30, 2020.

Qualifying community banking organizations that elect to use the CBLR framework and that maintain a leverage ratio of greater than 9% are considered to have satisfied the risk-based and leverage capital requirements in the federal banking agencies’ generally applicable capital rule. Additionally, such insured depository institutions are considered to have met the well-capitalized ratio requirements for purposes of Section 38 of the Federal Deposit Insurance Act.

47

The main components and requirements of the CBLR framework are as follows:

·

Tier 1 Capital Leverage ratio greater than 9%;

·

Less than $10 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

·

Not an advanced approaches banking organization

As of December 31, 2025 and 2024, our Company and the Bank were in compliance with the CBLR requirements.

The table below presents a summary of our measures of the main components and requirements of the CBLR:

(Dollars in thousands)

December 31, 2025

December 31, 2024

Bank Tier 1 Capital Leverage Ratio

13.42

%

12.90

%

Average Total Consolidated Assets

$

1,331,466

$

1,076,785

Off-Balance-Sheet Exposures

$

91,804

$

38,762

Ratio of Off-Balance-Sheet Exposures to Total Assets

6.77

%

3.47

%

Trading Assets

None

None

Advanced Approaches Banking Organization

No

No

Our Company’s common equity to assets ratio was 12.2% as of December 31, 2025, compared to 12.5% as of December 31, 2024. Our Company’s book value per share was $11.52 as of December 31, 2025, an increase of 17%, compared to $9.87 as of December 31, 2024.

Contractual Obligations

Our aggregate contractual obligations to make future cash payments as of December 31, 2025 are presented in the table below.

Payments Due by Period

(Dollars in thousands)

Total

One Year and Less

One to Three Years

Three to Five Years

More Than Five Years

Operating lease obligations

$

6,647

$

1,007

$

2,155

$

2,167

$

1,318

Certificates of deposit

568,564

411,139

129,775

27,650

-

Short-term borrowings

371

371

-

-

-

Subordinated debt

26,163

-

-

-

26,163

Total

$

601,745

$

412,517

$

131,930

$

29,817

$

27,481

Liquidity

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

Our 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.

We have a line of credit available from the FHLB of San Francisco. As of December 31, 2025 and 2024, the unused borrowing capacity with the FHLB of San Francisco, as collateralized by qualifying securities and pledged loans, was approximately $88.7 million and $85.0 million, respectively. The balance on the line of credit with the FHLB of San Francisco was $100 thousand as of December 31, 2025. No draws were outstanding on the line of credit with the FHLB of San Francisco as of December 31, 2024.

48

The Bank is approved to pledge loans under the Federal Reserve Bank’s Borrower-In-Custody (“BIC”) Program. As of December 31, 2025 and 2024, the Bank had pledged loans and securities with an approximate carrying value of $633.1 million and $590.5 million, respectively, under the BIC Program. Unused borrowing capacity at the Federal Reserve Bank totaled $351.3 million and $362.6 million for the years ended December 31, 2025 and 2024, respectively. The balance outstanding under the BIC Program was $1,000 as of December 31, 2025. No draws were outstanding under the BIC Program as of December 31, 2024.

We also have unsecured lines of credit with other correspondent banks totaling $40.0 million at December 31, 2025. The balance outstanding on these lines of credit totaled $260 thousand as of December 31, 2025. No draws were made under these lines of credit and no balances were outstanding as of December 31, 2024.

Management reviews our liquidity position daily, and believes that our overall liquidity position is strong. On at least a quarterly basis, a comprehensive liquidity analysis is reviewed by the Asset Liability Committee of the Bank Board and our Board of Directors. We are not aware of any current trends, demands, commitments or events that are reasonably likely to result in a decrease in liquidity in the near term. In order to ensure that the Bank maintains adequate liquidity, our Board of Directors has established certain limits and ratios regarding liquidity and funding, which are monitored by management daily and reported monthly to our Board of Directors.

The following tables present the required limits and ratios, and the position of the Bank:

Liquidity Ratios

Policy Limits & Targets

December 31, 2025

December 31, 2024

Liquidity Ratio

Minimum

10

%

27.2

%

24.0

%

Total Liquidity / Total Assets

Minimum

15

%

58.9

%

66.9

%

Held for Investment Loans / Total Assets

Maximum

85

%

70.9

%

75.6

%

Unfunded Loan Commitments / Total Assets

Maximum

25

%

6.8

%

5.2

%

12 Month CD Maturities / Primary Liquidity

Maximum

100

%

55.8

%

46.3

%

Funding Concentration Limits

Policy Limits & Targets

December 31, 2025

December 31, 2024

Brokered Deposits / Total Assets

Maximum

25

%

7.8

%

7.1

%

Deposit Listing Service / Total Assets

Maximum

25

%

8.5

%

6.5

%

FHLB Advances / FHLB Available Limit

Maximum

55

%

0.1

%

0.0

%

Borrowings / Total Assets

Maximum

20

%

0.0

%

0.0

%

Fed Funds Purchased / Total Assets

Maximum

15

%

0.0

%

0.0

%

Repurchase Agreements / Total Assets

Maximum

15

%

0.0

%

0.0

%

Total Wholesale Funding / Total Assets

Maximum

40

%

18.9

%

15.3

%

Our Consolidated Statements of Cash Flows included in this Annual Report on Form 10-K present additional information regarding the sources and uses of cash for the year ended December 31, 2025. Operating activities resulted in a net decrease in cash of $9.6 million, primarily due to cash outflows for the origination of loans held for sale, which offset cash inflows from loan sales. Investing activities resulted in a net decrease in cash of $144.7 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 $208.8 million, primarily due to a net increase in deposits during 2025.

Off-Balance Sheet Arrangements

We make contractual commitments to extend credit and extend lines of credit, which are subject to our credit approval and monitoring procedures. As of December 31, 2025, commitments to extend credit amounted to $91.1 million, compared to $57.4 million as of December 31, 2024.

Off-balance sheet commitments related to credit cards primarily represent our unfunded lending commitments to cardholders, which arise from available but unused credit lines. While these amounts do not appear on our consolidated balance sheet because they have not yet been drawn, they reflect our contractual obligation to extend credit, subject to applicable terms and conditions. We manage the associated credit risk through established underwriting standards, ongoing account monitoring, credit line management, and the ability to reduce or cancel available lines in accordance with applicable laws and agreements. Because cardholders may draw on available credit at any time, these commitments expose us to potential liquidity and credit risk; however, we believe that a significant portion of available credit lines will not be utilized. Credit card commitments were $116.6 million as of December 31, 2025, compared to $18.3 million as of December 31, 2024.

We also issue standby letters of credit to customers. The risk associated with standby letters of credit is essentially the same as the credit risk involved in loan extensions to customers. Standby letters of credit were $747 thousand at December 31, 2025, compared to $797 thousand at December 31, 2024.

49

Recent Accounting Pronouncements

See “Note 2. Summary of Significant Accounting Policies” in the Notes to our Consolidated Financial Statements included in this Annual Report on Form 10-K for a description of recent accounting pronouncements that may affect our financial condition and results of operations.

The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for emerging growth companies. As an “emerging growth company,” we may delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are required to be adopted by private companies. We intend to take advantage of the benefits of the extended transition period. Accordingly, our financial statements may not be comparable to companies that comply with such new or revised accounting standards.

Impact of Inflation and Changing Prices

Our Consolidated Financial Statements and related financial data presented in this Annual Report on Form 10-K have been prepared in accordance with U.S. GAAP, which requires the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation.

The primary impact of inflation on our operations is reflected in increased operating costs. Unlike most industrial companies, virtually all of the assets and liabilities of a financial institution are monetary in nature. As a result, interest rates, generally, have a more significant impact on a financial institution’s performance than does inflation. Interest rates do not necessarily move in the same direction or to the same extent as the prices of goods and services.

Risk Management

Effectively managing risk is crucial for the success of a financial institution. Our primary risk exposures include credit risk, interest rate risk, and market risk. Credit risk refers to the possibility of failing to collect interest or principal on loans or investments when due. Interest rate risk involves potential decreases in interest income due to changes in interest rates. Market risk stems from fluctuations in interest rates that can affect the value of financial instruments, such as available-for-sale securities measured at fair value. Additionally, we face operational risk, liquidity risk, and reputation risk. Operational risk encompasses issues related to fraud, regulatory compliance, processing errors, technology, and disaster recovery. Liquidity risk refers to the potential inability to meet obligations to depositors, lenders, or borrowers. Reputation risk involves the threat that negative publicity, whether true or not, could diminish our customer base or revenue.

We seek to mitigate the impacts of risk through various means while acknowledging that the impacts of the primary risk exposures can never been fully eliminated. The key strategic elements utilized to limit the risk of loss relating to each primary risk exposure identified include but are not limited to (i) effective asset liability management to limit interest rate risk, liquidity risk, and market risk, (ii) conservative lending and underwriting standards to limit credit risk, and (iii) hiring skilled personnel, providing ongoing training, and enforcing detailed policies and procedures to limit operational and reputational risks.