January 28th, 2026

The call presented a mix of strong execution and clear remedy actions tied to material operational challenges. Positives include record quarterly earnings, above-peer net interest margin, improving SBA gain-on-sale economics, low historical SBA losses, licensing and early deployment of the BoltBetz PPA with a large addressable market, and meaningful improvements to fraud/KYC controls that have stopped fraud penetration in the recent relaunch period. Negatives center on the earlier credit-card fraud and application issues that forced a marketing pause and reduced transactions, ACH/vendor failures requiring in‑house remediation, regulatory/partner changes (DraftKings/FanDuel) that removed some acceptance channels, and near-term expense and capital costs tied to product and people investments. Overall, management has identified root causes and implemented technical, operational and incentive fixes; the company shows operational recovery signs and strong core financial metrics, but some execution and timing risks remain.

Company Guidance

Management guided that GAAP gain-on-sale income should trend above 4% in 2026 (up from 3.24% to 3.98% in Q4), and that net interest margin should remain roughly stable around 4.33% (2025 actual vs. ~3.7% industry) even with anticipated Fed cuts, driven by expected growth in noninterest-bearing deposits from the BoltBetz PPA. They plan to restart credit-card marketing and scale volumes (Q4 transactions settled ~$99M, peak activity this year near $400M vs. $73M prior year) with a potential pathway to roughly $40–60M/month (implying up to ~$800M annualized) if fraud controls hold (no fraud penetrations in the last 60 days after a 10,000-app attack weekend). Key operating metrics: average card balance ~$10M, interchange added ~+$7M to noninterest income in 2025, ACH risks being brought in-house to eliminate 3-business-day delays; SBA remains a core grower (January sales: 12 loans, ~$32M, 8 with ≥1.25% spread), with long‑run SBA stats of 1,002 loans since 2015, ~$2.47B hotel originations, 12 defaults and $2.8M cumulative charge-offs, $761.6M hotel principal on‑balance ($243M guaranteed), $860M off‑balance, and a $10.5M reserve.