Gateway Bank, F.S.B. Reports Third Quarter 2026 Results; Loan Growth up 55% Year Over Year

Loan and deposit growth accompanied lower year-over-year losses, while quarterly funding costs and operating expenses increased.

Rhea-AI Summary

Gateway Bank (GWBK) reported a third-quarter 2026 net loss of $370,000, wider than the preceding quarter but narrower than a year earlier. The loss compared with $171,000 in the second quarter and $870,000 in third-quarter 2025. Nine-month losses narrowed to $877,000 from $2.66 million.

Third-quarter revenue rose 69.0% year over year to $2.06 million, but fell 5.1% sequentially. Net interest margin, the spread earned relative to interest-earning assets, was 2.54%, versus 3.05% the preceding quarter and 2.10% a year earlier. Non-interest expense rose 14.3% year over year to $2.37 million.

At September 30, loans reached $277.2 million, up 54.5% year over year, and deposits reached $245.5 million, up 18.2%. Nonperforming loans were $610,000, unchanged sequentially and down from $4.40 million a year earlier. Capital remained above the well-capitalized threshold. Results are unaudited.

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1 major · 9 points

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Positive

• Moderate pointTotal loans reached $277.2 million at September 30, up 12.5% quarterly and 54.5% year over year.
• Moderate pointTotal deposits reached $245.5 million, up 20.3% quarterly and 18.2% year over year.
• Moderate pointThird-quarter revenue increased 69.0% year over year to $2.06 million, but declined 5.1% sequentially.
• Moderate pointThird-quarter net interest income rose 63.1% year over year to $2.02 million, but fell 6.0% sequentially.
• Moderate pointNine-month net loss narrowed to $877,000, compared with $2.66 million a year earlier.
• Moderate pointNonperforming loans fell to $610,000 from $4.40 million a year earlier, unchanged sequentially.
• Moderate pointTotal assets reached $329.1 million, up 14.2% quarterly and 41.2% year over year.

11 minor points

• Minor pointNine-month revenue increased 60.0% to $5.77 million, versus $3.60 million a year earlier.
• Minor pointNine-month net interest income increased 55.0% to $5.67 million, versus $3.66 million a year earlier.
• Minor pointNet charge-offs remained zero in third-quarter 2026, the preceding quarter and third-quarter 2025.
• Minor pointCommunity Bank Leverage Ratio was 12.25% at September 30, above the well-capitalized threshold.
• Minor pointAverage quarterly assets increased to $322.9 million, up 12.2% sequentially and 34.2% year over year.
• Minor pointAverage quarterly gross loans reached $257.0 million, up 8.0% sequentially and 41.1% year over year.
• Minor pointAverage quarterly deposits reached $238.6 million, up 17.4% sequentially and 11.2% year over year.
• Minor pointCash and equivalents increased to $21,724,279 at September 30 from $9,058,212 at June 30.
• Minor pointConstruction loans increased to $4,178,521 at September 30 from $2,077,420 at June 30.
• Minor point. Forward-looking: it has not happened yet and may not happen.The Bank expects its construction lending pipeline to continue through year-end.
• Minor pointThird-quarter non-interest income increased to $43,669 from $25,965 sequentially and a $17,500 loss a year earlier.

Negative

• Major pointPeriod-end shares totaled 537,629,274, versus 269,912,602 a year earlier, increasing the outstanding share base.
• Moderate pointThird-quarter net loss was $370,000, versus $171,000 sequentially and $870,000 a year earlier.
• Moderate pointNet interest margin fell to 2.54% from 3.05% sequentially, but exceeded 2.10% a year earlier.
• Moderate pointThird-quarter non-interest expense rose to $2.37 million, up 6.4% sequentially and 14.3% year over year.
• Moderate pointThird-quarter interest expense increased to $2,426,498 from $2,077,331 sequentially and $1,929,731 a year earlier.
• Moderate pointLoan-loss allowance coverage declined to 0.96%, versus 1.07% sequentially and 1.41% a year earlier.
• Moderate pointBorrowings totaled $43,000,000, unchanged sequentially versus none at September 30, 2025.
• Moderate pointBook value per share fell to $0.068, from $0.069 sequentially and $0.085 a year earlier.
• Minor pointCredit-loss provision was $55,857, versus $109,774 sequentially and $10,859 a year earlier.

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OAKLAND, Calif., Nov. 09, 2026 (GLOBE NEWSWIRE) -- Gateway Bank, F.S.B. (OTCPK: GWBK) (“the Bank”) today announced a net loss of $370,000 for the third quarter of 2026. This compared to a net loss of $171,000 in the preceding quarter, and a net loss of $870,000 in the third quarter of 2025. Net interest margin expansion and solid loan growth drove improved operating results compared to both the prior quarter and year-ago period. In the first nine months of 2026 the Bank reported a net loss of $877,000, compared to a net loss of $2.66 million in the first nine months of 2025. All financial results are unaudited.

“We are approaching the finish line of a turnaround that has been several years in the making. Our third quarter results reflect continued progress across the Bank, and that momentum puts sustained profitability clearly within reach,” said Mukhtar Ali, President and CEO. “Construction was a meaningful source of new business this quarter, thanks largely to Tom Rodriguez and his underwriting team, who joined us in the second quarter. Their expertise has quickly translated into results, and we’ve continued to fund loans from a strong pipeline that we expect to carry thought the end of the year. Our construction lending is focused on single-family infill development rather than large subdivisions. We work with experienced developers who specialize in buying existing homes in well-established neighborhoods, tearing them down, and rebuilding. It’s a niche we understand well, and it fits the way we want to grow this part of the portfolio.”

“Net interest margin came under pressure during the quarter on both sides of the balance sheet. As noted during the prior quarter, our second quarter results benefited from interest income tied to loans returning to accrual status, and that benefit did not repeat to the same degree in the third quarter. That was the primary driver of the decline in yields on earning assets. At the same time, our cost of funds moved higher, reflecting continued competition for deposits across our markets. Going forward, we are focused on managing funding costs and on disciplined pricing of new loan production to stabilize yields and position the margin for improvement over the coming quarters,” said Ali.

Third Quarter and Year to Date 2026 Highlights:

• Net interest income decreased 6.0% to $2.02 million in the third quarter of 2026, compared to $2.15 million in the second quarter of 2026, and increased 63.1% compared to $1.24 million in the third quarter of 2025. In the first nine months of 2026, net interest income increased 55.0% to $5.67 million, compared to $3.66 million in the first nine months of 2025.
• The Bank reported a net loss of $370,000 for the third quarter of 2026, compared to net loss of $171,000 for the second quarter of 2026, and a net loss of $870,000 for the third quarter of 2025. Year to date, the Bank reported a net loss of $877,000, compared to a net loss of $2.66 million in the same period one year earlier.
• Total revenue, consisting of net interest income before the provision for credit losses, plus non-interest income, decreased 5.1% to $2.06 million in the third quarter of 2026, compared to $2.17 million in the preceding quarter and increased 69.0% compared to $1.22 million in the third quarter a year ago. In the first nine months of 2026, total revenue increased 60.0% to $5.77 million, compared to $3.60 million in the first nine months of 2025.
• Net interest margin was 2.54% in the third quarter of 2026, compared to 3.05% in the preceding quarter and 2.10% in the third quarter a year ago. The decrease compared to the second quarter of 2026 is primarily attributed to margins stabilizing to anticipated levels after one-time interest and fee items on loans in the previous quarter.
• Non-interest expense increased 6.4% to $2.37 million in the third quarter of 2026, compared to $2.23 million in the preceding quarter, and increased 14.3% when compared to $2.08 million in the third quarter a year ago. Salaries and employee benefits, which make up the largest component of non-interest expense, increased moderately while other non-interest expenses represented the majority of the increase compared to the prior quarter. These increases were partially offset by lower occupancy costs in the third quarter.
• Average assets for the quarter totaled $322.9 million, an increase of $35.2 million, or 12.2% from the prior quarter, and an increase of $82.4 million, or 34.2% from the year ago quarter. Total assets increased 14.2% to $329.1 million at September 30, 2026, compared to $288.2 million at June 30, 2026, and increased $96.0 million, or 41.2% compared to $233.0 million at September 30, 2025.
• Average total gross loans for the third quarter of 2026 increased $19.1 million, or 8.0% to $257.0 million, compared to $237.9 million in the second quarter of 2026, and increased $74.8 million, or 41.1% from $182.2 million in the third quarter of 2025. Total loans at September 30, 2026, increased 12.5% during the quarter to $277.2 million from $246.5 million at June 30, 2026, and increased 54.5% compared to $179.5 million at September 30, 2025.
• Average third quarter 2026 total deposits increased 17.4% to $238.6 million, from $203.4 million in the preceding quarter, and increased 11.2% from $214.6 million in the third quarter a year ago. Total deposits increased 20.3% to $245.5 million, at September 30, 2026, compared to $204.1 million at June 30, 2026, and increased $37.8 million, or 18.2% compared to $207.7 million at September 30, 2025.
• The Bank recorded a $56,000 provision for credit losses in the third quarter of 2026, compared to a $110,000 provision in the second quarter of 2026, and an $11,000 provision in the third quarter of 2025.
• Allowance for credit losses, as a percentage of total loans, was 0.96% at September 30, 2026, compared to 1.07% at June 30, 2026, and 1.41% at September 30, 2025.
• Nonperforming loans were $610,000 for the quarter ended September 30, 2026, and the prior quarter ended June 30, 2026, and decreased compared to $4.40 million a year ago.
• There were no net charge-offs in the third quarter of 2026, or in the prior quarter or year ago quarter.
• The Bank’s capital levels remained above the threshold for well-capitalized institutions with a Community Bank Leverage Ratio of 12.25% at September 30, 2026.
  
  

“Our Chinatown market continues to be a reliable foundation for our business, and Walnut Creek is quickly becoming a meaningful contributor. Engagement was strong in both markets this quarter, which tells us our approach is working in an established market and a newer one alike. The relationships we have built in these communities are a real competitive advantage, and we intend to keep investing in them to drive long-term growth,” said Ali. Earlier this year, the Bank celebrated the grand opening of its relocated Walnut Creek branch at 1801 N. California Blvd, Suite 101. The full-service location sits just a block from the Walnut Creek BART station, across from the business district, and offers parking beneath the building.

About Gateway Bank, F.S.B. Gateway Bank is a Federally-chartered savings bank headquartered in Oakland, California and began operations on June 8, 1990. The Bank currently operates out of its offices located in Oakland’s Chinatown and Walnut Creek, and offers banking services to individuals and businesses in the San Francisco Bay Area.

Gateway Bank, FSB
Balance Sheets
Unaudited
		Sep 30 2026				Jun 30 2026				Mar 31 2026				Dec 31 2025				Sep 30 2025
Assets
Cash and due from banks			2,854,013				1,852,376				1,828,608				1,629,783				1,285,211
Fed funds sold			695,743				-				128,881				-				-
Interest bearing deposits with banks			18,174,523				7,205,836				16,054,308				9,150,342				15,358,735
Total cash and equivalents			21,724,279				9,058,212				18,011,797				10,780,125				16,643,946
Investment securities, AFS			21,379,745				23,913,699				27,456,099				27,839,840				30,557,274
FHLB Stock and Other Investments			2,158,600				2,158,600				2,061,200				2,061,200				2,061,200
1-4 family residential			173,154,405				163,716,451				161,339,952				161,718,113				134,471,362
Multifamily residential			32,155,049				22,630,690				21,624,467				12,935,464				13,002,960
Non-farm, non-residential real estate			65,369,372				56,526,390				45,360,554				36,071,404				28,854,756
Construction			4,178,521				2,077,420				-				-				-
Commercial and industrial			2,351,668				1,535,966				4,356,480				4,366,320				3,134,343
Consumer and other			-				3,134				-				410				59
Loans, net of unearned income			277,209,015				246,490,051				232,681,453				215,091,711				179,463,480
Allowance for Credit Losses-Loans			(2,653,236	)			(2,639,477	)			(2,543,007	)			(2,540,065	)			(2,531,061	)
Total loans, net			274,555,779				243,850,574				230,138,446				212,551,646				176,932,419
Premises and equipment, net			866,216				889,335				800,400				695,171				602,114
Accrued interest receivable			1,559,834				1,434,070				1,231,367				1,162,055				1,156,714
Other assets			6,814,713				6,912,319				6,830,271				5,376,047				5,073,847
Total Assets		$	329,059,166			$	288,216,809			$	286,529,580			$	260,466,084			$	233,027,514
Liabilities
Non-Interest Bearing Deposits			12,951,549				8,025,908				8,365,308				9,641,094				9,165,121
Interest bearing demand deposits			37,280,733				6,086,803				5,787,575				6,793,724				7,025,056
Savings and Money Market Deposits			35,195,870				28,692,325				26,064,932				27,470,224				19,978,923
Time Deposits - Retail			150,073,600				149,313,715				150,125,894				147,156,815				159,529,226
Time Deposits - Wholesale			9,980,381				11,976,568				11,972,512				11,968,456				11,964,400
Total Deposits			245,482,133				204,095,319				202,316,221				203,030,313				207,662,726
Borrowings			43,000,000				43,000,000				43,000,000				33,000,000				-
Accrued expenses and other liabilities			3,816,203				3,940,874				3,871,641				2,346,532				2,380,514
Total Liabilities			292,298,336				251,036,193				249,187,862				238,376,845				210,043,240
Equity
Common stock			53,763,103				53,763,103				53,763,103				26,991,436				26,991,436
Capital surplus			24,897,315				24,771,345				24,665,279				35,972,894				35,962,369
Retained earnings			(38,216,587	)			(38,216,587	)			(38,216,587	)			(34,332,122	)			(34,332,122	)
Accumulated other comprehensive income (loss)			(2,806,051	)			(2,630,700	)			(2,534,270	)			(2,658,504	)			(2,981,990	)
Net Income			(876,950	)			(506,545	)			(335,807	)			(3,884,465	)			(2,655,419	)
Total Equity			36,760,830				37,180,616				37,341,718				22,089,239				22,984,274
Total Liabilities & Equity		$	329,059,166			$	288,216,809			$	286,529,580			$	260,466,084			$	233,027,514
# of Shares (period-end)			537,629,274				537,629,274				537,629,274				269,912,602				269,912,602
Book Value Per Share		$	0.068			$	0.069			$	0.069			$	0.082			$	0.085

Gateway Bank, FSB
Quarterly Income Statements
Unaudited		Quarter Ended
		Sep 30 2026				Jun 30 2026				Mar 31 2026				Dec 31 2025				Sep 30 2025
Interest Income
Interest and fees on loans		$	3,786,974			$	3,789,596			$	2,907,033			$	2,682,155			$	2,602,415
Dividends on FHLB stock			104,067				33,656				97,379				40,970				38,439
Interest on federal funds sold			588				888				283				208				3,447
Interest on deposits with banks			305,506				128,267				217,706				118,893				189,417
Investment securities - AFS			245,616				270,683				257,941				277,750				332,268
Total Interest Income			4,442,751				4,223,090				3,480,342				3,119,976				3,165,986
Interest Expense
Interest bearing demand deposits			322,501				1,475				1,453				1,651				1,215
Savings and money market deposits			209,576				172,562				159,637				146,900				122,160
Retail time deposits			1,380,560				1,384,829				1,382,261				1,464,269				1,661,229
Wholesale time deposits			105,751				115,572				114,287				116,736				145,127
Total Interest Expense on Deposits			2,018,388				1,674,438				1,657,638				1,729,556				1,929,731
Interest expense on borrowings			408,110				402,893				309,921				144,463				-
Total Interest Expense			2,426,498				2,077,331				1,967,559				1,874,019				1,929,731
Net Interest Income			2,016,253				2,145,759				1,512,783				1,245,957				1,236,255
Provision for credit losses			55,857				109,774				1,969				7,469				10,859
Net interest income after provision for credit losses			1,960,396				2,035,985				1,510,814				1,238,488				1,225,396
Non Interest Income
Service charges and fees			2,965				3,322				3,188				3,222				2,994
Loan servicing fees & MSR valuation			(4,825	)			(11,955	)			720				(12,209	)			(37,304	)
Other noninterest income			45,529				34,598				16,870				16,565				16,810
Total Non Interest Income			43,669				25,965				20,778				7,578				(17,500	)
Non Interest Expense
Salaries and employee benefits			1,389,926				1,374,579				1,059,563				1,335,580				1,120,524
Occupancy			152,406				164,801				153,832				174,937				292,661
Other noninterest expense			832,138				692,508				654,005				964,594				665,029
Total Non Interest Expense			2,374,470				2,231,888				1,867,400				2,475,111				2,078,214
Income (Loss) Before Taxes			(370,405	)			(169,938	)			(335,808	)			(1,229,045	)			(870,318	)
Income taxes			-				800				-				-				-
Net Income (Loss)		$	(370,405	)		$	(170,738	)		$	(335,808	)		$	(1,229,045	)		$	(870,318	)
# of Shares (wtd avg per quarter)			537,629,274				537,629,274				475,162,051				269,912,602				269,912,602
Earnings Per Share		$	(0.001	)		$	(0.000	)		$	(0.001	)		$	(0.005	)		$	(0.003	)

Gateway Bank, FSB
Year-To-Date Income Statements
Unaudited		Nine Months Ended
		Sep 30 2026				Sep 30 2025				$ Variance				% Variance
Interest Income
Interest and fees on loans		$	10,483,602			$	7,890,135			$	2,593,467			33	%
Dividends on FHLB stock			235,102				109,661				125,441			114	%
Interest on federal funds sold			1,758				34,873				(33,115	)		-95	%
Interest on deposits with banks			651,479				692,851				(41,372	)		-6	%
Investment securities - AFS			774,240				1,069,609				(295,369	)		-28	%
Total Interest Income			12,146,181				9,797,129				2,349,052			24	%
Interest Expense
Interest bearing demand deposits			325,429				2,862				322,567			11271	%
Savings and money market deposits			541,775				305,575				236,200			77	%
Retail time deposits			4,147,650				5,326,887				(1,179,237	)		-22	%
Wholesale time deposits			335,610				500,682				(165,072	)		-33	%
Total Interest Expense on Deposits			5,350,464				6,136,006				(785,542	)		-13	%
Interest expense on borrowings			1,120,923				-				1,120,923			0	%
Total Interest Expense			6,471,387				6,136,006				335,381			5	%
Net Interest Income			5,674,794				3,661,123				2,013,671			55	%
Provision for credit losses			167,600				37,900				129,700			342	%
Net interest income after provision for credit losses			5,507,194				3,623,223				1,883,971			52	%
Non Interest Income
Service charges and fees			9,475				16,399				(6,924	)		-42	%
Loan servicing fees			(16,059	)			(89,890	)			73,831			-82	%
Other noninterest income			96,998				14,981				82,017			547	%
Total Non Interest Income			90,414				(58,510	)			148,924			-255	%
Non Interest Expense
Salaries and employee benefits			3,824,068				3,290,434				533,634			16	%
Occupancy			471,039				772,387				(301,348	)		-39	%
Other noninterest expense			2,178,651				2,156,511				22,140			1	%
Total Non Interest Expense			6,473,758				6,219,332				254,426			4	%
Income (Loss) Before Taxes			(876,150	)			(2,654,619	)			1,778,469			-67	%
Income taxes			800				800				-			0	%
Net Income (Loss)		$	(876,950	)		$	(2,655,419	)		$	1,778,469			-67	%
# of Shares (wtd avg per period)			517,035,684				269,912,602
Earnings Per Share		$	(0.002	)		$	(0.010	)

Gateway Bank, FSB
Quarterly Financial Highlights
Unaudited		For The Quarter Ended
($ in Thousands)		Sep 30 2026				Jun 30 2026				Mar 31 2026				Dec 31 2025				Sep 30 2025
EARNINGS
Net interest income		$	2,016			$	2,146			$	1,513			$	1,246			$	1,236
Provision for credit losses			56				110				2				7				11
Non-interest income			44				26				21				8				(18	)
Non-interest expense			2,374				2,232				1,867				2,475				2,078
Net income			(370	)			(171	)			(336	)			(1,229	)			(870	)
PERFORMANCE RATIOS
Yield on loans			5.85	%			6.38	%			5.48	%			5.52	%			5.71	%
Yield on earning assets			5.61	%			5.99	%			5.19	%			5.20	%			5.32	%
Cost of funds			3.42	%			3.37	%			3.34	%			3.41	%			3.57	%
Net interest margin			2.54	%			3.05	%			2.23	%			2.10	%			2.10	%
Efficiency ratio			115	%			103	%			122	%			197	%			171	%
CAPITAL
Tangible equity to tangible assets			11.09	%			12.81	%			12.94	%			8.38	%			9.74	%
Community Bank Leverage Ratio			12.25	%			13.84	%			14.59	%			10.18	%			10.65	%
ASSET QUALITY
Net loan charge-offs (recoveries)		$	-			$	-			$	-			$	-			$	-
Allowance for credit losses on loans			2,653				2,639				2,543				2,540				2,531
Non-performing loans			610				610				5,757				5,877				4,039
ACL to total loans			0.96	%			1.07	%			1.09	%			1.18	%			1.41	%
ACL to non-performing loans			435	%			432	%			44	%			43	%			63	%
END OF PERIOD BALANCES
Total loans, gross		$	277,209			$	246,490			$	232,681			$	215,092			$	179,463
Total assets			329,059				288,217				286,530				260,466				233,028
Deposits			245,482				204,095				202,316				203,030				207,663
FHLB Advances			43,000				43,000				43,000				33,000				-
Total equity			36,761				37,181				37,342				22,089				22,984
Loan to deposit ratio			112.9	%			120.8	%			115.0	%			105.9	%			86.4	%
Common Shares Outstanding (thousands)			537,629				537,629				537,629				269,913				269,913
QUARTERLY AVERAGE BALANCES
Total loans, gross		$	256,986			$	237,875			$	212,719			$	194,060			$	182,190
Earning assets			314,406				279,472				266,442				236,773				234,217
Total assets			322,926				287,726				273,297				243,104				240,555
Deposits			238,639				203,350				204,549				202,358				214,611
FHLB Advances			43,000				43,000				34,000				15,565				-
Total equity			37,462				37,349				32,128				22,768				23,295
Common Shares Outstanding (thousands)			537,629				537,629				475,162				269,913				269,913

Contact:

Mukhtar Ali
(510) 813-8582
Mukhtar.Ali@gatewayfsb.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What were Gateway Bank's third-quarter 2026 earnings?

Gateway Bank reported an unaudited third-quarter net loss of $370,000, compared with $171,000 in the preceding quarter and $870,000 a year earlier. For the first nine months of 2026, the net loss was $877,000, versus $2.66 million in the corresponding 2025 period.

How much did Gateway Bank's loans grow in third-quarter 2026?

Total loans reached $277.2 million at September 30, 2026, increasing 12.5% from June 30 and 54.5% from September 30, 2025. Average third-quarter gross loans were $257.0 million, up 8.0% sequentially and 41.1% year over year.

Why did Gateway Bank's net interest margin decline in third-quarter 2026?

The Bank attributed the sequential margin decline primarily to a smaller benefit from interest income on loans returning to accrual status, alongside higher funding costs amid deposit competition. Net interest margin was 2.54%, compared with 3.05% in the preceding quarter.

What type of construction lending is Gateway Bank targeting?

Gateway Bank focuses its construction lending on single-family infill development rather than large subdivisions. It works with experienced developers who buy existing homes in established neighborhoods, tear them down and rebuild.