OptimumBank Holdings, Inc.
For the period ended Mar 31, 2025. Filed May 12, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 12, 2025
OPHC$8.83+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-08.
0001493152-24-044211
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-12.
0001641172-25-009608
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 40 previous paragraphs and 34 current paragraphs.
16 unchanged; 13 reworded; 5 added; 9 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (5)
Current report
We believe providing our clients with reasonable solutions that meet their business and personal needs fosters stability in our client base, builds full-service banking relationships, and allows for profitable growth that enhances shareholder returns. We intend to deliver the solutions to clients in a very personalized manner while investing in talent and leveraging modern technology to facilitate efficiency and decrease client pain points while enhancing our competitiveness.
Current report
We are focused on full-service banking relationships, continuing to identify deposit growth opportunities among our existing customer base and prospects throughout South Florida, Florida, and the United States. Improving our core funding capabilities is foundational to the ability to support our opportunity to capitalize on the strong business and real estate market in South Florida and with our niche skilled nursing facility and merchant cash advance markets. We will accomplish this through the addition of experienced and skilled bankers to our business development and retail banking teams, and we are modernizing and improving our products and digital services to better support our personalized business model. This includes upgrading our core banking system in 2025. We believe adding this talent and upgrading our core banking system will allow us to better service local area small businesses that will add granularity and diversification to our customer base and balance sheet, while improving the utilization of our local area branches.
Current report
Modernizing our technology and improving our products and services also allows us to better support our personalized business model to our niche business owner-operator client base with less friction, a human touch, and we believe better convenience than the large banks. In coordination with our Treasury Cash Management capabilities this has allowed us to enter niche businesses including banking services to Skilled Nursing Facilities in the areas of CRE, Asset-Based Lending (ABL) while capturing the business operating accounts. In addition, we have built capabilities in Small Business Administration (SBA) lending, entering the space in late 2023 and being designated as a Preferred Lender under the SBA’s Preferred Lenders Program (PLP) in the first quarter of 2025. Under the program the Bank offers SBA-guaranteed 7A loans generally secured by accounts receivable, inventory, equipment, or real estate. At March 31, 2025 the SBA loan portfolio totaled $9.9 million, or 1.2% of total loans, up from $9 million, or 1.1% of loans at December 31, 2024. Management has implemented initiatives that have enabled us to grow our loan portfolio primarily with South Florida and Florida generated relationships in the commercial real estate, owner-occupied commercial real estate, multifamily, and commercial and industrial sectors, out-of-area loans.
Current report
The Company increased deposits by approximately $80.7 million during the three-month period ended March 31, 2025. The increase in deposits provided funding for new loan originations and the repayment of outstanding borrowings from FHLB.
Current report
In addition to obtaining funds from depositors, the Company may borrow funds from other financial institutions. At March 31, 2025, the Company had outstanding borrowings of $10 million, against its $233.2 million in established borrowing capacity with the FHLB. The Company’s borrowing facility is subject to collateral and stock ownership requirements, as well as prior FHLB consent to each advance. The Bank has a line of credit with the Federal Reserve Bank which is secured by investment securities with fair value of $1.7 million as of March 31, 2025. At March 31, 2025, the Company also had available lines of credit amounting to $30.5 million with five correspondent banks to purchase federal funds. Disbursements on the lines of credit are subject to the approval of the correspondent banks. We measure and monitor our liquidity daily and believe our liquidity sources are adequate to meet our operating needs.
Removed paragraphs (9)
Previous report
During the nine-month period ended September 30, 2024, the Bank commenced offering U.S. Small Business Administration (“SBA”) SBA 7A loans. SBA 7A loans are generally used to establish a new business or assist in the acquisition, operation, or expansion of an existing business. With SBA loan programs, there are set eligibility requirements and underwriting standards outlined by SBA that can change as the government alters its fiscal policy. These loans are generally secured by accounts receivable, inventory, equipment, and real estate. The Bank hired two full-time SBA staff. At September 30, 2024, SBA 7A loans amounted to $4.7 million. The Bank sells the guaranteed portion of the SBA loans.
Previous report
Additionally, management has implemented initiatives that have enabled us to grow our loan portfolio primarily with locally generated relationships in the non-owner occupied, multi-family and commercial real estate sectors. However, out-of-area loans and loan pool purchases will be considered as deemed appropriate and subject to proper due diligence to further increase interest income and for portfolio diversification purposes.
Previous report
Properties
Previous report
The Company opened its third branch office in North Miami Beach on July 8, 2024.
Previous report
***Interest expense.***Interest expense increased $3.4 million to $6.4 million for the three months ended September 30, 2024, compared to interest expense of $3.0 million for the three months ended September 30, 2023, primarily due to interest bearing deposit rates and changes in the composition and volume of deposits.
Previous report
Net earnings. Net earnings for the nine months ended September 30, 2024, were $9.2 million or $1.02 per basic share and $.98 per diluted share compared to net earnings of $3.7 million or $.52 per basic and diluted share for the nine months ended September 30, 2023. The increase in net earnings during the nine months ended September 30, 2024 compared to nine months ended September 30, 2023 is primarily attributed to an increase in net interest income and non-interest income, partially offset by the increase in interest expense and non-interest expense.
Previous report
Interest income. Interest income increased $19.4 million to $44 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 due primarily to growth in the loan portfolio and increases in yields on interest earning assets.
Previous report
Noninterest income. Total noninterest income increased to $3.6 million for the nine months ended September 30, 2024, from $2.4 million for the nine months ended September 30, 2023, due to increased wire transfer and ACH fees.
Previous report
Noninterest expenses. Total noninterest expenses increased $4.1 million to $15.1 million for the nine months ended September 30, 2024, compared to $11.0 million for the nine months ended September 30, 2023, primarily due to employee compensation and benefits, and data processing.
Reworded paragraphs (13)
Previous wording
Our key strategic initiatives are designed to generate continued growth in earning assets, core transaction and savings deposits, treasury management fee income, and lower costs. Continued emphasis on expansion of our footprint and exploring additional lines of business are also part of our plans.
Current wording
Our key strategic initiatives are designed to generate continued growth in earning assets, core transaction deposits, treasury management fee income, while operating with an efficient cost structure. Continued emphasis on expansion of our South Florida footprint and exploring additional niche lines of business are also part of our strategic plan.
Previous wording
Presently, we intend to continue to limit our growth in loans and other illiquid assets. Therefore, we do not expect a material increase in our loan balances during the coming quarter. However, we expect to continue focus any loan growth on originating multi-family, non-owner occupied, commercial real estate, and skilled nursing receivable facility loans. As to deposits, we are focused on increasing our on-balance sheet liquidity by identifying deposit growth opportunities among our existing customer base and prospects throughout Florida and the United States. With respect to treasury management, our focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. For this revenue source to increase further in a meaningful way, automation will be necessary in order to further improve efficiency. We are currently investing in the necessary technology to achieve this end.
Current wording
In treasury management services, our primary focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. For this revenue source to increase further in a meaningful way, automation will be necessary in order to further improve efficiency. We are currently investing in the necessary technology and expect efficiencies to occur during 2025.
Previous wording
Going forward, our strategic plan will be to continue to emphasize and build upon initiatives focused on strengthening internal controls, credit oversight and credit administrative processes and procedures. Moreover, management continues to identify loan growth opportunities, subject to the above caveat, that are designed to improve overall profitability without sacrificing credit quality and underwriting standards. This strategic direction is expected to be facilitated by maintaining credit administration objectives including a risk-based and comprehensive credit culture and a credit administrative infrastructure that reinforces appropriate risk management practices.
Current wording
Our strategic plan emphasizes and builds upon initiatives focused on strengthening credit oversight and credit administrative processes and procedures. Moreover, management continues to identify loan growth opportunities that are designed to improve overall profitability without sacrificing credit quality and underwriting standards. This growth oriented strategic direction is expected to be facilitated by maintaining credit administration objectives including a risk-based and comprehensive credit culture and a credit administrative infrastructure that reinforces appropriate risk management practices.
Previous wording
The Company’s total assets increased by approximately $154 million to $945 million at September 30, 2024, from $791 million at December 31, 2023, primarily due to increases in loans, and cash and cash equivalents. The growth in assets was attributable to the success of the Company’s efforts to increase loans and deposits from new customers, predominantly in the first quarter. Net loans grew by $98 million to $769 million at September 30, 2024, from $671 million at December 31, 2023. Deposits grew by approximately $167 million to $807 million at September 30, 2024, from $640 million at December 31, 2023. Total stockholders’ equity increased by approximately $23 million to $93 million at September 30, 2024, from $70 million at December 31, 2023, primarily due to net earnings and proceeds from common and preferred stock sales, and changes in unrealized losses on debt securities available for sale.
Current wording
The Company’s total assets increased by approximately $44.6 million to $977.5 million at March 31, 2025, from $932.9 million at December 31, 2024, primarily due to increases in cash and cash equivalents. Net loans decreased by $3.7 million to $791.2 million at March 31, 2025, from $794.9 million at December 31, 2024. Deposits grew by approximately $80.7 million to $852.9 million at March 31, 2025, from $772.2 million at December 31, 2024. Total stockholders’ equity increased by approximately $4.8 million to $108 million at March 31, 2025, from $103.2 million at December 31, 2024, primarily due to net earnings, proceeds from common stock sales, and unrealized gains on debt securities available for sale.
Previous wording
(1) Annualized for the nine months ended September 30, 2024.
Current wording
(1) Annualized for the three months ended March 31, 2025.
Previous wording
The Company’s sources of funds include customer deposits, advances from the Federal Home Loan Bank of Atlanta (“FHLB”), principal repayments and sales of debt securities, loan repayments.
Current wording
The Company’s sources of funds include customer deposits, advances from the Federal Home Loan Bank of Atlanta (“FHLB”), principal repayments and sales of debt securities, loan repayments, the use of Federal Funds markets, net earnings, and loans taken out at the Federal Reserve Bank discount window.
Previous wording
Our liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and investment securities, funds provided by operations, and capital. Additionally, as a commercial bank, we are expected to maintain an adequate liquidity position. The liquidity position may consist of cash on hand, cash on demand deposit with correspondent banks, federal funds sold, and unpledged marketable securities such as municipal securities, U.S. agency mortgage-backed securities, and asset-backed securities.
Current wording
Our liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and investment securities, funds provided by operations, and capital. Additionally, as a commercial bank, we are expected to maintain an adequate liquidity position. The liquidity position may consist of cash on hand, cash on demand deposit with correspondent banks, federal funds sold, and unpledged marketable securities such as United States government treasury and agency securities, municipal securities, U.S. agency mortgage-backed securities, and asset-backed securities. Some of our securities are pledged to the Federal Reserve Bank. The market value of securities pledged to the Federal Reserve Bank was $1.7 million at March 31, 2025.
Previous wording
Net earnings. Net earnings for the three months ended September 30, 2024, were $3.3 million or $.34 per basic share and $.32 per diluted share compared to net earnings of $1.3 million or $.18 per basic and diluted share for the three months ended September 30, 2023. The increase in net earnings during the three months ended September 30, 2024 compared to three months ended September 30, 2023 is primarily attributed to an increase in net interest income and non-interest income, partially offset by the increase in interest expense and non-interest expense.
Current wording
Net earnings. Net earnings for the three months ended March 31, 2025, were $3.9 million or $0.33 per basic share and $0.32 per diluted share compared to net earnings of $2.4 million or $0.31 per basic share and $0.31 per diluted share for the three months ended March 31, 2024. The increase in net earnings during the three months ended March 31, 2025 compared to three months ended March 31, 2024 is primarily attributed to an increase in net interest income and increase in credit loss reversal.
Previous wording
Interest income. Interest income increased $6.4 million to $15.3 million for the three months ended September 30, 2024 compared to interest income of $8.9 million for the three months ended September 30, 2023 due primarily to growth in the loan portfolio and increases in yields on interest earning assets.
Current wording
Interest income. Interest income increased $1.5 million to $15 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024 due primarily to increases in average balances of interest earning assets.
Previous wording
***Interest expense.***Interest expense increased $10.5 million to $18.5 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to an increase in deposit rates and changes in the composition of deposits and increase in the average balances.
Current wording
***Interest expense.***Interest expense decreased $0.1 million to $5.6 million for the three months ended March 31, 2025, compared to the three months ended March 31, 2024, primarily due to reduction in deposit rates and repayment of borrowings, which lowered overall funding cost.
Previous wording
Credit loss expense. Expected credit loss expense decreased $1.4 million to $1.6 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, respectively. The expected credit loss expense is charged to earnings as losses are expected to have occurred in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected. Management’s periodic evaluation of the adequacy of the allowance for credit losses is based upon historical experience, the volume and type of lending conducted by the Company, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for credit losses totaled $8.3 million or 1.07% of loans outstanding at September 30, 2024, compared to $7.7 million or 1.13% of loans outstanding at December 31, 2023. The decrease in the credit loss expense during the third quarter of 2024 was primarily due to loan volume growth and the evaluation of the other factors noted above. During the nine-months ended September 30, 2024, the net charge off amounting to $1.1 million resulted from consumer lending.
Current wording
Credit loss (reversal) expense. The Company recorded a credit loss reversal of $0.2 million for the three months ended March 31, 2025, compared to a credit loss expense of $1.1 million for the three months ended March 31, 2024. The expected credit loss (reversal) expense is a credit to earnings as losses are expected to have occurred in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected. Management’s periodic evaluation of the adequacy of the allowance for credit losses is based upon historical experience, the volume and type of lending conducted by the Company, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for credit losses totaled $8.3 million or 1.03% of loans outstanding at March 31, 2025, compared to $8.7 million or 1.08% of loans outstanding at December 31, 2024. During the three-months ended March 31, 2025, the net charge off amounting to $246,000 resulted from consumer lending.
Previous wording
Noninterest income. Total noninterest income increased $204,000 to $1.1 million for the three months ended September 30, 2024, from $911,000 for the three months ended September 30, 2023, due to increased wire transfer and ACH fees during Third quarter of 2024.
Current wording
Noninterest income. Total noninterest income was $1.2 million for the three months ended March 31, 2025, compared to $1.2 for the three months ended March 31, 2024, The amount remained relatively unchanged, reflecting consistent performance in wire transfer and ACH fees during first quarter of 2025.
Previous wording
Noninterest expenses. Total noninterest expenses increased $1.6 million to $5.3 million for the three months ended September 30, 2024, compared to $3.7 million for the three months ended September 30, 2023, primarily due to employee compensation and benefits, data processing, and other operating costs.
Current wording
Noninterest expenses. Total noninterest expenses increased to $5.6 million for the three months ended March 31, 2025, compared to $4.7 million for the three months ended March 31, 2024, primarily due to employee compensation and benefits, professional fees, and other expenses.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Credit loss expense. Expected credit loss expense was $357,000 for the three months ended September 30, 2024, compared to $1.4 million for the three months ended September 30, 2023. The expected credit loss expense is charged to earnings as losses are expected to have occurred in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected. Management’s periodic evaluation of the adequacy of the allowance for credit losses is based upon historical experience, the volume and type of lending conducted by us, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for credit losses totaled $8.3 million or 1.07% of loans outstanding at September 30, 2024, compared to$7.7 million or 1.13% of loans outstanding at December 31, 2023. The decrease in the credit loss expense during the third quarter of 2024 was primarily due to loan volume growth and the evaluation of the other factors noted above. During the three-months ended September 30, 2024, the net charge offs amounting to $280,000 arose mostly due to consumer lending for the three-month ended September 30, 2024.
Previous report — wording carried elsewhere
Comparison of the Nine-Month Periods Ended September 30, 2024, and 2023