OptimumBank Holdings OPHC Form 10-Q filing Q2 FY2026

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

**Item

1. Financial Statements**

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

See accompanying notes to condensed consolidated financial statements.

(1) Earnings per share amounts for all periods presented have been restated to reflect the impact of the amendment to the rights of the Series B Preferred shares, as described in Note 12. This amendment resulted in a change in the calculation of diluted earnings per share, applied retrospectively to ensure comparability.

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Three and Six Months ended June 30, 2026 and 2025

(Dollars in thousands, except share amounts)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Three and Six Months ended June 30, 2026 and 2025

(Dollars in thousands, except share amounts)

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to condensed consolidated financial statements.

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) General. OptimumBank Holdings, Inc. (the “Company”) is a financial holding company and owns 100% of OptimumBank (the “Bank”), a Florida-chartered community bank, OptimumHUD Loans, LLC (d/b/a) as OptimumFunding, LLC, a wholly owned non-bank subsidiary, and OptimumFinance, LLC, a wholly owned non-bank, financing subsidiary. The Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”). The Bank offers a variety of community banking services to individual and corporate customers through its three banking offices located in Broward County and Miami-Dade County, Florida. The Bank also markets its deposit and electronic funds transfer services on a national basis to merchant cash advance providers. In the second quarter of 2026, the Company elected to become a financial holding company, from a bank holding company.

Basis of Presentation. In the opinion of management, the accompanying condensed consolidated financial statements of the Company contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at June 30, 2026, the results of operations for the three-month and six-month ended June 30, 2026 and 2025, and cash flows for the six-month periods ended June 30, 2026 and 2025. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three-month and six-month ended June 30, 2026, are not necessarily indicative of the results to be expected for the full year of 2026.

Comprehensive Income. Accounting Principles Generally Accepted in the United States of America (“U.S. GAAP”) requires recognized revenue, expenses, gains and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale debt securities are reported as a separate component of the equity section of the condensed consolidated balance sheets, such items along with net income, are components of comprehensive income.

Accumulated other comprehensive loss consists of the following (dollars in thousands):

Schedule of Accumulated Other Comprehensive Loss

Accounting Pronouncements Not Yet Adopted:

FASB ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative”. This ASU amends the disclosure or presentation requirements related to various subtopics in the FASB ASC. The amendments in this ASU are expected to clarify or improve disclosure and presentation requirements of a variety of Codification Topics, allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the requirements, and align the requirements in the Codification with the SEC’s regulations. For entities subject to the SEC’s existing disclosure requirements and for entities required to file or furnish statements with or to the SEC in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer, the effective date for each amendment will be the date on which the SEC removes that related disclosure from its rules. For all other entities, the amendments will be effective two years later. However, if by June 30, 2027, the SEC has not removed the related disclosure from its regulations, the amendments will be removed from the Codification and not become effective for any entity.

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OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) General, Continued.

FASB ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures”. This amendment requires enhanced disaggregation of certain expense categories within the income statement to provide more detailed information about the nature and function of expenses. The objective is to improve the transparency and usefulness of financial statements for users by offering greater insight into the components of operating expenses. The amendments in this update are effective for fiscal years beginning after December 15, 2026 and interim periods within annual reporting periods beginning after December 15, 2027. These changes may be applied prospectively or retroactively. Early adoption is permitted. The Company is currently evaluating the impact on its disclosures.

FASB ASU 2025-03, “Business Combinations (Topic 805) and Consolidation (Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity”. This amendment determining the Accounting Acquirer in a Business Combination Involving a Variable Interest Entity. This update clarifies how to identify the accounting acquirer when a business combination involves a variable interest entity. The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. Early adoption is permitted. The standard is effective prospectively for business combinations occurring on or after the adoption date. The Company does not expect the adoption of this standard to have a material impact on its condensed consolidated financial statements.

FASB ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Capitalization and Disclosure Improvements”. This amendment provides updated guidance on the capitalization of costs related to internal-use software and expands the required disclosures. The objective is to clarify when capitalization is appropriate and to enhance the transparency of financial reporting related to internal-use software development. The amendments in this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of this guidance; adoption is not expected to have a material effect on the Company’s condensed consolidated financial statements.

FASB ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. ASU 2025-11 clarifies interim disclosure requirements and provides a comprehensive list of interim disclosures that are required by GAAP. The ASU also includes a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact of the changes to its condensed consolidated financial statements and existing disclosures.

(2) Debt Securities. Debt securities have been classified according to management’s intent. The amortized cost of debt securities and fair values are as follows (dollars in thousands):

Schedule of Amortized Cost and Approximate Fair Values of Debt Securities

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(2) Debt Securities, Continued.

As of June 30, 2026, debt securities with a carrying amount of $1.5 million were pledged as collateral to the Federal Reserve Bank. There were no sales of debt securities during the three and six-month ended June 30, 2026, and 2025.

Debt securities available for sale with gross unrealized losses, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position, is as follows (dollars in thousands):

Schedule of Debt Securities Available for Sale with Gross Unrealized Losses, by Investment Category

At June 30, 2026 and December 31, 2025, the unrealized losses on 42 investment debt securities were caused by interest-rate changes and other market conditions.

The Company performed an analysis that determined that the mortgage-backed securities, collateralized mortgage obligations, and SBA pool securities, have a zero expected credit loss as they have the full faith and credit backing of the U.S. government or one of its agencies. Municipal securities that do not have a zero expected credit loss are evaluated at least quarterly to determine whether there is a credit loss associated with a decline in fair value. At June 30, 2026 and December 31, 2025 all municipal securities were rated as investment grade. All debt securities in an unrealized loss position as of June 30, 2026 and December 31, 2025 continue to perform as scheduled and the Company does not believe that there is a credit loss or that credit loss expense is necessary. Also, as part of our evaluation of our intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. The Company does not currently intend to sell the investments within the portfolio, and it is not more-likely-than-not that a sale will be required.

Management continues to monitor all of our investments with a high degree of scrutiny. There can be no assurance that in a future period, conditions may exist at that time indicating that some or all of the Company’s securities may be sold that would require a charge to earnings as credit loss expense in such period.

The majority of the Company’s debt securities available-for-sale and held-to-maturity have contractual maturity dates which are greater than ten years as of June 30, 2026. Expected maturities of these debt securities will differ from contractual maturities because borrowers have the right to call or repay obligations with or without call or prepayment penalties

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OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans. The segments of loans are as follows (dollars in thousands):

Schedule of Components of Loans

An analysis of the change in the allowance for credit losses follows (dollars in thousands):

Schedule of Changes in Allowance for Loan Losses

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

Reconciliation of Credit Loss Expense (Reversal)

The following table provides a reconciliation of the credit loss expense (reversal) on the condensed consolidated statements of earnings between the funded and unfunded components at the dates indicated:

Schedule of Reconciliation of Credit Loss Expense (Reversal)

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

The Company has divided the loan portfolio into six portfolio segments, each with different risk characteristics and methodologies for assessing risk. All loans are underwritten based upon standards set forth in the policies approved by the Bank’s Board of Directors. The Company identifies the portfolio segments as follows:

Residential Real Estate, Multi-Family Real Estate, Commercial Real Estate, Land and Construction. Residential real estate loans are underwritten based on repayment capacity and source, value of the underlying property, credit history and stability. The Company offers first and second one-to-four family mortgage loans; the collateral for these loans is generally the clients’ owner-occupied residences. Although these types of loans present lower levels of risk than commercial real estate loans, risks do still exist because of possible fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrowers’ financial condition. Multi-family and commercial real estate loans are secured by the subject property. Underwriting standards include, among other factors, loan to value limits, cash flow coverage and general creditworthiness of the obligors. Construction loans to borrowers finance the construction of owner occupied and leased properties. These loans are categorized as construction loans during the construction period, later converting to commercial or residential real estate loans after the construction is complete and amortization of the loan begins. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and an acceptable percentage of the appraised value of the property securing the loan. Real estate development and construction loan funds are disbursed periodically based on the percentage of construction completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien waivers on funds advanced. Development and construction loans are typically secured by the properties under development or construction, and personal guarantees are typically obtained. Further, to assure that reliance is not placed solely on the value of the underlying property, the Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sales information. The Company also makes loans on occasion for the purchase of land for future development by the borrower. Land loans are extended for future development for either commercial or residential use by the borrower. The Company carefully analyses the intended use of the property and the viability thereof.

Commercial. Commercial business loans and lines of credit consist of loans to small- and medium-sized companies. Commercial loans are generally used for working capital purposes or for acquiring equipment, inventory or furniture. Primarily all of the Company’s commercial loans are secured loans, along with a small amount of unsecured loans. The Company’s underwriting analysis consists of a review of the financial statements of the borrower, the lending history of the borrower, the debt service capabilities of the borrower, the projected cash flows of the business, the value of the collateral, if any, and whether the loan is guaranteed by the principals of the borrower. These loans are generally secured by accounts receivable, inventory and equipment. Commercial loans are typically made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business, which makes them of higher risk than residential loans and the collateral securing loans may be difficult to appraise and may fluctuate in value based on the success of the business. The Company mitigates these risks through its underwriting standards.

Consumer. Consumer loans are extended for various purposes, including purchases of automobiles, recreational vehicles, and boats. Also offered are home improvement loans, lines of credit, personal loans, and deposit account collateralized loans. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Loans to consumers are extended after a credit evaluation, including the creditworthiness of the borrower(s), the purpose of the credit, and the secondary source of repayment. Consumer loans are made at fixed and variable interest rates. Risk is mitigated by the fact that the loans are of smaller individual amounts.

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

Age analysis of past-due loans is as follows (dollars in thousands):

Schedule of Age Analysis of Past-due Loans

The Company has not made any modifications of loans to borrowers experiencing financial difficulties during the six-month ended June 30, 2026 and 2025.

The following table presents the amortized costs basis of loans on nonaccrual status, as of June 30, 2026 and December 31, 2025. As of June 30, 2026 and December 31, 2025 there were no loans 90 days or more past due and still accruing.

Schedule of Amortized Costs Basis of Loans on Nonaccrual Status

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OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

Collateral-Dependent Loans

The following table presents the amortized cost basis of non-accruing collateral-dependent loans by class of loans and type of collateral identified as of June 30, 2026 and December 31, 2025 under the current expected credit loss model:

Schedule of Amortized Costs Basis of Loans on Nonaccrual Status Collateral Dependent Loans

Internally assigned loan grades are defined as follows:

Pass — a Pass loan’s primary source of loan repayment is satisfactory, with secondary sources very likely to be realized if necessary. These are loans that conform in all aspects to bank policy and regulatory requirements, and no repayment risk has been identified.

OLEM — an Other Loan Especially Mentioned has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date.

Substandard — a Substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Included in this category are loans that are current on their payments, but the Bank is unable to document the source of repayment. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful — a loan classified as Doubtful has all the weaknesses inherent in one classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. The Company charges off the estimated loss on any loan classified as Doubtful.

Loss — a loan classified Loss is considered uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. The Company fully charges off any loan classified as loss.

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

Schedule of Amortized Cost Basis

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(4)Other Real Estate Owned (OREO).

As of June 30, 2026, the Company had no loans secured by residential real estate for which foreclosure was in process, and no residential real estate property in other real estate owned. During 2025, the Company acquired real estate located in the State of Florida through foreclosure. The property was previously collateral for a consumer home equity line of credit (“HELOC”) that became delinquent and was placed on nonaccrual status prior to foreclosure. As of December 31, 2025, the property was carried at $551,000, which represents the lower of cost of fair value. In the first quarter of 2026, the property was sold for $556,000, and the related gain was recorded in noninterest expenses.

Schedule of Real Estate Properties

(5) Earnings Per Share.

Basic earnings per share have been computed on the basis of the weighted-average number of shares of common stock outstanding during the periods. Each share of Series B Preferred stock can be converted into 8,172 common shares, and each share of Series C Convertible Preferred stock can be converted into one share of common stock at any time at the option of the holder. The conversion feature is considered to be diluted earnings per share (“EPS”) in accordance with ASC 260. The dilutive effect is calculated using the if-converted method. On October 1, 2025, the Company amended the conversion rights of its Series B Convertible Preferred shares to allow conversion at the holder’s discretion. As a result of this amendment, diluted earnings per share amounts for all periods presented have been restated to reflect the impact of the amendment to the rights of the Series B Preferred shares, as described in Note 12. This amendment resulted in a change in the calculation of diluted earnings per share, applied retrospectively to ensure comparability. On April 28, 2026, the articles of incorporation were amended to authorize a new class of capital stock designated as Nonvoting Common Stock. In May 2026, in accordance with the amended articles of incorporation, the Company exchanged all outstanding shares, or 1,295 and 875,641 shares of related party Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, respectively, for a total of 11,458,351 shares of Nonvoting Common Stock in the second quarter of 2026. After the exchange, the Company undesignated the Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. See Note 12 for further information.

Schedule of Basic and Diluted Loss Per Share

(6) Stock-Based Compensation.

The Company is authorized to grant stock options, stock grants and other forms of equity-based compensation under its 2018 Equity Incentive Plan (the “2018 Plan”). The plan has been approved by the shareholders. At the Company’s annual shareholders meeting held on April 29, 2025, shareholders approved an amendment to the Plan to increase the number of shares authorized for issuance by 500,000 shares, increasing the total number of shares authorized under the Plan from 1,050,000 shares. The Company is currently authorized to issue up to1,550,000 shares of common stock under the 2018 Plan. At June 30, 2026,627,312 shares remain available for grant.

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

During the six-month periods ended June 30, 2026 and 2025, the Company issued 101,315 and 62,171 shares, respectively, to employees for services performed and recorded compensation expense of $430,000 and $296,000, respectively.

(7) Fair Value Measurements.

Debt securities available for sale measured at fair value on a recurring basis are summarized below (dollars in thousands):

Schedule of Debt Securities Available for Sale Measured at Fair Value on Recurring Basis

(8) Financial Instruments. The estimated fair values and fair value measurement method with respect to the Company’s financial instruments were as follows (dollars in thousands):

Schedule of Estimated Fair Value of Financial Instruments

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(9) Commitments And Contingencies

Off- Balance Sheet Financial Instruments. The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit, unused lines of credit, and standby letters of credit and may involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the condensed consolidated balance sheets. The contract amounts of these instruments reflect the extent of involvement the Company has in these financial instruments.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the counterparty.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit to customers is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting those commitments. Standby letters of credit generally have expiration dates within one year.

Commitments to extend credit, unused lines of credit, and standby letters of credit typically result in loans with a market interest rate when funded. A summary of the contractual amounts of the Company’s financial instruments with off-balance sheet risk at June 30, 2026 follows (dollars in thousands):

Schedule of Off-Balance Sheet Risks of Financial Instruments

Guarantees. The Company, through its holding company, has entered into credit enhancement arrangements pursuant to which it guarantees certain borrowings of its financing subsidiary from third-party lenders.

Under these arrangements, the Company may, on a loan-by-loan basis, guarantee the repayment of amounts borrowed by the financing subsidiary. The guarantees are intended to enhance the subsidiary’s ability to obtain financing and generally remain in effect until the underlying borrowings are repaid.

If the financing subsidiary fails to perform under the terms of the underlying borrowing arrangements, the Company may be required to make payments to lenders for amounts outstanding under such borrowings.

The maximum potential amount of future payments under these guarantees represents the contractual amounts of the underlying borrowings subject to the guarantees and is not reduced by amounts that may be recoverable under indemnification or recourse arrangements. The Company has entered into agreements pursuant to which the financing subsidiary is required to reimburse the Company for any amounts paid under the guarantees, including applicable interest and associated costs. While such arrangements provide for reimbursement, they do not relieve the Company of its primary obligation under the guarantees.

The Company evaluates these arrangements in accordance with ASC 460, Guarantees, and ASC 450, Contingencies, and establishes accruals when losses are considered probable and reasonably estimable. If a loss is reasonably possible but not probable, or if the amount of loss cannot be reasonably estimated, the Company discloses the nature of the contingency.

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

In the opinion of management, there are no matters as of June 30, 2026 that are expected to have a material effect on the Company’s condensed consolidated financial statements.

(10) Related Party Transactions.

The Company engages in transactions with directors, executive officers, and their affiliates in the ordinary course of business. These transactions include lending, deposit, and other financial service arrangements and are conducted on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unaffiliated parties.

Related Party Lending Arrangement. During the period, a member of the Company’s Board of Directors (the “Related Party”) provided financing to the Company’s financing subsidiary in connection with the subsidiary’s lending activities.

Under this arrangement, the Related Party provides funds to the financing subsidiary, which are used to originate loans to third-party borrowers. The Company provides credit for these guarantee arrangements.

As of June 30, 2026, the outstanding balance of borrowings from the Related Party was approximately $14.0 million.

The borrowings are subject to customary terms and conditions, including stated interest rates, repayment provisions, and maturity dates. Management believes that these terms are comparable to those that could be obtained from unaffiliated third parties.

The Company has established policies and procedures for the review, approval, and monitoring of related party transactions. All such transactions are reviewed and approved in accordance with the Company’s governance policies.

Related Party Line of Credit. At June 30, 2026, the Company had an available related-party line of credit of $270,000. Related party loans were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with non-related parties.

(11) Regulatory Matters.

The Bank is subject to various regulatory capital requirements administered by the bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

As of June 30, 2026 and December 31, 2025, the Bank met all capital adequacy requirements to which it is subject to. The Bank’s actual capital amounts and percentages are presented in the table below (dollars in thousands):

Schedule of Capital Amounts, Ratios and Regulatory Thresholds

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OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

(12) Series B and C Preferred Stock and ATM offering program.

On March 8, 2024, the Company’s Board of Directors approved the issuance of up to 4,000,000 of Series C Preferred Stock. Each share of the Series C Preferred Stock was convertible into one share of common stock, at the option of the holder, provided that certain regulatory-required conditions are met.

On August 9, 2024, the Company filed a Form S-3 registration statement with Securities and Exchange Commission, registering for sale of up to an aggregate of $25 million in shares of common stock through an at-the-market offering (“ATM Program”). Under the ATM Program, the Company sold 52,819 shares during the year ended on December 31, 2025, generating net proceeds of $217,000. During the six-month period ended June 30, 2026, the Company sold an additional 174,348 common stock shares under the ATM program, generating net proceeds of $948,000. The ATM Program allows the Company to issue and sell to the public from time to time at prevailing market prices, at the Company’s discretion, newly issued shares of common stock. The ATM Program is expected to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to facilitate growth.

On October 1, 2025, the Company filed an Amended and Restated Certificate of Designation of Series B Preferred Stock, which amended and restated the rights, preferences, powers, and limitations of the Company’s previously outstanding Series B-1, Series B-2, and Series B-3 Preferred Stock and consolidated such shares into a single class designated as Series B Preferred Stock. At that date, 1,360 shares of Series B Preferred Stock were outstanding. Except in the event of liquidation, if the Company declared or paid a dividend or distribution on the common stock, the Company shall simultaneously declare and pay a dividend on the Series B Preferred Stock on a pro rata basis with the common stock determined on an as-converted basis assuming all shares of Series B Preferred Stock had been converted immediately prior to the record date of the applicable dividend. The Series B Preferred stock did not carry a stated dividend rate, and dividends were payable only if and when declared on the common stock. The Series B Preferred Stock had preferential liquidation rights over common stockholders. The liquidation price was the greater of (i) a stated liquidation preference per share or (ii) the amount that would have been received had all shares of Series B Stock been converted into common stock immediately prior to a liquidation. The Series B Preferred Stock generally had no voting rights except as provided in the Certificate of Designation.

As a result of the amendment, each share of Series B Preferred Stock was convertible, at the option of the holder, into 8,172 shares of the Company’s common stock, par value $0.01 per share, subject to adjustment for stock splits, stock dividends, combinations, mergers, or similar transactions, as provided in the Certificate of Designation. Conversion was subject to applicable ownership limitations and required federal and state banking regulatory approvals. In addition, conversion occurs automatically upon certain permitted transfers, as defined in the Certificate of Designation. The amendment represented a modification of the conversion rights of the outstanding Series B Preferred Stock and did not result in the issuance or redemption of any equity securities.

On January 27, 2026, the Company and Michael Blisko, a Director of the Company, entered into, and consummated the transaction contemplated by, an Exchange Agreement (the “Exchange Agreement”). Pursuant to the agreement, Mr. Blisko exchanged 65 shares of Company Series B Convertible Preferred Stock for 531,178 newly issued shares of Company common stock.

On April 28, 2026, the Board and subsequently the Shareholders approved an amendment to the Company’s Articles of Incorporation (the “Articles Amendment”) to authorize a new class of capital stock designated as Nonvoting Common Stock, par value $0.01 per share (the “Nonvoting Common Stock”). The Articles Amendment authorizes the issuance of up to 30,000,000 shares of Nonvoting Common Stock. In May 2026, in accordance with the Articles Amendment, the Company exchanged all outstanding shares, or 1,295 and 875,641 shares of related party Series B Convertible Preferred Stock and Series C Convertible Preferred Stock, respectively, for a total of 11,458,351 shares of Nonvoting Common Stock in the second quarter of 2026. Subsequent to the exchange, the Company undesignated the Series B Convertible Preferred Stock and Series C Convertible Preferred Stock.

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OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

The shares of Nonvoting Common Stock are identical with the Common Stock in all respects, except as described below.

Voting Rights. Holders of Nonvoting Common Stock are not to vote on matters submitted to shareholders, except as required by Florida law. Under the Florida law, holders of a class of shares are entitled to vote as a separate voting group on an amendment to the Articles of Incorporation if the amendment would:

• Alter or change the powers, preferences, or special rights of the shares so as to affect them adversely;
• Increase or decrease the number of authorized shares of that class; or
• Otherwise require a class vote under applicable law.

Dividend Rights. Holders of Nonvoting Common Stock are entitled to receive dividends, if and when declared by the Board, on the same per-share basis as holders of the Company’s Common Stock, subject to the preferential rights of any outstanding preferred stock.

Liquidation Rights. Upon any voluntary or involuntary liquidation, dissolution, or winding up of the Company, holders of Nonvoting Common Stock will be entitled to share ratably with holders of Common Stock in the Company’s net assets available for distribution, after payment of liabilities and subject to the rights of any outstanding preferred stock.

Other Rights. Nonvoting Common Stock does not have cumulative voting rights, preemptive rights, subscription rights, redemption rights, or sinking fund provisions, unless otherwise provided in the Articles of Incorporation required by law.

(13) Contingencies.

Various claims arise from time to time in the normal course of business. In the opinion of management, none have occurred that will have a material effect on the Company’s condensed consolidated financial statements.

(14) Borrowings.

The table below presents FHLB advances outstanding as follows (dollars in thousands):

Schedule of Maturities and Interest Rates on Federal Home Loan Bank and Federal Reserve Bank Advances

FHLB advances were structured as advances with potential calls on a quarterly basis.

FHLB advances were collateralized by a blanket lien requiring the Company to maintain certain first mortgage loans as pledged collateral. At June 30, 2026, the Company had credit availability of $355.5 million. At June 30, 2026, the Company had loans pledged with a carrying value of $688.8 million as collateral for any FHLB advances.

In addition, the Bank has a $58.7 million line of credit with the Federal Reserve Bank, which is secured by debt securities and loans with carrying value of $92.8 million as of June 30, 2026.

At June 30, 2026, the Company also had unsecured lines of credit amounting to $76.5 million with five correspondent banks to purchase federal funds. Disbursements on the lines are subject to the approval of correspondent banks. At June 30, 2026 there were no borrowings under these lines of credit.

(continued)

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

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto presented elsewhere in this report. For additional information, refer to the consolidated financial statements and footnotes for the year ended December 31, 2025, in the Annual Report on Form 10-K.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company, including adverse changes in economic, political and market conditions, losses from the Company’s lending activities, increases in interest rates, the possible loss of key personnel, the impact of increasing competition, the impact of changes in government regulation, the possibility of liabilities arising from violations of federal and state securities laws and the impact of changes in technology in the banking industry. Although the Company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances that the Company’s actual results will not differ materially from any results expressed or implied by the Company’s forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance.

Strategic Plan

Our strategic plan is focused on generating sustainable long-term growth through the expansion of full-service banking relationships, growth in earning assets, core transaction deposits, treasury management fee income, and disciplined expense management. We continue to expand our presence throughout South Florida while selectively pursuing specialized lines of business through OptimumFunding, LLC and OptimumFinance, LLC that complement our relationship-based banking model and leverage the Company’s existing expertise.

We believe long-term client relationships are built by delivering personalized financial solutions that meet the evolving needs of business owners and individuals. Our approach is centered on providing responsive, relationship-driven service supported by experienced bankers, modern technology, and tailored financial solutions. We believe this strategy strengthens client relationships, promotes customer retention, and supports profitable growth that enhances long-term shareholder value.

Our primary focus remains developing full-service banking relationships with business customers throughout Florida, and selected markets across the United States. We believe a strong and diversified core deposit base provides the foundation for continued loan growth and supports our ability to capitalize on opportunities within South Florida’s commercial real estate market and our specialized industry verticals, including skilled nursing facilities and merchant cash advance providers. We continue to invest in experienced banking professionals, treasury management capabilities, and enhancements to our technology platform, including upgrades to our core banking system and digital banking applications. These investments are intended to enhance the client experience while allowing us to continue delivering personalized service, improve operating efficiency, expand relationships with local small businesses, diversify our customer base and balance sheet, and increase utilization of our branch network.

In early 2026, the Company formed OptimumFinance LLC, a wholly owned non-bank financing subsidiary, to expand the Company’s commercial real estate lending capabilities through flexible bridge and transitional financing solutions. OptimumFinance enables the Company to provide short-term financing for the acquisition and repositioning of commercial real estate while supporting clients through the transition to permanent financing, further strengthening our ability to serve customers throughout the life cycle of their financing needs.

In late 2025, the Company formed OptimumHUD Loans, LLC (d/b/a OptimumFunding, LLC), a wholly owned non-bank subsidiary. Upon commencement of operations, the subsidiary is expected to provide specialized financing solutions, bridge-to Housing and Urban Development (“HUD”) financing, Federal Housing Administration (“FHA”) and HUD loan originations, and financing for acquisitions, refinancing, and repositioning of multifamily and healthcare properties. The platform is expected to build upon the Company’s established lending relationships and sector expertise while expanding our ability to serve clients in the skilled nursing, senior housing, and multifamily sectors.

(continued)

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

We believe investments in technology and product enhancements complement, rather than replace, our relationship-based banking model by making it easier for clients to conduct business while continuing to receive personalized service from experienced bankers. Together with our Treasury Cash Management platform, these investments have expanded our ability to serve specialized industries, including skilled nursing facilities, through commercial real estate, asset-based lending (“ABL”), and operating deposit relationships. We have also expanded our Small Business Administration (“SBA”) lending platform, entering the market in late 2023 and achieving Preferred Lender Program (“PLP”) status during the first quarter of 2025. Under the program, the Bank offers SBA-guaranteed 7(a) loans generally secured by accounts receivable, inventory, equipment, or real estate. These initiatives have contributed to continued growth in our loan portfolio through relationship-based commercial banking activities, primarily within the commercial real estate, owner-occupied commercial real estate, multifamily, and commercial and industrial sectors throughout Florida.

Treasury management services remain an important component of our broader commercial banking strategy. While we continue to serve our established merchant cash advance customer base and related electronic funds transfer business, our primary strategic focus is expanding full-service banking relationships with business customers. These relationships provide opportunities to grow operating deposits, treasury management services, and commercial lending relationships while strengthening long-term customer relationships. We continue to invest in automation and technology designed to improve efficiency, enhance the client experience, and support the continued growth of our treasury management platform throughout 2026 and beyond.

Our strategic plan continues to emphasize disciplined underwriting, prudent risk management, and a comprehensive credit culture that has supported the Company’s strong credit performance. As we pursue additional growth opportunities through our subsidiaries and existing banking platform, management remains committed to maintaining the underwriting standards, credit administration processes, and risk management practices that have supported the quality of our loan portfolio while positioning the Company for continued profitable growth.

Financial Condition at June 30, 2026 and December 31, 2025

Capital Levels

The Company continued to generate strong balance sheet growth during the first six months of 2026. Total assets increased by approximately $289.3 million to $1.4 billion at June 30, 2026, from $1.1 billion at December 31, 2025, primarily driven by continued growth in the loan portfolio.

Refer to Note 11 in the condensed consolidated financial statements, which presents the Bank’s actual and required minimum capital ratios to be well capitalized under prompt corrective action regulations.

Overview

The Company’s total assets increased by approximately $289.3 million to $1.4 billion at June 30, 2026, from $1.1 billion at December 31, 2025, primarily due to increases in loans. Net loans increased by $257.1 million to $1.2 billion at June 30, 2026, from $947.3 million at December 31, 2025. Deposits grew by approximately $282.3 million to $1.2 billion at June 30, 2026, from $931.8 million at December 31, 2025. Total stockholders’ equity increased by approximately $12.5 million to $134.4 million at June 30, 2026, from $ 121.9 million at December 31, 2025, primarily due to net income, stock-based compensation, and common stock shares sold under the ATM program.

The following table shows selected information for the period/year ended or at the dates indicated:

(1) Annualized for the six months ended June 30, 2026.

(continued)

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

Liquidity and Sources of Funds

The Company’s sources of funds include customer deposits, loan repayments, earnings, federal funds market, and access to various borrowing arrangements. These includes borrowing capacity with Federal Home Loan Bank of Atlanta (“FHLB”), the Federal Reserve Bank, and five correspondent banks.

Our liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and debt securities, funds provided by operations, and capital. The Company’s liquidity position is further supported by equity issuances and cash flow generated by its subsidiaries. As a commercial bank, maintaining adequate liquidity remains a core financial objective. The Company’s liquidity consists of cash on hand, balances maintained with correspondent banks, federal funds sold, and unpledged marketable securities, including U.S. government securities, collateralized mortgage obligations, and mortgage-backed securities. Certain securities are pledged to the Federal Reserve Bank to support borrowing capacity. The Bank has a $58.7 million line of credit with the Federal Reserve Bank, which is secured by debt securities and loans with carrying value of $92.8 million as of June 30, 2026.

Deposits increased by approximately $282.3 million during the six-month period ended June 30, 2026, providing a strong source of funding for continued loan growth while also supporting the repayment of Federal Home Loan Bank advances.

In addition to obtaining funds from depositors, the Company had borrowing capacity of $355.5 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. As of June 30, 2026, first mortgage loans with a carrying value of $688.8 million were pledged to FHLB. At June 30, 2026, the Company also had available lines of credit amounting to $76.5 million with five correspondent banks, disbursements on the lines of credit are subject to the approval of the correspondent banks. As of June 30, 2026, debt securities and loans with a carrying amount of $92.8 million were pledged as collateral to the Federal Reserve Bank. The Company monitor its liquidity position on daily basis and believes its current funding sources, including deposits, borrowing capacity, unencumbered liquid assets, and access to the federal funds market, are adequate to meet its ongoing operating needs.

Off-Balance Sheet Arrangements

Refer to Note 9 in the condensed consolidated financial statements for Off-Balance Sheet Arrangements.

Results of Operations

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; (v) net interest margin; and (vi) the ratio of average interest-earning assets to average interest-bearing liabilities.

(continued)

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

(continued)

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

(continued)

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

Comparison of the three-month periods ended June 30, 2026, and 2025

(1) On October 1, 2025, the Company amended the terms of the Series B preferred shares, as detailed in Note 12 to the condensed consolidated financial statements. This amendment affected the calculation of diluted earnings per share, and accordingly, all periods diluted EPS figures have been restated to reflect the new dilution structure. This ensures a consistent basis of comparison.

Net income. Net income for the three months ended June 30, 2026, were 6.7 million or $.40 per basic share and $.28 per diluted share compared to net income of $3.6 million or $.31 per basic share and $.15 per diluted share for the three months ended June 30, 2025. The Company’s strong financial performance during the quarter was primarily driven by growth in net interest income and noninterest income, reflecting continued execution of its relationship-based banking strategy.

Interest income. Interest income increased to $21.7 million for the three months ended June 30, 2026, compared to $15.6 million for the three months ended June 30, 2025 due primarily to increases in average balances of interest earning assets.

Interest expense. Interest expense increased to $7.0 million for the three months ended June 30, 2026, compared to $5.3 million for the three months ended June 30, 2025, primarily due to an increase in average interest-bearing liability balances, and a decrease in the cost of interest-bearing liabilities.

Credit loss expense. The Company recorded a credit loss recovery of $37,000 and a $1.0 million expense for the three months ended June 30, 2026, and 2025, respectively. The improvement primarily reflects the continued strength of the Company’s credit quality and management’s evaluation of the factors used to estimate expected credit losses, partially offset by continued growth in the loan portfolio. Expected credit losses are charged to earnings to maintain the allowance for credit losses at 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 composition of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, general economic conditions, particularly within the Company’s market areas, and other factors affecting the estimated collectability of loans. The allowance for credit losses totaled $11.0 million, or 0.91% of total loans outstanding, at June 30, 2026, compared to $10.3 million, or 1.07% of total loans outstanding, at December 31, 2025. Net charge-offs during the three months ended June 30, 2026 totaled $11,000 and were limited to the consumer loan portfolio.

Noninterest income. Total noninterest income was $2.5 million for the three months ended June 30, 2026, compared to $1.8 for the three months ended June 30, 2025. The increase reflects consistent performance in wire transfer and ACH fees, and gains on the sale of government guaranteed SBA loans.

Noninterest expenses. Total noninterest expenses increased to $8.4 million for the three months ended June 30, 2026, compared to $6.2 million for the three months ended June 30, 2025, primarily due to employee compensation and benefits, data processing fees, and other expenses.

(continued)

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

Comparison of the six-month periods ended June 30, 2026, and 2025

Net Income. Net income for the six months ended June 30, 2026, were 11.3 million or $0.79 per basic share and $0.48 per diluted share compared to net income of $7.5 million or $0.64 per basic share and $0.32 per diluted share for the six months ended June 30, 2025. The Company’s strong financial performance during the first six months of 2026 was primarily driven by growth in net interest income and noninterest income, reflecting continued execution of its relationship-based banking strategy.

Interest income. Interest income increased by $10.6 to $41.2 million for the six months ended June 30, 2026, compared to $30.6 million for the six months ended June 30, 2025, due primarily to increases in average balances of interest earning assets.

Interest expense. Interest expense increased by $2.4 million to $13.3 million for the six months ended June 30, 2026, compared to $10.9 million for the six months ended June 30, 2025, primarily due to an increase in average interest-bearing liability balances, and a decrease in the cost of interest-bearing liabilities.

Credit loss expense. The Company recorded a credit loss expense of $0.7 million for the six months ended June 30, 2026, compared to $0.9 million for the six months ended June 30, 2025. The decrease primarily reflects the continued strength of the Company’s credit quality and management’s evaluation of the factors used to estimate expected credit losses, partially offset by continued growth in the loan portfolio. Expected credit losses are charged to earnings to maintain the allowance for credit losses at a level management believes is appropriate to absorb estimated losses inherent in the loan portfolio. Management’s periodic evaluation of the adequacy of the allowance for credit losses considers historical loss experience, the volume and composition of the loan portfolio, adverse situations that may affect borrowers’ ability to repay, the estimated value of underlying collateral, general economic conditions, particularly within the Company’s market areas, and other factors affecting the estimated collectability of loans. Net charge-offs during the six months ended June 30, 2026 totaled $14,000 million and were limited to the consumer loan portfolio.

Noninterest income. Total noninterest income was $4.3 million for the six months ended June 30, 2026 compared to $3.1 million for the six months ended June 30, 2025. The increase reflects consistent performance in wire transfer and ACH fees, and gains on the sale of government guaranteed SBA loans.

Noninterest expenses. Total noninterest expenses $16.4 million for the six months ended June 30, 2026, compared to $11.8 million for the six months ended June 30, 2025, primarily due to employee compensation and benefits, data processing fees, and other expenses.

(continued)

Item 3. Quantitative and Qualitative Disclosures About Market Risk Item

3. Quantitative and Qualitative Disclosures about Market Risks**

Not applicable.

Item 4. Controls and Procedures

The Company’s management evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report, and based on this evaluation, the Principal Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective.

There have been no significant changes in the Company’s internal control over financial reporting during the quarter ended June 30, 2026, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

(continued)

PART II. OTHER INFORMATION

**Item

1. Legal Proceedings**

We are not currently a party to any material legal proceedings.

Item 1A. Risk Factors

Not applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

**Item

6. Exhibits**

The exhibits listed in the Exhibit Index following the signature page are filed or furnished with or incorporated by reference into this report.

**EXHIBIT