# OptimumBank Holdings (OPHC) 10-Q SEC filing - Q2 FY2026
- Filed: Aug 10, 2026, 2:18 PM EDT
- Fiscal quarter: Q2 FY2026
- Calendar quarter: Q2 2026
- Accession: 0001493152-26-036825
- OpenCapital page: https://www.opencapital.sh/filings/0001493152-26-036825
- Markdown URL: https://www.opencapital.sh/filings/0001493152-26-036825.md
- Official SEC filing index: https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/0001493152-26-036825-index.htm
## Filing documents
- [10-Q (form10-q.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/form10-q.htm)
- [EX-3.4 (ex3-4.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex3-4.htm)
- [EX-31.1 (ex31-1.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex31-1.htm)
- [EX-31.2 (ex31-2.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex31-2.htm)
- [EX-32.1 (ex32-1.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex32-1.htm)
- [EX-32.2 (ex32-2.htm)](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex32-2.htm)
---
## 10-Q
SEC source: [form10-q.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/form10-q.htm)
**UNITED
STATES**
**SECURITIES
AND EXCHANGE COMMISSION**
**Washington,
D.C. 20549**
**FORM10-Q**
(Mark
One)
**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
For
the quarterly period ended June 30, 2026
or
**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**
For
the transition period from __________ to _________
Commission
File Number: 001-42447
**OPTIMUMBANK
HOLDINGS, INC.**
(Exact
name of registrant as specified in its charter)
**Florida** **55-0865043**
(State or other jurisdiction of
incorporation or organization) (IRS Employer
Identification No.)
**2929
East Commercial Boulevard, Fort Lauderdale, FL 33308**
(Address
of principal executive offices, Zip Code)
**954-900-2800**
(Registrant’s
telephone number, including area code)
**N/A**
(Former
name, former address and former fiscal year, if changed since last report)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, $.01 Par Value OPHC NYSE American
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”,
“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate
the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 12,622,470 shares of voting common stock, $0.01 par value, issued and outstanding as of August 10, 2026. 11,458,351 shares of nonvoting common stock, $0.01 par value, issued and outstanding as of August 10, 2026.
**OPTIMUMBANK
HOLDINGS, INC. AND SUBSIDIARIES**
INDEX
| | **Page** |
| --- | --- |
| [PART I. FINANCIAL INFORMATION](#su_001) | 1 |
| [Item 1. Financial Statements](#su_002) | 1 |
| [Condensed Consolidated Balance Sheets — June 30, 2026 (unaudited) and December 31, 2025 (audited)](#su_003) | 1 |
| [Condensed Consolidated Statements of Earnings — Three and Six Months ended June 30, 2026 and 2025 (unaudited)](#su_004) | 2 |
| [Condensed Consolidated Statements of Comprehensive Income — Three and Six Months ended June 30, 2026 and 2025 (unaudited)](#su_005) | 3 |
| [Condensed Consolidated Statements of Stockholders’ Equity — Three and Six Months ended June 30, 2026 and 2025 (unaudited)](#su_006) | 4 |
| [Condensed Consolidated Statements of Cash Flows — Six Months ended June 30, 2026 and 2025 (unaudited)](#su_007) | 6 |
| [Notes to Condensed Consolidated Financial Statements (unaudited)](#su_008) | 7 |
| [Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations](#su_009) | 23 |
| [Item 3. Quantitative and Qualitative Disclosures About Market Risk](#su_010) | 30 |
| [Item 4. Controls and Procedures](#su_011) | 30 |
| [PART II. OTHER INFORMATION](#su_012) | 31 |
| [Item 1. Legal Proceedings](#su_013) | 31 |
| [Item 1A. Risk Factors](#su_014) | 31 |
| [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](#su_015) | 31 |
| [Item 3. Defaults Upon Senior Securities](#su_016) | 31 |
| [Item 4. Mine Safety Disclosures](#su_017) | 31 |
| [Item 5. Other Information](#su_018) | 31 |
| [Item 6. Exhibits](#su_019) | 31 |
| [SIGNATURES](#su_020) | 32 |
**OPTIMUMBANK
HOLDINGS, INC. AND SUBSIDIARIES**
**PART
I. FINANCIAL INFORMATION**
**Item
1. Financial Statements**
**Condensed
Consolidated Balance Sheets**
**(Dollars
in thousands, except share amounts)**
_(Unaudited) · (Audited)_
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Assets: | | |
| Cash and due from banks | $14,637 | $9,349 |
| Interest-bearing deposits with banks | 131,601 | 105,210 |
| Total cash and cash equivalents | 146,238 | 114,559 |
| Debt securities available for sale | 26,646 | 25,184 |
| Debt securities held-to-maturity (fair value of $183 and $190) | 208 | 214 |
| Loans, net of allowance for credit losses of $11,020 and $10,273 | 1,204,381 | 947,294 |
| Federal Home Loan Bank stock | 1,966 | 3,028 |
| Premises and equipment, net | 3,132 | 2,490 |
| Other real estate owned | - | 551 |
| Right-of-use lease assets | 2,405 | 2,617 |
| Accrued interest receivable | 4,862 | 3,621 |
| Deferred tax asset | 3,143 | 3,108 |
| Other assets | 7,956 | 9,012 |
| Total assets | $1,400,937 | $1,111,678 |
| Liabilities and Stockholders’ Equity: | | |
| Liabilities: | | |
| Noninterest-bearing demand deposits | $319,375 | $266,520 |
| Savings, NOW and money-market deposits | 383,297 | 306,921 |
| Time deposits | 511,373 | 358,309 |
| Total deposits | 1,214,045 | 931,750 |
| Federal Home Loan Bank advances | 25,000 | 50,000 |
| Operating lease liabilities | 2,547 | 2,745 |
| Other Borrowings | 14,000 | - |
| Other liabilities | 10,965 | 5,286 |
| Total liabilities | 1,266,557 | 989,781 |
| Commitments and contingencies (Notes 9 and 13) | - | |
| Stockholders’ equity: | | |
| Preferred stock, no par value; 0 and 6,000,000 shares authorized: | - | - |
| Series B Convertible Preferred, no par value, 0 and 1,360 shares authorized, 0 and 1,360 shares issued and outstanding | - | - |
| Series C Convertible Preferred, no par value, 0 and 4,000,000 shares authorized, 0 and 875,641 shares issued and outstanding | - | - |
| Preferred stock, value | - | - |
| Common stock, $.01 par value; 30,000,000 shares authorized, 12,340,785 and 11,533,943 shares issued and outstanding | 124 | 115 |
| Nonvoting Common stock, $.01 par value; 30,000,000 and 0 shares authorized, 11,458,351 and 0 shares issued and outstanding | 115 | - |
| Additional paid-in capital | 113,832 | 112,578 |
| Retained earnings | 25,119 | 13,801 |
| Accumulated other comprehensive loss | (4,810) | (4,597) |
| Total stockholders’ equity | 134,380 | 121,897 |
| Total liabilities and stockholders’ equity | $1,400,937 | $1,111,678 |
See
accompanying notes to condensed consolidated financial statements.
**OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES**
### Condensed Consolidated Statements of Earnings (Unaudited)
_(Dollars in thousands, except per share amounts)_
| Line item | 2026 / Three Months Ended / June 30, | 2025 / Three Months Ended / June 30, | 2026 / Six Months Ended / June 30, | 2025 / Six Months Ended / June 30, |
| --- | --- | --- | --- | --- |
| Interest income: | | | | |
| Loans | $20,386 | $14,026 | $38,501 | 27,627 |
| Debt securities | 204 | 158 | 396 | 318 |
| Other | 1,134 | 1,404 | 2,282 | 2,650 |
| Total interest income | 21,724 | 15,588 | 41,179 | 30,595 |
| Interest expense: | | | | |
| Deposits | 6,633 | 5,322 | 12,808 | 10,600 |
| Borrowings | 394 | 24 | 481 | 327 |
| Total interest expense | 7,027 | 5,346 | 13,289 | 10,927 |
| Net interest income | 14,697 | 10,242 | 27,890 | 19,668 |
| Credit loss (reversal) expense | (37) | 1,040 | 733 | 875 |
| Net interest income after credit loss expense | 14,734 | 9,202 | 27,157 | 18,793 |
| Noninterest income: | | | | |
| Service charges and fees | 1,551 | 1,099 | 2,863 | 2,137 |
| Other | 935 | 735 | 1,406 | 928 |
| Total noninterest income | 2,486 | 1,834 | 4,269 | 3,065 |
| Noninterest expenses: | | | | |
| Salaries and employee benefits | 5,279 | 3,738 | 10,268 | 7,119 |
| Professional fees | 363 | 275 | 658 | 522 |
| Occupancy and equipment | 354 | 294 | 693 | 576 |
| Data processing | 986 | 625 | 1,900 | 1,158 |
| Regulatory assessment | 196 | 202 | 375 | 400 |
| Other | 1,204 | 1,047 | 2,496 | 2,032 |
| Total noninterest expenses | 8,382 | 6,181 | 16,390 | 11,807 |
| Income before income taxes | 8,838 | 4,855 | 15,036 | 10,051 |
| Income taxes | 2,183 | 1,253 | 3,718 | 2,579 |
| Net income | $6,655 | $3,602 | $11,318 | $7,472 |
| Earnings per share - Basic | $0.40 | $0.31 | $0.79 | $0.64 |
| Earnings per share - Diluted(1) | $0.28 | $0.15 | $0.48 | $0.32 |
(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.
**OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES**
### Condensed Consolidated Statements of Comprehensive Income (Unaudited)
_(Dollars in thousands)_
| Line item | 2026 / Three Months ended / June 30, | 2025 / Three Months ended / June 30, | 2026 / Six Months Ended / June 30, | 2025 / Six Months Ended / June 30, |
| --- | --- | --- | --- | --- |
| Net Income | $6,655 | $3,602 | $11,318 | $7,472 |
| Other comprehensive (loss) income: | | | | |
| Change in unrealized loss on debt securities: | | | | |
| Unrealized (loss) gain arising during the period | (105) | (338) | (286) | 223 |
| Amortization of unrealized loss on debt securities transferred to held-to-maturity | - | - | 1 | (1) |
| Other comprehensive income before income taxes | (105) | (338) | (285) | 222 |
| Deferred income tax expense | 26 | 86 | 72 | (57) |
| Total other comprehensive (loss) income | (79) | (252) | (213) | 165 |
| Comprehensive income | $6,576 | $3,350 | $11,105 | $7,637 |
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)**
| Line item | Shares / Preferred Stock / Series B | Amount / Preferred Stock / Series B | Shares / Preferred Stock / Series C | Amount / Preferred Stock / Series C | Shares / Common Stock | Amount / Common Stock | Shares / Nonvoting / Common / Stock | Amount / Nonvoting / Common / Stock | Capital / Additional / Paid-In | earnings / (Accumulated / Deficit) / Retained | Loss / Accumulated / Other / Comprehensive | Equity / Stockholders’ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at March 31, 2026 (Unaudited) | 1,295 | - | 875,641 | - | 12,166,858 | $122 | - | - | $112,993 | $18,464 | $(4,731) | $126,848 |
| Proceeds from sale of common stock (net of offering costs of $30) (Unaudited) | - | - | - | - | 173,927 | 2 | - | - | 954 | - | - | 956 |
| Exchange of preferred stock for Nonvoting common stock (Unaudited) | (1,295) | - | (875,641) | - | - | - | 11,458,351 | 115 | (115) | - | - | - |
| Net change in unrealized (loss) on debt securities available for sale (Unaudited) | - | - | - | - | - | - | - | - | - | - | (79) | (79) |
| Net Income (Unaudited) | - | - | - | - | - | - | - | - | - | 6,655 | - | 6,655 |
| Balance at June 30, 2026 (Unaudited) | - | - | - | - | 12,340,785 | $124 | 11,458,351 | $115 | $113,832 | $25,119 | $(4,810) | $134,380 |
| Balance at December 31, 2025 | 1,360 | - | 875,641 | - | 11,533,943 | 115 | - | - | 112,578 | 13,801 | (4,597) | 121,897 |
| Exchange of preferred stock for common stock (Unaudited) | (65) | - | - | - | 531,179 | 5 | - | - | (5) | - | - | - |
| Proceeds from sale of common stock (net of offering costs of $41) (Unaudited) | - | - | - | - | 174,348 | 3 | - | - | 945 | - | - | 948 |
| Exchange of preferred stock for Nonvoting common stock (Unaudited) | (1,295) | - | (875,641) | - | - | - | 11,458,351 | 115 | (115) | - | - | - |
| Stock-based compensation (Unaudited) | - | - | - | - | 101,315 | 1 | - | - | 429 | - | - | 430 |
| Net change in unrealized loss on debt securities available for sale (Unaudited) | - | - | - | - | - | - | - | - | - | - | (214) | (214) |
| Amortization of unrealized loss on debt securities transferred to held-to-maturity (Unaudited) | - | - | - | - | - | - | - | - | - | - | 1 | 1 |
| Net income (Unaudited) | - | - | - | - | - | - | - | - | - | 11,318 | - | 11,318 |
| Balance at June 30, 2026 (Unaudited) | - | - | - | - | 12,340,785 | $124 | 11,458,351 | $115 | $113,832 | $25,119 | $(4,810) | $134,380 |
**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)**
| Line item | Preferred Stock / Series B / Shares | Preferred Stock / Series B / Amount | Preferred Stock / Series C / Shares | Preferred Stock / Series C / Amount | Common Stock / Shares | Common Stock / Amount | Nonvoting / Common Stock / Shares | Nonvoting / Common Stock / Amount | Paid-In / Capital | Retained / Earnings | Comprehensive / Loss | Stockholders’ / Equity |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Balance at March 31, 2025 (unaudited) | 1,360 | - | 525,641 | - | 11,751,082 | $118 | - | - | $112,015 | $1,023 | $(5,153) | $108,003 |
| Offering costs related to common stock ($5) (unaudited) | - | - | - | - | - | - | - | - | (5) | - | - | (5) |
| Net change in unrealized loss on debt securities available for sale (unaudited) | - | - | - | - | - | - | - | - | - | - | (252) | (252) |
| Net Income (unaudited) | - | - | - | - | - | - | - | - | - | 3,602 | - | 3,602 |
| Balance at June 30, 2025 (unaudited) | 1,360 | - | 525,641 | - | 11,751,082 | $118 | - | - | $112,010 | $4,625 | $(5,405) | $111,348 |
| Balance at December 31, 2024 (audited) | 1,360 | - | 525,641 | - | 11,636,092 | $116 | - | - | $111,485 | $(2,847) | $(5,570) | $103,184 |
| Balance | 1,360 | - | 525,641 | - | 11,636,092 | $116 | - | - | $111,485 | $(2,847) | $(5,570) | $103,184 |
| Proceeds from sale of common stock (net of offering costs of $21) (unaudited) | - | - | - | - | 52,819 | 1 | - | - | 230 | - | - | 231 |
| Proceeds from sale of common stock (net of offering costs (unaudited) | - | - | - | - | 52,819 | 1 | - | - | 230 | - | - | 231 |
| Stock-based Compensation (unaudited) | - | - | - | - | 62,171 | 1 | - | - | 295 | - | - | 296 |
| Net change in unrealized gain on debt securities available for sale (unaudited) | - | - | - | - | - | - | - | - | - | - | 166 | 166 |
| Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited) | - | - | - | - | - | - | - | - | - | - | (1) | (1) |
| Net income (unaudited) | - | - | - | - | - | - | - | - | - | 7,472 | - | 7,472 |
| Balance at June 30, 2025 (unaudited) | 1,360 | - | 525,641 | - | 11,751,082 | $118 | - | - | $112,010 | $4,625 | $(5,405) | $111,348 |
| Balance | 1,360 | - | 525,641 | - | 11,751,082 | $118 | - | - | $112,010 | $4,625 | $(5,405) | $111,348 |
See
accompanying notes to condensed consolidated financial statements.
**OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES**
### Condensed Consolidated Statements of Cash Flows (Unaudited)
_(Dollars in thousands)_
| Line item | 2026 / Six Months ended / June 30, | 2025 / Six Months ended / June 30, |
| --- | --- | --- |
| Cash flows from operating activities: | | |
| Net income | $11,318 | $7,472 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Credit loss expense | 733 | 875 |
| Depreciation and amortization | 273 | 217 |
| Gain on sale of other real estate owned | (5) | - |
| Deferred income tax expense (benefit) | 37 | (191) |
| Net (accretion) amortization of fees, premiums and discounts | (168) | (65) |
| Stock-based compensation expense | 430 | 296 |
| (Increase) decrease in accrued interest receivable | (1,241) | 210 |
| Amortization of right-of-use lease assets | 212 | 127 |
| Net decrease in operating lease liabilities | (198) | (113) |
| (Increase) decrease in other assets | 1,056 | (1,033) |
| Increase in other liabilities | 5,707 | 1,497 |
| Net cash provided by operating activities | 18,154 | 9,292 |
| Cash flows from investing activities: | | |
| Principal repayments of debt securities available for sale | 557 | 556 |
| Principal repayments of debt securities held-to-maturity | 7 | 22 |
| Purchase of debt securities available for sale | (2,342) | - |
| Net (increase) decrease in loans | (257,643) | 19,663 |
| Proceeds from sale of other real estate owned | 556 | - |
| Purchases of premises and equipment | (915) | (581) |
| Redemption of FHLB stock | 1,062 | 2,271 |
| Net cash (used in) provided by investing activities | (258,718) | 21,931 |
| Cash flows from financing activities: | | |
| Net increase in deposits | 282,295 | 106,670 |
| Net decrease in FHLB Advances | (25,000) | (50,000) |
| Increase in other borrowings | 14,000 | - |
| Proceeds from sale of common stock, net | 948 | 231 |
| Net cash provided by financing activities | 272,243 | 56,901 |
| Net increase in cash and cash equivalents | 31,679 | 88,124 |
| Cash and cash equivalents at beginning of the period | 114,559 | 93,630 |
| Cash and cash equivalents at end of the period | $146,238 | $181,754 |
| Supplemental disclosure of cash flow information: | | |
| Cash paid during the period for: | | |
| Interest | $10,696 | $9,305 |
| Income taxes | $1,725 | $2,424 |
| Supplemental noncash transactions: | | |
| Net change in unrealized gain (loss) on debt securities available for sale, net of income taxes | $(214) | $166 |
| Amortization of unrealized loss on debt securities transferred to held-to-maturity | $1 | $(1) |
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
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Unrealized loss on debt securities available for sale | $(6,431) | $(6,145) |
| Unamortized portion of unrealized loss related to debt securities available for sale transferred to securities held-to-maturity | (9) | (10) |
| Income tax benefit | 1,630 | 1,558 |
| Accumulated other comprehensive loss | $(4,810) | $(4,597) |
**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.
(continued)
**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
| At June 30, 2026: | Amortized / Cost | Gross / Unrealized / Gains | Gross / Unrealized / Losses | Fair / Value |
| --- | --- | --- | --- | --- |
| Available for sale: | | | | |
| SBA Pool Securities | $394 | - | $(9) | $385 |
| Collateralized mortgage obligations | 115 | - | (14) | 101 |
| Taxable municipal securities | 16,597 | - | (4,110) | 12,487 |
| Mortgage-backed securities | 15,971 | - | (2,298) | 13,673 |
| Total | $33,077 | - | $(6,431) | $26,646 |
| Held-to-maturity: | | | | |
| Collateralized mortgage obligations | $208 | - | $(25) | $183 |
| Total | $208 | - | $(25) | $183 |
| At December 31, 2025: | | | | |
| Available for sale: | | | | |
| SBA Pool Securities | $439 | - | $(10) | $429 |
| Collateralized mortgage obligations | 118 | - | (12) | 106 |
| Taxable municipal securities | 16,616 | - | (3,990) | 12,626 |
| Mortgage-backed securities | 14,156 | - | (2,133) | 12,023 |
| Total | $31,329 | - | $(6,145) | $25,184 |
| Held-to-maturity: | | | | |
| Collateralized mortgage obligations | $214 | - | $(24) | $190 |
| Total | $214 | - | $(24) | $190 |
(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: | Over Twelve Months / Gross / Unrealized / Losses | Over Twelve Months / Fair / Value | Less Than Twelve Months / Gross / Unrealized / Losses | Less Than Twelve Months / Fair / Value |
| --- | --- | --- | --- | --- |
| Available for Sale: | | | | |
| SBA Pool Securities | $(9) | $385 | - | - |
| Collateralized mortgage obligation | (14) | 101 | - | - |
| Taxable municipal securities | (4,110) | 12,487 | - | - |
| Mortgage-backed securities | (2,130) | 9,147 | (168) | 4,526 |
| Total | $(6,263) | $22,120 | $(168) | $4,526 |
| At December 31, 2025: | Over Twelve Months / Gross / Unrealized / Losses | Over Twelve Months / Fair / Value | Less Than Twelve Months / Gross / Unrealized / Losses | Less Than Twelve Months / Fair / Value |
| --- | --- | --- | --- | --- |
| Available for Sale: | | | | |
| SBA Pool Securities | $(10) | $429 | - | - |
| Collateralized mortgage obligation | (12) | 106 | - | - |
| Taxable municipal securities | (3,990) | 12,626 | - | - |
| Mortgage-backed securities | (2,133) | 12,023 | - | - |
| Total | $(6,145) | $25,184 | - | - |
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
(continued)
**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
| Line item | June 30, 2026 | December 31, 2025 |
| --- | --- | --- |
| Residential real estate | $78,268 | $74,018 |
| Multi-family real estate | 52,551 | 65,693 |
| Commercial real estate | 905,174 | 666,508 |
| Land and construction | 46,290 | 36,212 |
| Commercial | 51,389 | 48,196 |
| Consumer | 83,412 | 68,166 |
| Total loans | 1,217,084 | 958,793 |
| Deduct: | | |
| Net deferred loan fees and costs | (1,683) | (1,226) |
| Allowance for credit losses | (11,020) | (10,273) |
| Loans, net | $1,204,381 | $947,294 |
An
analysis of the change in the allowance for credit losses follows (dollars in thousands):
Schedule of Changes in Allowance for Loan Losses
| Three Months Ended June 30, 2026: | Residential Real / Estate | Multi-Family Real / Estate | Commercial / Real Estate | Land and / Construction | Commercial | Consumer | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Beginning balance (March 31, 2026) | $1,281 | $550 | $5,414 | $1,209 | $2,502 | $105 | $11,061 |
| Credit loss expense (reversal) | 118 | (191) | 109 | (69) | 38 | (35) | (30) |
| Charge-offs | - | - | - | - | - | (50) | (50) |
| Recoveries | - | - | - | - | - | 39 | 39 |
| Ending balance (June 30, 2026) | $1,399 | $359 | $5,523 | $1,140 | $2,540 | $59 | $11,020 |
| Three Months Ended June 30, 2025: | | | | | | | |
| Beginning balance (March 31, 2025) | $1,066 | $915 | $2,597 | $2,021 | $1,588 | $83 | $8,270 |
| Credit loss (reversal) expense | 126 | (157) | 288 | (311) | 1,001 | 96 | 1,043 |
| Charge-offs | - | - | - | - | - | (72) | (72) |
| Recoveries | - | - | - | - | - | 97 | 97 |
| Ending balance (June 30, 2025) | $1,192 | $758 | $2,885 | $1,710 | $2,589 | $204 | $9,338 |
(continued)
**OPTIMUMBANK
HOLDINGS, INC. AND SUBSIDIARIES**
**Notes
to Condensed Consolidated Financial Statements (Unaudited)**
**(3) *Loans, Continued.***
| Six Months Ended June 30, 2026: | Residential Real / Estate | Multi-Family Real / Estate | Commercial / Real Estate | Land and / Construction | Commercial | Consumer | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Beginning balance (December 31, 2025) | $1,477 | $666 | $4,608 | $1,077 | $2,351 | $94 | $10,273 |
| Credit loss expense (reversal) | (78) | (307) | 915 | 63 | 189 | (21) | 761 |
| Charge-offs | - | - | - | - | - | (94) | (94) |
| Recoveries | - | - | - | - | - | 80 | 80 |
| Ending balance (June 30, 2026) | $1,399 | $359 | $5,523 | $1,140 | $2,540 | $59 | $11,020 |
| Six Months Ended June 30, 2025: | | | | | | | |
| Beginning balance (December 31, 2024) | $1,114 | $786 | $2,705 | $2,015 | $1,675 | $365 | $8,660 |
| Beginning balance | $1,114 | $786 | $2,705 | $2,015 | $1,675 | $365 | $8,660 |
| Credit loss (reversal) expense | 78 | (28) | 180 | (305) | 914 | 60 | 899 |
| Charge-offs | - | - | - | - | - | (397) | (397) |
| Recoveries | - | - | - | - | - | 176 | 176 |
| Ending balance (June 30, 2025) | $1,192 | $758 | $2,885 | $1,710 | $2,589 | $204 | $9,338 |
| Ending balance | $1,192 | $758 | $2,885 | $1,710 | $2,589 | $204 | $9,338 |
***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)
| (Dollars in thousands) | 2026 / Three Months Ended / June 30, | 2025 / Three Months Ended / June 30, | 2026 / Six Months Ended / June 30, | 2025 / Six Months Ended / June 30, |
| --- | --- | --- | --- | --- |
| Credit loss expense – funded | $(30) | $1,043 | $761 | $899 |
| Credit loss reversal- unfunded | (7) | (3) | (28) | (24) |
| Total credit loss expense | $(37) | $1,040 | $733 | $875 |
(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
| Line item | Accruing Loans | Accruing Loans | Accruing Loans | Accruing Loans | Accruing Loans | Accruing Loans | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | 30-59 Days Past Due | | 60-89 Days Past Due | Greater Than 90 Days Past Due | Total Past Due | Current | Nonaccrual Loans | Total Loans |
| At June 30, 2026: | | | | | | | | |
| Residential real estate | $ | $397 | - | - | $397 | $77,871 | - | 78,268 |
| Multi-family real estate | | - | - | - | - | 52,551 | - | 52,551 |
| Commercial real estate | | 9,403 | - | - | 9,403 | 895,771 | - | 905,174 |
| Land and construction | | - | - | - | - | 46,290 | - | 46,290 |
| Commercial | | 2,381 | - | - | 2,381 | 46,853 | 2,155 | 51,389 |
| Consumer | | 50 | - | - | 50 | 83,362 | - | 83,412 |
| Total | $ | $12,231 | - | - | $12,231 | $1,202,698 | $2,155 | 1,217,084 |
| At December 31, 2025: | | | | | | | | |
| Residential real estate | $ | - | - | - | - | $74,018 | - | 74,018 |
| Multi-family real estate | | - | - | - | - | 65,693 | - | 65,693 |
| Commercial real estate | | - | - | - | - | 666,508 | - | 666,508 |
| Land and construction | | - | - | - | - | 36,212 | - | 36,212 |
| Commercial | | - | - | - | - | 45,299 | 2,897 | 48,196 |
| Consumer | | 65 | 13 | - | 78 | 68,088 | - | 68,166 |
| Total | $ | $65 | $13 | - | $78 | $955,818 | $2,897 | 958,793 |
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
_June 30, 2026_
| (dollars in thousands) | Nonaccrual / Without ACL | Nonaccrual / With ACL | Total / Nonaccrual |
| --- | --- | --- | --- |
| Commercial | $914 | $1,241 | $2,155 |
_December 31, 2025_
| (dollars in thousands) | Nonaccrual / Without ACL | Nonaccrual / With ACL | Total / Nonaccrual |
| --- | --- | --- | --- |
| Commercial | $954 | $1,943 | $2,897 |
(continued)
**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
_June 30, 2026_
| (dollars in thousands) | Real Estate | Other | Total |
| --- | --- | --- | --- |
| Commercial | $906 | $1,047 | $1,953 |
_December 31, 2025_
| (dollars in thousands) | Real Estate | Other | Total |
| --- | --- | --- | --- |
| Commercial | $901 | $1,996 | $2,897 |
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
| (Dollars in thousands) | Year 5 / Term Loans / Amortized Cost Basis by Origination Year / June 30, 2026 | Year 4 / Term Loans / Amortized Cost Basis by Origination Year / 2025 | Year 3 / Term Loans / Amortized Cost Basis by Origination Year / 2024 | Year 2 / Term Loans / Amortized Cost Basis by Origination Year / 2023 | Year 1 / Term Loans / Amortized Cost Basis by Origination Year / 2022 | Prior / Term Loans / Amortized Cost Basis by Origination Year | Revolving Loans (Amortized Cost Basis) / Revolving / Loans / (Amortized Cost Basis) | Revolving Loans Converted to Term Loans (Amortized Cost Basis) / Revolving Converted to / Term Loans / (Amortized Cost Basis) | Subtotal loans / Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Residential real estate | | | | | | | | | |
| Pass | $7,098 | $13,919 | - | $21,068 | $20,351 | $15,360 | - | - | $77,796 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | - | - | 472 | - | - | 472 |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $7,098 | $13,919 | - | $21,068 | $20,351 | $15,832 | - | - | $78,268 |
| Current period gross write-offs | - | - | - | - | - | - | - | - | - |
| Multi-family real estate | | | | | | | | | |
| Pass | $5,026 | - | $4,934 | - | $23,402 | $18,616 | - | - | $51,978 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | 573 | - | - | - | - | 573 |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $5,026 | - | $4,934 | $573 | $23,402 | $18,616 | - | - | $52,551 |
| Current period gross write-offs | - | - | - | - | - | - | - | - | - |
| Commercial real estate (CRE) | | | | | | | | | |
| Pass | $236,054 | $209,097 | $73,964 | $126,379 | $180,417 | $78,526 | - | - | $904,437 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | 737 | - | - | - | - | 737 |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $236,054 | $209,097 | $73,964 | $127,116 | $180,417 | $78,526 | - | - | $905,174 |
| Current period gross write-offs | - | - | - | - | - | - | - | - | - |
| Land and construction | | | | | | | | | |
| Pass | - | $11,173 | $5,026 | $9,237 | $19,690 | $1,164 | - | - | $46,290 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | - | $11,173 | $5,026 | $9,237 | $19,690 | $1,164 | - | - | $46,290 |
| Current period gross write-offs | - | - | - | - | - | - | - | - | - |
| Commercial | | | | | | | | | |
| Pass | $4,492 | $22,240 | $4,373 | $12,284 | $1,355 | $268 | - | - | $45,012 |
| OLEM (Other Loans Especially Mentioned) | - | - | 981 | 2,317 | - | - | - | - | 3,298 |
| Substandard | 934 | 1,047 | 1,098 | - | - | - | - | - | 3,079 |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $5,426 | $23,287 | $6,452 | $14,601 | $1,355 | 268 | - | - | $51,389 |
| Current period gross write-offs | - | - | - | - | - | - | - | - | - |
| Consumer | | | | | | | | | |
| Pass | $1,578 | - | - | $41 | $57 | $71 | $81,665 | - | $83,412 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $1,578 | - | - | $41 | $57 | $71 | 81,665 | - | $83,412 |
| Current period gross write-offs | - | - | - | $(22) | $(47) | $(25) | - | - | $(94) |
(continued)
**OPTIMUMBANK
HOLDINGS, INC. AND SUBSIDIARIES**
**Notes
to Condensed Consolidated Financial Statements (Unaudited)**
**(3) *Loans, Continued.***
| (Dollars in thousands) | Year 5 / Term Loans / Amortized Cost Basis by Origination Year / 2025 | Year 4 / Term Loans / Amortized Cost Basis by Origination Year / 2024 | Year 3 / Term Loans / Amortized Cost Basis by Origination Year / 2023 | Year 2 / Term Loans / Amortized Cost Basis by Origination Year / 2022 | Year 1 / Term Loans / Amortized Cost Basis by Origination Year / 2021 | Prior / Term Loans / Amortized Cost Basis by Origination Year | Revolving Loans (Amortized Cost Basis) / Revolving / Loans / (Amortized Cost Basis) | Revolving Loans Converted to Term Loans (Amortized Cost Basis) / Revolving Loans Converted to / Term Loans / (Amortized Cost Basis) | Subtotal loans / Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Residential real estate | | | | | | | | | |
| Pass | $13,949 | - | $21,156 | $20,677 | $7,636 | $10,121 | - | - | $73,539 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | 479 | - | - | - | - | 479 |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $13,949 | - | $21,156 | $21,156 | $7,636 | $10,121 | - | - | $74,018 |
| Current period Gross write-offs | - | - | - | - | - | - | - | - | - |
| Multi-family real estate | | | | | | | | | |
| Pass | - | $4,960 | $10,578 | $26,261 | $14,544 | $8,772 | - | - | $65,115 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | 578 | - | - | - | 578 |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | - | $4,960 | $10,578 | $26,261 | $15,122 | $8,772 | - | - | $65,693 |
| Current period Gross write-offs | - | - | - | - | - | - | - | - | - |
| Commercial real estate (CRE) | | | | | | | | | |
| Pass | $208,756 | $70,050 | $124,442 | $182,591 | $45,228 | $33,547 | - | - | $664,614 |
| OLEM (Other Loans Especially Mentioned) | - | - | 745 | - | - | - | - | - | 745 |
| Substandard | - | - | - | - | - | 1,149 | - | - | 1,149 |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $208,756 | $70,050 | $125,187 | $182,591 | $45,228 | $34,696 | - | - | $666,508 |
| Current period Gross write-offs | - | - | - | - | - | - | - | - | - |
| Land and construction | | | | | | | | | |
| Pass | $5,500 | $1,799 | $8,185 | $19,457 | $1,271 | - | - | - | $36,212 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $5,500 | $1,799 | $8,185 | $19,457 | $1,271 | - | - | - | $36,212 |
| Current period Gross write-offs | - | - | - | - | - | - | - | - | - |
| Commercial business loans | | | | | | | | | |
| Pass | $21,715 | $6,660 | $12,916 | $1,305 | $386 | - | - | - | $42,982 |
| OLEM (Other Loans Especially Mentioned) | - | - | 2,317 | - | - | - | - | - | 2,317 |
| Substandard | 1,117 | 901 | 879 | - | - | - | - | - | 2,897 |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $22,832 | $7,561 | $16,112 | $1,305 | $386 | - | - | - | $48,196 |
| Current period Gross write-offs | - | - | - | - | - | - | - | - | - |
| Consumer | | | | | | | | | |
| Pass | $2,865 | - | $64 | $93 | $152 | - | $64,992 | - | $68,166 |
| OLEM (Other Loans Especially Mentioned) | - | - | - | - | - | - | - | - | - |
| Substandard | - | - | - | - | - | - | - | - | - |
| Doubtful | - | - | - | - | - | - | - | - | - |
| Loss | - | - | - | - | - | - | - | - | - |
| Subtotal loans | $2,865 | - | $64 | $93 | $152 | - | $64,992 | - | $68,166 |
| Current period Gross write-offs | - | - | $(334) | $(323) | $(33) | $(37) | - | - | $(727) |
(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
| (dollars in thousands) | At June 30, 2026 | At December 31, 2025 |
| --- | --- | --- |
| OREO recorded value at acquisition | - | $605 |
| Subsequent valuation write-down | - | (54) |
| OREO carrying value | - | $551 |
**(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
| (Dollars in thousands, except per share amounts) | 2026 / Three Months Ended / June 30, | 2025 / Three Months Ended / June 30, | 2026 / Six Months Ended / June 30, | 2025 / Six Months Ended / June 30, |
| --- | --- | --- | --- | --- |
| Basic EPS: | | | | |
| Net Income | $6,655 | $3,602 | $11,318 | $7,472 |
| Average Voting Common Shares Outstanding | 12,236,185 | 11,751,082 | 12,106,067 | 11,727,974 |
| Average Nonvoting Common Shares Outstanding | 4,290,765 | - | 2,157,235 | - |
| Average Voting and Nonvoting Common Shares outstanding | 16,526,950 | 11,751,082 | 14,263,302 | 11,727,974 |
| Net income per share | $0.40 | $0.31 | $0.79 | $0.64 |
| Diluted EPS: | | | | |
| Net Income | $6,655 | $3,602 | $11,318 | $7,472 |
| Average Common Shares Outstanding | 16,526,950 | 11,751,082 | 14,263,302 | 11,727,974 |
| Effect of conversion of series B & C preferred shares | 7,167,587 | 11,639,530 | 9,380,353 | 11,639,530 |
| Average diluted shares outstanding | 23,694,537 | 23,390,612 | 23,643,655 | 23,367,504 |
| Net income per share | $0.28 | $0.15 | $0.48 | $0.32 |
**(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
| At June 30, 2026: | (Level 1) / Fair Value Measurements Using / Quoted Prices In Active Markets for Identical Assets | (Level 2) / Fair Value Measurements Using / Significant Other Observable Inputs | (Level 3) / Fair Value Measurements Using / Significant Unobservable Inputs |
| --- | --- | --- | --- |
| SBA Pool Securities | - | $385 | - |
| Collateralized mortgage obligations | - | 101 | - |
| Taxable municipal securities | - | 12,487 | - |
| Mortgage-backed securities | - | 13,673 | - |
| Total | - | $26,646 | - |
| At December 31, 2025: | | | |
| SBA Pool Securities | - | $429 | - |
| Collateralized mortgage obligations | - | 106 | - |
| Taxable municipal securities | - | 12,626 | - |
| Mortgage-backed securities | - | 12,023 | - |
| Total | - | $25,184 | - |
| Debt securities available for sale | - | $25,184 | - |
**(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
| Line item | At June 30, 2026 / Carrying Amount | At June 30, 2026 / Fair Value | At June 30, 2026 / Level | At December 31, 2025 / Carrying Amount | At December 31, 2025 / Fair Value | At December 31, 2025 / Level |
| --- | --- | --- | --- | --- | --- | --- |
| Financial assets: | | | | | | |
| Cash and cash equivalents | $146,238 | $146,238 | 1 | $114,559 | $114,559 | 1 |
| Debt securities available for sale | 26,646 | 26,646 | 2 | 25,184 | 25,184 | 2 |
| Debt securities held-to-maturity | 208 | 183 | 2 | 214 | 190 | 2 |
| Loans | 1,204,381 | 1,200,258 | 3 | 947,294 | 975,648 | 3 |
| Federal Home Loan Bank stock | 1,966 | 1,966 | 3 | 3,028 | 3,028 | 3 |
| Accrued interest receivable | 4,862 | 4,862 | 3 | 3,621 | 3,621 | 3 |
| Financial liabilities: | | | | | | |
| Deposit liabilities | 1,214,045 | 1,196,094 | 3 | 931,750 | 919,187 | 3 |
| Federal Home Loan Bank advances | 25,000 | 25,012 | 3 | 50,000 | 50,029 | 3 |
(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
| Commitments to extend credit | 38,050 |
| --- | --- |
| Unused lines of credit | $81,567 |
| Standby letters of credit | $4,931 |
**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
| As of June 30, 2026: | Actual / Amount | Actual / % | To Be Well Capitalized Under Prompt Corrective Action Regulations / Amount | To Be Well Capitalized Under Prompt Corrective Action Regulations / % |
| --- | --- | --- | --- | --- |
| Tier 1 Capital to Total Assets | $137,634 | 10.54% | $117,469 | 9.00% |
| As of December 31, 2025: | | | | |
| Tier 1 Capital to Total Assets | $125,467 | 11.39% | $99,126 | 9.00% |
(continued)
**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.
(continued)
**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
| Line item | Maturity | Interest / Rate | June 30, 2026 | December 31, 2025 |
| --- | --- | --- | --- | --- |
| FHLB | Jul-26 | 3.88% | 25,000 | - |
| FHLB | Jan-26 | 3.88% | - | 50,000 |
| | | | $25,000 | $50,000 |
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:
| Line item | Six Months Ended / June 30, 2026 | Year Ended / December 31, 2025 |
| --- | --- | --- |
| Average equity as a percentage of average assets | 10.16% | 11.08% |
| Equity to total assets at end of period | 9.59% | 10.97% |
| Return on average assets (1) | 1.81% | 1.64% |
| Return on average equity (1) | 17.81% | 14.83% |
| Noninterest expenses to average assets (1) | 2.62% | 2.48% |
(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)**
| (dollars in thousands) | Three Months Ended June 30, 2026 / Average / Balance | Three Months Ended June 30, 2026 / Interest / Income/ / Expense | Three Months Ended June 30, 2026 / Average / Yield/ / Rate(1) | Three Months Ended June 30, 2025 / Average / Balance | Three Months Ended June 30, 2025 / Interest / Income/ / Expense | Three Months Ended June 30, 2025 / Average / Yield/ / Rate(1) |
| --- | --- | --- | --- | --- | --- | --- |
| Interest-earning assets: | | | | | | |
| Loans | $1,141,791 | $20,386 | 7.16% | $803,171 | $14,026 | 6.99% |
| Securities | 27,042 | 204 | 3.03% | 22,684 | 158 | 2.79% |
| Other interest-earning assets (2) | 121,282 | 1,134 | 3.75% | 123,254 | 1,404 | 4.56% |
| Total interest-earning assets | 1,290,115 | 21,724 | 6.75% | 949,109 | 15,588 | 6.57% |
| Cash and due from banks | 14,702 | | | 12,833 | | |
| Premises and equipment | 2,825 | | | 2,336 | | |
| Other | 4,025 | | | 8,421 | | |
| Total assets | $1,311,667 | | | $972,699 | | |
| Interest-bearing liabilities: | | | | | | |
| Savings, NOW and money-market deposits | 367,750 | 2,168 | 2.36% | $280,454 | 1,742 | 2.48% |
| Time deposits | 462,792 | 4,465 | 3.87% | 330,118 | 3,580 | 4.34% |
| Borrowings (3) | 12,685 | 118 | 3.73% | 2,222 | 24 | 4.32% |
| Notes Payable | 10,770 | 276 | 10.28% | - | - | - |
| Total interest-bearing liabilities | $853,997 | 7,027 | 3.30% | 612,794 | 5,346 | 3.49% |
| Noninterest-bearing demand deposits | 314,858 | | | 241,457 | | |
| Other liabilities | 11,584 | | | 8,502 | | |
| Stockholders’ equity | 131,228 | | | 109,946 | | |
| Total liabilities and stockholders’ equity | $1,311,667 | | | $972,699 | | |
| Net interest income | | $14,697 | | | $10,242 | |
| Interest rate spread (4) | | | 3.45% | | | 3.08% |
| Net interest margin (5) | | | 4.57% | | | 4.32% |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 1.51 | | | 1.55 | | |
| (1) | Annualized. |
| --- | --- |
| (2) | Includes interest-earning deposits with banks and Federal Home Loan Bank stock dividends. |
| (3) | Includes Federal Home Loan Bank Advances. |
| (4) | Interest rate spread represents the difference between average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
| (5) | Net interest margin is net interest income divided by average interest-earning assets. |
(continued)
**Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)**
| (dollars in thousands) | Six Months Ended June 30, 2026 / Average / Balance | Six Months Ended June 30, 2026 / Interest / Income/ / Expense | Six Months Ended June 30, 2026 / Average / Yield/ / Rate(1) | Six Months Ended June 30, 2025 / Average / Balance | Six Months Ended June 30, 2025 / Interest / Income/ / Expense | Six Months Ended June 30, 2025 / Average / Yield/ / Rate(1) |
| --- | --- | --- | --- | --- | --- | --- |
| Interest-earning assets: | | | | | | |
| Loans | $1,091,687 | $38,501 | 7.11% | $800,008 | $27,627 | 6.91% |
| Securities | 26,784 | 396 | 2.98% | 22,831 | 318 | 2.79% |
| Other interest-earning assets (2) | 122,562 | 2,282 | 3.75% | 116,559 | 2,650 | 4.55% |
| Total interest-earning assets | 1,241,033 | 41,179 | 6.69% | 939,398 | 30,595 | 6.51% |
| Cash and due from banks | 12,679 | | | 13,504 | | |
| Premises and equipment | 2,754 | | | 2,238 | | |
| Other | 4,321 | | | 8,134 | | |
| Total assets | $1,260,787 | | | $963,274 | | |
| Interest-bearing liabilities: | | | | | | |
| Savings, NOW and money-market deposits | $351,283 | 4,063 | 2.33% | $278,733 | 3,493 | 2.51% |
| Time deposits | 449,498 | 8,745 | 3.92% | 321,117 | 7,107 | 4.43% |
| Borrowings (3) | 10,955 | 209 | 3.85% | 17,223 | 327 | 3.80% |
| Notes Payable | 5,385 | 272 | 10.18% | - | - | - |
| Total interest-bearing liabilities | 817,121 | 13,289 | 3.28% | 617,073 | 10,927 | 3.54% |
| Noninterest-bearing demand deposits | 305,803 | | | 230,330 | | |
| Other liabilities | 9,705 | | | 8,102 | | |
| Stockholders’ equity | 128,158 | | | 107,769 | | |
| Total liabilities and stockholders’ equity | $1,260,787 | | | $963,274 | | |
| Net interest income | | $27,890 | | | $19,668 | |
| Interest rate spread (4) | | | 3.41% | | | 2.97% |
| Net interest margin (5) | | | 4.53% | | | 4.19% |
| Ratio of average interest-earning assets to average interest-bearing liabilities | 1.52 | | | 1.52 | | |
| (1) | Annualized. |
| --- | --- |
| (2) | Includes interest-earning deposits with banks and Federal Home Loan Bank stock dividends. |
| (3) | Includes Federal Home Loan Bank Advances. |
| (4) | Interest rate spread represents the difference between average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
| (5) | Net interest margin is net interest income divided by average interest-earning assets. |
(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**
| (dollars in thousands, except per share amounts) | Three Months Ended / June 30, 2026 | Three Months Ended / June 30, 2025 | Increase / / (Decrease) / Amount | Increase / / (Decrease) / Percentage |
| --- | --- | --- | --- | --- |
| Total interest income | $21,724 | $15,588 | $6,136 | 39% |
| Total interest expense | 7,027 | 5,346 | 1,681 | 31% |
| Net interest income | 14,697 | 10,242 | 4,455 | 43% |
| Credit loss expense | (37) | 1,040 | (1,077) | (104 |
| Net interest income after credit loss expense | 14,734 | 9,202 | 5,532 | 60% |
| Total noninterest income | 2,486 | 1,834 | 652 | 36% |
| Total noninterest expenses | 8,382 | 6,181 | 2,201 | 36% |
| Income before income taxes | 8,838 | 4,855 | 3,983 | 82% |
| Income taxes | 2,183 | 1,253 | 930 | 74% |
| Net income | $6,655 | $3,602 | 3,053 | 85% |
| Earnings per share - Basic | $0.40 | $0.31 | | |
| Earnings per share - Diluted(1) | $0.28 | $0.15 | | |
(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**
| (Dollars in thousands, except per share amounts) | Six Months Ended / June 30, 2026 | Six Months Ended / June 30, 2025 | Increase / / (Decrease) / Amount | Increase / / (Decrease) / Percentage |
| --- | --- | --- | --- | --- |
| Total interest income | $41,179 | $30,595 | $10,584 | 35% |
| Total interest expense | 13,289 | 10,927 | 2,362 | 22% |
| Net interest income | 27,890 | 19,668 | 8,222 | 42% |
| Credit loss expense | 733 | 875 | (142) | (16 |
| Net interest income after credit loss expense | 27,157 | 18,793 | 8,364 | 45% |
| Total noninterest income | 4,269 | 3,065 | 1,204 | 39% |
| Total noninterest expenses | 16,390 | 11,807 | 4,583 | 39% |
| Income before income taxes | 15,036 | 10,051 | 4,985 | 50% |
| Income taxes | 3,718 | 2,579 | 1,139 | 44% |
| Net income | $11,318 | $7,472 | 3,846 | 51% |
| Earnings per share - Basic | $0.79 | $0.64 | | |
| Earnings per share - Diluted | $0.48 | $0.32 | | |
***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.
**SIGNATURES**
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
**OPTIMUMBANK HOLDINGS, INC.**
(Registrant)
Date: August 10, 2026 By: */s/ Moishe Gubin*
Moishe Gubin
Chief Executive Officer
Date: August 10, 2026 By: */s/ Elliot Nunez*
Elliot Nunez
Chief Financial Officer
**EXHIBIT
INDEX**
| Exhibit No. | Description |
| --- | --- |
| 3.1 | Amended and restated Articles of incorporation (incorporated by reference from Annual Report on Form 10-K filed with the SEC on February 26, 2025) |
| 3.2 | Bylaws (incorporated by reference from Current Report on Form 8-K filed with the SEC on May 11, 2004) |
| 3.3 | 2025 Amended and Restated Certificate of Designation of Series B Preferred Stock on Form 8-K (filed with the SEC on October 1, 2025) |
| 3.4 | Amendment to Amended and Restated Articles of Incorporation of OptimumBank Holdings, Inc., dated April 28, 2026 |
| 4.1 | Form of stock certificate (incorporated by reference from Quarterly Report on Form 10-QSB filed with the SEC on August 16, 2004) |
| 4.2 | Description of Securities (incorporated by reference from Annual Report on Form 10-K filed with the SEC on February 26, 2025) |
| 31.1 | Certification of Principal Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 |
| 31.2 | Certification of Chief Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934 |
| 32.1 | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
---
## EX-3.4
SEC source: [ex3-4.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex3-4.htm)
**Exhibit
3.4**
**AMENDMENT
TO**
**AMENDED
AND RESTATED ARTICLES OF INCORPORATION OF**
**OPTIMUMBANK
HOLDINGS, INC.**
Pursuant
to Sections 607.1001, 607.1003, and 607.1006, *Florida Statutes*, OptimumBank Holdings, Inc. has adopted this Amendment to Amended
and Restated Articles of Incorporation. This amendment was approved by the Board of Directors on January 27, 2026, and by the holders
of Common Stock, which was the only class of stock entitled to vote, on April 28, 2026.
*Article
III to the Articles of Incorporation of OptimumBank Holdings, Inc. shall read in its entirety:*
(a)
The aggregate number of shares of stock of all classes that the Corporation shall have authority to issue is 66,000,000 shares, of which
30,000,000 shares shall be voting common stock, par value $0.01 per share (“Voting Common Stock”), 30,000,000 shares shall
be nonvoting common stock, par value $0.01 per share (“Nonvoting Common Stock”), and of which 6,000,000 shares shall be preferred
stock, no par value (“Preferred Stock”).
(b)
Except as otherwise required by the Florida Business Corporation Act, holders of Nonvoting Common Stock shall have no voting rights and
shall not be entitled to notice of shareholder meetings. Nonvoting Common Stock shall be identical to Voting Common Stock in all respects,
except with respect to voting rights, including, but not limited to:
(i) Dividends: Both Voting Common Stock and Nonvoting Common Stock shall participate equally and ratably in dividends when and if declared by the Board of Directors; and
(ii) Liquidation: Upon liquidation, dissolution, or winding up of the Corporation, holders of Voting Common Stock and Nonvoting Common Stock shall share equally, on a per share basis, in all assets available for distribution after payment of liabilities.
(c)
The Board of Directors of the Corporation is hereby granted the authority, subject to the provisions of this Article III and to the limitations
prescribed by law, to classify the unissued shares of Preferred Stock into one or more series of Preferred Stock and with respect to
each such series to fix by resolution or resolutions providing for the issuance of such series the terms, including the preferences,
rights and limitations, of such series. Each series shall consist of such number of shares as shall be stated in the resolution or resolutions
providing for the issuance of such series together with such additional number of shares as the Board of Directors by resolution or resolutions
may from time to time determine to issue as a part of the series. The Board of Directors may from time to time decrease the number of
shares of any series of Preferred Stock (but not below the number thereof then outstanding) by providing that any unissued shares previously
assigned to such series shall no longer constitute part thereof and restoring such unissued shares to the status of authorized but unissued
shares of Preferred Stock.
(d)
The authority of the Board of Directors with respect to each series shall include, but not be limited to, determination of the following:
(i) The number of shares constituting that series and the distinctive designation of that series;
(ii) The dividend rate on the shares of that series, whether dividends shall be cumulative, and if so, from which date or dates, and the relative rights of priority, if any, of payments of dividends on shares of that series;
(iii) Whether that series shall have voting rights, in addition to the voting rights provided by law, and, if so, the terms of such voting rights;
(iv) Whether that series shall have conversion privileges, and, if so, the terms and conditions of such conversion, including provision for adjustment of the conversion rate in such events as the Board of Directors shall determine;
(v) Whether or not the shares of that series shall be redeemable, and, if so, the terms and conditions of such redemption, including the date or dates upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption rates;
(vi) Whether that series shall have a sinking fund for the redemption or purchase of shares of that series, and, if so, the terms and amount of such sinking fund; and
(vii) Any other relative rights, preferences, and limitations of that series.
(e)
The holders of shares of each series of Preferred Stock shall be entitled upon liquidation or dissolution, or upon the distribution of
the assets, of the Corporation to such preferences as provided in the resolution or resolutions creating the series, and no more, before
any distribution of the assets of the Corporation shall be made to the holders of any other series of Preferred Stock or to the holders
of shares of Voting Common Stock or Nonvoting Common Stock. Whenever the holders of shares of Preferred Stock of all series shall have
been paid the full amounts to which they shall be entitled, the holders of shares of Voting Common Stock and Nonvoting Common Stock shall
be entitled to shares ratably in all the remaining assets of the Corporation.
The
undersigned duly authorized officer of OptimumBank Holdings, Inc. executed this Amendment to Amended and Restated Articles of Incorporation
on April 28, 2026.
**OPTIMUMBANK HOLDINGS, INC.**
*/s/ Moishe Gubin*
Moishe Gubin
Chairman of the Board of Directors
---
## EX-31.1
SEC source: [ex31-1.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex31-1.htm)
**EXHIBIT
31.1**
**CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER**
**REQUIRED
BY RULE 13a-14(a)/15d-14(a)**
**UNDER
THE SECURITIES EXCHANGE ACT OF 1934**
I
certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Optimum Bank Holdings, Inc. (the “Company”); |
| --- | --- |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others
within that entity, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
*/s/ Moishe Gubin*
Moishe Gubin
Principal Executive Officer
Date: August 10, 2026
---
## EX-31.2
SEC source: [ex31-2.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex31-2.htm)
**EXHIBIT
31.2**
**CERTIFICATION
OF Principal FINANCIAL OFFICER**
**REQUIRED
BY RULE 13a-14(a)/15d-14(a)**
**UNDER
THE SECURITIES EXCHANGE ACT OF 1934**
I
certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Optimum Bank Holdings, Inc. (the “Company”); |
| --- | --- |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others
within that entity, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions
about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
and
(d)
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s
most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,
or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;
and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s
internal control over financial reporting.
*/s/ Elliot Nunez*
Elliot Nunez
Principal Financial Officer
Date: August 10, 2026
---
## EX-32.1
SEC source: [ex32-1.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex32-1.htm)
**EXHIBIT
32.1**
**CERTIFICATION
OF PRINCIPAL EXECUTIVE OFFICER**
**PURSUANT
TO 18 U.S.C. SECTION 1350,**
**AS
ADOPTED BY**
**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**
In
connection with the Quarterly Report of OptimumBank Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June
30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, as Principal Executive Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted by § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
*/s/ Moishe Gubin*
Moishe Gubin
Chief Executive Officer
Date: August 10, 2026
---
## EX-32.2
SEC source: [ex32-2.htm](https://www.sec.gov/Archives/edgar/data/1288855/000149315226036825/ex32-2.htm)
**EXHIBIT
32.2**
**CERTIFICATION
OF Chief FINANCIAL OFFICER**
**PURSUANT
TO 18 U.S.C. SECTION 1350,**
**AS
ADOPTED BY**
**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**
In
connection with the Quarterly Report of OptimumBank Holdings, Inc. (the “Company”) on Form 10-Q for the period ended June
30, 2026, as filed with the Securities and Exchange Commission (the “Report”), I, as Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. § 1350, as adopted by § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
*/s/ Elliot Nunez*
Elliot Nunez
Chief Financial Officer
Date: August 10, 2026