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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 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: 12,268,363 shares of common stock, $0.01 par value, issued and outstanding as of May 11, 2026.

 

 

 

 
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

INDEX

 

  Page
   
PART I. FINANCIAL INFORMATION 1
   
Item 1. Financial Statements 1
   
Condensed Consolidated Balance Sheets — March 31, 2026 (unaudited) and December 31, 2025 (audited) 1
   
Condensed Consolidated Statements of Earnings — Three Months ended March 31, 2026 and 2025 (unaudited) 2
   
Condensed Consolidated Statements of Comprehensive Income — Three Months ended March 31, 2026 and 2025 (unaudited) 3
   
Condensed Consolidated Statements of Stockholders’ Equity — Three Months ended March 31, 2026 and 2025 (unaudited) 4
   
Condensed Consolidated Statements of Cash Flows — Three Months ended March 31, 2026 and 2025 (unaudited) 5
   
Notes to Condensed Consolidated Financial Statements (unaudited) 6
   
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 20
   
Item 3. Quantitative and Qualitative Disclosures About Market Risk 24
   
Item 4. Controls and Procedures 24
   
PART II. OTHER INFORMATION 25
   
Item 1. Legal Proceedings 25
   
Item 1A. Risk Factors 25
   
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25
   
Item 3. Defaults Upon Senior Securities 25
   
Item 4. Mine Safety Disclosures 25
   
Item 5. Other Information 25
   
Item 6. Exhibits 25
   
SIGNATURES 26

 

i
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

Condensed Consolidated Balance Sheets

(Dollars in thousands, except share amounts)

 

   March 31,   December 31, 
   2026   2025 
   (Unaudited)   (Audited) 
Assets:          
Cash and due from banks  $15,074   $9,349 
Interest-bearing deposits with banks   124,942    105,210 
Total cash and cash equivalents   140,016    114,559 
Debt securities available for sale   27,044    25,184 
Debt securities held-to-maturity (fair value of $188 and $190)   212    214 
Loans, net of allowance for credit losses of $11,061 and $10,273   1,078,533    947,294 
Federal Home Loan Bank stock   2,678    3,028 
Premises and equipment, net   2,797    2,490 
Other real estate owned   -    551 
Right-of-use lease assets   2,511    2,617 
Accrued interest receivable   3,994    3,621 
Deferred tax asset   3,116    3,108 
Other assets   7,834    9,012 
Total assets  $1,268,735   $1,111,678 
           
Liabilities and Stockholders’ Equity:          
Liabilities:          
Noninterest-bearing demand deposits  $304,887   $266,520 
Savings, NOW and money-market deposits   345,494    306,921 
Time deposits   442,502    358,309 
Total deposits   1,092,883    931,750 
           
Federal Home Loan Bank advances   40,000    50,000 
Operating lease liabilities   2,647    2,745 
Other liabilities   6,357    5,286 
Total liabilities   1,141,887    989,781 
           
Commitments and contingencies (Notes 9 and 13)         
Stockholders’ equity:          
Preferred stock, no par value; 6,000,000 shares authorized:        
Series B Convertible Preferred, no par value, 1,360 shares authorized, 1,295 and 1,360 shares issued and outstanding        
Series C Convertible Preferred, no par value, 4,000,000 shares authorized, 875,641 shares issued and outstanding        
Common stock, $.01 par value; 30,000,000 shares authorized, 12,166,858 and 11,533,943 shares issued and outstanding   122    115 
Additional paid-in capital   112,993    112,578 
Retained earnings   18,464    13,801 
Accumulated other comprehensive loss   (4,731)   (4,597)
Total stockholders’ equity   126,848    121,897 
Total liabilities and stockholders’ equity  $1,268,735   $1,111,678 

 

See accompanying notes to condensed consolidated financial statements.

 

1
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Earnings (Unaudited)

(Dollars in thousands, except per share amounts)

 

   2026   2025 
   Three Months Ended 
   March 31, 
   2026   2025 
Interest income:          
Loans  $18,114   $13,601 
Debt securities   191    160 
Other   1,148    1,246 
Total interest income   19,453    15,007 
           
Interest expense:          
Deposits   6,176    5,278 
Borrowings   87    303 
Total interest expense   6,263    5,581 
           
Net interest income   13,190    9,426 
           
Credit loss expense (reversal)   770    (165)
Net interest income after credit loss expense   12,420    9,591 
           
Noninterest income:          
Service charges and fees   1,313    1,038 
Other   471    193 
Total noninterest income   1,784    1,231 
           
Noninterest expenses:          
Salaries and employee benefits   4,988    3,381 
Professional fees   295    247 
Occupancy and equipment   338    282 
Data processing   914    533 
Regulatory assessment   179    198 
Gain on sale and write-downs of other real estate owned   (5)   - 
Other   1,297    985 
Total noninterest expenses   8,006    5,626 
           
Net income before income taxes   6,198    5,196 
           
Income taxes   1,535    1,326 
Net income  $4,663   $3,870 
           
Earnings per share - Basic  $0.39   $0.33 
Earnings per share - Diluted(1)  $0.20   $0.17 

 

(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 11. 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.

 

2
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

(Dollars in thousands)

 

         
   Three Months Ended 
   March 31, 
   2026   2025 
         
Net Income  $4,663   $3,870 
Other comprehensive income:          
Change in unrealized loss on debt securities:          
Unrealized (loss) gain arising during the period   (182)   561 
Amortization of unrealized loss on debt securities transferred to held-to-maturity   1    (1)
Other comprehensive income before income taxes   (181)   560 
Deferred income tax expense   47    (143)
Total other comprehensive (loss) income   (134)   417 
Comprehensive income  $4,529   $4,287 

 

See accompanying notes to condensed consolidated financial statements.

 

3
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Stockholders’ Equity (Unaudited)

Three Months Ended March 31, 2026 and 2025

(Dollars in thousands, except share amounts)

 

   Shares   Amount   Shares   Amount   Shares   Amount   Capital   earnings   Loss   Equity 
                   (Accumulated   Accumulated     
   Preferred Stock           Additional   Deficit)   Other     
   Series B   Series C   Common Stock   Paid-In   Retained   Comprehensive   Stockholders’ 
   Shares   Amount   Shares   Amount   Shares   Amount   Capital   earnings   Loss   Equity 
                                         
Balance at December 31, 2024   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 $16) (Unaudited)   -    -    -    -    52,819    1    235    -    -    236 
                                                   
Stock-based compensation (Unaudited)   -    -    -    -    62,171    1    295    -    -    296 
                                                   
Net change in unrealized gain on debt securities available for sale (Unaudited)   -    -    -    -    -    -    -    -    418    418 
                                                   
Amortization of unrealized loss on debt securities transferred to held-to-maturity (Unaudited)   -    -    -    -    -    -    -    -    (1)   (1)
                                                   
Net Income (Unaudited)   -    -    -    -    -    -    -    3,870    -    3,870 
                                                   
Balance at March 31, 2025 (Unaudited)   1,360    $-    525,641   $-    11,751,082   $118   $112,015   $1,023   $(5,153)  $108,003 
                                                   
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    (6)    -     -    (1)
Proceeds from sale of common stock (net of offering costs of $11) (Unaudited)   -     -    -     -    421    1    (9)    -     -    (8)
Stock-based compensation (Unaudited)   -      -    -     -    101,315    1    430     -     -    431 
Net change in unrealized loss on debt securities available for sale (Unaudited)   -      -    -     -     -     -    -     -    (135)   (135)
Amortization of unrealized loss on debt securities transferred to held-to-maturity (Unaudited)   -      -     -     -     -     -    -     -    1    1 
Net income (Unaudited)   -      -     -     -     -     -    -    4,663     -    4,663 
Balance at March 31, 2026 (Unaudited)   1,295   $-    875,641   $-    12,166,858   $122   $112,993   $18,464   $(4,731)  $126,848 

 

See accompanying notes to condensed consolidated financial statements.

 

4
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Condensed Consolidated Statements of Cash Flows (Unaudited)

(Dollars in thousands)

 

    2026     2025  
    Three Months Ended  
    March 31,  
    2026     2025  
Cash flows from operating activities:                
Net income   $ 4,663     $ 3,870  
Adjustments to reconcile net income to net cash provided by operating activities:                
Credit loss expense (reversal)     770       (165 )
Depreciation and amortization     132       96  
Gain on sale of other real estate owned     (5 )     -  
Deferred income tax benefit     39       81  
Net (accretion) amortization of fees, premiums and discounts     (65 )     1  
Stock-based compensation expense     431       296  
(Increase) decrease in accrued interest receivable     (373 )     61  
Amortization of right-of-use lease assets     106       32  
Net decrease in operating lease liabilities     (98 )     (28 )
(Increase) decrease in other assets     1,178       (135 )
Increase (decrease) in other liabilities     1,092       (974 )
Net cash provided by operating activities     7,870       3,135  
                 
Cash flows from investing activities:                
Principal repayments of debt securities available for sale     278       261  
Principal repayments of debt securities held-to-maturity     3       11  
Net (increase) decrease in loans     (131,943 )     3,926  
Proceeds from sale of other real estate owned     556       -  
Purchases of premises and equipment     (439 )     (283 )
Purchase of debt securities available for sale     (2,342 )     -  
Redemption of FHLB stock     350       1,801  
Net cash used in investing activities     (133,537 )     5,716  
                 
Cash flows from financing activities:                
Net increase in deposits     161,133       80,739  
Net decrease in FHLB Advances     (10,000 )     (40,000 )
Proceeds from conversion of preferred stock     (1 )     -  
Proceeds from sale of common stock (net of offering costs of $11 and $16)     (8 )     236  
Net cash provided by financing activities     151,124       40,975  
                 
Net increase in cash and cash equivalents     25,457       49,826  
Cash and cash equivalents at beginning of the period     114,559       93,630  
Cash and cash equivalents at end of the period   $ 140,016     $ 143,456  
                 
Supplemental disclosure of cash flow information:                
Cash paid during the period for:                
Interest   $ 5,108     $ 4,796  
Income taxes   $ -     $ 479  
                 
Supplemental noncash transactions:                
Net change in unrealized gain (loss) on debt securities available for sale, net of income taxes   $ (135 )   $ 418  
Amortization of unrealized loss on debt securities transferred to held-to-maturity   $ 1     $ (1 )

 

See accompanying notes to condensed consolidated financial statements.

 

5
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(1) General. OptimumBank Holdings, Inc. (the “Company”) is a bank 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, asset-based lending 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.

 

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 March 31, 2026, the results of operations for the three-month ended March 31, 2026 and 2025, and cash flows for the three-month periods ended March 31, 2026 and 2025. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three-month ended March 31, 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):

  

   March 31,   December 31, 
   2026   2025 
         
Unrealized loss on debt securities available for sale  $(6,326)  $(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   1,604    1,558 
Accumulated other comprehensive loss  $(4,731)  $(4,597)

 

Recently Adopted Accounting Pronouncements:

 

Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2023-09, “Income Taxes (Topic 740) Improvements to Income Tax Disclosures”. The Company adopted ASU 2023-09 during the year ended December 31, 2025. The amendments enhance income tax disclosures, primarily related to the rate reconciliation and income taxes paid. The adoption of this guidance was applied prospectively and did not have a material impact on the Company’s consolidated financial statements.

 

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)

 

6
 

 

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):

  

       Gross   Gross     
   Amortized   Unrealized   Unrealized   Fair 
   Cost   Gains   Losses   Value 
                 
At March 31, 2026:                    
Available for sale:                    
SBA Pool Securities  $404   $             -   $(10)  $394 
Collateralized mortgage obligations   117    -    (13)   104 
Taxable municipal securities   16,607    -    (4,066)   12,541 
Mortgage-backed securities   16,242    -    (2,237)   14,005 
Total  $33,370   $-   $(6,326)  $27,044 
                     
Held-to-maturity:                    
Collateralized mortgage obligations  $212   $-   $(24)  $188 
Total  $212   $-   $(24)  $188 
                     
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)

 

7
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(2) Debt Securities, Continued.

 

As of March 31, 2026, debt securities with a fair value of $52.1 million were pledged as collateral to the Federal Reserve Bank. There were no sales of debt securities during the three-month ended March 31, 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):

  

   Over Twelve Months   Less Than Twelve Months 
   Gross       Gross     
   Unrealized   Fair   Unrealized   Fair 
   Losses   Value   Losses   Value 
At March 31, 2026:                    
Available for Sale:                    
SBA Pool Securities  $(10)  $394   $            -   $         - 
Collateralized mortgage obligation   (13)   104    -    - 
Taxable municipal securities   (4,066)   12,541    -    - 
Mortgage-backed securities   (2,117)   9,419    (120)   4,586 
Total  $(6,206)  $22,458   $(120)  $4,586 

 

   Over Twelve Months   Less Than Twelve Months 
   Gross       Gross     
   Unrealized   Fair   Unrealized   Fair 
   Losses   Value   Losses   Value 
                 
At December 31, 2025:                    
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 March 31, 2026 and December 31, 2025, the unrealized losses on 42 investment debt securities, respectively, 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 U.S. government 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 bonds 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 March 31, 2026 and December 31, 2025 all municipal securities were rated as investment grade. All debt securities in an unrealized loss position as of March 31, 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 March 31, 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)

 

8
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

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

  

   March 31,   December 31, 
   2026   2025 
         
Residential real estate  $73,130   $74,018 
Multi-family real estate   63,655    65,693 
Commercial real estate   790,238    666,508 
Land and construction   41,000    36,212 
Commercial   46,127    48,196 
Consumer   76,744    68,166 
Total loans   1,090,894    958,793 
           
Deduct:          
Net deferred loan fees and costs   (1,300)   (1,226)
Allowance for credit losses   (11,061)   (10,273)
           
Loans, net  $1,078,533   $947,294 

 

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

  

   Residential Real   Multi-Family Real   Commercial   Land and             
   Estate   Estate   Real Estate   Construction   Commercial   Consumer   Total 
                             
Three Months Ended March 31, 2026:                                   
Beginning balance (December 31, 2025)  $1,477   $666   $4,608   $1,077   $2,351   $94   $10,273 
Credit loss expense (reversal)   (196)   (116)   806    132    151    14    791 
Charge-offs   -    -    -    -    -    (44)   (44)
Recoveries   -    -    -    -    -    41    41 
Ending balance (March 31, 2026)  $1,281   $550   $5,414   $1,209   $2,502   $105   $11,061 
                                    
Three Months Ended March 31, 2025:                                   
Beginning balance (December 31, 2024)  $1,114   $786   $2,705   $2,015   $1,675   $365   $8,660 
Credit loss (reversal) expense   (48)   129    (108)   6    (87)   (36)   (144)
Charge-offs   -    -    -    -    -    (325)   (325)
Recoveries   -    -    -    -    -    79    79 
Ending balance (March 31, 2025)  $1,066   $915   $2,597   $2,021   $1,588   $83   $8,270 

 

(continued)

 

9
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

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:

  

   2026   2025 
   Three Months Ended 
   March 31, 
   2026   2025 
Credit loss expense - funded  $791    (144)
Credit loss expense (reversal) - unfunded   (21)   (21)
Total Credit loss expense  $770    (165)

 

(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.

 

(continued)

 

10
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(3) Loans, Continued.

 

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.

 

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

  

   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 March 31, 2026:                                   
Residential real estate  $196   $-   $-   $196   $72,934   $-   $73,130 
Multi-family real estate   -    -    -    -    63,655    -    63,655 
Commercial real estate   -    -    -    -    790,238    -    790,238 
Land and construction   -    -    -    -    41,000    -    41,000 
Commercial   1,015    -    -    1,015    42,952    2,160    46,127 
Consumer   65    29    -    94    76,650    -    76,744 
Total  $1,276   $29   $-   $1,305   $1,087,429   $2,160   $1,090,894 
                                    
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 three-month ended March 31, 2026 and 2025.

 

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

  

   March 31, 2026 
   Nonaccrual   Nonaccrual   Total 
(dollars in thousands)  Without ACL   With ACL   Nonaccrual 
Commercial   919    1,241    2,160 
Total   919    1,241    2,160 

 

   December 31, 2025 
   Nonaccrual   Nonaccrual   Total 
(dollars in thousands)  Without ACL   With ACL   Nonaccrual 
Commercial              954                1,943                   2,897 
Total  $954   $1,943   $2,897 

 

(continued)

 

11
 

 

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 March 31, 2026 and December 31, 2025 under the current expected credit loss model:

  

   March 31, 2026 
(dollars in thousands)  Real Estate   Other   Total 
Commercial  $895   $1,073   $1,968 
Total   895    1,073    1,968 

 

   December 31, 2025 
(dollars in thousands)  Real Estate   Other   Total 
Commercial   901    1,996    2,897 
Total  $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)

 

12
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(3) Loans, Continued.

 

(Dollars in thousands) 

Year 5

   Year 4   Year 3   Year 2   Year 1   Prior  

Revolving Loans (Amortized Cost Basis)

  

Revolving Loans Converted to Term Loans (Amortized Cost Basis)

   Subtotal loans  
   Term Loans   Revolving Loans   Revolving Loans Converted to Term Loans     
   Amortized Cost Basis by Origination Year   (Amortized   (Amortized     
(dollars in thousands) 

March

31, 2026

   2025   2024   2023   2022   Prior  

Cost

Basis)

  

Cost

Basis)

   Total 
Residential real estate                                             
Pass  $             -   $13,936   $-   $21,112   $21,015   $16,592   $-   $-   $72,655 
OLEM (Other Loans Especially Mentioned)   -    -    -    -    -    -    -    -    - 
Substandard   -    -    -    -    -    475    -    -    475 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $-   $13,936   $-   $21,112   $21,015   $17,067   $-   $-   $73,130 
Current period gross write-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Multi-family real estate                                           - 
Pass  $1,116   $-   $4,946   $9,952   $23,832   $23,233   $-   $-   $63,079 
OLEM (Other Loans Especially Mentioned)   -    -    -    576    -    -    -    -    576 
Substandard   -    -    -    -    -    -    -    -    - 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $1,116   $-   $4,946   $10,528   $23,832   $23,233   $-   $-   $63,655 
Current period gross write-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial real estate (CRE)                                           - 
Pass  $118,010   $209,190   $76,335   $125,643   $181,487   $77,691   $-   $-   $788,356 
OLEM (Other Loans Especially Mentioned)   -    -    -    741    -    -    -    -    741 
Substandard   -    -    -    -    -    1,141    -    -    1,141 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $118,010   $209,190   $76,335   $126,384   $181,487   $78,832   $-   $-   $790,238 
Current period gross write-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Land and construction                                           - 
Pass  $-   $8,361   $2,363   $9,269   $19,789   $1,218   $-   $-   $41,000 
OLEM (Other Loans Especially Mentioned)   -    -    -    -    -    -    -    -    - 
Substandard   -    -    -    -    -    -    -    -    - 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $-   $8,361   $2,363   $9,269   $19,789   $1,218   $-   $-   $41,000 
Current period gross write-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Commercial                                           - 
Pass  $983   $20,276   $5,422   $12,195   $1,468   $322   $-   $-   $40,666 
OLEM (Other Loans Especially Mentioned)   -    -    -    2,317    -    -    -    -    2,317 
Substandard   973    1,073    1,098    -    -    -    -    -    3,144 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $1,956   $21,349   $6,520   $14,512   $1,468   $322   $-   $-   $46,127 
Current period gross write-offs  $-   $-   $-   $-   $-   $-   $-   $-   $- 
Consumer                                           - 
Pass  $2,270   $-   $-   $51   $77   $105   $74,241   $-   $76,744 
OLEM (Other Loans Especially Mentioned)   -    -    -    -    -    -    -    -    - 
Substandard   -    -    -    -    -    -    -    -    - 
Doubtful   -    -    -    -    -    -    -    -    - 
Loss   -    -    -    -    -    -    -    -    - 
Subtotal loans  $2,270   $-   $-   $51   $77   $105   $74,241   $-   $76,744 
Current period gross write-offs  $-   $-   $-   $(7)  $(20)  $(17)  $-   $-   $(44)

 

(continued)

 

13
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(3) Loans, Continued.

 

(dollars in thousands)  Year 5   Year 4   Year 3   Year 2   Year 1   Prior   Revolving Loans (Amortized Cost Basis)   Revolving Loans Converted to Term Loans (Amortized Cost Basis)   Subtotal loans 
   Term Loans
Amortized Cost Basis by Origination Year
   Revolving Loans
(Amortized Cost
   Revolving Loans
Converted to Term
Loans (Amortized Cost
     
(dollars in thousands)  2025   2024   2023   2022   2021   Prior   Basis)   Basis)   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)

 

14
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(4) Other Real Estate Owned (OREO): As of March 31, 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.

 

   2026   2025 
   March 31,
2026
   December 31,
2025
 
(dollars in thousands)        
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 11. This amendment resulted in a change in the calculation of diluted earnings per share, applied retrospectively to ensure comparability.

  

   Three Months Ended 
   March 31, 
   2026   2025 
(dollars in thousands, except per share amounts)  Earnings   Weighted
Average Shares
   Amount   Earnings   Weighted
Average Shares
   Amount 
                         
Basic EPS:  $4,663    11,974,503   $0.39   $3,870    11,704,610   $0.33 
Effect of conversion of series B & C preferred shares        11,617,705              11,639,530      
                               
Diluted EPS:  $4,663    23,592,208   $0.20   $3,870    23,344,140   $0.17 

 

(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 to 1,550,000 shares of common stock under the 2018 Plan. At March 31, 2026, 627,309 shares remain available for grant.

 

During the three-month periods ended March 31, 2026 and 2025, the Company issued 101,315 and 62,171 shares, respectively, to employees for services performed and recorded compensation expense of $431,000 and $296,000, respectively.

 

(continued)

 

15
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(7) Fair Value Measurements.

 

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

 

   Fair Value   (Level 1)   (Level 2)   (Level 3) 
   Fair Value Measurements Using 
       Quoted Prices   Significant     
       In Active   Other   Significant 
       Markets for   Observable   Unobservable 
       Identical Assets   Inputs   Inputs 
   Fair Value   (Level 1)   (Level 2)   (Level 3) 
At March 31, 2026:                    
SBA Pool Securities  $394   $        -   $394   $               - 
Collateralized mortgage obligations   104    -    104    - 
Taxable municipal securities   12,541    -    12,541    - 
Mortgage-backed securities   14,005    -    14,005    - 
Total  $27,044   $-   $27,044   $- 
                     
At December 31, 2025:                    
SBA Pool Securities  $429   $-   $429   $- 
Collateralized mortgage obligations   106    -    106    - 
Taxable municipal securities   12,626    -    12,626    - 
Mortgage-backed securities   12,023    -    12,023    - 
Total  $25,184   $-   $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):

 

   At March 31, 2026   At December 31, 2025 
   Carrying
Amount
   Fair Value   Level   Carrying Amount   Fair Value   Level 
                         
Financial assets:                              
Cash and cash equivalents  $140,016   $140,016    1   $114,559   $114,559    1 
Debt securities available for sale   27,044    27,044    2    25,184    25,184    2 
Debt securities held-to-maturity   212    188    2    214    190    2 
Loans   1,078,533     1,092,756     3    947,294    975,648    3 
Federal Home Loan Bank stock   2,678    2,678    3    3,028    3,028    3 
Accrued interest receivable   3,994    3,994    3    3,621    3,621    3 
                               
Financial liabilities:                              
Deposit liabilities   1,092,883     1,077,390     3    931,750    919,187    3 
Federal Home Loan Bank advances   40,000     40,010     3    50,000    50,029    3 

 

(continued)

 

16
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(9) 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 March 31, 2026 follows (dollars in thousands):

 

Commitments to extend credit  $41,900 
      
Unused lines of credit  $64,293 
      
Standby letters of credit  $3,943 

 

(10) 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 March 31, 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):

 

   Actual   To Be Well Capitalized Under Prompt Corrective Action Regulations 
   Amount   %   Amount   % 
As of March 31, 2026:                    
Tier 1 Capital to Total Assets  $130,491    10.74%  $109,311    9.00%
                     
As of December 31, 2025:                    
Tier 1 Capital to Total Assets  $125,467    11.39%  $99,126    9.00%

 

(continued)

 

17
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

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

 

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 declares or pays 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 does not carry a stated dividend rate, and dividends are payable only if and when declared on the common stock. The Series B Preferred Stock has preferential liquidation rights over common stockholders. The liquidation price is 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 has no voting rights except as provided in the Certificate of Designation.

 

As a result of the amendment, each share of Series B Preferred Stock is 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 is 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 represents 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. As of March 31, 2026, 1,295 shares of Series B Preferred Stock were outstanding. If all outstanding shares of Series B Preferred Stock were converted as of March 31, 2026, such conversion would result in the issuance of approximately 10,582,740 shares of the Company’s common stock, based on the stated conversion rate. Conversion of the Series B Preferred Stock is at the option of the holder.

  

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 is 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 three-month period ended March 31, 2026, the Company sold an additional 421 common stock shares under the ATM program, generating net proceeds of ($8,000). 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 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.

 

(continued)

 

18
 

 

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARIES

 

Notes to Condensed Consolidated Financial Statements (Unaudited)

 

(12) Subsequent Events.

 

On April 28, 2026, the Board has 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 accordance with the Articles Amendment, the Company expects to exchange 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 Q2 2026. The Company does not expect the amendment to have a material impact on its condensed consolidated financial statements.

 

(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):

 

       Interest   March 31,   December 31, 
  Maturity   Rate   2026   2025 
FHLB   April 2026    3.88%   40,000    - 
FHLB   January 2026    3.88%   -    50,000 
             $40,000   $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 March 31, 2026, the Company had credit availability of $293.4 million. At March 31, 2026, the Company had loans pledged with a carrying value of $579.9 million as collateral for any FHLB advances.

 

In addition, the Bank has a collateralized line of credit with the Federal Reserve Bank, which is secured by debt securities with fair value of $52.1 million as of March 31, 2026.

 

At March 31, 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 March 31, 2026 there were no borrowings under these lines of credit.

 

(continued)

 

19
 

 

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 key strategic initiatives are designed to generate continued growth in earning assets, core transaction deposits, treasury management fee income, while operating with an efficient cost structure. Continued emphasis on expansion of our South Florida customer base, along with and exploring additional niche lines of business through OptimumFunding, LLC and OptimumFinance, LLC, are also part of our strategic plan.

 

We believe providing our clients with reasonable solutions that meet their business and personal needs fosters stability in our client base, builds full-service banking relationships, and allows for profitable growth that enhances shareholder returns. We intend to deliver the solutions to clients in a very personalized manner while investing in talent and leveraging modern technology to facilitate efficiency and decrease client pain points while enhancing our competitiveness.

 

We are focused on full-service banking relationships, continuing to identify deposit growth opportunities among our existing customer base and prospects throughout South Florida, Florida, and the United States. Improving our core funding capabilities is foundational to the ability to support our opportunity to capitalize on the strong business and real estate market in South Florida and with our niche skilled nursing facility and merchant cash advance markets. We will accomplish this through the addition of experienced and skilled bankers to our business development and retail banking teams, and we are modernizing and improving our products and digital services to better support our personalized business model. This includes upgrading our core banking system, including our online banking and mobile banking applications. We believe adding this talent and upgrading our core banking system and client facing applications will allow us to better service local area small businesses that will add granularity and diversification to our customer base and balance sheet, while improving the utilization of our local area branches.

 

In early 2026, the Company formed OptimumFinance LLC, a wholly owned non-bank, asset-based lending subsidiary. The subsidiary was created to expand the company’s commercial real estate lending capabilities through flexible bridge and transitional financing solutions. Through OptimumFinance, the Company is able to provide flexible, short-term financing to acquire and reposition assets, and provides a single platform to support clients from bridge origination through permanent financing.

 

In late 2025, the Company formed OptimumHUD Loans, LLC (d/b/a) as OptimumFunding, LLC, a wholly owned non-bank subsidiary. When the subsidiary commences operations, it is expected to support a focused suite of financing solutions, including bridge-to Housing and Urban Development (“HUD”) financing to support acquisitions, refinancing and repositioning to facilitate a transition to long-term HUD or Federal Housing Administration (“FHA”) financing and FHA and HUD loan origination capability for multifamily and healthcare properties. The platform will deliver specialized expertise serving skilled nursing facilities, senior housing, and multifamily assets, building upon the Company’s established lending relationships and sector knowledge.

 

Modernizing our technology and improving our products and services allows us to better support our personalized business model to our niche business owner-operator client base with less friction, a human touch, and we believe better convenience than the large banks. In coordination with our Treasury Cash Management capabilities this has allowed us to enter niche businesses including banking services to Skilled Nursing Facilities in the areas of CRE and Asset-Based Lending (“ABL”) while capturing the business operating accounts. In addition, we have built capabilities in Small Business Administration (SBA) lending, entering the space in late 2023 and being designated as a Preferred Lender under the SBA’s Preferred Lenders Program (“PLP”) in the first quarter of 2025. Under the program the Bank offers SBA-guaranteed 7A loans generally secured by accounts receivable, inventory, equipment, or real estate. Management has implemented initiatives that have enabled us to grow our loan portfolio primarily with South Florida and Florida generated relationships in the commercial real estate, owner-occupied commercial real estate, multifamily, and commercial and industrial sectors.

 

In treasury management services, our primary focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. For this revenue source to increase further in a meaningful way, automation will be necessary to further improve efficiency. We are currently investing in the necessary technology and expect efficiencies to occur throughout 2026 and beyond.

 

(continued)

 

20
 

 

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

 

Our strategic plan emphasizes and builds upon initiatives focused on strengthening credit oversight and credit administrative processes and procedures. Moreover, management continues to identify loan growth opportunities through our subsidiaries that are designed to improve overall profitability without sacrificing credit quality and underwriting standards. This growth oriented strategic direction is expected to be facilitated by maintaining credit administration objectives including a risk-based and comprehensive credit culture and a credit administrative infrastructure that reinforces appropriate risk management practices.

 

Financial Condition at March 31, 2026 and December 31, 2025

 

Capital Levels

 

As of March 31, 2026 and December 31, 2025, the Bank is well capitalized under regulatory guidelines.

 

Refer to Note 10 in the condensed consolidated financial statements, which presents the Bank’s actual and required minimum capital ratios under Prompt Corrective Action Regulations (“CBLR Framework”).

 

Overview

 

The Company’s total assets increased by approximately $157.1 million to $1.3 billion at March 31, 2026, from $1.1 billion at December 31, 2025, primarily due to increases in loans. Net loans increased by $131.2 million to $1.1 billion at March 31, 2026, from $947.3 million at December 31, 2025. Deposits grew by approximately $161.1 million to $1.1 billion at March 31, 2026, from $931.8 million at December 31, 2025. Total stockholders’ equity increased by approximately $5 million to $126.8 million at March 31, 2026, from $ 121.9 million at December 31, 2025, primarily due to net income and stock-based compensation.

 

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

 

   Thress Months Ended   Year Ended 
   March 31, 2026   December 31, 2025 
         
Average equity as a percentage of average assets   10.34%   11.08%
           
Equity to total assets at end of period   10.00%   10.97%
           
Return on average assets (1)   1.56%   1.64%
           
Return on average equity (1)   15.12%   14.83%
           
Noninterest expenses to average assets (1)   2.68%   2.48%

 

(1) Annualized for the three months ended March 31, 2026.

 

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 also maintained by selling equity and cash flow generation from our subsidiaries. Additionally, as a commercial bank, we are expected to maintain an adequate liquidity position. The Company’s liquidity position may consist of cash on hand, cash on demand deposit with correspondent banks, federal funds sold, and unpledged marketable securities such as United States government securities, collateralized mortgage obligations, and mortgage-backed securities. Some of our securities are pledged to the Federal Reserve Bank to secure borrowing capacity. The market value of securities pledged to the Federal Reserve Bank was $52.1 million at March 31, 2026.

(continued)

 

21
 

 

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

 

Deposits increased by approximately $161.1 million during the three-month period ended March 31, 2026. The increase in deposits provided funding for new loan originations and repayment of Federal Home Loan Bank advances.

 

In addition to obtaining funds from depositors, the Company had borrowing capacity of $293.4 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 March 31, 2026, first mortgage loans with a carrying value of $579.9 million were pledged to FHLB. At March 31, 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 March 31, 2026, debt securities with a fair value of $52.1 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.

 

   Three Months Ended March 31, 
   2026   2025 
       Interest   Average       Interest   Average 
   Average   Income/   Yield/   Average   Income/   Yield/ 
(dollars in thousands)  Balance   Expense   Rate(1)   Balance   Expense   Rate(1) 
Interest-earning assets:                              
Loans   1,041,583   $18,114    7.05%  $796,846   $13,601    6.83%
Securities   26,527    191    2.92%   22,977    160    2.79%
Other interest-earning assets (2)   123,845    1,148    3.76%   109,863    1,246    4.54%
                               
Total interest-earning assets   1,191,955    19,453    6.62%   929,686    15,007    6.46%
                               
Cash and due from banks   10,656              14,177           
Premises and equipment   2,684              2,139           
Other   4,641              7,862           
Total assets   1,209,936             $953,864           
                               
Interest-bearing liabilities:                              
Savings, NOW and money-market deposits   334,816    1,896    2.30%  $277,012    1,751    2.53%
Time deposits   436,205    4,280    3.98%   312,116    3,527    4.52%
Borrowings (3)   9,224    87    3.83%   32,222    303    3.76%
Total interest-bearing liabilities   780,245    6,263    3.26%   621,350    5,581    3.59%
                               
Noninterest-bearing demand deposits   296,750              219,204           
Other liabilities   7,852              7,719           
Stockholders’ equity   125,089              105,591           
Total liabilities and stockholders’ equity   1,209,936             $953,864           
                               
Net interest income       $13,190             $9,426      
                               
Interest rate spread (4)             3.36%             2.87%
                               
Net interest margin (5)             4.49%             4.06%
                               
Ratio of average interest-earning assets to average interest-bearing liabilities   1.53              1.50           

 

(1) Annualized.
(2) Includes interest-earning deposits with banks, Federal Funds Sold and Federal Home Loan Bank stock dividends.

 

(continued)

 

22
 

 

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

 

(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.

 

Comparison of the three-month periods ended March 31, 2026, and 2025

 

   Three Months Ended   Increase / 
   March 31,   (Decrease) 
(dollars in thousands, except per share amounts)  2026   2025   Amount   Percentage 
Total interest income  $19,453   $15,007   $4,446    29.6%
Total interest expense   6,263    5,581    682    12.2%
Net interest income   13,190    9,426    3,764    39.9%
Credit loss expense   770    (165)   935    (566.7)%
Net interest income after credit loss expense   12,420    9,591    2,829    29.5%
Total noninterest income   1,784    1,231    553    44.9%
Total noninterest expenses   8,006    5,626    2,380    42.3%
Net income before income taxes   6,198    5,196    1,002    19.3%
Income taxes   1,535    1,326    209    15.8%
Net income  $4,663   $3,870    793    20.5%
Earnings per share - Basic  $0.39   $0.33           
Earnings per share - Diluted(1)  $0.20   $0.17           

 

(1) On October 1, 2025, the Company amended the terms of the Series B preferred shares, as detailed in Note 11 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 March 31, 2026, were $4.7 million or $0.39 per basic share and $0.20 per diluted share compared to net income of $3.9 million or $0.33 per basic share and $0.17 per diluted share for the three months ended March 31, 2025. The increase in net income during the three months ended March 31, 2026, compared to three months ended March 31, 2025, is primarily attributed to an increase in net interest income and noninterest income.

 

Interest income. Interest income increased by $4.4 million to $19.5 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, the increase was primarily attributed to the increase in average balances of interest earning assets.

 

Interest expense. Interest expense increased by $0.7 million to $6.3 million for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, primarily due to an increase in average interest-bearing liability balances.

 

Credit loss expense. The Company recorded a credit loss expense of $0.8 million for the three months ended March 31, 2026, compared to a credit loss reversal of ($0.2) million for the three months ended March 31, 2025. The expected credit loss expense is charged to earnings as losses are expected to have occurred in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected. Management’s periodic evaluation of the adequacy of the allowance for credit losses is based upon historical experience, the volume and type of lending conducted by the Company, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for credit losses totaled $11.1 million or 1.01% of loans outstanding at March 31, 2026, compared to $10.3 million or 1.07% of loans outstanding at December 31, 2025. During the three-months ended March 31, 2026, the net charge-off amounting to $3,000 resulted from consumer lending.

 

(continued)

 

23
 

 

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

 

Noninterest income. Total noninterest income was $1.8 million for the three months ended March 31, 2026, compared to $1.2 for the three months ended March 31, 2025. The increase reflects an increase in service charges and fees related to banking services.

 

Noninterest expenses. Total noninterest expenses increased to $8.0 million for the three months ended March 31, 2026, compared to $5.6 million for the three months ended March 31, 2025, primarily due prior quarter adjustments to year-end incentive compensation combined with seasonal increases in payroll taxes and other employee benefits and continued investments in personnel.

 

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 March 31, 2026, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

 

(continued)

 

24
 

 

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

 

On January 27, 2026, the Company and Michael Blisko entered into, and consummated the transaction contemplated by, an Exchange Agreement. Pursuant to such agreement, Mr. Blisko exchanged 65 shares of Company Series B Convertible Preferred Stock for 531,178 newly issued shares of Company common stock. Such exchange was effected pursuant to an exemption from registration under the Securities Act of 1933, as amended, including but not limited to Section 3(a)(9) thereof.

 

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.

 

25
 

 

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: May 11, 2026 By: /s/ Moishe Gubin
    Moishe Gubin
    Principal Executive Officer
     
Date: May 11, 2026 By: /s/ Elliot Nunez
    Elliot Nunez
    Chief Financial Officer

 

26
 

 

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)

 

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ATTACHMENTS / EXHIBITS

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XBRL PRESENTATION FILE

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