OptimumBank Holdings, Inc. (the “Company”) (OPHC-NASDAQ) Announces First Quarter Results

Rhea-AI Summary

OptimumBank Holdings (NASDAQ: OPHC) announced its first-quarter results for 2024, highlighting a significant increase in net earnings to $2.377 million, up 106% from $1.153 million in Q1 2023. The company’s stockholders' equity stands at $83 million. In Q1, OptimumBank issued 2,311,552 common shares in a private placement, ending the quarter with total assets of $940 million, loans of $746 million, and deposits of $798 million.

The loan portfolio saw a 50.4% increase, reaching $755.9 million from $502.5 million in Q1 2023. Noninterest income rose by 69.96% to $1.2 million. The capital to total assets ratio is at 10.20% as of March 31, 2024. The bank has introduced SBA 7A loans and aims to expand its deposit base and footprint.

Chairman Moishe Gubin emphasized the bank's balanced growth and future plans for strategic expansion and portfolio diversification, while maintaining strong credit standards.

Positive

• Net earnings increased by 106% to $2.377 million from $1.153 million in Q1 2023.
• Loan portfolio grew by 50.4%, reaching $755.9 million.
• Noninterest income rose by 69.96% to $1.2 million.
• Capital to total assets ratio is strong at 10.20%.
• Introduction of SBA 7A loans for business growth.
• Stockholders' equity stands at $83 million.
• Total assets reached $940 million.
• Continued regulatory adequacy compliance.

Negative

• Issuance of 2,311,552 common shares may lead to shareholder dilution.
• Chairman indicated a future slowdown in loan growth.
• Need to evaluate the human resources organizational chart, suggesting potential restructuring challenges.

Financial Analyst

OptimumBank Holdings, Inc.'s first-quarter results indicate a significant improvement in financial performance, with net earnings doubling from $1.153 million to $2.377 million year-over-year. This notable growth is impressive given the challenges banks often face regarding interest rate volatility, regulatory requirements and economic fluctuations.

The private placement transaction, where 2,311,552 common shares were issued, likely provided the company with additional capital to support growth, contributing to the $83 million in stockholders' equity. This infusion of capital could enhance the bank's ability to fund more loans, thereby increasing revenue streams. However, it's worth noting the potential dilution effect on existing shareholders, which might temper some of the positive sentiment.

Furthermore, the loan portfolio's 50.4% increase year-over-year to $755.9 million reflects robust demand for the bank's lending products. In contrast, the bank's decision to slow loan growth in the immediate term signals a prudent approach to risk management amid potential economic uncertainties. The capital to total assets ratio of 10.20% underscores the bank's solid capital base, which is essential for maintaining regulatory compliance and financial stability.

From a financial perspective, the overall performance and strategic moves like starting SBA 7A loans should support future profitability and diversification. However, investors should monitor how the new loan offerings and growth strategies impact the bank's financial health in the longer term.

Market Research Analyst

OptimumBank's expansion into SBA 7A loans represents a strategic diversification of its lending portfolio. SBA 7A loans can be particularly appealing for small businesses seeking funding for growth and operations, potentially positioning OptimumBank as a preferred lender in this segment. This move could drive future revenue growth and enhance customer loyalty, but it also introduces new risks related to the underwriting and management of these loans.

Additionally, the bank's focus on deposit growth and increasing on-balance sheet liquidity indicates a proactive approach to managing liquidity risk. In a rising interest rate environment, attracting and retaining deposits can be challenging, but it's essential for maintaining lending capabilities and financial health. The bank's strong ties with local businesses and its community outreach efforts in South Florida could provide a solid foundation for achieving these deposit growth targets.

Overall, the expansion into SBA loans and the focus on liquidity management reflect a strategic approach to growth and risk management. However, the effectiveness of these strategies will need to be assessed over time, particularly as the bank scales its operations and integrates new business lines.

Fort Lauderdale, FL, May 16, 2024 (GLOBE NEWSWIRE) -- OptimumBank Holdings, Inc., (NASDAQ: OPHC) The Company had net earnings of $2.377 million for the 1^st quarter ended March 31, 2024, compared with net earnings of $1.153 million for the 1^st quarter ended March 31, 2023, an increase of 106%; in conjunction with $83 million of Stockholders’ equity. The Company’s only business is the ownership and operation of OptimumBank. To support future growth, the Company issued 2,311,552 common shares in a private placement transaction which closed in the first quarter.

The Company ended the quarter with total assets of $940 million, loans (net of allowance for credit losses) of $746 million, and total deposits of $798 million. The loan portfolio increased 50.4% to $755.9 million from the prior year 1st quarter ending balance of $502.5 million. Noninterest income generated was $1.2 million, an increase of 69.96% from the prior year 1st quarter ending balance amount of $729 thousand. This growth was accomplished while staying well capitalized by regulatory adequacy requirements throughout the year with the Company’s capital to total assets ratio at 10.20%, month-ended, March 31, 2024.

Chairman Moishe Gubin commented: “We have completed a turnaround of the Bank and have shown our ability to grow our balance sheet in a controlled manner while maintaining the same credit standards and policies we have had over the last five plus years. Although we intend to slow loan growth in the immediate term, we will continue to evaluate prudent growth opportunities, including expansion of our footprint and exploring additional lines of business. As a recent example, during the first quarter of 2024, the Bank commenced offering U.S. Small Business Administration (“SBA”) SBA 7A loans. SBA 7A loans are generally used to establish a new business or assist in the acquisition, operation, or expansion of an existing business. Consistent with the introduction of SBA lending, management will continue to identify opportunities aimed at portfolio diversification.

As to deposits, we are focused on increasing our on-balance sheet liquidity by identifying deposit growth opportunities among our existing customer base and prospects throughout Florida and the United States. The Bank is on solid footing with strong support from our loyal business customers who continue to use us as their bank of choice as well as referring us to their friends and business associates. Our outreach efforts in the communities throughout South Florida over the past several years have proven to be extremely rewarding. Finally, during the remainder of 2024, we plan to evaluate the performance of these changes to our business model and modify our plans as necessary. We also plan to review our human resources to determine if our current organizational chart is appropriate for our newly $1 billion bank.”

About OptimumBank Holdings, Inc.

OptimumBank Holdings, Inc. operates as the bank holding company for OptimumBank that provides a range of consumer and commercial banking services to individuals and businesses.

The company accepts demand interest-bearing and noninterest-bearing savings, money market, NOW and time deposit accounts, as well as certificates of deposit; and offers residential and commercial real estate, commercial, and consumer loans, as well as lending lines for working capital needs. It also provides debit and ATM cards; investment, cash management, and notary and night depository services; and direct deposits, money orders, cashier’s checks, domestic collections, drive-in tellers, and banking by mail, as well as Internet banking services. In addition, the company engages in holding, managing, and disposal of foreclosed real estate. It operates through banking offices located in Broward County, Florida. OptimumBank Holdings, Inc. was founded in 2000 and is based in Fort Lauderdale, Florida.

Safe Harbor Statement:

This press release contains forward-looking statements that can be identified by terminology such as “believes,” “expects,” “potential,” “plans,” “suggests,” “may,” “should,” “could,” “intends,” or similar expressions. Many forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results or implied by such statements. These factors include, but are not limited to, our limited operating history, managing our expected growth, risks associated with integration of acquired websites, possible inadvertent infringement of third-party intellectual property rights, our ability to effectively compete, our acquisition strategy, and a limited public market for our common stock, among other risks. OptimumBank Holdings, Inc.’s future results may also be impacted by other risk factors listed from time-to-time in its SEC filings. Many factors are difficult to predict accurately and are generally beyond the company’s control. Forward looking statements speak only as to the date they are made and OptimumBank Holdings, Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.

Investor Relations:
OptimumBank Holdings. Inc.
investor@optimumbank.com
+1.954.900.2850

FAQ

What are OptimumBank's earnings for Q1 2024?

OptimumBank reported net earnings of $2.377 million for Q1 2024.

How much did OptimumBank's loan portfolio grow in Q1 2024?

The loan portfolio grew by 50.4% to $755.9 million in Q1 2024.

What was OptimumBank's noninterest income for Q1 2024?

Noninterest income for Q1 2024 was $1.2 million, a 69.96% increase from the previous year.

What is OptimumBank's capital to total assets ratio as of March 31, 2024?

OptimumBank's capital to total assets ratio was 10.20% as of March 31, 2024.

How many common shares did OptimumBank issue in Q1 2024?

OptimumBank issued 2,311,552 common shares in a private placement in Q1 2024.

What are OptimumBank's total assets as of Q1 2024?

OptimumBank's total assets were $940 million as of Q1 2024.

What new loan products did OptimumBank introduce in Q1 2024?

OptimumBank introduced SBA 7A loans in Q1 2024.