Moderator: Ladies and gentlemen, thank you for joining us, and welcome to the OptimumBank Holdings, Inc. Second Quarter 2026 Earnings Call. After today’s prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today’s call, please press star 9 to raise your hand and star 6 to unmute. You are also welcome to ask a question through the text Q&A box or via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N @optimumbank.com. I will now hand the conference over to Seth Denison, Managing Director of Investor Relations. Please go ahead.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Good afternoon, everyone, and thank you for joining us today for OptimumBank Holdings’ second quarter 2026 earnings webcast. The second quarter represents another milestone in the evolution of OptimumBank. During the quarter, we continued to build upon the momentum established over the past several years, delivering record quarterly earnings while surpassing $1.4 billion in total assets for the first time in the company’s history. These results reflect the continued execution of our relationship-based banking strategy, disciplined credit culture, and our focus on creating long-term value for shareholders. Beyond our financial performance, the second quarter was also transformational from a corporate perspective. In May, the company announced planned executive leadership transition with our long-serving Chairman, Moishe Gubin, assuming the additional role of Chief Executive Officer while veteran banking executive Braden Smith joined OptimumBank as President.

This transition was designed to position the company for its next phase of growth while maintaining the continuity that has defined OptimumBank for more than 25 years. We also completed an important simplification of our capital structure through the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock. Because the preferred shares had already been reflected in our fully diluted share count, the transaction had minimal impact on dilution while creating a simpler and more transparent capital structure for investors going forward. Operationally, we also continued expanding our lending platform. During the quarter, Optimum Finance completed its first transaction, providing another avenue for growth while allowing the company to leverage third-party capital alongside our traditional banking platform.

Combined with the earlier formation of OptimumFunding, these initiatives broaden our product offerings and create additional opportunities to serve our customers while diversifying future earning streams. The investment community has also continued to recognize our progress. During the quarter, OptimumBank earned two nationally recognized distinctions, including being ranked the 49th best performing community bank in the nation by S&P Global Market Intelligence and being recognized by Raymond James as a Community Bankers Cup recipient, placing OptimumBank among the top performing publicly traded community banks in the country. That recognition has also extended to the research community. During the quarter, Brean Capital and A.G.P., or Alliance Global Partners, initiated research coverage with buy ratings, while Compass Point upgraded its rating on OptimumBank from neutral to buy.

Together, these developments expanded independent research coverage while reinforcing growing institutional awareness of the company’s financial performance, disciplined execution, and long-term growth strategy. While external recognition is certainly encouraging, our focus remained unchanged. Every day, we remain committed to serving our customers, supporting our communities, and executing on the strategy that has produced these results. We believe that continued execution will create lasting value for our shareholders over the long term. Today’s call may include forward-looking statements based on management’s current expectations, assumptions, and beliefs about OptimumBank’s business and environment in which it operates. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those anticipated. The call is being recorded, and we refer you to our SEC filings, including our most recent Form 10-Q, for additional information regarding risk factors and forward-looking statements.

Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as identified in the presentation deck. Joining me today are Moishe Gubin, Chairman of the Board and Chief Executive Officer, Braden Smith, President, and Elliot Nunez, Chief Financial Officer and Executive Vice President. This leadership team combines decades of banking, financial, and executive leadership experience and is well-positioned to guide the company’s continued growth. After this brief presentation, Moishe, Braden, and Elliot will be available for any viewers’ questions during the Q&A session. With that, I’ll turn it over to Moishe to begin the presentation.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Thank you, Seth, and good afternoon, everyone. Thank you for joining us today and for your continued support of our beloved bank. When I look at slide 4, I’m reminded that our performance this quarter is a result of a strategy we have consistently executed over many years. Since opening our doors in 2000, our mission has remained the same: build a relationship-driven community bank that serves its customers while creating long-term value for shareholders. What has changed is the scale of the opportunity before us. Over the past several years, we’ve transformed OptimumBank into an institution that has now surpassed $1.4 billion. Along the way, we’ve expanded our franchise, strengthened our leadership team, broadened our lending capabilities, and significantly increased our earnings power. Today, we are not simply a larger bank. We are a stronger and more profitable bank.

During the second quarter, our annualized core return on average equity reached 26.9%, reflecting the earnings power we’ve built while maintaining disciplined underwriting and a conservative approach to risk. This quarter marks another important chapter in our evolution. The additions of OptimumFunding and Optimum Finance expand our lending platform and enhance our ability to meet a broader range of our borrowers’ financing needs. These capabilities allow us to deepen existing relationships, support our customers across more stages of their growth, and extend those relationships further than we have been able to in the past. At the same time, our leadership transition positions the company for its next phase while maintaining the continuity that has guided our success. As chairman for more than 16 years and now as chief executive officer, I remain extremely optimistic about our future.

While we are proud of what we have accomplished, I believe we are still in the early stages of our long-term growth opportunity. With that, let’s turn to our second quarter financial results. Turning to slide 5, I believe our second quarter results demonstrate the strength and scalability of our business model. Importantly, we believe this quarter establishes a sustainable new benchmark for our financial performance going forward. Based on our current quarterly earnings run rate of approximately $0.28 per share, we believe it is reasonable to increase our forward-looking annual earnings estimate to a range of approximately $1 per share to approximately $1.15 per share. We reported record quarterly net income of $6.7 million, representing a 43% increase over the first quarter and an 85% increase over the second quarter of last year.

As a result, profitability strengthened considerably, with pretax income increasing by approximately $2.6 million from the first quarter. Net interest income grew to nearly $14.7 million, driven by continued loan growth and disciplined balance sheet management. At the same time, non-interest income increased to approximately $2.5 million, reflecting the continued diversification of our revenue streams. We also recorded a reversal of credit loss expense during the quarter, highlighting the continued strength of our loan portfolio. That positive credit trend continued immediately following quarter end, and on July 1st, our one loan that had been past due was paid off and another was brought current, reducing our loans more than 30 days past due to a very modest level. I also want to briefly address our earnings per share presentation.

During the second quarter, we completed the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock. Because those preferred shares had already been reflected in our fully diluted share count, the exchange had minimal impact on diluted earnings per share. Going forward, our capital structure is simpler and easier for investors to understand. Overall, I believe these results reflect the continued execution of our long-term strategy and reinforce our confidence in the opportunities that lie ahead. Turning to slide 6, this reconciliation highlights a metric that I believe best reflects the underlying earnings power of our franchise, core pretax pre-provision earnings. During the second quarter, core pretax pre-provision earnings increased to $8.8 million, while our annualized core ROE reached 26.9%. These are exceptional results and demonstrate that our profitability continues to improve as we grow the balance sheet.

Our objective has never been growth for growth’s sake. Our objective is to build a larger, more profitable institution that consistently generates attractive returns for our shareholders while maintaining disciplined underwriting and prudent risk management. Turning to slide 7. I believe this slide best illustrates the transformation of OptimumBank over the past several years. Since 2022, total assets have grown at a compound annual growth rate of more than 28%, increasing from approximately $585 million to more than $1.4 billion today. During that same period, we’ve continued investing in our people, expanding our franchise, and building the infrastructure necessary to support our long-term growth. Our profitability has grown alongside the balance sheet. During the second quarter, net interest margin expanded to 4.57%, and we believe there is still some opportunity for further expansion. At the same time, annualized core pretax pre-provision earnings reached nearly $32 million.

These results demonstrate that the investments we have made in our people, technology, lending capabilities, and new business platforms are translating into stronger operating performance and increasing shareholder value. While we are proud of what we have accomplished, we believe there remains significant opportunity ahead. We intend to continue executing the same strategy that has brought us to this point by growing responsibly, serving our customers, investing in our communities, and creating long-term value for our shareholders. With that, I will turn the presentation over to our Chief Financial Officer, Elliot Nunez, who will review our financial results in greater detail.

Elliot Nunez, Chief Financial Officer and Executive Vice President, OptimumBank Holdings, Inc.: Thank you, Moishe. As Moishe discussed on slide number 5, the second quarter reflected continued growth in earnings and profitability. I will build on that overview by walking through the underlying revenue, funding costs, and expense trends shown on slide number 8. Total interest income increased to $21.7 million during the quarter, driven primarily by continued loan growth. Total interest expense also increased as deposit balances and borrowings supported balance sheet growth. As a result, net interest income increased to $14.7 million, up approximately $1.5 million from the first quarter and $4.5 million from the second quarter of last year. Net interest margin expanded to 4.57%, compared to 4.49% in the prior quarter and 4.14% a year ago. We recorded a $37,000 reversal of credit loss expense during the quarter compared to a $770,000 provision in the first quarter, reflecting the continued strength of our credit quality.

Total non-interest income increased to $2.49 million, driven by growth in service charges and other fee income. Total non-interest expense increased to $8.38 million, reflecting continued investment in personnel and technology to support the company’s growth. These results contributed to pretax income of $8.84 million, an increase of approximately $2.64 million from the first quarter. Net income increased to $6.66 million, or $0.40 per basic share and $0.28 per diluted share. Turning to slide number 9, this slide summarizes our results for the first six months of 2026 compared to the first six months of 2025. Total interest income increased by approximately $10.6 million to $41.2 million, while net interest income increased by approximately $8.2 million to $27.9 million. This growth was primarily driven by continued expansion of the loan portfolio and higher-earning assets. Total non-interest income increased by approximately $1.2 million to $4.3 million.

Non-interest expense increased by approximately $4.6 million, primarily reflecting investments in personnel, technology, and infrastructure to support the company’s continued growth. Pretax income increased to $15 million from $10.1 million during the first six months of 2025, while net income increased to $11.3 million compared to $7.5 million in the prior year period. Basic earnings per share increased to $0.79 from $0.64, and diluted earnings per share increased to $0.48 from $0.32. Moving on now next to slide number 10, gross loans increased to approximately $1.22 billion at June 30, 2026. Since December 31, 2022, the loan portfolio has grown at a compound annual growth rate of 30.19%. The loan yield for the first six months of 2026 was 7.11%. Total deposits increased to approximately $1.21 billion at June 30, 2026, representing a compound annual growth rate of 28.27% since December 31, 2022.

Annualized non-interest income totaled approximately $8.6 million through the first six months of 2026. Since December 31, 2022, non-interest income has grown at a compound annual growth rate of 35.68%. Now turning over to slide number 11, credit quality remained strong during the second quarter. At June 30, 2026, the allowance for credit losses to loans was 0.91%. Non-performing assets represented 0.22% of total assets, and net charge-offs to average loans were 0%. This matrix continued to reflect the quality of our loan portfolio and our disciplined underwriting practices. The bank also remained well-capitalized. Our Tier 1 leverage ratio was 10.54% at quarter end. Turning now to the balance sheet, we continued building on that momentum achieved in 2025. Total assets increased by $401.8 million year-over-year to $1.4 billion at June 30, 2026.

This growth was well-funded, with total deposits increasing by $335.2 million to $1.21 billion over the same period. On the funding side, we maintained strong balance sheet discipline while continuing to diversify our deposit base and maintain ample on and off-balance sheet liquidity. Finally, reflecting strong earnings retention and disciplined capital management, total stockholders’ equity increased by $20 million year-over-year to $134.4 million at June 30, 2026. Turning to our final slide, I believe it summarizes many of the themes we discussed throughout today’s presentation. Since December 31, 2022, our loan portfolio has grown at a compound annual growth rate of 30.19%, while deposits have grown at a 28.27% compound annual growth rate. At the same time, tangible book value per diluted share has increased to $5.65. We believe that growth has been achieved without sacrificing profitability.

Our efficiency ratio of 48.79% continues to compare favorably to our peer group, while our net interest margin of 4.57% remains well above the peer average. As discussed earlier, the exchange of our Series B and Series C convertible preferred stock during the second quarter simplified our capital structure. Although diluted earnings per share for the first six months of 2026 reflects the impact of the exchange occurring during the reporting period, future reporting periods will reflect our simplified capital structure. Overall, we believe this matrix demonstrates the continued execution of our long-term strategy and our commitment to creating value for our shareholders. Now, I will turn it back over to Moishe.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Thank you, Elliot. As we conclude today’s presentation, I want to thank our employees, customers, shareholders, and board of directors for their continued trust and support. The results we reported today reflect the dedication of our team and the strength of the franchise we have built together. While we are proud of another record quarter, we remain focused on the opportunities ahead. We believe OptimumBank is well-positioned for continued growth, supported by a strong balance sheet, a diversified lending platform, disciplined credit culture, and an experienced management team committed to long-term value creation. As chairman for more than 16 years and now as Chief Executive Officer, I am excited about the future of our company. We will continue to execute the same disciplined strategy that has brought us to this point while remaining focused on serving our customers, supporting our communities, and delivering sustainable returns for our shareholders.

With that, I will turn it back to Seth to open the call for questions.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Thanks, Moishe Gubin. OptimumBank continues to deliver a strong financial performance, and we appreciate those taking the time to learn more about us. Let’s open it up for questions.

Moderator: We will now begin the question and answer session. A kind reminder, if you would like to ask a question, please raise your hand using the raise hand function at the bottom of your screen. If you have dialed in to today’s call, please press star 9 to raise your hand and star 6 to unmute. You are also welcome to ask a question via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N @optimumbank.com, and it will be read aloud. Please ensure you are unmuted locally when asking your question. Kindly stand by while we compile the Q&A roster. Your first question comes from the line of Gaurav Mehta with Alliance Global Partners. Kind reminder to press star 6 to unmute. Your line is open. Please go ahead.

Gaurav Mehta, Analyst, Alliance Global Partners: Yeah, thank you. I wanted to start with the annual run rate guidance that you talked about, $1 to $1.15. Just to clarify, is that number, are you expecting for 2026 or that is the annual run rate going forward?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah. Gaurav, thank you for joining us. I wanted to keep to the $0.28 that we had in the second quarter, that should be easily matched going forward. The reason why I gave a guidance the way I did it is, at some point, we’re going to raise equity to sustain the growth of the balance sheet. At some point, the math to figure out what I raise and then what that new money out the door at a multiple keeping with a 10% capital ratio, what that turns into, I haven’t done the math. I kept it to a simple range of $1-$1.15. But if things remain totally constant with nothing else, that $0.28 is easily able to be replicated going forward.

Gaurav Mehta, Analyst, Alliance Global Partners: In that $0.28, there was nothing non-recurring, everything was recurring in that number?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah, it’s a nice clean month. Right now we have already in this quarter, we already have more money out the door. We’re running at this point, I think we did $300 million over the first six months. So, you figure that’s $50 million extra a month. $50 million at a NIM of 457, which we think we could kind of squeeze a little more out of. That’s bringing us some sizable accretion to our net income.

Gaurav Mehta, Analyst, Alliance Global Partners: Okay. As a follow-up on that $0.28 number, what do you think drove that sort of performance in the second quarter? I remember in the first quarter, I think you were talking about $0.18-$0.21, so that number is higher. Maybe talk about some of the surprises, if you saw anything in the quarter that sort of surprised you to the upside.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: No. I think if you look at our quarter-over-quarter trends on the financial statement, the costs of the non-interest expenses has been flat so far quarter-over-quarter for 26. We are at full employment today, so we are not looking really to add any payroll. We do not really expect payroll to go up. Maybe something immaterial here and there. With that, the revenue or the total net interest income continues to rise because we are getting money out the door. Every loan that gets paid off is being paid off at most likely a rate around 5% or below 5%, and the money going out the door is 7%+. So every day our financial strength is getting better and better.

Gaurav Mehta, Analyst, Alliance Global Partners: Okay. Thanks for those details. A follow-up question maybe on the Optimum Finance. Can you provide some color on how you are viewing that platform and what kind of demand you are seeing there, which sectors you plan to lend in?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah. If I had a fast-forward button, that is the one that I would want to fast-forward because I think that to me is they might even overshadow the bank 5, 10 years from now as far as what they are going to make and what the size of that portfolio is going to be. Without having the guardrails of bank regulation, we are being able to act prudently and lend money to deals that are not bankable deals but are deals that make a lot of sense. Certainly for me as a businessman, not necessarily a banker, they are deals that make a lot of sense with good coverage, full recourse loans at LTVs that are not crazy. We are lending against real estate. So far every deal that we have done, they are all CRE loans throughout the country. We have done already I think now four loans.

One of them is a hotel in New Jersey. One is backed by someone’s personal residence here in Miami. One of them is a hotel, a smaller hotel deal, I think, also in New Jersey. I forgot the fourth one. The fourth one was a $6 million loan. I forgot everybody what that was, too. But good deals, strong deals. We have good governance how we are managing for it. We have a little bit of growing pains on operational and to do it because the group of people working here are bankers, so they are used to doing banking way of doing things. This is a finance company and therefore a little different. That being said, I am really, really long. The deals that we have made so far, we are already expecting the first payoff. Our average yield is over 18%, 2 points in, 1 point out.

And they’re deals that are not meant to be long-term deals, so potentially they could be a pipeline for the bank. Potentially it could be an A and B deal where the bank will take an A position on something, and then they’ll take the B position behind it. This is a conversation not really meant for this call, but if anyone wants to talk to me about it individually, I could go on and on about this. I’m really, really long on this. It’s not more risky, but it’s stuff that we’re able to get a better price because it doesn’t fit the traditional banker’s box of our normal policies at the bank. So I’m really long. I’d be glad to elaborate further if anyone wants to talk to me offline.

Gaurav Mehta, Analyst, Alliance Global Partners: All right. Thanks for those details. That’s all I have.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: You’re welcome. Thank you.

Moderator: A kind reminder, if you would like to ask a question, please raise your hand. If you have dialed in to today’s call, please press star nine. You can also email your question to sdenison@optimumbank.com. Again, that is S-D-E-N-I-S-O-N@optimumbank.com. Your next question comes from the line of Kenneth Billingsley with Compass Point Research and Trading. Your line is open. Please go ahead.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: Hi, good afternoon.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Hi, good afternoon, Ken. Thanks for joining us.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: Oh, thank you. I do have an Optimum Finance question, so I’ll go there first. Why was it did it not fit the bank? Was it just because of the timing? Did they have a short-term funding need? You said it could provide loans to the bank in the future, but could you just talk about why it didn’t fit the bank?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah. Start with understanding strategy, right? We’re a relationship bank. We make friends with our borrowers. We get to know our borrowers, and we want to do everything for our borrowers in every vertical that we could possibly do, where we can manage that. We have a borrower at the bank, they borrowed money at 40% LTV, and it’s a deal that the guarantor strength was worth $1 billion, and it’s a deal that everybody in the room from loan committee knew the asset, and they basically said, "We want to take care of this guy." Then the borrower comes back three months later and says, "I have a partner. We already are seeing great results. Here’s all of our bookings." It’s a hotel.

So like, "Here’s all of our deals, and this thing is going to be a home run, best deal ever, and it’s going to be worth double, triple what we originally appraised the deal at," which again, a loan was at like 40% LTV. They come along and then say, "I want to buy out my investor that invested in this deal, and I could get out basically at his cost. Can you just extend me some more money?" Typically at OptimumBank, when we give somebody financing, we’re not looking to go back to the well on a loan, and reopen a loan, and modify a loan once the loan closes. Certainly not for like the first year. It doesn’t look right where you do a deal and then you change something a couple of months later.

That was a deal where instead of him finding another bank, and a lot of banks don’t want to do a second mortgage. But for us, since we had the first in the bank level, we were okay putting a second behind it, and we were able to extend out a little bit more money, all underwritten, all already based on a few months of operations. We were able to underwrite the deal again, saying, "Well, we see this deal that as soon as he has that same stability from the first couple of months of operation, this thing will appraise out double, triple what was originally appraised out." And certainly, he’s credit worthy and the LTV is still down, and so we were able to then do a loan for him. They’re the happiest people because they wanted that loan, and they now own 100% of the deal.

They got rid of their partner, and they have an operating business that’s doing amazing. Instead of them having to change out the first, have a prepayment penalty, and go to find another lender, they’re able to then do that deal. We fit a need, and now already, once the thing is going to be stable, they’re going to come back to us and say, "Okay, can we refinance the first and second at a different interest rate for a longer period of time, more fixed?" In which case, we’re going to try to figure out whether or not we want or we could lend at the bank level, or do we want to help them find a different lender that wants to do a bigger deal than we usually what we’re going to do. Just for that color, right?

It stems from strategy of meeting the borrower’s needs, making friends with our people, and then doing a deal. In this case, just we couldn’t do it through OptimumBank, and it didn’t make sense for them to go to a different lender. For that, we’re able to get a better yield, and we’re able to meet the need of our customer. They’re happy, we’re happy, and it falls under a different silo. That silo was able to be profitable based on that kind of loan at that percentage, and OptimumBank has no effect. And we have a happy customer out of it.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: Oh, great. When you mention that, are most of the loans so far to existing customers of the bank?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: They’re known to us. We’re not really lending risky money to random strangers. It’s risky from the sense of it doesn’t fit bank policy, but it’s not risky in the sense of common sense lending, of knowing your borrower, and taking care of the borrower. I think people have been telling me, "I really meant to be born 20, 30 years earlier and have been a bank executive in the days when relationship banking was more normal." Today, everyone has a box, and they try to push away from relationships. I push that we’re a community bank, and our community, again, is a Jewish community as well as the South Florida and Florida community. I push to take care of our people. We have a different deal that we made.

The guy, the borrower, is very wealthy, but he’s in a very messy divorce, and his wife won’t sign documents, and there’s all kinds of issues. We were able to find a way to collateralize and give and take basically first and second mortgages and personal residences, at lower than a 75% or 80% LTV, which is typical HELOC policies in most banks, including ours. We found a way to do it at a higher interest rate, and that’s another happy customer, and hopefully his divorce ends well. But the point is, we were able to meet his need. Another happy guy. It’s CRE that happens to be in South Florida. Again, it’s somebody we know. We know that besides for the way it’s underwritten, morally and ethically, that borrower is not going to burn us. They’re going to take care of us.

We’ll get paid off sooner than later. Most of these loans are probably a one-year term. I think one of the loans we made a little bit longer, but they’re really relatively shorter-term loans where at the bank, our normal loan is a 10-year loan with a fixed period at the beginning of the loan, three years, five years, seven years.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: All right. In the press release, I believe it said you had a note at 10%, and I think your comment was that the yield on SOFR is about 18%. Is it 10% just the timing, or could you just talk about the financing side of it and the spread?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Oh. The note payable is where we’re borrowing the money to fund those loans.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: Right.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: We’re borrowing the money today at 10%. We’re in negotiations with a couple of banks to do note-on-note financing. I want these balance sheets, when I’m talking about funding and finance, because the bank already stands on their own. I want Optimum Finance to stand on their own, have their own line of credit with the bank, and be able to borrow. The money out the door to the borrower at the end of the day is 18 with two points in and one point out. Our cost of money today is 10%. We’re making a spread. I think right now the portfolio is up to 24.1 or something like that. On that 24.1, our coupon is between 18% and 20% total. It’s probably 18.5, something like that.

Our cost of money is, like I said, 10% on the money borrowed, and then we have overhead. Right now, we’re already profitable. I think you’ll see that in the third quarter. We’ll present a slide specific on how Optimum Finance is doing, and you’ll see it’ll be profitable. It’s already profitable as far as cash flow. As far as paperwork, we’re treating some on the GAAP rules. We have allowances for bad debt and some other paper expenses to kind of eat up some of the income. This is going to be a home run for our shareholders, and it diversifies and takes care of our borrowers to meet their needs across the board, and I’m happy about that.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: Last question, if you don’t mind, just a capital question. So it looks like you tapped the ATM during the quarter. Was it just opportunistic and anything specific? If you could add, you mentioned about raising capital. If you’re looking to raise capital soon, would it be to primarily support bank growth, or would a large portion of this opportunity that you see in Optimum Finance, would most of it go to supporting Optimum Finance opportunities?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: No, our primary business today is the bank. Whatever we do is we don’t lose focus on the bank. The bank is the core engine for the whole business. What we’re looking at is, and it might be a little bit backwards in the way other folks do it. I’m not using a budget. I’m using demand. Our marketplace and our current customers, and I call them our family, has demand today where our pipeline is, I think it’s north of $700 million, which is crazy. It’s all vanilla. It’s all customers we know. It’s clean deals at our pricing, which is crazy. I’m sure for any folks on this call, they have other banks that they are following or investing in. No one has this kind of demand. We have this demand.

It’s unexplainable other than the fact that I call it our cult following, where people support us, and they take care of us, and we take care of them. That being said, based on demand, I know that to hold up the balance sheet, thinking with a minimum 10% capital ratio, that means if we were to close half of that $350 million over the next six months, for argument’s sake. Which again, is a crazy growth number, but let’s assume that number just because, right? That means at some point I need $35 million to cover the growth of that $350 million, assuming half. If there’s less than that, then we’ll have a little bit more capital, and then we’ll have money for next year. If it’s more than that, I’ll have to figure out what to do. The ATM strategy all along has been based on opportunity.

The biggest goal for me there is that I want to have more liquidity in the stock and I want to have more ability for bigger institutions and investors to be shareholders. If I get an opportunity to sell stock above book where it’s accretive to our book equity, then I do that, and that’s really mainly looking out for shareholders so there’s more shares outstanding so people could trade more. That’s part of managing a stock for the marketplace, not really the business. The fact that it adds a little equity and that it helps us less of an equity need later down the road is really ancillary to the fact that I’m just getting more shares out there so that guys at bigger shops. I’ve had people come to me and say, "We want to invest $25-plus million.

We love your bank, but we cannot because you do not have enough liquidity and we cannot own such a large percentage of your bank. That being said, the more shares that I get out the door, the more likely and able to get someone to invest a $10 million chunk, assuming we could get where 4.9%, which right now our market cap would have that. Someone could spend $10 million and own less than 5%, which is good for a lot of the guys that do not want to end up on a proxy with over 5%, so they keep themselves at 4.9. We are getting there now finally, where we could sell those shares to somebody.

This is really good in the long run for the shareholders because once we are able to be traded similar to our peers, then our valuation should be similar to our peers. I think on even a $1 run rate, which is the low end of my number, our peers are trading easily 8 to 12, 8 to 14 times the PE. So our PE ratio is 8 to 14 times. With that, we should be providing shareholder value to shareholders. Most of my investors that I have sold stock to over the years, no one wants to sell. Everyone is like, "We are riding this thing. Moshe, when you are ready to sell, we are going to sell with you. But in the meantime, I am behind you, pal. We are never selling." That is what I hear from a lot of investors.

I am sure there are others out there that are happy that the stock is up and it is still way lower than it should be. The stock is up and people can make a profit on their stock trade if they wanted to trade instead of invest. Hopefully that answers your question, Ken.

Kenneth Billingsley, Analyst, Compass Point Research and Trading: It does. Thank you. Congratulations to you and your team.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Thank you, sir. Appreciate your support.

Moderator: There are no further audio questions at this time. I will turn it over to Seth for email Q&A.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Very good. Thank you, Karina. Guys, we have a question that was emailed to me from Chris Maronick, who as you know is another one of the analysts that covers us from Green Capital. It is two different questions and there is a bit of an A and a B to it. Question one A, and I will break it down into A and B. So one A is, can you elaborate on what is making OptimumBank successful in recent quarters at raising new deposits?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Okay. I am going to have Braden Smith answer since me and Elliot Nunez presented. Braden Smith has not had a chance yet to talk, so we are going to let Braden Smith give an answer to that question.

Braden Smith, President, OptimumBank Holdings, Inc.: Yeah. Thanks, Moishe first. I think when you look at this, when we got involved on May 1st, you looked at this. Being very relationship-focused, we took a look at the existing portfolio and really said, if there’s an opportunity just with some low-hanging fruit to go into the portfolio, look to expand existing relationships we had. We dedicated a team internally to achieve that. I would say part of that success has been that team being very successful in expanding existing relationships that we had where we didn’t have a lot in the operating accounts or even on the personal side that we went after. Secondly, the team has done a really fantastic job, especially on the treasury side, of bringing in new relationships to OptimumBank. That has been a really nice surprise for the second quarter.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: So, one B to that question is, do you attribute this to customer acceptance to a broader, deeper bank relationship, new customers, or a focus on paying specific rates?

Braden Smith, President, OptimumBank Holdings, Inc.: So on two of the three there in terms of customer acceptance of broader and deeper relationships, absolutely. New relationships, absolutely. We’ve been very disciplined like we are on the lending side. We’ve been very disciplined on the deposit pricing standpoint as well. I think the team’s done a very good job of manage that as best they can.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Okay. So we’ve got question two and I’ll break that up again to two A and two B. Two A is, how do you approach loan concentrations at OptimumBank?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Well, I’ll start with that and then I’ll give it to you, okay?

Braden Smith, President, OptimumBank Holdings, Inc.: Okay.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: No, I think in Kenneth Billingsley’s question to me, I kind of touched on that, is the reality is that we, I guess I’m elaborating on it, is that our lending basically has three different types and pricing. We have HELOCs, which are a flat, it’s a prime plus a half program, same program for everybody across the board. That pricing stays that. Then we have the AR lending, which we do for the nursing home world, and that pricing sits to prime plus 3 pricing, and that sits. Everything else that we have is basically the same price. We don’t change our pricing to get a certain type of loan in the door. With that, we play it as it lies. Whatever comes in the door, we act on. We know who the borrowers are anyway, like I said earlier.

From that, we have set concentration limits from a risk management perspective, and that’s held through credit, and we look at that on the board level regularly. When it comes to actual lending and making a lending decision, it’s not part of the decision process. Where people coming in the door with a loan, the loan makes sense, we’re going to do the loan regardless of where we are in the concentration of that specific segment. If it’s a CRE deal, so that we also have sub-concentrations when it comes to CRE stuff. Regardless, if it comes in the door, we look at the deal, the deal underwrites, low LTV, meets all of our criteria. It makes no difference whether that finds its way under retail, multifamily, hospitality. It doesn’t matter to us.

Braden Smith, President, OptimumBank Holdings, Inc.: I would add, too, as we’ve mentioned in the past, pricing discipline is something that we keep a very close eye on, and we stick to it. When you look at the marketplace in which we’re in between Palm Beach and Miami, there are, and I forgot the exact number of how many C&I businesses that have $35 million-$40 million in annual revenue or more. You’ve got every bank in the world that’s got a commercial team down here and deals on the C&I side that should get priced at SOFR plus 300 that might be close to fitting our bucket because of the competition is getting priced at SOFR plus 150. Our viewpoint is taking into account shareholder value and risk and reward, it’s just not there.

It just doesn’t make sense to put capital out at 5% when we’ve got the pipeline that we do that we’re able to get 7% north. Frankly, I think in our opinion, it’s less risk. We get asked the concentration question all the time. It’s something that we’d love to be a little more broad-based. But we’re also not going to do deals that don’t make sense and at pricing that doesn’t fit our model.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: I think you guys, for the most part, answered 2B. I’ll leave 2B out if you want to add anything to it, but I think that was a pretty comprehensive response. 2B is, particularly how do you consider the maximum size of any given borrower loan or relationships relative to the portfolio, capital, and regulatory guidelines?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Well, the technical answer to that starts with we have legal lending limits that’s defined, and we put a little bit of a governor on that number. As opposed to 100% of our legal lending limit, we lend a little bit less than that. That being said, if a deal underwrites and the coverage is there and the LTV is fine, and there’s cash flow to support repayment of loan, it doesn’t matter to us. I think we differ in opinion with maybe some conventional wisdom that a bigger loan people think is more risky. I think it’s less risky. You do a bigger loan to a guy that’s worth a lot more money, he has the wherewithal if something goes bad to be able to meet it, take care of his obligations to us.

A guy who’s thinner on the deal and his only asset is this one item, he might care more because it’s his only asset, but he doesn’t have the well to draw from to try to meet a need if he doesn’t have the money to pay his mortgage or something goes wrong. We’ll lend as much as the request is for, up to our lending limit, without pricing for the right borrower every day of the week.

Braden Smith, President, OptimumBank Holdings, Inc.: I would only add, too, when you look at the portfolio, too, every deal that we have in there has full personal recourse back to the

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah.

Braden Smith, President, OptimumBank Holdings, Inc.: The guarantors. Yeah.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Sometimes we were on an investor call and somebody asked that question, and I do not know how we realized, we have never told the world that we should. We do not do non-recourse lending. Every loan we have has recourse to it, full recourse. We have to remember to keep telling people that because I guess people think the automatic assumption, you are doing this kind of CRE, that they think it is a big office building in downtown Manhattan or somewhere, and there is maybe a bad boy carve-out, but no guarantees. That cannot be further away from the truth for us. The CRE we are doing is stuff that is some owner-occupied, some not owner-occupied, some owner-occupied, but by regulations, it is considered non-owner occupied. The point is, they are all recourse deals, all strong deals. That is why we have not had a bad loan in many years.

Braden Smith, President, OptimumBank Holdings, Inc.: I would only add, too, since the time I have been here, I have been pleasantly surprised at the strength of the guarantors that we have on the loan portfolio. These are individuals that have 3 to 10 times the loan amount plus a decent percentage in cash and marketable securities and significant cash flow from other businesses. So it is one of the reasons why our credit metrics continue to be as strong as they are.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Okay. I have got two more questions that have come in. The first one is, your allowance for credit losses has declined from 1.2% of loans in 2022 to 0.91% today, while the portfolio has more than doubled. Why is 91 basis points adequate given the pace of loan growth and concentration in commercial real estate?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Okay. I will let Elliot Nunez elaborate, but I will just start it by saying, first things first is we have not changed our policy on how we create our allowance. Our allowance has been measured with environmental factors and quantitative and qualitative factors that have been using historical bad debt, as well as environmental factors that create some kind of metric going forward. We have maintained consistency. We have not changed anything. Our battle is the fact that we have no bad loans. The history is dictating we should be at zero bad debt, and therefore zero allowance. But we are fighting that.

In fact, with the last couple of board meetings, I have been suggesting let us put extra money into the allowance just because people in the marketplace, whoever wrote that question, is exactly a metric that I would think someone is going to look at and say, "Hold on, your number is too low." But reality is based on our history, it is way too high. That being said, Elliot Nunez, why don’t you elaborate on that?

Elliot Nunez, Chief Financial Officer and Executive Vice President, OptimumBank Holdings, Inc.: Sure.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Unless I already solved everything, you have nothing to add.

Elliot Nunez, Chief Financial Officer and Executive Vice President, OptimumBank Holdings, Inc.: I’ll add a little bit.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: A little bit.

Elliot Nunez, Chief Financial Officer and Executive Vice President, OptimumBank Holdings, Inc.: You covered most of it. When you look at the allowance for loan losses, you got to realize there are three components. There’s the historical loss, there’s the qualitative factors, and then there is the forward look. As you go back in time, I was mentioning the question, we were at one point to zero. There was a point in time we did have some specific reserves on the books. As the quality of those loans has increased, those specific reserves have come off and off and off. What you’re left with nowadays is mostly general reserve. That general reserve in the last few quarters of this year has been positively impacted by two things, an improvement in Q factors, number one, and also on the forward look.

As we head into the second half of 2026, we do expect that that forward look is going to shrink, and probably the qualitative factors when it comes to concentration and growth will get a little bit higher. I think we’re going to be rising above that 91 and getting much closer to the 1% for the rest of the year.

Braden Smith, President, OptimumBank Holdings, Inc.: I would only add that we’ve got a very disciplined approach to this. We look at the past due report on a daily basis. If a borrower gets to be 10 to 15 days past due, they’re getting a phone call from either Moishe, myself, or our chief lending officer. At 30 days, they’re getting a demand to bring current, and at 45 days, they’re getting a demand to pay in full. We keep a very close eye on the portfolio. We are monitoring it on daily basis, and like I said, it’s worked out well. I’ve been pleasantly surprised at how quickly if Moishe or I call and say, "Hey, you’re 15 days past due," they don’t usually get to 16.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Okay. This is the last question that we have submitted. Following the preferred stock exchange, can you clarify what investors should use as the normalized share count for calculating EPS going forward, and how investors should think about tangible book value per share under the new capital structure?

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: That is a good question, and I don’t have a good answer. Seth, maybe you have an answer for that.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: I do.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Oh, boy. Who has a half an hour?

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: It was explained by one of Elliot’s lieutenants, Natasha, who’s a very gifted and capable accountant, and essentially because the conversion occurred in the middle of the second quarter, there was a portion of the second quarter where we did still have the preferred share structure. And so to normalize it for the second quarter, we still had to present it as a fully diluted number because it doesn’t just turn on a dime. It’s not like at the end of the quarter, it was all common equity. So that will ultimately further normalize into Q3. And by the time you get to the end of the year, it’s basically all going to be considered common equity, and there’s not going to be a distinction between-

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: But our investors should still use a diluted EPS number, not the regular number.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: For the time being, that is right. Yes.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Yeah. For their question, they asked what is our amount of shares that we have outstanding today.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: It is roughly 24,790,000 something.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: There you go, 24,800,000 rounded.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Yes. It is in the presentation, and it is on our investor website. It is in our second quarter deck. It is in our earnings release. It is not difficult to find the exact numbers should somebody want the exact number.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Okay.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: They can always email me, and I am happy to give them the exact number.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Hopefully, that answers their question.

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: Okay.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: Anything else?

Seth Denison, Managing Director of Investor Relations, OptimumBank Holdings, Inc.: I think that is going to be it. I think we can wrap up the second quarter earnings call.

Moishe Gubin, Chairman of the Board and Chief Executive Officer, OptimumBank Holdings, Inc.: I want to thank everybody for joining us today. Thank you for your support. Thank you for your interest. Anyone needing any follow-up, please feel free to reach out to Seth, myself, or even Braden, I guess, and we would be glad to schmooze it up with you and let you know why OptimumBank is a good investment. With that, wish everybody a good day. And again, just thank you, thank you, thank you, and be well.

Moderator: This concludes today’s call. Thank you for attending. You may now disconnect.