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OptimumBank Holdings, Inc. (OPHC)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024 delivered strong year-over-year growth: net earnings rose 106% to $2.377M, driven by 53% higher net interest income and 70% higher noninterest income; net interest margin expanded to 3.70% from 3.49% .
  • Funding costs were a headwind: total interest expense increased 133% YoY on higher deposit rates and mix, while consumer net charge-offs were $0.534M, lifting expected credit loss expense to $1.057M .
  • Balance sheet scaled meaningfully: total assets grew ~19% QoQ to $940.6M; deposits rose ~$159M QoQ to $798.4M; net loans increased ~$75.3M QoQ to $746.4M .
  • Guidance pivot: management intends to limit loan growth in Q2 to preserve liquidity, while investing in automation to expand treasury management fee income; SBA 7(a) launched with $1.4M outstanding and plan to sell the guaranteed portion .
  • No earnings call transcript or Wall Street consensus estimates were available; focus for traders is the narrative shift toward liquidity, deposit growth, and fee income amid rising funding costs .

What Went Well and What Went Wrong

What Went Well

  • Net earnings more than doubled YoY to $2.377M, with EPS up to $0.31 (basic/diluted), supported by stronger net interest income and fee income growth .
  • Net interest margin improved to 3.70% (vs 3.49% YoY), reflecting asset yield expansion on loan growth and higher earning asset yields .
  • Management emphasized a strategic pivot to liquidity, automation, and fee income: “we intend to limit our growth in loans… focus on increasing our on-balance sheet liquidity… investing in the necessary technology [automation]” .

What Went Wrong

  • Interest expense rose sharply (+133% YoY) to $5.714M on higher deposit rates and mix changes, pressuring spread (2.48% vs 2.54% YoY) .
  • Consumer credit costs ticked up: net charge-offs of $0.534M in consumer lending; allowance increased to $8.281M (1.10% of loans) .
  • Accumulated other comprehensive loss widened to $(5.697)M, with a $(0.382)M other comprehensive loss in Q1 on securities marks (partly offset by tax benefit) .

Financial Results

Income Statement and Margins (YoY comparison)

MetricQ1 2023Q1 2024
Total Interest Income ($USD Thousands)$7,516 $13,465
Total Noninterest Income ($USD Thousands)$729 $1,239
Net Interest Income ($USD Thousands)$5,059 $7,751
Credit Loss Expense ($USD Thousands)$820 $1,057
Net Earnings ($USD Thousands)$1,153 $2,377
EPS - Basic ($USD)$0.16 $0.31
EPS - Diluted ($USD)$0.16 $0.31
Net Interest Margin (%)3.49% 3.70%
Interest Rate Spread (%)2.54% 2.48%

Notes: Management attributes interest income growth to loan portfolio expansion and higher asset yields; expense increased on higher deposit rates and balances .

Balance Sheet (Prior Quarter vs Current)

MetricDec 31, 2023Mar 31, 2024
Total Assets ($USD Thousands)$791,254 $940,633
Net Loans ($USD Thousands)$671,094 $746,370
Total Deposits ($USD Thousands)$639,581 $798,409
FHLB Advances ($USD Thousands)$62,000 $40,000
FRB Advances ($USD Thousands)$13,600 $13,355
Total Equity ($USD Thousands)$70,007 $83,044
AOCI ($USD Thousands)$(5,315) $(5,697)

Deposit Mix (Prior Quarter vs Current)

Deposit CategoryDec 31, 2023 ($USD Thousands)Mar 31, 2024 ($USD Thousands)
Noninterest-bearing Demand$194,892 $217,940
Savings/NOW/Money-Market$322,932 $318,511
Time Deposits$121,757 $261,958
Total Deposits$639,581 $798,409

KPIs

KPIPrior PeriodCurrent Period
Return on Avg Assets (%)1.0% (FY 2023) 1.1% (Q1 2024, annualized)
Return on Avg Equity (%)9.6% (FY 2023) 13.1% (Q1 2024, annualized)
Tier 1 Capital to Total Assets (%)10.00% (Dec 31, 2023) 10.20% (Mar 31, 2024)
Off-balance Sheet Commitments ($USD Thousands)—Commitments $9,117; Unused Lines $63,691; Standby LCs $4,390 (Mar 31, 2024)

Segment Breakdown (Loans)

Loan Type ($USD Thousands)Dec 31, 2023Mar 31, 2024
Residential Real Estate$71,400 $70,814
Multi-family Real Estate$67,498 $64,793
Commercial Real Estate$422,680 $493,602
Land and Construction$32,600 $52,688
Commercial$41,870 $33,867
Consumer$44,023 $40,134
Total Loans$680,071 $755,898
Allowance for Credit Losses$(7,683) $(8,281)
Loans, net$671,094 $746,370

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan GrowthQ2 2024Not specified“Limit growth in loans and other illiquid assets; do not expect a material increase in loan balances” Lowered
Liquidity/DepositsQ2 2024Not specified“Focus on increasing on-balance sheet liquidity by identifying deposit growth opportunities in FL and U.S.” Emphasized
Treasury Mgmt (ACH/Wire)2024Not specified“Investing in necessary technology for automation to further improve efficiency and increase revenue” Introduced/Expanded
SBA 7(a) Program2024$50MM closings target for 2024 (Bank-level PR) Commenced; $1.4M outstanding at 3/31; intend to sell guaranteed portion Executing ramp
Capital2024Well-capitalizedWell-capitalized; Tier 1 leverage 10.20% vs 9.00% “well-capitalized” threshold Maintained

No numeric guidance ranges were provided for revenue, margins, OpEx, OI&E, tax rate, or dividends .

Earnings Call Themes & Trends

No Q1 2024 earnings call transcript available for OPHC; themes derived from 8-K/10-Q narrative .

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2024)Trend
SBA LendingFY 2023 PR: new national SBA program targeting ~$50MM in 2024 SBA 7(a) commenced; $1.4M outstanding; plan to sell guaranteed portions Ramp-up underway
Treasury Mgmt/FeesLimited prior disclosure; strategic plan to expand fee-based businesses Fee income up (wire/ACH); investing in automation to scale Increasing; scaling via tech
Loan/Asset GrowthQ3 2023: assets >$712M; plan to grow NIM via loan-to-deposit ratio Management to limit loan growth in Q2; net loans up QoQ to $746M Moderating growth
Funding Costs/MixNot explicitly highlighted earlierInterest expense +133% YoY; time deposits surged to $262M Rising costs; mix shift
Credit QualityStrategic plan mentions risk management focus Consumer NCOs $534k; ACL 1.10% of loans Watch consumer; coverage stable
Capital/RegulatoryWell capitalized status emphasized Tier 1 leverage 10.20%; $2.05M Series C issued; $8.8M common raise Strengthened capital

Management Commentary

  • Strategic pivot: “During the second quarter, we intend to limit our growth in loans and other illiquid assets… focused on increasing our on-balance sheet liquidity… [and] investing in the necessary technology to achieve [automation]” .
  • Growth vector: “During the first quarter of 2024, the Bank commenced offering… SBA 7A loans… [and] intends to sell the guaranteed portion” .
  • Prior context: “Our strategic plan… achieved well managed capital ratios… [national] SBA lending program is expected to achieve $50MM in closings during 2024… providing approximately $20MM in accounts receivable credit lines to Skilled Nursing Facilities” .

Q&A Highlights

No Q1 2024 earnings call transcript found; no Q&A content available .

Estimates Context

  • No Wall Street consensus EPS or revenue estimates were available for Q1 2024; S&P Global consensus data could not be retrieved and appears unavailable for this microcap bank. As a result, we cannot assess beat/miss vs street for Q1 2024 (S&P Global estimates unavailable) .

Key Takeaways for Investors

  • Strong core performance: Q1 net earnings doubled YoY with NIM expansion and fee income growth; asset and deposit scaling provide balance sheet leverage .
  • Funding cost pressure is real: interest expense up 133% YoY on higher deposit rates and mix; watch time deposit growth and its impact on spread and margin .
  • Strategic de-risking in Q2: management plans to cap loan growth to protect liquidity while accelerating automation to scale treasury fee revenues—near-term narrative shift away from pure loan-led growth .
  • Fee income and SBA are catalysts: ACH/wire fees increased; SBA 7(a) program is live with intent to sell guarantees, which can boost noninterest income and capital efficiency .
  • Credit quality watchpoints: consumer net charge-offs ($0.534M) and higher expected credit loss expense warrant monitoring as consumer balances and delinquencies evolve .
  • Capital position solid: Tier 1 leverage at 10.20%; recent capital raises (Series C and common) strengthen regulatory ratios and support growth optionality .
  • Tactical implication: In absence of Street coverage and a call, stock may trade on liquidity strategy updates, deposit growth trajectory, and the pace of fee income ramp vs funding-cost normalization; monitor Q2 deposit mix and margin prints for inflection .