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OptimumBank Holdings, Inc. (OPHC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered stronger profitability and core earnings: net earnings rose to $4.32M with diluted EPS of $0.18, up from $0.15 a year ago and $0.15 last quarter, driven by higher net interest income, lower funding costs, and deposit growth .
  • EPS beat S&P Global consensus by $0.03 (actual $0.18 vs $0.15 consensus); “Revenue” (S&P-defined net revenue = NII after provision + noninterest income) rose to $12.27M; revenue estimates were not available, indicating limited Street coverage for the name. Values retrieved from S&P Global.*
  • Balance sheet expansion accelerated: deposits up $80.6M q/q to $959.5M, noninterest-bearing demand deposits mix increased to 32.7%, and no borrowings outstanding; total assets reached $1.08B .
  • Net interest margin expanded to 4.37% (+5 bps q/q, +41 bps y/y) on disciplined deposit pricing and reduced cost of interest-bearing liabilities (3.48%), a tailwind as long-term rates fell and AOCL improved by $0.66M q/q .
  • Strategic loan mix shift continued: commercial real estate and consumer loans grew while land & construction declined; credit metrics improved with net recoveries and lower credit loss expense .

What Went Well and What Went Wrong

What Went Well

  • Strong earnings and margin expansion: net earnings rose to $4.32M; NIM increased to 4.37% on improved asset yields and lower funding costs .
  • Funding mix and liquidity strengthened: deposits +$80.6M q/q to $959.5M; noninterest-bearing demand deposits rose to 32.7% of total; no borrowings during the quarter .
  • Management tone constructive: “Our momentum continues to build… disciplined deposit pricing, targeted lending, and operating efficiency continues to drive results” — Moishe Gubin, Chairman .

What Went Wrong

  • Operating expense pressure: noninterest expenses increased to $6.60M q/q on higher staffing and data processing as the bank scales; efficiency ratio remains ~51% .
  • Loan portfolio migration: continued decline in land & construction (-$17.8M q/q), and commercial loans (-$4.75M q/q), reflecting market conditions and portfolio repositioning .
  • Credit costs, while improved q/q, remain an earnings headwind vs prior year: credit loss expense was $0.76M vs $0.36M in Q3 2024, though net recoveries of $41K and lower specific reserves supported the trend .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Net earnings ($USD Millions)$3.30 $3.60 $4.32
EPS - Basic ($)$0.34 $0.31 $0.37
EPS - Diluted ($)$0.15 $0.29 $0.18
“Revenue” (S&P net revenue) ($USD Millions)$9.72*$11.04*$12.27*
Net interest income ($USD Millions)$8.96 $10.24 $11.05
Net interest margin (%)3.96% 4.32% 4.37%
Efficiency ratio (%)52.45% 51.18% 50.68%
ROAA (%)1.42% 1.48% 1.68%
Total deposits ($USD Millions)$806.51 $878.87 $959.49
Total assets ($USD Millions)$945.19 $999.13 $1,083.04

Note: S&P Global consensus/actual values are marked with an asterisk. Values retrieved from S&P Global.*

Segment loan mix

Segment ($USD Millions)Sep 30, 2024Jun 30, 2025Sep 30, 2025
Residential real estate$75.877 $66.602 $66.723
Multi-family real estate$62.280 $68.321 $67.435
Commercial real estate$479.038 $478.224 $524.865
Land & construction$72.729 $61.126 $43.364
Commercial$39.957 $50.351 $45.604
Consumer$48.177 $59.940 $65.731
Total loans$778.058 $784.564 $813.722

KPIs and Balance Sheet Quality

KPIQ3 2024Q2 2025Q3 2025
Noninterest-bearing demand deposits (% total)25.09% 29.56% 32.72%
Net loan-to-deposit ratio (%)95.34% 88.13% 83.67%
Tier 1 Capital to Total Assets (%)10.38% 11.89% 11.71%
ACL ratio (% of loans)N/A1.19% 1.23%
Nonaccrual loans ($USD Millions)$2.18 $3.22 $2.98
AOCL ($USD Millions)$(4.48) $(5.41) $(4.75)
Cost of interest-bearing liabilities (%)4.17% 3.49% 3.48%
Net interest spread (%)2.61% 3.08% 2.98%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total assets (EOY)2025≥$1.2B (Q2 clarification) ≥$1.2B (no update; constructive outlook) Maintained
Total assets (EOY)2026$1.5–$1.6B (Q2 clarification) $1.5–$1.6B (no update) Maintained

Earnings Call Themes & Trends

Note: A Q3 2025 earnings call transcript was not located; current-period themes reflect the press release and 8-K. Prior-period themes include Q2 webcast Q&A.

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Deposit pricing/funding mixQ2: CD rates reduced; average borrowings fell from $32.2M to $2.2M; deposits +$25.9M; NIB deposits up to 29.6% Deposits +$80.6M; NIB deposits 32.7%; no borrowings Improving mix and lower funding costs
Credit quality/provisionsQ2: $1.04M specific reserve; net recoveries $25K $0.76M provision; net recoveries $41K; ACL 1.23% Lower credit cost; portfolio well-managed
Loan growth mixQ2: Consumer (+$8.0M), multifamily (+$4.7M); land & construction (-$19.2M) CRE (+$46.6M), consumer (+$5.8M); land & construction (-$17.8M); commercial (-$4.8M) Shift toward CRE/consumer; de-emphasis construction
Technology/AIQ2 Q&A: Not using AI for loan approvals Continued investment in technology and scalability Investing in tech; underwriting remains traditional
Regulatory readiness (FDICIA)Q2 Q&A: Internal controls build underway; management testing planned Strong capital ratios; constructive outlook Progressing toward readiness
Macro rates/AOCLQ2: AOCL widened $(0.26)M on rate moves AOCL improved $0.66M on decline in long-term rates Rate decline a tailwind to AFS values

Management Commentary

  • “Our momentum continues to build as we expand our customer base, strengthen our core earnings, and deliver meaningful value to our shareholders… disciplined deposit pricing, targeted lending, and operating efficiency continues to drive results.” — Moishe Gubin, Chairman .
  • CFO perspective (Q2 webcast): “Net interest margin expanded to 4.32%… aided with the growth in our average loan portfolio combined with increasing loan yields and… reductions [in] deposit portfolio pricing… asset quality remains well managed.” — Elliot Nunez .
  • Strategic positioning: “We continue to invest in technology, talent, and targeted growth strategies that reinforce our position as one of the most dynamic and rapidly growing community banks in South Florida.” .

Q&A Highlights

  • Specific reserve context: “This specific reserve… nursing home division… backed by government receivables… we expect to get paid in full… we thought it was the prudent choice to record a specific reserve in the second quarter.” — Moishe Gubin .
  • Underwriting standards: “We have not changed our underwriting standards at all… excellent asset quality… result of the way we underwrite loans.” — Tim Terry, CEO .
  • FDICIA readiness: “Contracted with an outside firm to help us build [internal] controls… documenting workflows… management testing of key controls… fully ready” for 2026 requirements. — Elliot Nunez .
  • AI use: “We are not using AI software to approve loans… not so sure AI would render the same quality results… just not right now.” — Tim Terry .
  • NPAs and loan resolution: $5.6M non-performing loan sold at full book; no loss taken, improving NPA profile. — Elliot Nunez .

Estimates Context

MetricQ3 2024Q2 2025Q3 2025
EPS Consensus Mean ($)N/A*0.15*0.15*
EPS Actual Diluted ($)0.15 0.29 0.18
Surprise ($)N/A+0.14 vs consensus*+0.03 vs consensus*
“Revenue” Consensus Mean ($USD Millions)N/A*N/A*N/A*
“Revenue” Actual (S&P net revenue) ($USD Millions)9.72*11.04*12.27*

Notes: S&P Global coverage for revenue consensus was not available; EPS consensus appears based on limited estimates. Values retrieved from S&P Global.*

Key Takeaways for Investors

  • EPS beat of $0.03 vs consensus, driven by NIM expansion and reduced funding costs; watch for continued deposit mix improvements and disciplined pricing to sustain margins .
  • Funding tailwinds: rapid q/q deposit growth (+$80.6M) with rising noninterest-bearing demand deposits and no borrowings underpin lower cost of funds and liquidity strength .
  • Credit normalization: provision declined q/q; net recoveries and stable ACL ratio at 1.23% suggest well-managed risk, though absolute provision remains above prior-year levels .
  • Loan mix pivot: CRE and consumer growth with contraction in construction/commercial supports yields and risk-adjusted returns; monitor CRE concentrations and market conditions .
  • Capital and AOCL: Tier 1 at 11.71%; AOCL improved with rate moves, reducing OCI drag; potential tailwind if long rates continue to ease .
  • Operating leverage: expenses rose with scaling, but efficiency ratio improved to ~50.7%; continued investment in technology and infrastructure should support scalable growth .
  • Near-term trading: stock reaction likely tied to EPS beat, margin trajectory, and deposit growth; medium-term thesis hinges on sustaining 25–30% annual asset growth targets and executing the mix shift while preserving credit quality .