OPHC OptimumBank Holdings Inc

OptimumBank (Sole subsidiary of OptimumBank Holdings, Inc. (NASDAQ:OPHC) Select Call Report Data on 1st Quarter and Month of March Performance for 2020

Brief Summary of results:

Month of March Net Income: $27,000, excluding Allowance for Loan Losses (ALLL) of $186,000.

1st Quarter Net Income of $43,000, excluding ALLL of $190,000.

Balance sheet trends

Last year OptimumBank (the “Bank”) implemented various strategies to improve its earnings. Accordingly, as of March 31, 2020, loans increased by $5.2 million and cash and securities rose by $9.1 million. This is on top of substantial growth in the 4th quarter of 2019 and despite the emerging COVID 19 crisis (more on this later).

In preparation for this growth, the Bank had undertaken a significant program of increasing non-maturity deposits such as checking accounts and Money Market accounts. This reduced the need to generate higher priced time deposits (CD’s). It also allows the bank to adjust prices to the current market which have recently fallen to near zero percent.

Income Statement

Interest income for the quarter increased by $31,000 meanwhile interest expense decreased by $32,000; thereby contributing a total of $63,000 to net interest income. This improving performance is the result of balance sheet changes mentioned above. The enhanced liquidity also allows the Bank to quickly respond to borrowers need.

Noninterest income, excluding asset disposal loss, essentially doubled from the 4th Qtr. 2019 of $26,000 to $67,000 in 1st Qtr. 2020. This growth was a result of loan fees along with wire and ACH fees. Noninterest income in the 4th Qtr. 2019, included a one-time $215,000 asset disposal loss due to the relocation of the Bank office at 2477 E. Commercial Boulevard, Fort Lauderdale, Florida to a newer and more accessible location at 2929 E. Commercial Boulevard, Fort Lauderdale, Florida.

Core Noninterest expense increased by $59,000 due primarily to higher FDIC assessments and compensation and benefits.

In conclusion, the Strategic plan has successfully provided the roadmap for increased growth, revenue, fee income while balancing expenses.

It should also be noted that the Bank took a non-cash charge to earnings to fund the ALLL of $190,000. This pays for itself as the loan portfolio matures but will be regulatory drag on earnings during periods of rapid growth.

Capital Levels

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios of Total and Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. As of March 31, 2020, the Bank is well capitalized under the regulatory framework for prompt corrective action.

Comment on COVID 19: Optimum Bank is open during the shutdown, and actively working with the SBA and Borrowers to implement the PPP (Payroll Protection Plan) and serve its community. The Bank has already made a significant number of such loans.

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:OptimumBankHoldings.Inc. investor@optimumbank.com +1.954.900.2805