OptimumBank Holdings, Inc. (OPHC-NASDAQ) Chairman Comments from the Annual Shareholder Meeting held on May 25, 2021

Florida, UNITED STATES


Fort Lauderdale, FL., May 26, 2021 (GLOBE NEWSWIRE) -- OptimumBank Holdings, Inc. (OPHC-NASDAQ) I will begin my comments this year similar to last year’s comments. I am grateful that we are all healthy and able to be here today. Most of us have seen major changes in our everyday lives. Most of us have lost friends and family members to the Corona Virus. We have seen the way business gets done in many industries change as well. We have also seen how the real estate market has been affected. At the Bank however, we have experienced little change in our operation. What has changed is the acceleration to meet our objectives. Last year, I said that I appreciated the confidence you have in me to lead our Board and help OptimumBank Holdings, Inc. (the “Company”) reach profitability and work towards reaching our singular goal of bringing shareholder returns, while safeguarding the Company’s equity. Well, 2020 was the year that we finally reached a core profitability that we are so far past as of the end of the first quarter. Being that we are currently five (5) months into 2021, I wanted to discuss our first quarter numbers and compare some of the numbers to last year’s end and last year’s first quarter results.

The Bank was and continues to work with the Small Business Administration (“SBA”) and its borrowers to implement the Paycheck Protection Plan (“PPP”). The Bank closed 267 PPP loans totaling $17.7million during the first quarter of this year and bringing the total amount to 471 PPP loans totaling $36.8 million. From that total, $3.9 million has been forgiven already. We expect when all is said and done, the Bank will receive $1.3 million of fee income from the PPP loans. OptimumBank has facilitated these loans to assist the local community, obtain new customers, strengthen ties, and has actively engaged in cross-selling other Bank products.

We at the Bank were very fortunate to avoid any major issues associated with COVID-19. Last year, at the onset of the pandemic, management for the Bank recognized that to avoid any interruption in its operation, its employees would need to achieve some degree of social distancing. Accordingly, the Bank had four (4) of its employees that were able to work from home begin working remotely, which allowed for space for additional social distancing for the employees who remained in the offices. All three (3) branch lobbies remained open throughout, however, customers were requested to use the drive-throughs when feasible. The Bank had bottles of hand sanitizer available throughout its locations, signs encouraging social distancing, and Plexiglas barriers for the customer service employees in the branches. Management took the position at the very onset that if any employee felt that he or she had been exposed to the Coronavirus, the employee was required to inform management, and was immediately sent home for the remaining duration of a 14-day self-quarantine period from the date they were exposed, with full pay, no questions asked. The Bank experienced three situations where this procedure was implemented resulting in the closing of one branch for two separate one to two-week periods, which had no negative effect on the business.

Since the pandemic began, the Bank granted six month forbearances on 58 loans totaling $43.7 million, which accounted for 31.5% of its gross loan portfolio. As expected, all these forbearances expired, and all the borrowers recovered and resumed their monthly mortgage payments.

In first quarter 2021, we had a Net Income before Allowance for Loan Losses of $324 thousand. This compares to a $119 thousand loss for the same period in 2020, which is an improvement of $443 thousand. As I mentioned earlier, we became profitable in the third quarter of 2020 and we were able to make up the first two quarter losses and show that profit at year end. We expect 2021 earnings to be over two million dollars before the PPP fee income which we should be able to grow quarter over quarter. Net interest income increased by $903 thousand or 112% 2021 over 2020. Total noninterest expenses increased $350 thousand to $1.5 million for the three month period ended March 31, 2021 compared to $1.2 million for the three-month period ended March 31, 2020. Noninterest income amounted to $176 thousand for the first quarter compared to $73 thousand same period last year. This was a result of wires and ACH fees which we expect to continue to rise.

Total assets amounted approximately to $252 million and$141MM at March 31, 2021 and 2020, respectively, which represents a growth of $111 million or 79%, and includes the PPP loans of close to $31 million. The increase in total assets was driven by a growth of $61 million in loans and $50 million in cash, cash equivalents and investments. For the 12-month period ended March 31, 2020, significant growth was experienced in the following loan categories: commercial by $32 million, commercial real estate by $13 million, multi-family real estate by $10 million while residential real estate was flat. In addition, the Company raised new equity by selling $14.8 million mixture of common and preferred stock. Part of the equity was an exchange of last year’s exchange of Trust Preferred Securities (“TruPs”) debt for equity. We expect to have the TruPs fully extinguished by the end of the second quarter. This has enabled the Company to continue to grow while maintaining its capital in accordance with regulatory standards. At this point, capital is not an obstacle to the Company’s growth. As has been noted in the past, the Company and the Bank are fortunate to enjoy broad-based Boards of Directors with access to capital.

To fund the growth experienced by the Bank, it undertook a significant program of increasing non- maturity deposits such as checking accounts and money market accounts. We grew from end of the first quarter 2020 until the end of the first quarter 2021 by 98% or $103.7 million. This reduced the need to generate higher priced time certificates of deposits (“CD’s”). It also allowed the Bank to adjust prices to the current market which have recently fallen to near zero percent. This improving performance is the result of balance sheet changes mentioned above. The enhanced liquidity also allows the Bank to quickly respond to borrowers’ needs. At the end of 2019, the Bank relocated its branch located at 2477 E. Commercial Boulevard in Fort Lauderdale, Florida to a newer and more accessible location at 2929 E. Commercial Boulevard, Fort Lauderdale, Florida. We expect in 2021 to close the Plantation branch and open a new branch in a location nearby.

I will conclude my comments with the following. We started a few years ago with a Strategic Plan which provided the roadmap for increased growth, revenue, and fee income while balancing expenses. Once we graduated from the enhanced regulatory scrutiny which exhausted management’s time and efforts in 2019, we were able to raise additional capital and went after the tasks we needed to do to succeed. As we succeed, we will keep pushing the goals further out so that we can improve our results and truly succeed in bringing returns to our shareholders.

We will continue working hard and expect great things to happen in the future.

Thank you,

Moishe Gubin, Chairman

Safe Harbor Statement

This statement 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.

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