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What changed in OptimumBank Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of OptimumBank Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+113 added−125 removedSource: 10-K (2025-02-26) vs 10-K (2024-03-08)

Top changes in OptimumBank Holdings, Inc.'s 2024 10-K

113 paragraphs added · 125 removed · 99 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeThe Bank offers its customers mobile access to their account information, with the option to setup alerts, and deposit checks across a broad range of phones and mobile devices. The Bank also offers its business customers remote deposit capture and online cash management services that include ACH origination and wire transfers using soft token technology for security.
Biggest changeThe Bank also offers its business customers remote deposit capture and online cash management services that include ACH origination and wire transfers using soft token technology for security. Competition The Bank encounters strong competition in making loans and attracting deposits.
The Interstate Banking and Branching Act provides for nationwide interstate banking and branching. Under the law, interstate acquisitions of banks or bank holding companies in any state by bank holding companies in any other state are permissible subject to certain limitations.
Interstate Banking and Branching . The Interstate Banking and Branching Act provides for nationwide interstate banking and branching. Under the law, interstate acquisitions of banks or bank holding companies in any state by bank holding companies in any other state are permissible subject to certain limitations.
The excess balance account is the excess cash the Bank has available over and above daily cash needs. This money is invested on an overnight basis with the Federal Reserve. 3 Correspondent Banking Correspondent banking involves one bank providing services to another bank which cannot provide that service for itself from an economic or practical standpoint.
The excess balance account is the excess cash the Bank has available over and above daily cash needs. This money is invested on an overnight basis with the Federal Reserve. Correspondent Banking Correspondent banking involves one bank providing services to another bank which cannot provide that service for itself from an economic or practical standpoint.
Large multi-branch banking competitors tend to compete primarily by rate and the number and location of branches while smaller, independent financial institutions tend to compete primarily by rate and personal service. 4 Human Capital The Bank is committed to establishing personal relationships with its customers and providing personalized banking services that meet their specific needs.
Large multi-branch banking competitors tend to compete primarily by rate and the number and location of branches while smaller, independent financial institutions tend to compete primarily by rate and personal service. Human Capital The Bank is committed to establishing personal relationships with its customers and providing personalized banking services that meet their specific needs.
Among other things, the agencies may require that institutions cease and desist from certain activities, may preclude persons from participating in the affairs of insured depository institutions, may suspend or remove deposit insurance, and may impose civil money penalties against institution-affiliated parties for certain violations. 11 Community Reinvestment Act.
Among other things, the agencies may require that institutions cease and desist from certain activities, may preclude persons from participating in the affairs of insured depository institutions, may suspend or remove deposit insurance, and may impose civil money penalties against institution-affiliated parties for certain violations. Community Reinvestment Act.
In addition, banks are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or the providing of any property or service. Change of Bank Control. Florida law restricts the amount of voting stock of a bank that a person may acquire without the prior approval of banking regulators.
In addition, banks are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or the providing of any property or service. 7 Change of Bank Control. Florida law restricts the amount of voting stock of a bank that a person may acquire without the prior approval of banking regulators.
The Bank may sell loan participations to other banks with respect to loans which exceed its lending limit. The Bank may purchase loan participations to supplement loan demand. Data Processing The Bank outsources most of its data processing services, including an automated general ledger, deposit accounting, and loan sub-system.
The Bank may sell loan participations to other banks with respect to loans which exceed its lending limit. The Bank may purchase loan participations to supplement loan demand. 3 Data Processing The Bank outsources most of its data processing services, including an automated general ledger, deposit accounting, and loan sub-system.
The Bank has devoted substantial attention and resources to compliance with these laws. 10 Other Consumer Laws. Florida usury laws and federal laws concerning interest rates limit the amount of interest and various other charges collected or contracted by a bank.
The Bank has devoted substantial attention and resources to compliance with these laws. Other Consumer Laws. Florida usury laws and federal laws concerning interest rates limit the amount of interest and various other charges collected or contracted by a bank.
Supervision, regulation, and examination of banks by regulatory agencies are intended primarily for the protection of depositors, rather than shareholders. 5 Regulatory Matters Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.
Supervision, regulation, and examination of banks by regulatory agencies are intended primarily for the protection of depositors, rather than shareholders. Regulatory Matters Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.
A Florida bank also may establish, maintain, and operate one or more branches in a state other than Florida pursuant to an interstate merger transaction in which the Florida bank is the resulting bank. Financial Modernization .
A Florida bank also may establish, maintain, and operate one or more branches in a state other than Florida pursuant to an interstate merger transaction in which the Florida bank is the resulting bank. 6 Financial Modernization .
The FDIC and the Florida OFR also have the authority to approve or disapprove mergers, consolidations, and similar corporate actions. 9 Dividends . The Company’s ability to pay dividends is substantially dependent on the ability of the Bank to pay dividends to the Company.
The FDIC and the Florida OFR also have the authority to approve or disapprove mergers, consolidations, and similar corporate actions. Dividends . The Company’s ability to pay dividends is substantially dependent on the ability of the Bank to pay dividends to the Company.
The Bank’s fixed rate loans generally are for terms of five years or less, and are repayable in monthly instalments based on a maximum 30-year amortization schedule. Loan originations are derived primarily from director and employee referrals, existing customers, and direct marketing. Certain credit risks are inherent in making loans.
The Bank’s fixed rate loans generally are for terms of five years or less, and are repayable in monthly installments based on a maximum 30-year amortization schedule. Loan originations are derived primarily from director and employee referrals, existing customers, and direct marketing. Certain credit risks are inherent in making loans.
The community bank leverage ratio minimum requirement is 9%. Under the CBLR framework, an eligible community banking organization can opt out of the CBLR framework and revert back to the risk-weighting framework without restriction. Management believes, as of December 31, 2023, that the Bank met all capital adequacy requirements to which it was subject.
The community bank leverage ratio minimum requirement is 9%. Under the CBLR framework, an eligible community banking organization can opt out of the CBLR framework and revert back to the risk-weighting framework without restriction. Management believes, as of December 31, 2024, that the Bank met all capital adequacy requirements to which it was subject.
The Bank’s loans are also subject to federal laws applicable to consumer credit transactions, such as the: ● Federal Truth-In-Lending Act governing disclosures of credit terms to consumer borrowers; ● Community Reinvestment Act requiring financial institutions to meet their obligations to provide for the total credit needs of the communities they serve, including investing their assets in loans to low and moderate-income borrowers; ● Home Mortgage Disclosure Act requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves; ● Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed or other prohibitive factors in extending credit; ● Real Estate Settlement Procedures Act which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions; ● Fair Debt Collection Act governing the manner in which consumer debts may be collected by collection agencies; ● Fair and Accurate Credit Transactions Act which establishes additional rights for consumers to obtain and correct credit reports, addresses identity theft, and establishes additional requirements for consumer reporting agencies and financial institutions that provide adverse credit information to a consumer reporting agency; and ● The rules and regulations of various federal agencies charged with the responsibility of implementing such federal laws.
The Bank’s loans are also subject to federal laws applicable to consumer credit transactions, such as the: ● Federal Truth-In-Lending Act governing disclosures of credit terms to consumer borrowers; ● Community Reinvestment Act requiring financial institutions to meet their obligations to provide for the total credit needs of the communities they serve, including investing their assets in loans to low and moderate-income borrowers; ● Home Mortgage Disclosure Act requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves; ● Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed or other prohibitive factors in extending credit; ● Real Estate Settlement Procedures Act which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions; ● Fair Debt Collection Act governing the manner in which consumer debts may be collected by collection agencies; ● Fair and Accurate Credit Transactions Act which establishes additional rights for consumers to obtain and correct credit reports, addresses identity theft, and establishes additional requirements for consumer reporting agencies and financial institutions that provide adverse credit information to a consumer reporting agency; and ● The rules and regulations of various federal agencies charged with the responsibility of implementing such federal laws. 8 Such laws and other consumer regulation matters are administered by the Consumer Financial Protection Bureau (the “Bureau”) .
As part of these efforts, the Bank seeks to offer competitive compensation and benefits, maintain a community in which all employees are empowered to perform their duties to the best of their abilities, and give employees the opportunity to contribute to the local community. As of December 31, 2023, the Bank had 60 full-time employees, including executive officers.
As part of these efforts, the Bank seeks to offer competitive compensation and benefits, maintain a community in which all employees are empowered to perform their duties to the best of their abilities, and give employees the opportunity to contribute to the local community. As of December 31, 2024, the Bank had 73 full-time employees, including executive officers.
Growing businesses can use the loans to expand inventory, take discounts, offset receivables, or establish new structured financing and repayment plans that are consistent with the cash flow of the business. During the third quarter of 2023, the Bank started providing small businesses administration government loans to small and middle market businesses.
Growing businesses can use the loans to expand inventory, take discounts, offset receivables, or establish new structured financing and repayment plans that are consistent with the cash flow of the business. During the third quarter of 2023, the Bank started providing U.S. Small Business Administration (“SBA”) guaranteed loans to small and middle market businesses.
In addition, any person or group of persons must obtain the approval of the Federal Reserve under the BHCA before acquiring 25% (5% in the case of an acquirer that is already a bank holding company) or more of the outstanding common stock of a bank holding company, or otherwise obtaining control or a “controlling influence” over the bank holding company. 8 Interstate Banking and Branching .
In addition, any person or group of persons must obtain the approval of the Federal Reserve under the BHCA before acquiring 25% (5% in the case of an acquirer that is already a bank holding company) or more of the outstanding common stock of a bank holding company, or otherwise obtaining control or a “controlling influence” over the bank holding company.
As of December 31, 2023, the maximum dividend payable by the Bank to the Company was $17 million. However, under the Federal Deposit Insurance Act, an FDIC-insured institution may not pay any dividend if payment would cause it to become undercapitalized or while it is undercapitalized.
As of December 31, 2024, the maximum dividend payable by the Bank to the Company was $26.1 million. However, under the Federal Deposit Insurance Act, an FDIC-insured institution may not pay any dividend if payment would cause it to become undercapitalized or while it is undercapitalized.
With respect to treasury management, our focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. For this revenue source to increase further in a meaningful way, automation will be necessary in order to further improve efficiency. We are currently investing in the necessary technology to achieve this end.
With respect to treasury management, our focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. For this revenue source to increase further in a meaningful way, automation will be necessary in order to further improve efficiency. We are currently investing in the necessary technology and expect efficiencies to occur in 2025.
This growth oriented strategic direction is expected to be facilitated by maintaining credit administration objectives including a risk-based and comprehensive credit culture and a credit administrative infrastructure that reinforces appropriate risk management practices. During the third quarter of 2023, the Bank commenced offering U.S. Small Business Administration (“SBA”) SBA 7A loans.
This growth oriented strategic direction is expected to be facilitated by maintaining credit administration objectives including a risk-based and comprehensive credit culture and a credit administrative infrastructure that reinforces appropriate risk management practices. During the third quarter of 2023, the Bank commenced offering SBA-guaranteed 7A loans.
As of December 31, 2023, 91% of the loan portfolio consisted of loans secured by mortgages on real estate, of which approximately 62% of the total loan portfolio was secured by commercial real estate properties. The real estate loans are located primarily in the counties the Bank serves in the State of Florida.
As of December 31, 2024, 87% of the loan portfolio consisted of loans secured by mortgages on real estate, of which approximately 60% of the total loan portfolio was secured by commercial real estate properties. The real estate loans are located primarily in the counties the Bank serves in the State of Florida.
Deposits are gathered principally from within the South Florida area through the offering of a broad variety of deposit products, including checking accounts, money-market accounts, regular savings accounts, term certificate of deposit accounts. The Company also gathers deposits via listing services. The Bank had no brokered deposits at December 31, 2023 or 2022.
Deposits are gathered principally from within the South Florida area through the offering of a broad variety of deposit products, including checking accounts, money-market accounts, regular savings accounts, term certificate of deposit accounts. The Company also gathers deposits via listing services. In 2024, the Bank had brokered deposits, whereas in 2023, the Bank had no brokered deposits.
Based upon the Bank’s capital, the maximum loan the Bank is currently permitted to make to any one borrower (and certain related entities of such borrower) is approximately $18.7 million, provided the unsecured portion does not exceed approximately $11.2 million. Transactions with Affiliates.
Based upon the Bank’s capital, the maximum loan the Bank is currently permitted to make to any one borrower (and certain related entities of such borrower) is approximately $26.8 million, provided the unsecured portion does not exceed approximately $16.1 million. Transactions with Affiliates.
Operating and Business Strategy Our key strategic initiatives are designed to generate continued growth in earning assets, core transaction and savings deposits, treasury management fee income, and lower costs. Continued emphasis on expansion of our footprint and exploring additional lines of business are also part of our plans.
The Bank achieved SBA preferred lender status on February 18, 2025. Operating and Business Strategy Our key strategic initiatives are designed to generate continued growth in earning assets, core transaction and savings deposits, treasury management fee income, and lower costs. Continued emphasis on expansion of our footprint and exploring additional lines of business are also part of our plans.
Competition The Bank encounters strong competition in making loans and attracting deposits. The deregulation of the banking industry and the widespread enactment of state laws which permit multi-bank holding companies as well as an increasing level of interstate banking have created a highly competitive environment for commercial banking.
The deregulation of the banking industry and the widespread enactment of state laws which permit multi-bank holding companies as well as an increasing level of interstate banking have created a highly competitive environment for commercial banking.
Investments The Bank’s investment securities portfolio was approximately $24.7 million and $ 25.6 million at December 31, 2023 and 2022, respectively, representing 3% and 4% of its total assets. At December 31, 2023, 48% of this portfolio was invested in asset-backed securities. Mortgage-backed securities generally have a shorter life than the stated maturity.
Investments The Bank’s investment securities portfolio was approximately $23 million and $25 million at December 31, 2024 and 2023, respectively, representing 2% and 3% of its total assets. At December 31, 2024, 45% of this portfolio was invested in mortgage-backed securities. Mortgage-backed securities generally have a shorter life than the stated maturity.
The Company’s common stock is registered with the Securities and Exchange Commission (the “SEC”) under Section 12(b) of the Securities Exchange Act of 1934, and we are subject to restrictions, reporting requirements and review procedures under federal securities laws and regulations.
The Company’s common stock is registered with the Securities and Exchange Commission (the “SEC”) under Section 12(b) of the Securities Exchange Act of 1934, and we are subject to restrictions, reporting requirements and review procedures under federal securities laws and regulations. Until December 30, 2024, our common stock was listed on the NASDAQ stock market.
The Company is subject to the supervision and regulation of The Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Bank is subject to the supervision and regulation of the State of Florida Office of Financial Regulation (“OFR”) and the FDIC. The Bank is a member of the Federal Home Loan Bank of Atlanta.
The Bank is subject to the supervision and regulation of the State of Florida Office of Financial Regulation (“OFR”) and the FDIC. The Bank is a member of the Federal Home Loan Bank of Atlanta.
The Bank’s net loans at December 31, 2023 were $671 million, or 85% of total assets. During 2023 net loans increased by $194 million, attributed to the bank’s successful pursuit of new lending opportunities in South Florida.
The Bank’s net loans at December 31, 2024 were $795 million, or 86.21% of total assets. During 2024 net loans increased by $124 million, attributed to the bank’s successful pursuit of new lending opportunities in South Florida.
The interest rates charged on loans varied with the degree of risk, maturity, and amount of the loan, and are further subject to competitive pressures, money market rates, availability of funds, and government regulations.
The interest rates charged on loans varied with the degree of risk, maturity, and amount of the loan, and are further subject to competitive pressures, money market rates, availability of funds, and government regulations. 2 The Bank’s loan portfolio is concentrated in three major areas: residential, commercial real estate loans, and land and construction loans.
The Company’s only business is the ownership and operation of the Bank. The Bank is a Florida state-chartered bank established in 2000, with deposits insured by the Federal Deposit Insurance Corporation (“FDIC”). The Bank offers a variety of commercial banking services to individual and corporate customers through its two banking offices located in Broward County, Florida.
The Company’s only business is the ownership and operation of the Bank. The Bank is a Florida state-chartered bank established in 2000, with deposits insured by the Federal Deposit Insurance Corporation (“FDIC”).
At December 31, 2023, the Company had total assets of $791 million, net loans of $671 million, total deposits of $640 million and stockholders’ equity of $70 million. During 2023, the Company had a net income of $6 million.
At December 31, 2024, the Company had total assets of $933 million, net loans of $795 million, total deposits of $772 million and stockholders’ equity of $103 million. During 2024, the Company had a net income of $13 million.
The Bank’s actual capital amounts and percentages are presented in the table ($’s in thousands): To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Actual Framework) Amount % Amount % As of December 31, 2023: Tier 1 Capital to Total Assets $ 74,999 10.00 % $ 67,499 9.00 % As of December 31, 2022: Tier 1 Capital to Total Assets $ 66,291 11.29 % $ 52,865 9.00 % Dodd-Frank Act The Company and the Bank are subject to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act.
The Bank’s actual capital amounts and percentages are presented in the table ($’s in thousands): To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Actual Framework) Amount % Amount % As of December 31, 2024: Tier 1 Capital to Total Assets $ 107,112 10.91 % $ 88,381 9.00 % As of December 31, 2023: Tier 1 Capital to Total Assets $ 74,999 10.00 % $ 67,499 9.00 % 5 Company Regulation General .
These loans are generally secured by accounts receivable, inventory, equipment, and real estate. The Bank hired two full-time SBA staff. At December 31, 2023, SBA 7A loans amounted to $1.4 million. Additionally, management has implemented initiatives that have enabled us to grow our loan portfolio primarily with locally generated relationships in the non-owner occupied, multi-family and commercial real estate sectors.
The small business loans portfolio represented 1.1% and 0.2% of our total loan portfolio at December 31, 2024 and 2023, respectively. Additionally, management has implemented initiatives that have enabled us to grow our loan portfolio primarily with locally generated relationships in the non-owner occupied, multi-family and commercial real estate sectors.
The Dodd-Frank Act created a new, independent Consumer Financial Protection Bureau, or the Bureau, within the Federal Reserve. The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services.
The Bureau is tasked with establishing and implementing rules and regulations under certain federal consumer protection laws with respect to the conduct of providers of certain consumer financial products and services. The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers.
The Bank believes that its compensation program provides fair and competitive compensation and aligns associate and shareowner interests, including by incentivizing business and individual performance and integrating compensation with our business plans. In addition to cash compensation, the Bank also offers employees benefits such as life and health insurance, paid time off, paid parental leave and a 401(k) plan.
The Bank believes that its compensation program provides fair and competitive compensation and aligns associate and shareowner interests, including by incentivizing business and individual performance and integrating compensation with our business plans.
Like other issuers of publicly traded securities, the Company must also comply with the corporate governance reforms enacted under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules of the SEC and Nasdaq Stock Market adopted pursuant to the Sarbanes-Oxley Act.
Effective December 31, 2024, our common stock began trading on NYSE American. As a publicly traded Company, we adhere to the corporate governance reforms enacted under the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and the rules of the SEC and NYSE American, stock market adopted pursuant to the Sarbanes-Oxley Act.
Loan balances increased by $21 million in residential real estate loans, $112 million in commercial real estate loans, $15 million in land and construction loans, $37 million in commercial loans, and $14 million in consumer loans.
Loan balances increased by $3 million in residential real estate loans, $63 million in commercial real estate loans, $45 million in land and construction loans, $11 million in commercial loans, and $6 million in consumer loans, offset by a decrease of $3 million in multi-family loans.
The Bank is focused on building an inclusive culture through a variety of diversity and inclusion initiatives, including related to internal promotions and hiring practices. Community Involvement. The Bank aims to give back to the local community and believes that this commitment helps in our efforts to attract and retain employees.
In addition to cash compensation, the Bank also offers employees benefits such as life and health insurance, paid time off, paid parental leave and a 401(k) plan. 4 Community Involvement. The Bank aims to give back to the local community and believes that this commitment helps in our efforts to attract and retain employees.
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The Bank has no loans to non-U.S. borrowers. 2 The Bank’s loan portfolio is concentrated in three major areas: residential, commercial real estate loans , and land and construction loans.
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The Bank offers a variety of commercial banking services to individual and corporate customers through its two branch offices located in Broward County, and one branch office in Miami Dade County, Florida. The Company is subject to the supervision and regulation of The Board of Governors of the Federal Reserve System (the “Federal Reserve”).
Removed
Diversity and Inclusion. The Bank believes that an equitable and inclusive environment produces more creative solutions, results in better services and is crucial to our efforts to attract and retain key talent. The Bank strives to promote inclusion through our corporate values of integrity, advocacy, partnership, relationships, community, and personalized service.
Added
These loans are generally secured by accounts receivable, inventory, equipment, and real estate. The Bank hired five full-time SBA staff. We provide financing to small businesses in various industries that include guarantees under the Small Business Administration’s (SBA’s) loan programs. Our small business loans amounted to $9 million at December 31, 2024 from $1.4 million at December 31, 2023.
Removed
The Dodd-Frank Act has had a broad impact on the financial services industry, including significant regulatory and compliance changes including, among other things, (1) enhanced resolution authority of troubled and failing banks and their holding companies; (2) changes to capital and liquidity requirements; (3) changes to regulatory examination fees; (4) changes to assessments to be paid to the FDIC for federal deposit insurance; and (5) numerous other provisions designed to improve supervision and oversight of, and strengthening safety and soundness for, the financial services sector. 6 The following items provide a brief description of the impact of the Dodd-Frank Act on the Bank’s operations and activities, both currently and prospectively.
Added
The Bank offers its customers mobile access to their account information, with the option to setup alerts, and deposit checks across a broad range of phones and mobile devices, and send and receives payments through Zelle.
Removed
Increased Capital Standards and Enhanced Supervision . The Dodd-Frank Act revised capital rules became effective for community banks with assets less than $10 billion and their holding companies pursuant to the requirements of the Dodd-Frank Act and standards adopted by the Basel Committee on Banking Supervision (referred to as “Basel III”).
Removed
The Dodd-Frank Act also increased regulatory oversight, supervision and examination of banks, bank holding companies and their respective subsidiaries by the appropriate regulatory agency. Compliance with new regulatory requirements and expanded examination processes could increase the Company’s cost of operations. The Consumer Financial Protection Bureau .
Removed
The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers. Generally, we will not be directly subject to the rules and regulations of the Bureau.
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However, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the Bureau and state attorneys general are permitted to enforce consumer protection rules adopted by the Bureau against certain state-chartered institutions.
Removed
Any such new regulations could increase the cost of operations and, as a result, could limit the Bank’s ability to expand into these products and services. Deposit Insurance . The Dodd-Frank Act made permanent the $250,000 deposit insurance limit for insured deposits.
Removed
Amendments to the Federal Deposit Insurance Act also revised the assessment base against which an insured depository institution’s deposit insurance premium paid to the FDIC’s Deposit Insurance Fund (the “DIF”) is calculated. Under the amendments, the assessment base will be its average consolidated total assets less its average tangible equity.
Removed
Additionally, the Dodd-Frank Act made changes to the minimum designated reserve ratio of the DIF, increasing the minimum from 1.15 percent to 1.35 percent of the estimated amount of total insured deposits, and eliminated the requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds.
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The Dodd-Frank Act also provides that depository institutions may pay interest on demand deposits, which assists the Bank in obtaining more deposits. In December 2022, the Bank began participating as a member of the IntraFi Network, which is the largest provider of reciprocal deposits.
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With IntraFi’s deposit services, the Bank can offer depositors access to FDIC insurance for an unlimited amount, well beyond the standard maximum of $250,000 for funds placed into demand deposit accounts, money market deposit accounts, or CDs. The Company uses IntraFi Network’s reciprocal deposit program and not its one-way deposit program.
Removed
At December 31, 2023, 15% of depositors were benefiting from the additional FDIC insurance provided by the IntraFi network. Transactions with Affiliates .
Removed
The Dodd-Frank Act enhanced the requirements for certain transactions with affiliates under Sections 23A and 23B of the Federal Reserve Act, including an expansion of the definition of “covered transactions” and increasing the amount of time for which collateral requirements regarding covered transactions must be maintained. Transactions with Insiders .
Removed
Insider transaction limitations were expanded through the strengthening on loan restrictions to insiders and the expansion of the types of transactions subject to the various limits. Enhanced Lending Limits . The Dodd-Frank Act strengthened the existing limits on a depository institution’s credit exposure to one borrower.
Removed
The Dodd-Frank Act expanded the scope of these restrictions to include credit exposure arising from derivative transactions, repurchase agreements, and securities lending and borrowing transactions. 7 Company Regulation General .
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The Company is also subject to the rules and reporting requirements of the Nasdaq Capital Market, on which its common stock is traded.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Institution’s third-party risk management program is appropriate to the nature, size, complexity, and scope of our third-party relationships and provides the internal control framework for management to identify, measure, mitigate, monitor, and report risks associated with the use of third-party providers. Third-party service providers are required to comply with the Company’s policies regarding non-public personal information and information security.
Biggest changeEach exercise results in lessons learned and subsequent improvement to the Incident Response Plan, as warranted. 10 The Institution’s third-party risk management program is appropriate to the nature, size, complexity, and scope of our third-party relationships and provides the internal control framework for management to identify, measure, mitigate, monitor, and report risks associated with the use of third-party providers.
To help carry out their responsibilities, the Board will be periodically trained to understand IT activities and risk, including cyber risks. Cybersecurity matters and assessments are regularly included in ITC meetings. The Board’s oversight of cybersecurity risk is supported by our Information Security Officer (“ISO”). The ISO attends ITC meetings and provides cybersecurity updates to these Management committees.
To help carry out their responsibilities, the Board will be periodically trained to understand IT activities and risk, including cyber risks. Cybersecurity matters and assessments are regularly included in ITC meetings. The Board’s oversight of cybersecurity risk is supported by our Information Security Officer (“ISO”). The ISO attends ITSC meetings and provides cybersecurity updates to these Management committees.
While the Board may delegate the design, implementation, and monitoring or certain IT activities to the IT Steering Committee (ITSC), the Board remains response over overseeing the IT activities and is strongly encouraged to prove a credible challenge to management.
While the Board may delegate the design, implementation, and monitoring or certain IT activities to the IT Steering Committee (ITSC), the Board remains responsible over overseeing the IT activities and is strongly encouraged to prove a credible challenge to management.
Each employee is expected to be responsible for the security and confidentiality of customer information, and we communicate this responsibility to employees upon hiring and regularly throughout their employment. We provide employees with mandatory security awareness training.
We maintain policies and procedures for the safe storage, handling and secure disposal of customer information. Each employee is expected to be responsible for the security and confidentiality of customer information, and we communicate this responsibility to employees upon hiring and regularly throughout their employment. We provide employees with mandatory security awareness training.
Our Plan includes notification procedures for reporting incidents to appropriate stakeholders, including the Company’s Executive Management Team and the Board of Directors. Annually, our Incident Response Team performs a tabletop exercise to simulate the Institution’s responses to events, including cybersecurity. Each exercise results in lessons learned and subsequent improvement to the Incident Response Plan, as warranted.
Our Plan includes notification procedures for reporting incidents to appropriate stakeholders, including the Company’s Executive Management Team and the Board of Directors. Annually, our Incident Response Team performs a tabletop exercise to simulate the Institution’s responses to events, including cybersecurity.
Third parties processing non-public personal information are contractually required to meet all legal and regulatory obligations to protect customer data against security threats or unauthorized access.
Third-party service providers are required to comply with the Company’s policies regarding non-public personal information and information security. Third parties processing non-public personal information are contractually required to meet all legal and regulatory obligations to protect customer data against security threats or unauthorized access.
The identification of threats involves the understanding of the sources of threats, their capabilities, and their objectives. Knowledge of threat sources is especially important to help identify vulnerabilities.
The identification of threats involves the understanding of the sources of threats, their capabilities, and their objectives. Knowledge of threat sources is especially important to help identify vulnerabilities. Vulnerabilities can occur in many areas, such as the system design, the system operation, security procedures, business line controls, and the implementation of the system and controls.
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Vulnerabilities can occur in many areas, such as the system design, the system operation, security procedures, business line controls, and the implementation of the system and controls. 12 We maintain policies and procedures for the safe storage, handling and secure disposal of customer information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The Bank operates a main office and one branch office in Broward County, Florida, and currently plans to open an additional branch office in Miami-Dade County in the second quarter of 2024. The following table sets forth information with respect to the Bank’s offices as of December 31, 2023.
Biggest changeItem 2. Properties The Bank operates a main office and two branch offices in Broward County, Florida. In addition, a third branch office was opened in Miami-Dade County in the third quarter of 2024. The following table sets forth information with respect to the Bank’s offices as of December 31, 2024.
Location Year Facility Opened Facility Status Executive Office and Ft. Lauderdale Branch Office: 2019 Leased 2929 East Commercial Boulevard Suite 101, 303 - 306 Fort Lauderdale, Florida 33308 Deerfield Beach Branch Office: 2004 Leased 2215 West Hillsboro Boulevard Deerfield Beach, Florida 33442 Planned North Miami Beach Office: 757 NE 167 th Street, North Miami Beach FL 33162 Leased
Location Year Facility Opened Facility Status Executive Office and Ft. Lauderdale Branch Office: 2019 Leased 2929 East Commercial Boulevard Suite 101 and 303-306 Fort Lauderdale, Florida 33308 Deerfield Beach Branch Office: 2004 Leased 2201 West Hillsboro Boulevard Deerfield Beach, Florida 33442 North Miami Beach Office: 2024 757-759 NE 167th Street, North Miami Beach FL 33162 Leased

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe Bank is currently permitted to pay cash dividends subject to restrictions imposed by the Florida Financial Institution Codes and federal banking law. The Company is currently permitted to pay cash dividends subject to restrictions under the Florida Business Corporation Act. The Company does not plan to pay any dividends in the foreseeable future.
Biggest changeThe Company is currently permitted to pay cash dividends subject to restrictions under the Florida Business Corporation Act. The Company does not plan to pay any dividends in the foreseeable future. Instead, the Company intends to retain any income for the purpose of enhancing its financial position and supporting the growth of the Bank. Item 6. [Reserved]
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock currently trades on the Nasdaq Capital Market under the symbol “OPHC.” The Company had approximately 751 record holders of its common stock as of December 31, 2023.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Until December 30, 2024, the Company’s common stock was listed on the Nasdaq Capital Market under the symbol “OPHC.” Effective December 31, 2024, the Company’s common stock began trading on the NYSE American under the same symbol, “OPHC”.
During the first quarter of 2023, the Company issued 72,221 shares of its common stock in a private placement transaction to two accredited investors at a price of $4.50 per share. None of these investors was an officer, director or affiliate of the Company.
During the first quarter of 2024, the Company issued 2,311,552 shares of its common stock in a private placement transaction to nine accredited investors at a price ranging from $3.90 to $4.25 per share. None of these investors were officers, directors or affiliates of the Company.
Removed
The Company issued these shares in reliance on Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering. The Company used the proceeds to make capital contributions to the Bank in order to augment the Bank’s regulatory capital ratios.
Added
The Company had approximately 1,264 registered shareholders of its common stock as of December 31, 2024. Certain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Removed
Instead, the Company intends to retain any income for the purpose of enhancing its financial position and supporting the growth of the Bank. Item 6. [Reserved]
Added
The Company issued these shares in reliance on Section 4(a)(2) of the Securities Act of 1933. During the third quarter of 2024, the Company registered with the SEC and commenced an At-the Market (ATM) Offering, allowing for the sale of up to an aggregate of $25 million in shares of common stock.
Added
Under the ATM, the Company may issue and sell newly issued shares of common stock to the public from time to time, at prevailing market prices, at the Company’s discretion. During the third quarter of 2024, the Company issued 329,529 shares of common stock through the ATM at prices ranging from $4.56 to $4.85 per share.
Added
In the fourth quarter of 2024, the Company issued an additional 1,629,132 shares of common stock through the ATM at prices ranging from $4.56 to $5.49 per share. These capital raising activities provide the Company with additional financing flexibility.
Added
The Company used the proceeds to make capital contributions to the Bank in order to enhance the Bank’s regulatory capital ratios and support its growth. The Bank is currently permitted to pay cash dividends subject to restrictions imposed by the Florida Financial Institution Codes and federal banking law.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeDisclosure Regarding Foreign Jurisdictions that Prevent Inspections 62 PART III Item 10. Directors, Executive Officers, and Corporate Governance 6 3 Item 11. Executive Compensation 63 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 63 Item 13. Certain Relationships and Related Transactions, and Director Independence 63 Item 14.
Biggest changeDisclosure Regarding Foreign Jurisdictions that Prevent Inspections 60 PART III Item 10. Directors, Executive Officers, and Corporate Governance 61 Item 11. Executive Compensation 61 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 61 Item 13. Certain Relationships and Related Transactions, and Director Independence 61 Item 14.
Item 6. [Reserved] 14 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 14 Item 8. Financial Statements and Supplementary Data 26 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 62 Item 9A. Controls and Procedures 62 Item 9B. Other Information 62 Item 9C.
Item 6. [Reserved] 12 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 12 Item 8. Financial Statements and Supplementary Data 25 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 60 Item 9A. Controls and Procedures 60 Item 9B. Other Information 60 Item 9C.
Principal Accounting Fees and Services 63 PART IV Item 15. Exhibits and Financial Statement Schedules 64 Item 16. Form 10-K Summary 65 SIGNATURES 66 i PART I
Principal Accounting Fees and Services 61 PART IV Item 15. Exhibits and Financial Statement Schedules 62 Item 16. Form 10-K Summary 62 SIGNATURES 63 i PART I

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe increase in money market consisted of $105 million in deposits sourced through an online listing service and $51 million in deposits from competitive offerings at our branch offices. 22 The following table displays the distribution of the Company’s deposits by product at December 31, 2023 and 2022 (in thousands): 2023 2022 Amount % of Deposits Amount % of Deposits Noninterest-bearing demand deposits $ 194,892 30.5 % $ 159,193 31.3 % NOW deposits 106,172 16.6 47,224 9.3 Money-market deposits 216,309 33.8 60,020 11.8 Savings 451 0.1 1,482 0.3 Subtotal 517,824 81.0 % $ 267,919 52.7 % Time deposits: 0.00% – 0.99% 416 0.1 % $ 2,618 0.5 % 1.00% – 1.99% 2,169 0.3 5,660 1.2 2.00% – 2.99% 2,087 0.3 231,702 45.6 3.00% – 3.99% 13,135 2.1 — — 4.00% – 4.99% 4,637 0.7 — — 5.00% – 5.99% 99,313 15.5 — — Total time deposits (1) 121,757 19.0 % 239,980 47.3 % Total deposits $ 639,581 100.0 % $ 507,899 100.0 % (1) Includes Individual Retirement Accounts (IRA’s) totaling $2,267,000 and $1,537,000 at December 31, 2023 and 2022, respectively, all of which are in the form of time deposits.
Biggest changeThe following table displays the distribution of the Company’s deposits by product at December 31, 2024 and 2023 (in thousands): 2024 2023 Amount % of Deposits Amount % of Deposits Noninterest-bearing demand deposits $ 211,900 27.4 % $ 194,892 30.5 % NOW deposits 83,570 10.8 106,172 16.6 Money-market deposits 194,357 25.2 216,309 33.8 Savings 428 0.1 451 0.1 Subtotal 490,255 63.5 % $ 517,824 81.0 % Time deposits: 0.00% – 0.99% 113 0.0 % $ 416 0.1 % 1.00% – 1.99% 4,533 0.6 2,169 0.3 2.00% – 2.99% 866 0.1 2,087 0.3 3.00% – 3.99% — — 13,135 2.1 4.00% – 4.99% 153,171 19.8 4,637 0.7 5.00% – 5.99% 123,257 16.0 99,313 15.5 Total time deposits (1) 281,940 36.5 % 121,757 19.0 % Total deposits $ 772,195 100.0 % $ 639,581 100.0 % (1) Includes Individual Retirement Accounts (IRA’s) totaling $3,421,000 and $2,267,000 at December 31, 2024 and 2023, respectively, all of which are in the form of time deposits. 20 The following table displays the distribution of the Company’s deposits by source at December 31, 2024 and 2023 (in thousands): At December 31, 2024 At December 31, 2023 Retail Listing Services Brokered Deposits Total Retail Listing Services Brokered Deposits Total Noninterest-bearing demand deposits 211,900 — — 211,900 194,892 — — 194,892 NOW deposits 56,528 — 27,042 83,570 106,172 — — 106,172 Money-market deposits 101,695 52,299 40,363 194,357 110,524 105,785 — 216,309 Savings 428 — — 428 451 — — 451 Time deposits 148,982 52,958 80,000 281,940 87,150 34,607 — 121,757 519,533 105,257 147,405 772,195 499,189 140,392 — 639,581 The Company uses the listing services from QwickRate, National CD RateLine and Raisin.
The Company’s significant accounting policies are discussed in Note 1 of Notes to the consolidated financial statements. 14 Regulation and Legislation As a state-chartered commercial bank, the Bank is subject to extensive regulation by the Florida Office of Financial Regulation, or Florida OFR, and the FDIC.
The Company’s significant accounting policies are discussed in Note 1 of Notes to the consolidated financial statements. Regulation and Legislation As a state-chartered commercial bank, the Bank is subject to extensive regulation by the Florida Office of Financial Regulation, or Florida OFR, and the FDIC.
The Bank’s primary sources of cash during the year ended December 31, 2023, were payments of principal and interest on loans made by the Bank to third parties, payments of principal and interest on debt securities held by the Bank and deposits made by third parties at the Bank.
The Bank’s primary sources of cash during the year ended December 31, 2024, were payments of principal and interest on loans made by the Bank to third parties, payments of principal and interest on debt securities held by the Bank and deposits made by third parties at the Bank.
(4) Includes Federal Home Loan Bank and Federal Reserve Bank advances. 24 Rate/Volume Analysis The following tables set forth certain information regarding changes in interest income and interest expense for the periods indicated.
(4) Includes Federal Home Loan Bank and Federal Reserve Bank advances. 22 Rate/Volume Analysis The following tables set forth certain information regarding changes in interest income and interest expense for the periods indicated.
The allowance for credit losses is increased by the credit loss expense charged to earnings and reduced by loans charged off, net of recoveries. The allowance for credit losses represented 1.13% and 1.20% of the total loans outstanding at December 31, 2023, and 2022, respectively.
The allowance for credit losses is increased by the credit loss expense charged to earnings and reduced by loans charged off, net of recoveries. The allowance for credit losses represented 1.08% and 1.13% of the total loans outstanding at December 31, 2024, and 2023, respectively.
The growth experienced in the loan portfolio is due to the implementation of our relationship-based banking model and the success of our lenders in competing for new business in a highly competitive South Florida area. The Company’s total liabilities at December 31, 2023, were $721 million, an increase of $199 million from December 31, 2022.
The growth experienced in the loan portfolio is due to the implementation of our relationship-based banking model and the success of our lenders in competing for new business in a highly competitive South Florida area. The Company’s total liabilities at December 31, 2024, were $830 million, an increase of $109 million from December 31, 2023.
As of December 31, 2023, the Bank had outstanding borrowings of $62 million against its $178 million in established borrowing capacity with the FHLB. The Company’s borrowing facility is subject to collateral and stock ownership requirements, as well as prior FHLB consent to each advance.
As of December 31, 2024, the Bank had outstanding borrowings of $50 million against its $236 million in established borrowing capacity with the FHLB. The Company’s borrowing facility is subject to collateral and stock ownership requirements, as well as prior FHLB consent to each advance.
Fixed-rate loans are scheduled, including repayment, according to their maturities. (2) Money-market, interest-bearing checking and savings deposits are regarded as readily accessible withdrawable accounts. Time deposits are scheduled through the maturity dates.
Fixed-rate loans are scheduled, including repayment, according to their maturities. (2) Money-market, interest-bearing checking and savings deposits are regarded as readily accessible withdrawable accounts.
The following table sets forth the Bank’s allowance for credit losses by loan type (dollars in thousands): At December 31, 2023 2022 Amount % of Total Loans Amount % of Total Loans Residential real estate $ 1,020 10 % $ 768 11 % Multi-family real estate 1,041 11 748 14 Commercial real estate 3,793 62 3,262 64 Land and construction 1,019 5 173 4 Commercial 281 6 277 1 Consumer 529 6 565 6 Total allowance for credit losses $ 7,683 100 % $ 5,793 100 % Allowance for credit losses as a percentage of total loans outstanding 1.13 % 1.20 % 16 The following summarizes the amount of nonperforming loans (in thousands): At December 31, 2023 2022 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded: Consumer $ 1,025 $ 1,025 $ — $ — $ — $ — With an allowance recorded: Consumer — — — — — — Total $ 1,025 $ 1,025 $ — $ — $ — $ — During 2023, 2022, and 2021, the average recorded investment in impaired loans and interest income recognized and received on impaired loans were as follows (in thousands): Year Ended December 31, 2023 2022 2021 Average investment in impaired loans $ 85 $ — 658 Interest income recognized on impaired loans $ — $ — 7 Interest income received on a cash basis on impaired loans $ — $ — 7 Liquidity and Capital Resources Liquidity represents an institution’s ability to meet current and future obligations through liquidation or maturity of existing assets or the acquisition of additional liabilities.
The following table sets forth the Bank’s allowance for credit losses by loan type (dollars in thousands): At December 31, 2024 2023 2022 % of % of % of Total Total Total Amount Loans Amount Loans Amount Loans Residential real estate $ 1,114 9 % $ 1,020 10 % $ 768 11 % Multi-family real estate 786 8 1,041 11 748 14 Commercial real estate 2,705 60 3,793 62 3,262 64 Land and construction 2,015 10 1,019 5 173 4 Commercial 1,675 7 281 6 277 1 Consumer 365 6 529 6 565 6 Total allowance for loan losses $ 8,660 100 % $ 7,683 100 % $ 5,793 100 % Allowance for loan losses as a percentage of total loans outstanding 1.08 % 1.13 % 1.20 % 14 The following summarizes the amount of nonperforming loans (in thousands): At December 31, 2024 2023 Unpaid Unpaid Recorded Principal Related Recorded Principal Related Investment Balance Allowance Investment Balance Allowance With no related allowance recorded: Consumer $ 605 $ 605 $ — $ 1,025 $ 1,025 $ — Construction and land real estate 5,597 5,597 — — — — With an allowance recorded: Commercial business loans 1,374 1,374 1,374 — — — Total $ 7,576 $ 7,576 $ 1,374 $ 1,025 $ 1,025 $ — During 2024, 2023, and 2022, the average recorded investment in impaired loans and interest income recognized and received on impaired loans were as follows (in thousands): Year Ended December 31, 2024 2023 2022 Average investment in collateral dependent loans $ 2,134 $ 85 — Interest income recognized on collateral dependent loans $ — $ — — Interest income received on a cash basis on collateral dependent loans $ — $ — — Liquidity and Capital Resources Liquidity represents an institution’s ability to meet current and future obligations through liquidation or maturity of existing assets or the acquisition of additional liabilities.
The allowance for credit losses totaled $7.6 million or 1.13% of loans outstanding at December 31, 2023, compared to $5.8 million or 1.20% of loans outstanding at December 31, 2022.
The allowance for credit losses totaled $8.6 million or 1.08% of loans outstanding at December 31, 2024, compared to $7.6 million or 1.13% of loans outstanding at December 31, 2023.
We measure and monitor our liquidity daily and believe our liquidity sources are adequate to meet our operating needs. Debt Securities The Bank’s securities portfolio is comprised of SBA pool securities, mortgage-backed securities, taxable municipal securities and collateralized mortgage obligations.
The Company measure and monitor our liquidity daily and believes its sources of funding are adequate to meet our operating needs. 15 Debt Securities The Bank’s securities portfolio is comprised of SBA pool securities, mortgage-backed securities, taxable municipal securities and collateralized mortgage obligations.
Cash was used primarily to fund loans and repay Federal Home Loan Bank of Atlanta (“FHLB”) advances. The Bank adjusts rates on its deposits to attract or retain deposits as needed.
Cash was used primarily to fund loans and repay Federal Home Loan Bank of Atlanta (“FHLB”) advances. The Bank adjusts rates on its deposits to attract or retain deposits as needed. The Bank primarily obtains deposits from its market area and secondarily from listing services.
The following table sets forth the Company’s maturity distribution of time deposits of $250,000 or more at December 31, 2023 and 2022 (in thousands): At December 31, 2023 2022 Due three months or less $ 3,847 $ — Due more than three months to six months 2,671 — More than six months to one year 18,444 44,680 One to five years 14,171 2,656 Total $ 39,133 $ 47,336 23 Analysis of Results of Operations The Company’s profitability depends primiarlly on net interest income, which is the difference between the interest received on earning assets, such as loans and securities, and the interest paid on interest-bearing liabilities, principally deposits and borrowings.
The following table sets forth the Company’s maturity distribution of time deposits of $250,000 or more at December 31, 2024 and 2023 (in thousands): At December 31, 2024 2023 Due three months or less $ 39,864 $ 3,847 Due more than three months to six months 12,985 2,671 More than six months to one year 9,570 18,444 One to five years 12,361 14,171 Total $ 74,780 $ 39,133 Analysis of Results of Operations The Company’s profitability depends primarily on net interest income, which is the difference between the interest received on earning assets, such as loans and securities, and the interest paid on interest-bearing liabilities, principally deposits and borrowings.
Total noninterest income of $3.5 million increased by $492,000 for the year ended December 31, 2023, from $3 million for the year ended December 31, 2022. The increase is primarily related to service charges, wire transfers, and ACH fees on deposit payment transactions. Noninterest Expenses .
Total noninterest income of $4.6 million increased by $1.2 million for the year ended December 31, 2024, from $3.5 million for the year ended December 31, 2023. The increase is primarily related to service charges on deposits, wire transfers, and ACH fees on deposit payment transactions. Noninterest Expenses .
Interest expense on deposits and borrowings increased by $8.0 million to $12.1 million for the year ended December 31, 2023 compared to the prior year. The increase in interest expense was caused by increases in interest rates paid on deposits and borrowings offset by volume increases in deposits and borrowings. Credit loss expense.
Interest expense on deposits and borrowings increased by $12.9 million to $24.9 million for the year ended December 31, 2024 compared to $12.1 million from the prior year. The increase in interest expense was caused by increases in interest rates paid on deposits and borrowings and volume increases in deposits. Credit loss expense.
This activity may subject the Bank to potential credit losses, the magnitude of which depends on a variety of economic factors affecting borrowers which are beyond its control. As of December 31, 2023, the Bank’s nonperforming loans were approximately $1 million, or .15% of gross loan portfolio. At December 31, 2022, the Bank had not no nonperforming loans.
This activity may subject the Bank to potential credit losses, the magnitude of which depends on a variety of economic factors affecting borrowers which are beyond its control. As of December 31, 2024, the Bank’s nonperforming loans were approximately $7.5 million, or 0.9% of gross loan portfolio.
The increase in deposit balances primarily consisted of an increase of $36 million in noninterest-bearing demand deposits, increase of $156 million in money market accounts, and an increase of $59 million in NOW deposits. These increases were partially offset by a decrease of $1 million in savings, decrease of $118 in time deposits.
The increase in deposit balances primarily consisted of an increase of $17 million in noninterest-bearing demand deposits and increase of $160 million in time deposits. These increases were partially offset by a decrease of $23 million in NOW accounts, a decrease of $22 million in money market accounts, and a decrease of $23,000 in savings.
The Bank primarily obtains deposits from its market area and secondarily from listing services. 17 The Bank also has external sources of funds through the FHLB and with unsecured lines of credit with correspondent banks and the Federal Reserve. The Bank is a member of the FHLB, which allows it to borrow funds under a pre-arranged line of credit.
The Bank also has external sources of funds through the FHLB and with unsecured lines of credit with correspondent banks and the Federal Reserve. The Bank is a member of the FHLB, which allows it to borrow funds under a pre-arranged line of credit.
The increase primarily consisted of increases of $5 million in cash and cash equivalents, $194 million in net loans, and $5 million in other assets offset by a $747,000 reduction in debt securities available for sale due to principal paydowns and unrealized gains during the year, and $933,000 in decreased value of our deferred tax asset.
The increase primarily consisted of increases of $17 million in cash and cash equivalents, $124 million in net loans, offset by a $1.5 million reduction in debt securities available for sale due to principal paydowns and unrealized losses during the year, and $98,000 in increased value of our deferred tax asset.
The increase in the credit loss expense during the year ended on December 31, 2023 was primarily due to loan volume growth and the evaluation of the other factors noted above. During the year ended December 31, 2023, the net charge off amounting to $2 million resulted from consumer lending. Noninterest Income.
The decrease in the credit loss expense during the year ended on December 31, 2024 was primarily due to improvements in the credit quality of the loan portfolio and the evaluation of the other factors noted above. During the year ended December 31, 2024, the net charge-off amounting to $1.4 million resulted from consumer lending. 24 Noninterest Income.
The following table sets forth the composition of the Bank’s loan portfolio (dollars in thousands): At December 31, 2023 2022 2021 % of % of % of Amount Total Amount Total Amount Total Residential real estate $ 71,400 10.50 % $ 50,354 10.42 % $ 32,583 12.96 % Multi-family real estate 67,498 9.93 69,555 14.39 48,592 19.33 Commercial real estate 422,680 62.15 310,695 64.27 129,468 51.50 Land and construction 32,600 4.79 17,286 3.58 3,772 1.50 Commercial 41,870 6.16 5,165 1.07 14,157 5.63 Consumer 44,023 6.47 30,323 6.27 22,827 9.08 Total loans $ 680,071 100.00 % $ 483,378 100.00 % $ 251,399 100.00 % (Deduct) add: Net deferred loan fees (1,294 ) (367 ) (422 ) Allowance for credit losses (7,683 ) (5,793 ) (3,075 ) Loans, net $ 671,094 $ 477,218 $ 247,902 The following table sets forth the activity in the allowance for credit losses (in thousands): Year Ended December 31, 2023 2022 2021 Beginning balance $ 5,793 $ 3,075 $ 1,906 Additional allowance recognized due to adoption of Topic 326 218 — — Credit loss expense 3,759 3,466 1,173 Loans charged off (2,442 ) (901 ) (277 ) Recoveries 355 153 273 Ending balance $ 7,683 $ 5,793 $ 3,075 15 The allowance for credit losses represents management’s estimate of expected losses in the existing loan portfolio.
The following table sets forth the composition of the Bank’s loan portfolio (dollars in thousands): At December 31, 2024 2023 2022 % of % of % of Amount Total Amount Total Amount Total Residential real estate $ 74,064 9.21 % $ 71,400 10.50 % $ 50,354 10.42 % Multi-family real estate 64,001 7.96 67,498 9.93 69,555 14.39 Commercial real estate 485,671 60.39 422,680 62.15 310,695 64.27 Land and construction 77,295 9.61 32,600 4.79 17,286 3.58 Commercial 52,810 6.57 41,870 6.16 5,165 1.07 Consumer 50,399 6.26 44,023 6.47 30,323 6.27 Total loans $ 804,240 100.00 % $ 680,071 100.00 % $ 483,378 100.00 % (Deduct) add: Net deferred loan (fees) costs and premiums (595 ) (1,294 ) (367 ) Allowance for credit losses (8,660 ) (7,683 ) (5,793 ) Loans, net $ 794,985 $ 671,094 $ 477,218 13 The following table sets forth the activity in the allowance for credit losses (in thousands): Year Ended December 31, 2024 2023 2022 Beginning balance $ 7,683 $ 5,793 $ 3,075 Additional allowance recognized due to adoption of Topic 326 — 218 — Credit loss expense 2,372 3,759 3,466 Loans charged off (1,777 ) (2,442 ) (901 ) Recoveries 382 355 153 Ending balance $ 8,660 $ 7,683 $ 5,793 The allowance for credit losses represents management’s estimate of expected losses in the existing loan portfolio.
The Company has focused on raising time deposits primarily within its market area, which is the area of Broward, Miami-Dade, Palm Beach, Martin, and St. Lucie counties. However, the Company offers a variety of deposit products, which are promoted within its market area. Deposits increased $132 million in 2023.
The Company has focused on raising time deposits primarily within its market area, which is the area of Broward, Miami-Dade, Palm Beach, Martin, and St. Lucie counties. The Company offers a variety of deposit products, such as mobile banking, remote deposit capture and bank-to-bank ACH, which are promoted within its market area. Deposits increased $133 million in 2024.
The Company experienced growth across the various loan types due to new organic originations. The net increase in loans resulted from $112 million in commercial real estate loans, $15 million in land and construction loans, $37 million in commercial, and $21 million in residential real estate loans.
The Company experienced growth across the various loan types due to new organic originations. The net increase in loans resulted from $63 million increase in commercial real estate loans, $45 million increase in land and construction loans, $11 million increase in commercial, $6 million of Consumer loans and $3 million increase in residential real estate loans.
These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the consolidated balance sheet.
These instruments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amounts recognized in the consolidated balance sheet. The contractual amounts of those instruments reflect the extent of the Company’s involvement in particular classes of financial instruments.
The headcount of full-time equivalent employees increased from 48 to 60. The increase in noninterest expenses is directly attributable to the growth of the Bank. Income Taxes. The Company recorded income taxes of $2.2 million for the year ended December 31, 2023 compared to an income tax expense of $1.4 million for the year ended December 31, 2022.
The increase in noninterest expenses is directly attributable to the growth of the Bank. Income Taxes. The Company recorded income taxes of $4.5 million for the year ended December 31, 2024 compared to an income tax expense of $2.2 million for the year ended December 31, 2023.
Total noninterest expenses of $14.7 million increased by $4.7 million for the year ended December 31, 2023, compared to $9.9 million for the year ended December 31, 2022. The increase is primarily due to a one-time litigation settlement, increases in salaries and employee benefits, data processing, and other operating costs.
Total noninterest expenses of $19.5 million increased by $4.8 million for the year ended December 31, 2024, compared to $14.7 million for the year ended December 31, 2023. The increase is primarily due to increases in salaries and employee benefits, data processing, and other operating costs. The headcount of full-time equivalent employees increased from 60 to 73.
The following table sets forth the amortized cost and fair value of the Bank’s debt securities portfolio (in thousands): Amortized Cost Fair Value At December 31, 2023: Held-to-maturity: Collateralized mortgage obligations $ 353 $ 318 Mortgage-backed Securities 7 8 Total $ 360 $ 326 Available for sale: SBA Pool Securities $ 706 $ 690 Collateralized mortgage obligation 138 123 Taxable municipal securities 16,690 12,210 Mortgage-backed Securities. 13,927 11,332 Total $ 31,461 $ 24,355 At December 31, 2022: Held-to-maturity: Collateralized mortgage obligations $ 475 $ 440 Mortgage-backed Securities 65 64 Total $ 540 $ 504 Available for sale: SBA Pool Securities $ 834 $ 817 Collateralized mortgage obligations 145 130 Taxable municipal securities 16,729 11,620 Mortgage-backed Securities. 15,180 12,535 Total $ 32,888 $ 25,102 18 The following table sets forth, by maturity distribution, certain information pertaining to the debt securities portfolio at amortized cost (dollars in thousands): After One Year Through Five After Ten Years Years Total Yield At December 31, 2023: Collateralized mortgage obligation $ — $ 490 $ 490 2.19 % Mortgage-backed securities — 13,935 13,935 1.99 % Taxable municipal securities — 16,690 16,690 2.17 % SBA pool securities — 706 706 5.18 % $ — $ 31,821 $ 31,821 At December 31, 2022: Collateralized mortgage obligation — $ 620 $ 620 2.29 % Mortgage-backed securities $ — 15,245 15,245 2.04 % Taxable municipal securities — 16,729 16,729 2.17 % SBA pool securities — 834 834 4.54 % $ — $ 33,428 $ 33,428 Expected maturities of these debt securities will differ from contractual maturities because borrowers have the right to call or repay obligations with or without call or prepayment penalties.
The following table sets forth the amortized cost and fair value of the Bank’s debt securities portfolio (in thousands): Amortized Cost Fair Value At December 31, 2024: Held-to-maturity: Collateralized mortgage obligations $ 281 $ 247 Total $ 281 $ 247 Available for sale: SBA Pool Securities $ 581 $ 567 Collacteralized mortgage obligation 128 111 Taxable municipal securities 16,654 11,914 Mortgage-backed Securities. 12,883 10,181 Total $ 30,246 $ 22,773 At December 31, 2023: Held-to-maturity: Collateralized mortgage obligations $ 353 $ 318 Mortgage-backed Securities 7 8 Total $ 360 $ 326 Available for sale: SBA Pool Securities $ 706 $ 690 Collateralized mortgage obligations 138 123 Taxable municipal securities 16,690 12,210 Mortgage-backed Securities. 13,927 11,332 Total $ 31,461 $ 24,355 The following table sets forth, by maturity distribution, certain information pertaining to the debt securities portfolio at amortized cost (dollars in thousands): After One Year Through Five After Ten Years Years Total Yield At December 31, 2024: Collateralized mortgage obligation $ — $ 409 $ 409 2.41 % Mortgage-backed securities — 12,883 12,883 2.08 % Taxable municipal securities — 16,654 16,654 2.18 % SBA pool securities — 581 581 5.28 % $ — $ 30,527 $ 30,527 At December 31, 2023: Collateralized mortgage obligation — $ 490 $ 490 2.19 % Mortgage-backed securities $ — 13,935 13,935 1.99 % Taxable municipal securities — 16,690 16,690 2.17 % SBA pool securities — 706 706 5.18 % $ — $ 31,821 $ 31,821 16 Expected maturities of these debt securities will differ from contractual maturities because borrowers have the right to call or repay obligations with or without call or prepayment penalties.
The Company also has a $13.6 million advance with the Federal Reserve that matures in August 2024. At December 31, 2023, the Company also had available lines of credit amounting to $29.5 million with five correspondent banks to purchase federal funds. Disbursements on the lines of credit are subject to the approval of the correspondent banks.
At December 31, 2024, the Company also had available lines of credit amounting to $30.5 million with five correspondent banks to purchase federal funds. Disbursements on these lines of credit are subject to the approval of the correspondent banks.
The increase in total liabilities was mainly due to an increase of $132 million in total deposits, $13.6 in Federal Reserve Bank advances, and increase of $52 million in Federal Home Loan Bank advances. The Company’s total stockholders’ equity at December 31, 2023, was $70 million, an increase of $7.4 million from December 31, 2022.
The increase in total liabilities was mainly due to an increase of $133 million in total deposits, offset by a decrease of $12 million in Federal Home Loan Bank advances and a decrease of $13.6 million in FRB advances. The Company’s total stockholders’ equity at December 31, 2024, was $103 million, an increase of $33 million from December 31, 2023.
A variety of estimates impact the carrying value of the Company’s loan portfolio including the calculation of the allowance for credit losses, valuation of underlying collateral, the timing of loan charge-offs and the amount and amortization of loan fees and deferred origination costs.
A variety of estimates impact the carrying value of the Company’s loan portfolio including the calculation of the allowance for credit losses, valuation of underlying collateral, the timing of loan charge-offs and the amount and amortization of loan fees and deferred origination costs. 12 The calculation of the allowance for credit losses is a complex process containing estimates which are inherently subjective and susceptible to significant revision as current information becomes available.
Management believes that these processes and procedures provide us with better capital planning, asset mix and volume controls, loan-pricing guidelines, and deposit interest-rate guidelines, which should result in effective controls and limited exposure to interest-rate risk. 19 The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring an institution’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.
The matching of assets and liabilities may be analyzed by examining the extent to which such assets and liabilities are “interest rate sensitive” and by monitoring an institution’s interest rate sensitivity “gap.” An asset or liability is said to be interest rate sensitive within a specific time period if it will mature or reprice within that time period.
The increase was principally due to the, issuance of common stock for an aggregate amount of $324,000, increase in unrealized gain on debt securities of $511,000, and net income of $6.3 million.
The increase was principally due to the issuance of common stock and preferred stock for an aggregate amount of $19.8 million, partially offset by an increase in unrealized losses on debt securities of $257,000, and net income of $13.1 million.
Average balances are based on average daily balances (dollars in thousands): Year Ended December 31, 2023 2022 Interest Average Interest Average Average And Yield/ Average And Yield/ Balance Dividends Rate Balance Dividends Rate Interest-earning assets: Loans $ 543,745 31,759 5.8 % $ 354,521 17,952 5.1 % Securities 24,841 686 2.8 % 29,263 649 2.2 % Other interest-earning assets (1) 63,804 3,335 5.2 % 64,989 1,281 2.0 % Total interest-earning assets/interest income 632,390 35,780 5.7 % 448,773 19,882 4.4 % Cash and due from banks 13,344 16,430 Premises and equipment 1,157 867 Other assets 4,174 4,480 Total assets 651,065 $ 470,550 Interest-bearing liabilities: Savings, NOW and money-market deposits 189,286 4,315 2.3 % $ 152,588 669 0.4 % Time deposits 185,727 7,284 3.9 % 83,324 2,565 3.1 % Borrowings (4) 16,739 468 2.8 % 39,152 812 2.1 % Total interest-bearing liabilities/interest expense 391,752 12,067 3.1 % 275,064 4,046 1.5 % Noninterest-bearing demand deposits 188,826 145,670 Other liabilities 4,992 3,014 Stockholders’ equity 65,495 46,802 Total liabilities and stockholders’ equity $ 651,065 $ 470,550 Net interest income 23,713 15,836 Interest rate spread (2) 2.58 % 2.96 % Net interest margin (3) 3.75 % 3.53 % Ratio of average interest-earning assets to average interest- bearing liabilities 1.61 1.63 (1) Includes interest-earning deposits with banks, Federal funds sold and Federal Home Loan Bank stock dividends.
Average balances are based on average daily balances (dollars in thousands): Year Ended December 31, 2024 2023 Interest Average Interest Average Average And Yield/ Average And Yield/ Balance Dividends Rate Balance Dividends Rate Interest-earning assets: Loans $ 753,904 52,051 6.9 % $ 543,745 31,759 5.8 % Securities 23,903 652 2.7 % 24,841 686 2.8 % Other interest-earning assets (1) 127,229 6,926 5.4 % 63,804 3,335 5.2 % Total interest-earning assets/interest income 905,036 59,629 6.6 % 632,390 35,780 5.7 % Cash and due from banks 13,810 13,344 Premises and equipment 1,798 1,157 Other assets 6,804 4,174 Total assets 927,448 $ 651,065 Interest-bearing liabilities: Savings, NOW and money-market deposits 322,507 9,910 3.1 % $ 189,286 4,315 2.3 % Time deposits 248,676 13,053 5.2 % 185,727 7,284 3.9 % Borrowings (4) 47,312 1,976 4.2 % 16,739 468 2.8 % Total interest-bearing liabilities/interest expense 618,495 24,939 4.0 % 391,752 12,067 3.1 % Noninterest-bearing demand deposits 216,643 188,826 Other liabilities 6,438 4,992 Stockholders’ equity 85,872 65,495 Total liabilities and stockholders’ equity $ 927,448 $ 651,065 Net interest income 34,690 23,713 Interest rate spread (2) 2.60 % 2.60 % Net interest margin (3) 3.83 % 3.75 % Ratio of average interest-earning assets to average interest- bearing liabilities 1.46 1.61 (1) Includes interest-earning deposits with banks, Federal funds sold and Federal Home Loan Bank stock dividends.
A summary of the contractual amounts of the Company’s financial instruments with off-balance sheet risk at December 31, 2023, follows (in thousands): Commitments to extend credit $ 31,044 Unused lines of credit $ 69,978 Standby letters of credit $ 4,559 The following is a summary of the Company’s on-balance sheet contractual obligations at December 31, 2023 (in thousands): Payments Due by Period Less Than 1 1-3 3-5 More Than 5 Contractual Obligations Total Year Years Years Years Federal Home Loan Bank advances $ 62,000 $ 52,000 $ 10,000 $ — $ — Federal Reserve Bank Advances 13,600 13,600 — — — Operating lease liabilities 2,530 321 672 749 788 Total $ 78,130 $ 65,921 10,672 749 788 Deposits Deposits traditionally are the primary source of funds for the Company’s use in lending, making investments and meeting liquidity demands.
The amount of collateral obtained, if deemed necessary in order to extend credit, is based on management’s credit evaluation of the counterparty. 19 A summary of the contractual amounts of the Company’s financial instruments with off-balance sheet risk at December 31, 2024, follows (in thousands): Commitments to extend credit $ 8,103 Unused lines of credit $ 55,238 Standby letters of credit $ 4,547 The following is a summary of the Company’s on-balance sheet contractual obligations at December 31, 2024 (in thousands): Payments Due by Period Less Than 1 1-3 3-5 More Than 5 Contractual Obligations Total Year Years Years Years Federal Home Loan Bank advances $ 50,000 $ 50,000 $ — $ — $ — Operating lease liabilities 3,242 433 852 450 1,507 Total $ 53,242 $ 50,433 $ 852 $ 450 $ 1,507 Deposits Deposits traditionally are the primary source of funds for the Company’s use in lending, making investments and meeting liquidity demands.
Expected credit loss expense was $4.0 million during the year ended December 31, 2023, and $3.5 million for the year ended December 31, 2022. The expected credit loss expense is charged to earnings as losses are expected in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected.
The CECL expense is charged to earnings as losses are expected in order to bring the total allowance for credit losses to a level deemed appropriate by management to absorb losses expected.
The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yield; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest rate spread; and (v) net interest margin.
The Company’s results of operations are also affected by credit loss expense, operating expenses such as salaries and employee benefits, occupancy and other operating expenses including income taxes, and noninterest income such as loan prepayment fees. 21 The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest income from interest-earning assets and the resultant average yield; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest rate spread; and (v) net interest margin.
None of the deposits obtained from the listing services are considered brokered deposits. At December 31, 2023 and 2022, listing service deposits comprised 22% and 32% of total deposits, respectively.
At December 31,2024 brokered deposits comprised 19% of total deposits none at December 31, 2023, and listing service deposits comprised 14% and 22% of total deposits, respectively.
The contractual amounts of those instruments reflect the extent of the Company’s involvement in particular classes of financial instruments. 21 The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments.
The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.
The calculation of the allowance for credit losses is a complex process containing estimates which are inherently subjective and susceptible to significant revision as current information becomes available. The allowance is established and maintained at a level management believes is adequate to cover losses resulting from the inability of borrowers to make required payments on loans.
The allowance is established and maintained at a level management believes is adequate to cover losses resulting from the inability of borrowers to make required payments on loans.
The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed-expiration dates or other termination clauses and may require payment of a fee.
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed-expiration dates or other termination clauses and may require payment of a fee. Since certain commitments expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements.
Interest income increased by $15.9 million to $35.8 million for the year ended December 31, 2023 from $19.9 million for the year ended December 31, 2022, primarily due to an increase in loan volume. Interest Expense.
Additionally, the Company recognized a $1.8 million decrease in credit loss expense. Interest Income. Interest income increased by $23.8 million to $59.6 million for the year ended December 31, 2024 from $35.8 million for the year ended December 31, 2023, primarily due to increases in loan volume and in interest rates. Interest Expense.
At December 31, 2023, the Bank had a Tier 1 leverage ratio of 10%. 25 Results of Operations for Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Years Ended December 31, Increase / (Decrease) (dollars in thousands) 2023 2022 Amount Percentage Total interest income $ 35,780 $ 19,882 $ 15,898 80 % Total interest expense 12,067 4,046 8,021 198 % Net interest income 23,713 15,836 7,877 50 % Credit loss expense 4,047 3,466 581 17 % Net interest income after credit loss expense 19,666 12,370 7,296 59 % Total noninterest income 3,452 2,960 492 17 % Total noninterest expenses 14,661 9,938 4,723 48 % Net earnings before income taxes 8,457 5,392 3,065 57 % Income taxes 2,174 1,369 805 59 % Net earnings $ 6,283 $ 4,023 $ 2,260 56 % Net earnings per share - Basic and diluted $ 0.87 $ 0.68 Net earnings.
At December 31, 2024, the Bank had a Tier 1 leverage ratio of 10.91%. 23 Results of Operations for Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Years Ended December 31, Increase / (Decrease) (dollars in thousands) 2024 2023 Amount Percentage Total interest income $ 59,629 $ 35,780 $ 23,849 67 % Total interest expense 24,939 12,067 12,872 107 % Net interest income 34,690 23,713 10,977 46 % Credit loss expense 2,222 4,047 (1,825 ) -45 % Net interest income after provision for loan losses 32,468 19,666 12,802 65 % Total noninterest income 4,623 3,452 1,171 34 % Total noninterest expenses 19,460 14,661 4,799 33 % Net earnings before income taxes 17,631 8,457 9,174 108 % Income tax expense 4,507 2,174 2,333 107 % Net earnings $ 13,124 $ 6,283 $ 6,841 109 % Net earnings per share - Basic $ 1.39 $ 0.87 Net earnings per share - Diluted 1.33 0.87 Net earnings.
For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in rate (change in rate multiplied by prior volume), (2) changes in volume (change in volume multiplied by prior rate) and (3) changes in rate-volume (change in rate multiplied by change in volume) (in thousands): Year Ended December 31, 2023 versus 2022 Increases (Decreases) Due to Change In: Rate Volume Rate/Volume Total Interest-earning assets: Loans $ 2,755 $ 9,582 $ 1,470 $ 13,807 Securities 159 (98 ) (24 ) 37 Other interest-earning assets 2,116 (23 ) (39 ) 2,054 Total interest-earning assets 5,030 9,461 1,407 15,898 Interest-bearing liabilities: Savings, NOW and money-market 2,809 160 676 3,645 Time deposits 704 3,151 865 4,720 Other 283 (465 ) (162 ) (344 ) Total interest-bearing liabilities 3,796 2,846 1,379 8,021 Net interest income $ 1,234 $ 6,615 $ 28 $ 7,877 Financial Condition as of December 31, 2023 Compared to December 31, 2022 The Company’s total assets at December 31, 2023, were $791 million, an increase of $206 million from December 31, 2022.
For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in rate (change in rate multiplied by prior volume), (2) changes in volume (change in volume multiplied by prior rate) and (3) changes in rate-volume (change in rate multiplied by change in volume) (in thousands): Year Ended December 31, 2024 versus 2023 Increases (Decreases) Due to Change In: Rate Volume Rate/ Volume Total Interest-earning assets: Loans $ 5,782 $ 12,275 $ 2,235 $ 20,292 Securities (8 ) (25 ) — (33 ) Other interest-earning assets 138 3,315 137 3,590 Total interest-earning assets 5,912 15,565 2,372 23,849 Interest-bearing liabilities: Savings, NOW and money-market 1,501 3,036 1,057 5,594 Time deposits 2,465 2,469 835 5,769 Other 231 855 422 1,508 Total interest-bearing liabilities 4,197 6,360 2,314 12,871 Net interest income $ 1,715 $ 9,205 $ 58 $ 10,978 Financial Condition as of December 31, 2024 Compared to December 31, 2023 The Company’s total assets at December 31, 2024, were $933 million, an increase of $142 million from December 31, 2023.
The Company had net earnings of $6.3 million for the year ended December 31, 2023 compared to a net earnings of $4.0 million for the year ended December 31, 2022.
The Company had net earnings of $13.1 million for the year ended December 31, 2024 compared to net earnings of $6.3 million for the year ended December 31, 2023. The growth was primarily driven by a $10.9 million increase in net interest income, partially offset by $4.8 million rise in non-interest expenses.
The following table sets forth certain information related to the Bank’s interest-earning assets and interest-bearing liabilities at December 31, 2023, that are estimated to mature or are scheduled to reprice within the period shown (dollars in thousands): Gap Maturity / Repricing Schedule More than More than Five Years One Year and Less One and Less than Over Year than Five Fifteen Fifteen or Less Years Years Years Total Loans (1): Residential real estate loans $ 6,109 55,919 9,372 — $ 71,400 Multi—family real estate loans 1,695 63,798 2,005 — 67,498 Commercial real estate loans 34,870 343,538 44,272 — 422,680 Land and construction 5,598 21,370 5,632 — 32,600 Commercial 27,874 13,748 248 — 41,870 Consumer 17,151 2,423 — 24,449 44,023 Total loans 93,297 500,796 61,529 24,449 680,071 Securities 690 — 6,337 17,688 24,715 Interest—bearing deposits in banks 62,654 — — — 62,654 — — — — Federal Home Loan Bank stock 3,354 — — — 3,354 Total rate—sensitive assets 159,995 500,796 67,866 42,137 770,794 Deposit accounts (2): Money—market deposits 216,309 — — — 216,309 Interest—bearing checking deposits 106,172 — — — 106,172 Savings deposits 451 — — — 451 Time deposits 81,302 40,455 — — 121,757 Total deposits 404,234 40,455 — — 444,689 Federal Home Loan Bank advances 52,000 10,000 — — 62,000 Federal Reserve Bank advances 13,600 — — — 13,600 Total rate—sensitive liabilities 469,834 50,455 — — 520,289 GAP (repricing differences) $ (309,839 ) $ 450,341 $ 67,866 $ 42,137 $ 250,505 Cumulative GAP $ (309,839 ) $ 140,502 $ 208,368 $ 250,505 Cumulative GAP/total assets (39 )% 18 % 26 % 32 % 20 (1) In preparing the table above, adjustable-rate loans are included in the period in which the interest rates are next scheduled to adjust rather than in the period in which the loans mature.
The Bank’s policies emphasize the origination of adjustable-rate loans, building a stable core deposit base and, to the extent possible, matching deposit maturities with loan repricing timeframes or maturities. 17 The following table sets forth certain information related to the Bank’s interest-earning assets and interest-bearing liabilities at December 31, 2024, that are estimated to mature or are scheduled to reprice within the period shown (dollars in thousands): Gap Maturity / Repricing Schedule More than More than Five Years One Year and Less and Less than Over One Year than Five Fifteen Fifteen or Less Years Years Years Total Loans (1): Residential real estate loans $ 10,210 52,022 11,832 — $ 74,064 Multi-family real estate loans 12,177 50,851 973 — 64,001 Commercial real estate loans 116,039 354,461 15,171 — 485,671 Land and construction 4,407 68,483 4,405 — 77,295 Commercial 46,620 6,190 — — 52,810 Consumer 8,864 — — 41,535 50,399 Total loans 198,317 532,007 32,381 41,535 804,240 Securities 577 — 6,991 15,486 23,054 Interest-bearing deposits in banks 79,648 — — — 79,648 Federal Home Loan Bank stock 2,929 — — — 2,929 Total rate-sensitive assets 281,471 532,007 39,372 57,021 909,871 Deposit accounts (2): Money-market deposits 194,357 — — — 194,357 Interest-bearing checking deposits 83,570 — — — 83,570 Savings deposits 428 — — — 428 Time deposits 251,438 30,502 — — 281,940 Total deposits 529,793 30,502 — — 560,295 Federal Home Loan Bank advances 50,000 — — — 50,000 Other Borrowings — — — — - Total rate-sensitive liabilities 579,793 30,502 — — 610,295 GAP (repricing differences) $ (298,322 ) $ 501,505 $ 39,372 $ 57,021 $ 299,576 Cumulative GAP $ (298,322 ) $ 203,183 $ 242,555 $ 299,576 Cumulative GAP/total assets -32 % 22 % 26 % 32 % (1) In preparing the table above, adjustable-rate loans are included in the period in which the interest rates are next scheduled to adjust rather than in the period in which the loans mature.
Removed
The Bank’s policies emphasize the origination of adjustable-rate loans, building a stable core deposit base and, to the extent possible, matching deposit maturities with loan repricing timeframes or maturities.
Added
In addition, the Bank has access to the Federal Reserve Discount Window as supplemental source of liquidity. As of December 31, 2024, the Bank had pledged $1.8 million in securities as collateral to secure this borrowing facility, providing a line of credit available for use if needed.
Removed
The following table sets forth loan maturities by type of loan at December 31, 2023 (in thousands): One Year or After One But Within After Five Less Five Years Years Total Residential real estate $ 747 $ 9,188 $ 61,465 $ 71,400 Multi-family real estate — 2,158 65,340 67,498 Commercial real estate 4,827 65,721 352,132 422,680 Land and construction — 1,488 31,112 32,600 Commercial 19,622 13,748 8,500 41,870 Consumer 19,575 — 24,448 44,023 Total $ 44,771 $ 92,303 $ 542,997 $ 680,071 The following table sets forth the maturity or repricing of loans by interest type at December 31, 2023 (in thousands): One Year or After One But Within Five After Five Less Years Years Total Fixed interest rate $ 3,223 $ 44,758 $ 362,792 $ 410,773 Variable interest rate 41,548 47,545 180,205 269,298 Total $ 44,771 $ 92,303 $ 542,997 $ 680,071 Scheduled contractual principal repayments of loans do not reflect the actual life of such assets.
Added
Management believes that these processes and procedures provide us with better capital planning, asset mix and volume controls, loan-pricing guidelines, and deposit interest-rate guidelines, which should result in effective controls and limited exposure to interest-rate risk.
Removed
Since certain commitments expire without being drawn upon, the total committed amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary in order to extend credit, is based on management’s credit evaluation of the counterparty.
Added
Time deposits are scheduled through the maturity dates. 18 The following table sets forth loan maturities by type of loan at December 31, 2024 (in thousands): After One One Year or But Within After Five Less Five Years Years Total Residential real estate $ - $ 16,005 $ 58,059 $ 74,064 Multi-family real estate 19 14,002 49,980 64,001 Commercial real estate 1,516 120,720 363,435 485,671 Land and construction 1,445 13,630 62,220 77,295 Commercial 37,453 1,190 14,167 52,810 Consumer 8,864 — 41,535 50,399 Total $ 49,297 $ 165,547 $ 589,396 $ 804,240 The following table sets forth the maturity of loans by interest type at December 31, 2024 (in thousands): After One One Year or But Within After Five Less Five Years Years Total Fixed interest rate $ 7,875 $ 76,984 $ 376,874 $ 461,733 Variable interest rate 41,422 88,563 212,522 342,507 Total $ 49,297 $ 165,547 $ 589,396 $ 804,240 Scheduled contractual principal repayments of loans do not reflect the actual life of such assets.
Removed
The following table displays the distribution of the Company’s deposits by source at December 31, 2023 and 2022 (in thousands): At December 31, 2023 At December 31, 2022 Retail Listing Services Total Retail Listing Services Total Noninterest-bearing demand deposits 194,892 — 194,892 159,193 — 159,193 NOW deposits 106,172 — 106,172 47,224 — 47,224 Money-market deposits 110,524 105,785 216,309 60,020 — 60,020 Savings 451 — 451 1,482 — 1,482 Time deposits 87,150 34,607 121,757 75,438 164,542 239,980 499,189 140,392 639,581 343,357 164,542 507,899 The Company uses the listing services from QwickRate, National CD RateLine and Raisin.
Added
The Company evaluates each customer’s credit worthiness on a case-by-case basis.
Removed
The Company’s results of operations are also affected by the provision for loan losses, operating expenses such as salaries and employee benefits, occupancy and other operating expenses including income taxes, and noninterest income such as loan prepayment fees.
Added
None of the deposits obtained from the listing services are considered brokered deposits. In addition, during the year ended December 31, 2024 the Company added a brokered certificate of deposit (CD) as part of its funding strategy. This brokered CD is classified as brokered deposit. Non-maturity reciprocal deposits are also included as brokered deposits.
Removed
Adversely affecting net income was the Company recording a credit loss expense amounting to $4.0 million during the year ended December 31, 2023, which was largely due to the growth in the loan portfolio of $196.7 million. This compared to the Company recording a credit loss expense amounting to $3.5 million during the year ended December 31, 2022. Interest Income.
Added
Expected credit loss expense was $2.2 million during the year ended December 31, 2024, and $4.0 million for the year ended December 31, 2023. The Company adopted the Current Expected Credit Loss (CECL) methodology on January 1, 2023.

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