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What changed in OptimumBank Holdings, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of OptimumBank Holdings, Inc.'s 2024 and 2025 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 2025 report.

+136 added−131 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-26)

Top changes in OptimumBank Holdings, Inc.'s 2025 10-K

136 paragraphs added · 131 removed · 109 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

49 edited+13 added−9 removed67 unchanged
Biggest changeThe 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.
Biggest changeOn the loan side, management has implemented initiatives that have enabled us to grow our loan portfolio primarily with South Florida and Florida generated relationships in the commercial real estate, owner-occupied commercial real estate, multifamily, and commercial and industrial portfolios. The Company leverages decades of Board and management experience in healthcare and specifically to skilled nursing facilities.
The BHCA further prohibits a person or group of persons from acquiring “control” of a bank holding company unless the Federal Reserve Bank has been notified and has not objected to the transaction.
The BHCA further prohibits a person or group of persons from acquiring “control” of a bank holding company unless the Federal Reserve has been notified and has not objected to the transaction.
In general, the GLB Act repealed most of the federal statutory barriers which separated commercial banking firms from insurance and securities firms and authorized the consolidation of such firms in a “financial services holding company.” The Bank has no current plans to utilize the structural options created by the GLB Act. Securities Regulation and Corporate Governance .
In general, the GLB Act repealed most of the federal statutory barriers which separated commercial banking firms from insurance and securities firms and authorized the consolidation of such firms in a “financial services holding company.” The Bank has no current plans to utilize the structural options created by the GLB Act. 6 Securities Regulation and Corporate Governance .
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”).
The Bank offers a variety of commercial banking services to individual and corporate customers through its headquarters and 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”).
Loans to One Borrower. Florida law generally allows a state bank such as the Bank to extend credit to any one borrower (and certain related entities of such borrower) in an amount up to 25% of its capital accounts, provided that the unsecured portion may not exceed 15% of the capital accounts of the bank.
Florida law generally allows a state bank such as the Bank to extend credit to any one borrower (and certain related entities of such borrower) in an amount up to 25% of its capital accounts, provided that the unsecured portion may not exceed 15% of the capital accounts of the bank.
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 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.
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 .
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 .
Under the Gramm-Leach-Bliley Financial Modernization Act of 1999 which is discussed below, bank holding companies have the opportunity to seek broadened authority, subject to limitations on investment, to engage in activities that are “financial in nature” if all of their subsidiary depository institutions are well capitalized, well managed, and have at least a satisfactory rating under the Community Reinvestment Act, which is also discussed below.
Under the Gramm-Leach-Bliley Financial Modernization Act of 1999 which is discussed below, bank holding companies have the opportunity to seek broadened authority, subject to limitations on investment, to engage in activities that are “financial in nature” if all of their subsidiaries depository institutions are well capitalized, well managed, and have at least a satisfactory rating under the Community Reinvestment Act, which is also discussed below.
The basic services offered include: demand interest-bearing and noninterest-bearing accounts, money market deposit accounts, NOW accounts, time deposits, Wire transfers, ACH services, Visa debit and ATM cards, cash management, direct deposits, notary services, money orders, night depository, cashier’s checks, domestic collections, and banking by mail.
The basic services offered include demand interest-bearing and noninterest-bearing accounts, money market deposit accounts, NOW accounts, time deposits, wire transfers, ACH services, Visa debit and ATM cards, cash management, direct deposits, notary services, money orders, night depositories, cashier’s checks, domestic collections, and banking by mail.
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”) .
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.
Statistical Profile and Other Financial Data Reference is hereby made to the statistical and financial data contained in the sections captioned “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for statistical and financial data providing a review of the Bank’s business activities.
Statistical Profile and Other Financial Data Reference is hereby made to the statistical and financial data contained in the sections captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” for statistical and financial data providing a review of the Bank’s business activities.
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.
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 to send and receive payments through Zelle.
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.
In addition, banks are prohibited from engaging in certain tie-in arrangements in connection with any extension of credit or the provision 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.
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.
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, 2025, the Bank had 98 full-time employees, including executive officers.
In one or more aspects of its business, the Bank competes with other commercial banks, savings and loan associations, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries.
In one or more aspects of its business, the Bank competes with other commercial banks, credit unions, finance companies, mutual funds, insurance companies, brokerage and investment banking companies, and other financial intermediaries.
The Bank’s deposit and loan operations are also subject to the following: ● GLB Act privacy provisions, which require the Bank maintain privacy policies intended to safeguard consumer financial information, to disclose these policies to its customers, and allow customers to “opt-out” of having their financial service providers disclose their confidential financial information to non-affiliated third parties, subject to certain exceptions; ● Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and ● Electronic Funds Transfer Act and Regulation E, which govern automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
The Bureau has rulemaking authority over many of the statutes governing products and services offered to bank consumers. 8 The Bank’s deposit and loan operations are also subject to the following: ● GLB Act privacy provisions, which require the Bank maintain privacy policies intended to safeguard consumer financial information, to disclose these policies to its customers, and allow customers to “opt-out” of having their financial service providers disclose their confidential financial information to non-affiliated third parties, subject to certain exceptions; ● Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; and ● Electronic Funds Transfer Act and Regulation E, which govern automatic deposits to, and withdrawals from, deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services.
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.
As of December 31, 2025, 95% of the loan portfolio consisted of loans secured by mortgages on real estate, of which approximately 70% 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.
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 FDIC and the Florida OFR also have the authority to approve or disapprove mergers, consolidations, and similar corporate actions. Dividends . The Company has not declared or paid dividends to its stockholders. The Company’s ability to pay dividends is substantially dependent on the ability of the Bank to pay dividends to the Company.
These employees are not represented by a collective bargaining unit. The Bank considers its relations with its employees to be good. Compensation and Benefits Program.
The Company employed one individual. These employees are not represented by a collective bargaining unit. The Bank considers its relations with its employees to be good. 4 Compensation and Benefits Program.
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.
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 $32.7 million, provided the unsecured portion does not exceed approximately $19.6 million. Transactions with Affiliates.
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.
Investments The Bank’s investment securities portfolio was approximately $25.2 million and $22.8 million at December 31, 2025 and 2024, respectively, representing 2.3% and 2.5% of its total assets. At December 31, 2025, 47.7% 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. Until December 30, 2024, our common stock was listed on the NASDAQ stock market.
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. Our common stock is listed on NYSE American.
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.
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.
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.
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.
Going forward, our strategic plan will continue to emphasize and build upon initiatives focused on strengthening credit oversight and credit administrative processes and procedures. Moreover, management continues to identify loan growth opportunities that are designed to improve overall profitability without sacrificing credit quality and underwriting standards.
Going forward, our strategic plan will continue to emphasize and build upon initiatives focused on strengthening credit oversight and credit administrative processes and procedures, while identifying loan growth opportunities designed to enhance overall profitability without sacrificing credit quality or underwriting standards.
The Bank’s investments are managed in relation to loan demand and deposit growth, and are generally used to provide for the investment of excess funds at minimal risk levels while providing liquidity to fund increases in loan demand or to offset fluctuations in deposits.
The Bank’s investments are managed in relation to loan demand and deposit growth, and are generally used to provide for the investment of excess funds at minimal risk levels while providing liquidity to fund increases in loan demand or to offset fluctuations in deposits. 3 The excess balance account is the excess cash the Bank has available over and above daily cash needs.
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 .
The Bank’s actual capital amounts and percentages are presented in the table: To Be Well Capitalized Under Prompt Corrective Actual Action Regulations (dollars in thousands) Amount % Amount % As of December 31, 2025: Tier 1 Capital to Total Assets $ 125,467 11.39 % $ 99,126 9.00 % As of December 31, 2024: Tier 1 Capital to Total Assets $ 107,112 10.91 % $ 88,381 9.00 % 5 Company Regulation General .
Maturity terms, service fees, and withdrawal penalties are established by the Bank on a periodic basis. The determination of rates and terms is predicated on funds acquisition and liquidity requirements, market rate competition, growth goals, and federal regulations.
The Company also facilitates depositor access to additional FDIC insurance via the IntraFi network. Maturity terms, service fees, and withdrawal penalties are established by the Bank on a periodic basis. The determination of rates and terms is predicated on funds acquisition and liquidity requirements, market rate competition, growth goals, and federal regulations.
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.
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. The Bank provides U.S. Small Business Administration (“SBA”) guaranteed loans to small and middle market businesses. The Bank achieved SBA preferred lender status on February 18, 2025.
Under Florida law, no person or group of persons may, directly or indirectly or acting by or through one or more persons, purchase or acquire a controlling interest in any bank which would result in the change in control of that bank unless the Florida OFR first shall have approved such proposed acquisition.
Consequently, shareholders of financial institutions are less likely to benefit from the rapid increases in stock prices that often result from tender offers or similar efforts to acquire control of other companies. 7 Under Florida law, no person or group of persons may, directly or indirectly or acting by or through one or more persons, purchase or acquire a controlling interest in any bank which would result in the change in control of that bank unless the Florida OFR first shall have approved such proposed acquisition.
Bank Regulation General. The Bank is chartered under the laws of the State of Florida, and its deposits are insured by the FDIC to the extent provided by law.
Bank Regulation General. The Bank is chartered under the laws of the State of Florida, and its deposits are insured by the FDIC to the extent provided by law. The Bank is subject to comprehensive regulation, examination and supervision by the FDIC and the Florida Office of Financial Regulation (“Florida OFR”), and to other laws and regulations applicable to banks.
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 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.
As a state-chartered bank, the Bank is subject to dividend restrictions set by Florida law and the FDIC. Except with the prior approval of the Florida OFR, all dividends of any Florida bank must be paid out of retained net profits from the current period and the previous two years, after deducting expenses, including losses and bad debts.
Except with the prior approval of the Florida OFR, all dividends of any Florida bank must be paid out of retained net profits from the current period and the previous two years, after deducting expenses, including losses and bad debts. As of December 31, 2025, the Bank paid one-time to the Company totaled $500,000.
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.
Loan balances increased by $180.8 million in commercial real estate loans, $17.8 million in consumer loans, and $1.7 million in multi-family loans, offset by a decrease of $41.1 million in land and construction loans, $4.6 million in commercial loans, and $46,000 in residential real estate loans.
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.
Deposits are gathered throughout Florida and across other states within the United States, 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.
As a bank holding company registered under the Bank Holding Company Act of 1956 (the “BHCA”), the Company is subject to the regulation and supervision of, and inspection by, the Federal Reserve Board (“Federal Reserve”). The Company is also required to file with the Federal Reserve annual reports and other information regarding its business operations, and those of its subsidiaries.
As a bank holding company registered under the Bank Holding Company Act of 1956 (the “BHCA”), the Company is subject to the regulation and supervision of, and inspection by, the Federal Reserve Board (“Federal Reserve” or “FRB”).
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 Bank’s net loans at December 31, 2025 were $947.3 million, or 85% of total assets, and its loan to deposits ratio was 103%. During 2025 net loans increased by $152.3 million, attributed to the bank’s successful pursuit of new lending opportunities in South Florida.
The Bank considers the majority of its regular savings, demand, NOW, money market deposit accounts and certificates of deposit under $250,000 to be core deposits. Deposits are insured up to the maximum amount allowed by law by the FDIC. The Company also facilitates depositor access to additional FDIC insurance via the IntraFi network.
In 2025 and 2024 the Bank maintained fully FDIC-insured brokered deposits totaling $80 million and $105 million respectively. The Bank considers the majority of its regular savings, demand, NOW, money market deposit accounts and certificates of deposit under $250,000 to be core deposits. Deposits are insured up to the maximum amount allowed by law by the FDIC.
The Bank encourages its employees to volunteer with local service organizations and philanthropic groups. Health and Safety. The success of the Bank’s business is fundamentally connected to the well-being of its employees. Accordingly, the Bank is committed to the health, safety and the wellness of its employees.
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. The Bank encourages its employees to volunteer with local service organizations and philanthropic groups. Health and Safety. The success of the Bank’s business is fundamentally connected to the well-being of its employees.
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.
Such laws and other consumer regulation matters are administered by the Consumer Financial Protection Bureau (the “Bureau”). 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.
Further, the FDIC and the Florida OFR also have the general authority to limit the dividend payment by banks if such payment may be deemed to constitute an unsafe and unsound practice. It is likely that those agencies would view a Bank dividend which materially reduced the capital ratios of the Bank to be such an unsafe or unsound practice.
It is likely that those agencies would view a Bank dividend which materially reduced the capital ratios of the Bank to be such an unsafe or unsound practice. Loans to One Borrower.
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.
Operating and Business Strategy Our key strategic initiatives are designed to generate continued growth in earning assets, core transaction deposits, treasury management and other fee income, while operating with an efficient cost. Continued emphasis on expansion of our South Florida customer base and exploring additional niche lines of business are also part of our strategic 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.
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.
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.
At December 31, 2025, the Company had total assets of $1.1 billion, net loans of $947.3 million, total deposits of $931.8 million and stockholders’ equity of $121.9 million. During 2025, the Company had a net income of $16.6 million.
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.
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. Further, the FDIC and the Florida OFR also have the general authority to limit the dividend payment by banks if such payment may be deemed to constitute an unsafe and unsound practice.
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.
Management believes, as of December 31, 2025, that the Bank met all capital adequacy requirements to which it was subject.
On the loan side, we intend to continue our focus on increasing our multi-family, non-owner occupied, commercial real estate, and skilled nursing facility loan portfolios. As to deposits, we are focused on identifying deposit growth opportunities among our existing customer base and prospects throughout Florida and the United States.
The platform will deliver specialized expertise serving skilled nursing facilities, senior housing, and multifamily assets, building upon the Company’s established lending relationships and sector knowledge. As to deposits, we are focused on identifying deposit-growth opportunities among our existing customer base and prospects throughout Florida and across other states within the United States.
The Bank is subject to comprehensive regulation, examination and supervision by the FDIC and the Florida Office of Financial Regulation, or the Florida OFR, and to other laws and regulations applicable to banks.
As a state-chartered bank, the Bank is subject to dividend restrictions set by Florida law, the regulations of the Florida OFR and the FDIC.
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.
With respect to treasury management, our focus will remain on merchant cash advance providers and the related electronic funds transfer line of business. The Bank has carved out a niche in the MCA industry to provide treasury management services, including servicing of high-volumn ACH transactions to organizations with various entities.
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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.
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We believe providing our clients with reasonable solutions that meet their business and personal needs fosters stability in our client base, builds full-service banking relationships, and allows for profitable growth that enhances shareholder returns.
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SBA 7A loans are generally used to establish a new business or assist in the acquisition, operation, or expansion of an existing business. With SBA loan programs, there are set eligibility requirements and underwriting standards outlined by SBA that can change as the government alters its fiscal policy.
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We intend to deliver the solutions to clients in a very personalized manner while investing in talent and leveraging modern technology to facilitate efficiency and decrease client pain points while enhancing our competitiveness.
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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.
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The company provides stabilized owner-occupied and non-owner-occupied loans, as well as accounts receivable-based asset-based-lending (“ABL”) lines of credit to skilled nursing facility clients. In coordination with our Treasury Cash Management capabilities this has allowed us to expand relationships in these niche businesses to capture full relationships including the business operating accounts.
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However, out-of-area loans and loan pool purchases will be considered as deemed appropriate and subject to proper due diligence to further increase interest income and for portfolio diversification purposes.
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Where appropriate, out of area loans will be considered, subject to proper due diligence to supplement portfolio diversification and increase interest income. In addition, we have built capabilities in Small Business Administration (SBA) lending, entering the space in late 2023 and being designated as a Preferred Lender under the SBA’s Preferred Lenders Program (PLP) in the first quarter of 2025.
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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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Under the program the Bank offers SBA-guaranteed 7A loans generally secured by accounts receivable, inventory, equipment, or real estate. diligence to further increase interest income and for portfolio diversification purposes In late 2025, the Company formed OptimumHUD Loans, LLC (d/b/a) as OptimumFunding, LLC, a wholly owned non-bank subsidiary.
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In 2019, the federal banking agencies jointly issued a final rule that provides for an optional, simplified measure of capital adequacy, the community bank leverage ratio framework (CBLR framework), for qualifying community banking organizations. The final rule became effective on January 1, 2020, and was elected by the Bank.
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When the subsidiary commences operations, it is expected to support a focused suite of financing solutions, including bridge-to Housing and Urban Development (“HUD”) financing to support acquisitions, refinancing and repositioning to facilitate a transition to long-term HUD or Federal Housing Administration (“FHA”) financing and FHA and HUD loan origination capability for multifamily and healthcare properties.
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The community bank leverage ratio removes the requirement for qualifying banking organizations to calculate and report risk-based capital but rather only requires a Tier 1 to average assets (leverage) ratio.
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Providing these services in a seamless fashion has allowed the Bank to gather low-cost deposits while generating noninterest fee income. For this revenue source to increase further in a meaningful way, automation is necessary to further improve efficiency. We continue to invest in necessary technology and expect efficiencies to continue to occur throughout 2026.
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Qualifying community banking organizations that elect to use the community bank leverage ratio framework and that maintain a leverage ratio of greater than required minimums will be considered to have satisfied the generally applicable risk-based and leverage capital requirements in the agencies’ capital rules (generally applicable rule) and, if applicable, will be considered to have met the well capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act.
Added
This strategy is supported by a risk-based, comprehensive credit culture, and a strong credit administrative infrastructure that reinforces appropriate risk management practices. We remain focused on full-service banking relationships and identifying deposit growth opportunities among our existing customer base and prospects throughout Florida, and the United States.
Removed
Consequently, shareholders of financial institutions are less likely to benefit from the rapid increases in stock prices that often result from tender offers or similar efforts to acquire control of other companies.
Added
Strengthening our core funding capabilities is foundational to supporting our growth in our targeted business and real estate markets, including our niche skilled nursing facility and merchant cash advance markets. 2 To support this strategy, we are investing in experienced banking talent across our business development and retail teams while modernizing our products and digital services.
Added
These initiatives include upgrading our core banking system and our online and mobile banking platforms. Together, these investments are expected to improve client experience, expand our customer base, increase balance sheet diversification, and enhance branch utilization.
Added
The Bank’s loan portfolio is concentrated in three major areas: commercial real estate loans, residential real estate loans, and consumer loans, which consist primarily of home equity lines of credit.
Added
Accordingly, the Bank is committed to the health, safety and the wellness of its employees.
Added
The Company is also required to file with the Federal Reserve annual reports and other information regarding its business operations, and those of its subsidiaries.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeTo 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.
Biggest changeTo 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 ITSC 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 .
Our Information Security Program represents the standards, policies, procedures, and guidelines defining our intuition’s security requirements and related activities. information. Threat monitoring procedures provide for continual and ad hoc monitoring of threat intelligence communication and systems, effective incident detection and response, and the use of monitoring tools and reports in any subsequent forensic or legal procedures.
Our Information Security Program represents the standards, policies, procedures, and guidelines defining our institution’s security requirements and related activities. Threat monitoring procedures provide for continual and ad hoc monitoring of threat intelligence communication and systems, effective incident detection and response, and the use of monitoring tools and reports in any subsequent forensic or legal procedures.

Item 2. Properties

Properties — owned and leased real estate

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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.
Biggest changeItem 2. Properties The Bank operates a main office and three branch offices. The headquarters and two branch offices are located in Broward County, Florida, and one branch office located in Miami-Dade County, Florida. The following table sets forth information with respect to the Bank’s offices as of December 31, 2025. Location Year Facility Opened Facility Status Headquarters and Ft.
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
Lauderdale Branch Office: 2019 Leased 2929 East Commercial Boulevard Suites 101, 303, 306, and 502 Fort Lauderdale, Florida 33308 Deerfield Beach Branch Office: 2004 Leased 2201 W. Hillsboro Blvd., Deerfield Beach, FL 33442 North Miami Beach Office: 2024 Leased 757-759 NE 167th Street, North Miami Beach FL 33162

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs of the date of the filing of this Form 10-K, management is of the opinion that the ultimate aggregate liability in connection with any pending litigation will not have a material adverse effect on the Company’s consolidated financial condition or results of operations.
Biggest changeAs of the date of the filing of this Form 10-K, management is of the opinion that the ultimate aggregate liability in connection with any pending litigation will not have a material adverse effect on the Company’s consolidated financial condition or results of operations. 11 Item 4. Mine Safety Disclosure Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe 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.
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. During 2025, the Bank paid a one-time dividend of $500,000 to the Company.
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. 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]
The Company has not declared or paid any dividends to its stockholders and does not plan to pay 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]
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.
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.
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”.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The Company’s common stock is listed on the NYSE American under the symbol, “OPHC”. The Company had approximately 1,240 registered shareholders of its common stock as of December 31, 2025.
Removed
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.
Added
During the first quarter of 2025, the Company issued 52,819 shares of common stocks through its at-the market (“ATM”) Offering for aggregate gross proceeds of approximately $245,000 The Company did not issue any additional shares through the ATM during the remainder of 2025.
Removed
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
The proceeds from ATM offering were used to make capital contributions to the Bank to enhance the Bank’s regulatory capital ratios and support its growth. On October 1, 2025, the Company issued 350,000 shares of its Series C Convertible Preferred Stock in exchange for 350,000 shares of Company common stock.
Removed
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 connection with this exchange, the Company retired the reacquired shares of common stock. The shares of Series C Convertible Preferred Stock were issued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended. The Company did not repurchase any shares of its common stock in 2025.
Removed
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.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe 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.
Biggest changeThese debt securities are reported at fair market value and unrealized gains and losses are excluded from earnings and reported in other comprehensive losses. 15 The following table sets forth the amortized cost and fair value of the Bank’s debt securities portfolio: (dollars in thousands) Amortized Cost Fair Value At December 31, 2025: Held-to-maturity: Collateralized mortgage obligations $ 214 $ 190 Total $ 214 $ 190 Available for sale: SBA Pool Securities $ 439 $ 429 Collateralized mortgage obligation 118 106 Municipal securities 16,616 12,626 Mortgage-backed Securities. 14,156 12,023 Total $ 31,329 $ 25,184 At December 31, 2024: Held-to-maturity: Collateralized mortgage obligations $ 281 $ 247 Total $ 281 $ 247 Available for sale: SBA Pool Securities $ 581 $ 567 Collateralized mortgage obligations 128 111 Municipal securities 16,654 11,914 Mortgage-backed Securities. 12,883 10,181 Total $ 30,246 $ 22,773 The following table sets forth, by maturity distribution, certain information pertaining to the debt securities portfolio at amortized cost: (dollars in thousands) Less than a year After 1-5 Years After 5-10 Years After 10 Years Total Yield At December 31, 2025: Collateralized mortgage obligation $ — $ — $ — $ 332 $ 332 3.02 % Mortgage-backed securities — — — 14,156 14,156 2.59 % Municipal securities — — 1,513 15,103 16,616 2.18 % SBA pool securities — — — 439 439 5.99 % $ — $ — $ 1,513 $ 30,030 $ 31,543 At December 31, 2024: Collateralized mortgage obligation — $ — $ — $ 409 $ 409 2.41 % Mortgage-backed securities $ — — — 12,883 12,883 2.08 % Municipal securities — — — 16,654 16,654 2.18 % SBA pool securities — — — 581 581 5.28 % $ — $ — $ — $ 30,527 $ 30,527 16 The following table sets forth, by maturity distribution, certain information pertaining to the debt securities portfolio at fair value: (dollars in thousands) Less than a year After 1-5 Years After 5-10 Years After 10 Years Total Yield At December 31, 2025: Collateralized mortgage obligation $ — $ — $ — $ 429 $ 429 3.02 % Mortgage-backed securities — — — 296 296 2.59 % Municipal securities — — 1,264 11,362 12,626 2.18 % SBA pool securities — — — 12,023 12,023 5.99 % $ — $ — $ 1,264 $ 24,110 $ 25,374 At December 31, 2024: Collateralized mortgage obligation — $ — $ — $ 409 $ 409 2.41 % Mortgage-backed securities $ — — — 12,883 12,883 2.08 % Municipal securities — — — 16,654 16,654 2.18 % SBA pool securities — — — 581 581 5.28 % $ — $ — $ — $ 30,527 $ 30,527 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.
Because the calculation of the allowance for credit losses relies on the Company’s estimates and judgments relating to inherently uncertain events, results may differ from management’s estimates. The allowance for credit losses is also discussed as part of “Loan Portfolio, Asset Quality and Allowance for Credit Losses” and in Note 3 of Notes to the consolidated financial statements.
Because the calculation of the allowance for credit losses relies on the Company’s estimates and judgments relating to inherently uncertain events, results may differ from management’s estimates. The allowance for credit losses is also discussed as part of “Loan Portfolio, Asset Quality and Allowance for Credit Losses” and in Note 3 of Notes to Consolidated Financial Statements.
The Company is also subject to regulation and examination by the Federal Reserve Board of Governors. Loan Portfolio, Asset Quality and Allowance for Loan Losses The Bank’s primary business is making business loans.
The Company is also subject to regulation and examination by the Federal Reserve Board of Governors. Loan Portfolio, Asset Quality and Allowance for Credit Losses The Bank’s primary business is making business loans.
Market Risk Market risk is the risk of loss from adverse changes in market prices and rates. The Bank’s market risk arises primarily from interest-rate risk inherent in its lending and deposit-taking activities. The Bank does not engage in securities trading or hedging activities and does not invest in interest-rate derivatives or enter into interest rate swaps.
Market Risk Market risk is the risk of loss from adverse changes in market prices and rates. The Bank’s market risk arises primarily from interest-rate risk inherent in its lending and deposit-taking activities. The Bank does not engage in securities trading or hedging activities and does not invest in interest-rate derivatives or interest rate swaps.
The interest-rate sensitivity gap is defined as the difference between interest-earning assets and interest-bearing liabilities maturing or repricing within a given time period. The gap ratio is computed as the amount of rate sensitive assets less the amount of rate sensitive liabilities divided by total assets.
The interest-rate sensitivity gap is defined as the difference between interest-earning assets and interest-bearing liabilities maturing or repricing within a specific time period. The gap ratio is computed as the amount of rate sensitive assets less the amount of rate sensitive liabilities divided by total assets.
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.
The Bank’s primary sources of cash during the year ended December 31, 2025, 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.
Disclosures about the fair value of financial instruments, which reflect changes in market prices and rates, can be found in Note 8 of notes to consolidated financial statements.
Disclosures about the fair value of financial instruments, which reflect changes in market prices and rates, can be found in Note 9 of Notes to Consolidated Financial Statements.
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 Company’s significant accounting policies are discussed in Note 1 of Notes to Consolidated Financial Statements. 12 Regulation and Legislation As a state-chartered commercial bank, the Bank is subject to extensive regulation by the Florida OFR and the FDIC.
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 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 $159.6 million in 2025.
Loan originations and re-financings tend to slow as interest rates increase. As a general principle, higher interest rates are likely to reduce the Company’s earnings.
Loan originations and re-financing tend to slow as interest rates increase. As a general principle, higher interest rates are likely to reduce the Company’s earnings. 24
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.
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, 2025, the Bank’s nonperforming loans were approximately $2.9 million, or 0.3% of gross loan portfolio.
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.
In addition, the Bank has access to the Federal Reserve Discount Window as supplemental source of liquidity. As of December 31, 2025, the Bank had pledged $50.8 million in securities and loans as collateral to secure this borrowing facility, providing a line of credit available for use if needed.
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 .
Total noninterest income of $6.8 million increased by $2.2 million for the year ended December 31, 2025, from $4.6 million for the year ended December 31, 2024. The increase is primarily related to service charges on deposits, wire transfers, and ACH fees on deposit payment transactions. Noninterest Expenses .
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.
The increase in non-interest expenses is directly attributable to the growth of the Bank. Income Taxes. The Company recorded income taxes of $5.5 million for the year ended December 31, 2025, compared to an income tax expense of $4.5 million for the year ended December 31, 2024.
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 decrease in the credit loss expense during the year ended on December 31, 2025 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, 2025, the net charge-off amounting to $727,000 resulted from consumer lending. Noninterest Income.
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.
Total noninterest expenses of $25.2 million increased by $5.7 million for the year ended December 31, 2025, compared to $19.5 million for the year ended December 31, 2024. 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 73 to 98.
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.
Fixed-rate loans are scheduled, including repayment, according to their maturities. 2 Securities are scheduled through the repricing date. 3 Money-market, interest-bearing checking and savings deposits are regarded as readily accessible withdrawable accounts.
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.
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, 2025, were $989.8 million, an increase of $160.0 million from $829.7 million on December 31, 2024.
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.
The following table sets forth the Company’s maturity distribution of time deposits of $250,000 or more at December 31, 2025 and 2024: At December 31, (dollars in thousands) 2025 2024 Due three months or less $ 51,543 $ 39,864 Due more than three months to six months 34,598 12,985 More than six months to one year 8,053 9,570 One to five years 817 12,361 Total $ 95,011 $ 74,780 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.
The securities portfolio is categorized as either “held-to-maturity” or “available for sale.” Debt securities held-to-maturity represent those securities which the Bank has the positive intent and ability to hold to maturity. These debt securities are carried at amortized cost.
Debt Securities The Bank’s securities portfolio is comprised of SBA pool securities, mortgage-backed securities, taxable municipal securities and collateralized mortgage obligations. The securities portfolio is categorized as either “held-to-maturity” or “available for sale.” Debt securities held-to-maturity represent those securities which the Bank has the positive intent and ability to hold to maturity. These debt securities are carried at amortized cost.
Additionally, as a commercial bank, we are expected to maintain an adequate liquidity position. The liquidity position may consist of cash on hand, cash on demand deposit with correspondent banks, federal funds sold, and marketable securities such as United States government treasury and agency securities, municipal securities, U.S. agency mortgage-backed securities and asset-backed securities.
The liquidity position may consist of cash on hand, cash on demand deposit with correspondent banks, federal funds sold, and marketable securities such as United States government treasury and agency securities, municipal securities, U.S. agency mortgage-backed securities and asset-backed securities.
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.
The allowance for credit losses totaled $10.3 million or 1.07% of loans outstanding at December 31, 2025, compared to $8.7 million or 1.08% of loans outstanding at December 31, 2024.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations General Critical Accounting Policies The Company’s financial condition and results of operations are sensitive to accounting measurements and estimates of matters that are inherently uncertain.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A - Qualitative and Quantitative Disclosures about Market Risk Not applicable. General Critical Accounting Policies The Company’s financial condition and results of operations are sensitive to accounting measurements and estimates of matters that are inherently uncertain.
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.
As of December 31, 2025, the Bank had outstanding borrowings of $50.0 million and pledged $464.8 million in loans as a collateral, providing borrowing availability of $231.9 million under its 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.
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.
A summary of the contractual amounts of the Company’s financial instruments with off-balance sheet risk at December 31, 2025, follows: (dollars in thousands) Commitments to extend credit $ 7,775 Unused lines of credit $ 72,940 Standby letters of credit $ 3,779 19 The following is a summary of the Company’s on-balance sheet contractual obligations at December 31, 2025: (dollars in thousands) Payments Due by Period Contractual Obligations (dollars in thousands) Less Than 1 Year 1-3 Years 3-5 Years More Than 5 Years Total Federal Home Loan Bank advances $ 50,000 $ — $ — $ — $ 50,000 Operating lease liabilities 499 1,540 268 828 3,135 Total $ 50,499 1,540 268 828 $ 53,135 Deposits Deposits traditionally are the primary source of funds for the Company’s use in lending, making investments and meeting liquidity demands.
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.
At December 31, 2025, brokered deposits comprised 9% of total deposits, compared to 19% at December 31, 2024, and listing service deposits comprised 15% and 14% of total deposits at December 31, 2025 and 2024 respectively.
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.
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.
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 allowance for credit losses is increased by the credit loss expense charged to earnings and reduced by loans charged off, net of recoveries.
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.
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. 17 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 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 following table sets forth the composition of the Bank’s loan portfolio: At December 31, 2025 2024 2023 % of % of % of (dollars in thousands) Amount Total Amount Total Amount Total Residential real estate $ 74,018 7.7 % $ 74,064 9.2 % $ 71,400 10.0 % Multi-family real estate 65,693 6.8 64,001 7.9 67,498 10.7 Commercial real estate 666,508 69.6 485,671 60.6 422,680 62.1 Land and construction 36,212 3.8 77,295 9.6 32,600 4.7 Commercial 48,196 5.0 52,810 6.5 41,870 6.1 Consumer 68,166 7.1 50,399 6.2 44,023 6.4 Total loans $ 958,793 100.0 % $ 804,240 100.0 % $ 680,071 100.0 % (Deduct) add: Net deferred loan (fees) costs and premiums (1,226 ) (595 ) (1,294 ) Allowance for credit losses (10,273 ) (8,660 ) (7,683 ) Loans, net $ 947,294 $ 794,985 $ 671,094 The following table sets forth the activity in the allowance for credit losses: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Beginning balance $ 8,660 $ 7,683 $ 5,793 Additional allowance recognized due to adoption of Topic 326 — — 218 Credit loss expense 1,927 2,372 3,759 Loans charged off (727 ) (1,777 ) (2,442 ) Recoveries collected 413 382 355 Total ending allowance balance $ 10,273 $ 8,660 $ 7,683 Reconciliation of Credit Loss Expense The following table provides a reconciliation of the credit loss expense on the condensed consolidated statements of income between the funded and unfunded components at the dates indicated: At December 31, 2025 2024 Credit loss expense - funded $ 1,927 $ 2,372 Credit loss expense - unfunded 109 150 Total Credit loss expense $ 2,036 $ 2,222 The allowance for credit losses represents management’s estimate of expected losses in the existing loan portfolio.
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.
At December 31, 2025, the Company also had available lines of credit amounting to $73.5 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 Company measure and monitor our liquidity daily and believes its sources of funding are adequate to meet our operating needs.
Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical loan default and loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information incorporate management’s view of current conditions and forecasts.
Historical loan default and loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information incorporate management’s view of current conditions and forecasts.
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.
Interest expense on deposits and borrowings decreased by $3.2 million to $21.8 million for the year ended December 31, 2025 compared to $24.9 million from the prior year. The decrease in interest expense was primarily driven by lower interest rates paid on deposits and borrowings. Credit loss expense.
Debt securities available for sale represent those investments which may be sold for various reasons including changes in interest rates and liquidity considerations. These debt securities are reported at fair market value and unrealized gains and losses are excluded from earnings and reported in other comprehensive loss.
Debt securities available for sale represent those investments which may be sold for various reasons including changes in interest rates and liquidity considerations.
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 following table sets forth the Bank’s allowance for loan losses by loan type: At December 31, 2025 2024 2023 (dollars in thousands) Amount % of Total Loans Amount % of Total Loans Amount % of Total Loans Residential real estate $ 1,477 7.7 % $ 1,114 9.2 % 1,020 10.0 % Multi-family real estate 666 6.8 786 7.9 1,041 10.7 Commercial real estate 4,608 69.6 2,705 60.6 3,793 62.1 Land and construction 1,077 3.8 2,015 9.6 1,019 4.7 Commercial 2,351 5.0 1,675 6.5 281 6.1 Consumer 94 7.1 365 6.2 529 6.4 Total allowance for credit losses $ 10,273 100.0 % $ 8,660 100.0 % $ 7,683 100.0 % Allowance for loan losses as a percentage of total loans outstanding 1.07 % 1.08 % 1.13 % The following summarizes the amount of nonperforming loans: December 31, 2025 (dollars in thousands) Nonaccrual Without ACL Nonaccrual With ACL Total Nonaccrual Commercial $ 954 $ 1,943 $ 2,897 Total $ 954 $ 1,943 $ 2,897 December 31, 2024 (dollars in thousands) Nonaccrual Without ACL Nonaccrual With ACL Total Nonaccrual Land and construction $ 5,597 $ — $ 5,597 Commercial — 1,374 1,374 Consumer 605 — 605 Total $ 6,202 $ 1,374 $ 7,576 During 2025, 2024, and 2023, the average recorded investment in collateral dependent loans and interest income recognized and received on collateral dependent loans were as follows: Year Ended December 31, (dollars in thousands) 2025 2024 2023 Average investment in collateral dependent loans $ 3,758 $ 2,134 $ 85 Interest income recognized $ 292 104 — Interest income received $ 292 104 — 14 Other Real Estate Owned (“OREO”) is excluded from the allowance for credit losses.
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 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.
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.
Interest income increased by $4.7 million to $64.4 million for the year ended December 31, 2025 from $59.6 million for the year ended December 31, 2024, primarily due to increases in loan volume. Interest Expense.
The 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 following table displays the distribution of the Company’s deposits by product at December 31, 2025 and 2024: 2025 2024 (dollars in thousands) Amount % of Deposits Amount % of Deposits Noninterest-bearing demand deposits $ 266,520 28.6 % $ 211,900 27.4 % NOW deposits 94,865 10.2 83,570 10.8 Money-market deposits 211,412 22.7 194,357 25.2 Savings 644 0.1 428 0.1 Subtotal 573,441 61.6 % $ 490,255 63.5 % Time deposits: 0.00% – 0.99% 112 — % $ 113 0.0 % 1.00% – 1.99% 4,947 0.5 4,533 0.6 2.00% – 2.99% 357 — 866 0.1 3.00% – 3.99% 55,572 6.0 — — 4.00% – 4.99% 297,321 31.9 153,171 19.8 5.00% – 5.99% — — 123,257 16.0 Total time deposits (1) 358,309 38.4 % 281,940 36.5 % Total deposits $ 931,750 100.0 % $ 772,195 100.0 % (1) Includes Individual Retirement Accounts (IRA’s) totaling $3,919,000 and $3,421,000 at December 31, 2025 and 2024, 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, 2025 and 2024: At December 31, 2025 At December 31, 2024 (dollars in thousands) Retail Listing Services Brokered Total Retail Listing Services Brokered Total Noninterest-bearing demand deposits $ 266,520 $ — $ — $ 266,520 $ 211,900 $ — $ — $ 211,900 NOW deposits 94,865 — — 94,865 56,528 — 27,042 83,570 Money-market deposits 174,122 37,290 — 211,412 101,695 52,299 40,363 194,357 Savings 394 250 — 644 428 — — 428 Time deposits 176,582 101,727 80,000 358,309 148,982 52,958 80,000 281,940 $ 712,483 $ 139,267 $ 80,000 $ 931,750 $ 519,533 $ 105,257 $ 147,405 $ 772,195 The Company uses third-party deposits listing services as part of its funding strategy.
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 increase in deposit balances primarily consisted of an increase of $54.6 million in noninterest-bearing demand deposits, an increase of $11.3 million in NOW accounts, an increase of $17.1 million in money market accounts, an increase of $216,000 in savings accounts, and an increase of $76.4 million in time deposits.
The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The allowance for credit losses is adjusted by a credit loss expense which is reported in earnings and reduced by the charge-off of loan amounts, net of recoveries.
The allowance for credit losses is adjusted by a credit loss expense which is reported in earnings and reduced by the charge-off of loan amounts, net of recoveries. Loans are charged off against the allowance when management determines that the loan balance is uncollectable. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.
The Bank’s ability to respond to the needs of depositors and borrowers and to benefit from investment opportunities is facilitated through liquidity management. Management monitors the liquidity position daily. The Bank’s liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and investment securities, funds provided by operations, and capital.
The Bank’s liquidity is derived primarily from our deposit base, scheduled amortization and prepayments of loans and investment securities, funds provided by operations, and capital. Additionally, as a commercial bank, we are expected to maintain an adequate liquidity position.
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.
Average balances are based on average daily balances: Year Ended December 31, 2025 2024 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ (dollars in thousands) Balance Expense Rate Balance Expense Rate Interest-earning assets: Loans $ 819,233 57,146 6.98 % $ 753,904 52,051 6.90 % Securities 23,137 635 2.74 % 23,903 652 2.73 % Other interest-earning assets (1) 152,496 6,573 4.31 % 127,229 6,926 5.44 % Total interest-earning assets/interest income 994,866 64,354 6.47 % 905,036 59,629 6.60 % Cash and due from banks 11,478 13,810 Premises and equipment 2,334 1,798 Other assets 4,529 6,804 Total assets 1,013,207 $ 927,448 Interest-bearing liabilities: Savings, NOW and money-market deposits 286,701 7,006 2.44 % $ 322,507 9,910 3.07 % Time deposits 331,563 14,428 4.35 % 248,676 13,053 5.25 % Borrowings (2) 8,747 333 3.81 % 47,312 1,976 4.14 % Total interest-bearing liabilities/interest expense 627,011 21,767 3.47 % 618,495 24,939 4.03 % Noninterest-bearing demand deposits 265,551 216,643 Other liabilities 8,368 6,438 Stockholders’ equity 112,277 85,872 Total liabilities and stockholders’ equity $ 1,013,207 $ 927,448 Net interest income 42,587 34,690 Interest rate spread (3) 3.00 % 2.60 % Net interest margin (4) 4.28 % 3.83 % Ratio of average interest-earning assets to average interest- bearing liabilities 1.59 1.46 1 Includes interest-earning deposits with banks, Federal funds sold and Federal Home Loan Bank stock dividends. 2 Includes Federal Home Loan Bank advances 3 Interest rate spread represents the difference between average yield on interest-earning assets and the average cost of interest-bearing liabilities 4 Net interest margin is net interest income divided by average interest-earning assets. 22 Rate/Volume Analysis The following tables provide certain information regarding changes in interest income and interest expense for the periods indicated.
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.
The increase in total liabilities was mainly due to an increase of $159.6 million in total deposits. The Company’s total stockholders’ equity at December 31, 2025, was $121.9 million, an increase of $18.7 million from $103.2 million on December 31, 2024.
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.
None of the deposits obtained from the listing services are considered brokered deposits. In addition, the Company utilized brokered deposits as part of its funding strategy, consisting primarily of brokered certificate deposits.
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.
At December 31, 2025, the Bank had a Tier 1 leverage ratio of 11.39%. 23 Results of Operations for Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Years Ended December 31, Increase / (Decrease) (dollars in thousands) 2025 2024 Amount Percentage Total interest income $ 64,354 $ 59,629 $ 4,725 7.9 % Total interest expense 21,767 24,939 (3,172 ) (12.7 )% Net interest income 42,587 34,690 7,897 22.8 % Credit loss expense 2,036 2,222 (186 ) (8.4 )% Net interest income after credit loss expense 40,551 32,468 8,083 24.9 % Total noninterest income 6,774 4,623 2,151 46.5 % Total noninterest expenses 25,154 19,460 5,694 29.3 % Income before income taxes 22,171 17,631 4,540 25.8 % Income taxes expense 5,523 4,507 1,016 22.5 % Net income $ 16,648 $ 13,124 $ 3,524 26.9 % Earnings per share - Basic $ 1.42 $ 1.39 Earnings per share – Diluted (1) 0.71 0.63 (1) On October 1, 2025, the Company amended the terms of the Series B preferred shares, as detailed in Note 19, to the consolidated financial statements.
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.
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): Year Ended December 31, 2025 versus 2024 Increases (Decreases) Due to Change In: (dollars in thousands) Rate Volume Rate/ Volume Total Interest-earning assets: Loans $ 538 $ 4,510 $ 47 $ 5,095 Securities 4 (21 ) — (17 ) Other interest-earning assets (1,442 ) 1,375 (286 ) (353 ) Total interest-earning assets (900 ) 5,864 (239 ) 4,725 Interest-bearing liabilities: Savings, NOW and money-market (2,029 ) (1,100 ) 225 (2,904 ) Time deposits (2,232 ) 4,351 (744 ) 1,375 Other (175 ) (1,611 ) 143 (1,643 ) Total interest-bearing liabilities (4,436 ) 1,640 (376 ) (3,172 ) Net interest income $ 3,536 $ 4,224 $ 137 $ 7,897 Financial Condition as of December 31, 2025 Compared to December 31, 2024 The Company’s total assets at December 31, 2025, were $1.1 billion, an increase of $178.7 million from December 31, 2024.
The Company evaluates each customer’s credit worthiness on a case-by-case basis.
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.
Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Expected credit loss inherent in non-cancellable off-balance sheet credit exposures is provided through the credit loss expense, but recorded separately in other liabilities.
Expected credit loss inherent in non-cancellable off-balance sheet credit exposures is provided through the credit loss expense, but recorded separately in other liabilities. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts.
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 growth was primarily driven by a $7.9 million increase in net interest income, partially offset by $5.7 million increase in non-interest expenses. Additionally, the Company recognized a $186,000 decrease in credit loss expense. Interest Income.
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.
The increase primarily consisted of increases of $20.9 million in cash and cash equivalents, $152.3 million in net loans, and $2.4 million in debt securities available for sale, primarily due to purchase of two new securities and unrealized gains during the year. The Company experienced growth across the various loan types due to new organic originations.
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.
The increase was primarily attributable to net income of $16.6 million, stock-based compensation of $875,000, proceeds of $217,000 from the issuance of common stocks, and unrealized gains on debt securities of $973,000.
Removed
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.
Added
The allowance for credit losses represented 1.07% and 1.08% of the total loans outstanding at December 31, 2025, and 2024, respectively. 13 The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.
Removed
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.
Added
Upon foreclosure, the loan was removed from loans held for investment. Subsequent declines in the fair value of OREO are recognized through direct write-downs rather than through an allowance methodology. During 2025, the Bank acquired one property through foreclosure of a consumer home equity line of credit (“HELOC”).
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. 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.
Added
The addition of OREO increased total nonperforming assets; however, management believes the risk is mitigated as the property is actively marketed for sale. Management continues to monitor local market conditions in Florida and will recognize additional write-downs, if necessary, based on changes in fair value.
Removed
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.
Added
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 Bank’s ability to respond to the needs of depositors and borrowers and to benefit from investment opportunities is facilitated through liquidity management. Management monitors the liquidity position daily.
Removed
(2) Interest rate spread represents the difference between average yield on interest-earning assets and the average cost of interest-bearing liabilities. (3) Net interest margin is net interest income divided by average interest-earning assets.
Added
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.
Removed
(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.
Added
The following table sets forth certain information related to the Bank’s interest-earning assets and interest-bearing liabilities at December 31, 2025, that are estimated to mature or are scheduled to be repriced within the period shown: Gap Maturity / Repricing Schedule (dollars in thousands) Less than a year After 1-5 Years After 5-15 Years After 15 Years Total Loans (1): Residential real estate loans $ 27,409 $ 44,355 $ 469 $ 1,785 $ 74,018 Multi-family real estate loans 23,343 41,449 901 — 65,693 Commercial real estate loans 313,261 352,336 910 — 666,507 Land and construction 7,549 26,059 2,604 — 36,212 Commercial 23,566 24,631 — — 48,197 Consumer 55,049 7,248 — 5,869 68,166 Total loans 450,177 496,078 4,884 7,654 958,793 Securities (2) — — 1,264 24,134 25,398 Interest-bearing deposits in banks 105,210 — — — 105,210 Federal Home Loan Bank stock 3,028 — — — 3,028 Total rate-sensitive assets 558,415 496,078 6,148 31,788 1,092,429 Deposit accounts (3): Money-market deposits 211,412 — — — 211,412 Interest-bearing checking deposits 94,865 — — — 94,865 Savings deposits 644 — — — 644 Time deposits 354,173 4,136 — — 358,309 Total deposits 661,094 4,136 — — 665,230 Federal Home Loan Bank advances 50,000 — — — 50,000 Total rate-sensitive liabilities 711,094 4,136 — — 715,230 GAP (repricing differences) $ (152,679 ) $ 491,942 $ 6,148 $ 31,788 $ 377,199 Cumulative GAP $ (152,679 ) $ 339,263 $ 345,411 $ 377,199 Cumulative GAP/total assets (13.7 )% 30.5 % 31.1 % 33.9 % 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 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.
Added
Time deposits are scheduled through the maturity dates. 18 The following table sets forth loan maturities by type of loan at December 31, 2025: (dollars in thousands) Less than a year After 1-5 Years After 5-15 Years After 15 Years Total Residential real estate $ 1,197 $ 21,970 $ 49,066 1,785 $ 74,018 Multi-family real estate 257 37,696 27,740 — 65,693 Commercial real estate 8,923 162,926 494,659 — 666,508 Land and construction — 7,377 28,835 — 36,212 Commercial 6,319 24,752 13,394 3,731 48,196 Consumer 677 3,063 4,184 60,242 68,166 Total $ 17,373 $ 257,784 $ 617,878 65,758 $ 958,793 The following table sets forth the maturity or repricing of loans by interest type at December 31, 2025: (dollars in thousands) Less than a year After 1-5 Years After 5-15 Years After 15 Years Total Fixed interest rate $ 9,432 $ 81,768 $ 4,884 1,785 $ 97,869 Variable interest rate 440,745 414,310 — 5,869 860,924 Total $ 450,177 $ 496,078 $ 4,884 7,654 $ 958,793 Scheduled contractual principal repayments of loans do not reflect the actual life of such assets.
Removed
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.
Added
The net increase in loans resulted from $180.8 million increase in commercial real estate loans, $17.8 million increase in consumer loans, $1.7 million increase in multi-family real estate loans, partially offset by decreases in $41.1 million in land and construction loans and $4.6 million decrease in commercial loans.
Removed
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.
Added
This amendment affected the calculation of diluted earnings per share, and accordingly, prior period diluted earnings per share amounts have been restated to conform to the current period presentation. This ensures a consistent basis of comparison. Net income.
Added
The Company had net income of $16.6 million or $1.42 per basic share and $.71 per diluted share for the year ended December 31, 2025 compared to net income of $13.1 million or $1.39 per basic share and $.63 per diluted share for the year ended December 31, 2024.
Added
Credit loss expense totaled $2.0 million for the year ended December 31, 2025, compared to $2.2 million for the year ended December 31, 2024. Credit loss expense is recognized to maintain the allowance for credit losses at a level management believes is appropriate to absorb expected losses.

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