OptimumBank Holdings, Inc. Aktie

Good morning. The meeting will please come to order. I would like to start our meeting by introducing myself to you for the 3 people that might not know who I am. I'm Moishe Gubin, Chairman of Optimum Bank Holdings, and I will act as Chairman of this meeting. I would like to extend to you a cordial welcome to the Annual Meeting of the Shareholders of OptimumBank Holdings, Inc.

A quick reminder, we may be making forward-looking statements. These are based on current expectations, but actual results may differ. Please review the full language on this slide for more detail. Our agenda for today are seen on the screen, an introduction of the Board members. We'll go through the agenda. And at the end, we'll have questions open for the people listening, and we'll go from there. All persons entitled to vote as shareholders or as proxies, please give their names to Elliot Nunez, who is acting Secretary and file their proxies with the acting Secretary if they have not already done so. I'd like to introduce the other directors of OptimumBank Holdings, along with us -- with our officers, who I shall ask to stand upon being introduced. First is Michael Blisko.

Good morning.

Avi Zwelling.

Good morning.

Tom Procelli.

Good morning.

Joel Klein.

Good morning.

Steve Newman.

Good morning.

Management, President and CEO, Tim Terry.

Good morning.

Delightful CFO, Elliot Nunez. In the back of the room over there, we have the Chief Lender, Jeni. We got the Chief Credit Officer, Ryan, and we got the COO, Ari and our HR, previously marvelous, sometimes more than marvelous, Mary Franco sitting in my chair. I hereby appoint Elliot Nunez as Inspector of Election, and I will now call upon Mr. Nunez to present proof of the calling of the meeting of shareholders.

Mr. Chairman, I present my affidavit certifying to the fact that the notice of this meeting was mailed on March 27, 2026, to shareholders of record as of the close of business on March 9, 2026, the record date fixed by the Board of Directors.

Unless there is someone who wishes the affidavit read, I'll direct that the affidavit be filed with the minutes of the meeting. There being no objection, it is so ordered. A certified list of shareholders entitled to vote at the meeting is available at the meeting and may be inspected by any shareholder. Elliot Nunez, having been appointed as Inspector of Election and having subscribed to the oath of office, I hereby direct that such oath is filed with the minutes of the meeting. The inspector will please make a tally of the number of shares of common stock at the meeting and advise me whether there is a quorum present to conduct -- for the conduct of business.

Mr. Chairman, I find that there are 8,991,733 shares of common stock represented at this meeting in person or by proxy out of a total of 12,166,437 shares of common stock outstanding as of record date. Therefore, 73.906% of the outstanding shares of common stock are represented in person or by proxy at this meeting, and there is a quorum for all matters to be presented.

Personally, almost 74% voting. That's pretty good for a publicly traded company. There is a quorum present, and the meeting can now proceed to consider the matters that come before it. The meeting now undertake consideration of Proposal 1, the election of directors as set forth in the notice of stockholders. Each director elected will hold office until the annual meeting in 2027 and until their successors are elected and qualified. Nominations for directors are now in order.

Mr. Chairman, the following people have been nominated to serve as directors until the annual meeting in 2027 and until their successors shall have been duly elected and qualified: Moishe Gubin, Joel Klein, Thomas Procelli, Avi Zwelling, Michael Blisko and Steve Newman.

I second the nominations.

A motion has been made and seconded for the nominations of myself, Moishe Gubin, Mr. Klein, Mr. Procelli, Mr. Zwelling, Mr. Blisko and Mr. Newman. Are there any other nominations? There being no other nominations, we will move to proposal 2, to approve an amendment to the company's articles of incorporation to authorize a class of nonvoting common stock. We will next consider Proposal 3 to ratify the selection of Hacker, Johnson & Smith as the company's independent auditor for fiscal year 2026. And finally, we'll consider Proposal #4 to approve the adjournment of the annual meeting, if necessary, to permit further solicitation of proxies.

The polls are now open, and the inspector of election will proceed to distribute ballots and tabulate the votes for proposals 1, 2, 3 and 4. If you have already executed a proxy and returned it to the company, you should not execute a ballot here at the meeting unless you wish to revoke the proxy you previously executed. If you wish to execute a ballot here at the meeting, please raise your hand so that those assisting the meeting may supply you with a ballot.

Have all the ballots been collected? I now declare the polls closed. While the Inspector of Election has completed the tabulation of the ballots, I would like to share a PowerPoint presentation for those in the room and those participating from remote locations. Upon conclusion of the portion of our shareholders' meeting, which requires the voting of shares, I will entertain questions from the floor as well as through e-mail that the audience is free to send during or after my presentation. E-mail questions can be sent to sdenison, S-D-E-N-I-S-O-N, [email protected], and that e-mail will also appear on the slide at the end of the presentation.

So 2025 was another defining year for OptimumBank as we surpassed the $1 billion asset milestone, ending the year with over $1.1 billion in total assets, up more than 19% year-over-year. Equity reached a record $122 million, increasing over 18%, while net earnings rose 27% to $16.6 million. Core ROAE remained exceptionally strong at approximately 21.6%, and our net interest margin expanded to a new high of 4.28%. Loans grew 19% to $959 million and deposits increased 21% to $932 million, reflecting continued franchise expansion. We also continue to invest in the platform, growing our team to 98 employees and advancing key initiatives, while institutional ownership increased approximately 17%, reflecting growing interest from sophisticated investors. Taken together, these results reflect not only strong performance, but a company that has successfully transitioned into a new phase of scale, profitability and institutional relevance.

Importantly, our performance is now being recognized externally. During the year, OptimumBank was ranked #49 out of 3,465 U.S. community banks by S&P Global Market Intelligence, placing us in the top 1.4% nationwide. While this reflects our 2025 performance, we are continuing to see increased recognition in 2026, including the recent initiation of equity research coverage from Alliance Global Partners offering a buy recommendation and a price target more than $1 higher than where the stock is currently trading, which we believe further validates the strength and growing visibility of our platform.

On Slide 5, you see a balance sheet. This graph tells the story in numbers. Assets, deposits and shareholders' equity have all grown significantly over time, each reaching record levels in 2025. This growth has been consistent and disciplined, reflecting the strength of our franchise as we move beyond the $1 billion milestone. The '26 versus '25 Slide 6, momentum has carried into 2026. In just the first quarter, we added meaningful assets and expanded our loan and deposit base. Take particular note that on a year-over-year basis, we increased shareholder equity by $19 million. And in a single quarter, we grew by approximately $5 million. This continued growth demonstrates that we are not only scaling but doing so in a disciplined and sustainable manner.

On Slide 7, OptimumBank's earnings performance over the past decade tells a powerful story of sustained growth and transformation. From just $4.6 million in total revenue in 2016, the bank has grown to over $71 million in 2025. More importantly, 2025 represents the highest net earnings in the bank's history, reflecting continued momentum, expanding noninterest income and disciplined credit management. This progression highlights our evolution into a consistently high-performing financial institution.

The next slide is looking at year-over-year Q1 performance. You see the acceleration continuing, a clear step-up in earnings and a powerful start to 2026. Net income increased meaningfully from the prior year period, reflecting continued strength in our core operating performance. This reinforces our position not just as a strong community bank, but as a growing and consistently profitable institution. Net interest margin. Our NIM trajectory over the past decade has been carefully managed and 2025 capped it at 4.28%, our highest on record. This is a record of disciplined asset liability management, active loan pricing and a very well-structured deposit strategy. This margin positions us well for scale.

On the next slide, ROE is the clearest measure of shareholder return. And in 2025, we continue to deliver strong results. Core ROAE remained at an elevated level of approximately 21.6%, reflecting the strength and consistency of our earnings. While ROAE moderated slightly year-over-year, this was driven by meaningful growth in our equity base, not a change in underlying performance. We're not only growing, but we're also doing so efficiently and profitability. This slide, not as important to me, but it's present anyway. Our deposit base is both diversified and high quality. As of Q1 2026, nearly $305 million is in noninterest-bearing deposit -- demand deposits, representing a highly efficient source of funding. And I think that's actually higher than most of our peers, like most of our numbers. This mix supports stability, liquidity and long-term earnings power. Our footprint remains focused but impactful with 3 branches anchoring our growth across South Florida.

The next slide reflects the deposit composition at the end of 2025 and Q1 2026. You can see that we maintain a balanced mix of funding with continued strength in low-cost deposit demand deposits alongside growth in time deposits. This reflects our ability to manage funding costs while supporting balance sheet growth, which remains critical in the current rate environment. Our lending remains both strategic and selective. Office, hotel and retail loans represent around 41% of our portfolio. We have maintained diversification across both geography and borrower type. Additionally, a significant majority of our loans are concentrated in Florida, and we remain closely aligned with the market we know best.

Before moving on, I want to highlight an exciting development that reflects our progress towards our strategic goal of building multiple verticals so we can meet the needs of all borrowers. We recently launched a newly -- wholly owned subsidiary, Optimum Finance, focused on commercial real estate bridge lending. This is a natural evolution for us. Over the past several years, we've built deep expertise in commercial real estate underwriting and asset management. Optimum Finance allows us to apply that expertise in a more flexible, higher-yielding segment, short-duration bridge loans while maintaining the disciplined approach that has defined our success. I'm pleased to share that earlier this month, Optimum Finance closed its first transaction, a $14.185 million loan secured by a hotel property in New Jersey.

This is an important milestone, demonstrating both demand for the product and our ability to execute effectively in a new vertical. We view Optimum Finance as a strategic platform that can generate attractive risk-adjusted returns, diversify revenue streams and create incremental growth opportunities beyond the traditional balance sheet. While still early, this platform represents another step in our evolution from a high-performing community bank to a broader financial institution with multiple avenues for growth.

The next slide to summarize, over $1.1 billion in assets, approximately $959 million in loans and a strong, well-positioned balance sheet. We've built a powerful and efficient platform with return on average equity at nearly 15% and core return on average equity over 21%. We're not just scaling the balance sheet. We're doing so with discipline and profitability. This chart highlights our tangible book value per diluted share over the past 5 years, reflecting consistent and disciplined value creation. From $3.11 in 2021 to $5.18 in 2025, we have delivered steady double-digit growth in intrinsic value, representing an annual growth rate of over 13.5%. This progression is driven by strong earnings, prudent capital management and a focus on long-term performance.

As we continue to scale the balance sheet and generate profitability, we believe this foundation positions us well to drive further shareholder value. Before we close, I want to take a moment to reflect on a truly special milestone for OptimumBank. In 2025, we proudly celebrated our 25th anniversary, marking a journey defined by growth, resilience and transformation. To commemorate the occasion, we had the honor of ringing the opening bell at the New York Stock Exchange, a powerful symbol of how far we have come. We also hosted a celebration attended by more than 350 friends, family members, customers, investors and supporters all of whom have played a role in our success. It was an incredible reminder that what we have built extends far beyond the numbers.

On behalf of our Board, leadership and the entire team, thank you for being part of this journey and for the continued confidence in our future. We are also proud to share that a majority of OptimumBank's employees are now shareholders. This milestone reflects a deep commitment of our team, and it speaks to a culture where every success is shared. Our employees believe in the future of this bank, and they are proudly invested in helping us reach it. Has the inspector completed the tabulation of the votes on the matters brought before this meeting and is he ready to present his report?

Mr. Chairman, I'm ready to report Proposal 1, I report that the holders of 6,571,984 shares of common stock voted for Proposal 1.

To summarize regarding proposal 1, the following directors are therefore duly elected to serve for 1 year and until their successors are elected and qualified, Moishe Gubin, Joel Klein, Thomas Procelli, Avi Zwelling, Michael Blisko and Steve Newman.

The vote for Proposal 2 is as follows: to approve an amendment of the company's articles of incorporation to authorize a class of nonvoting common stock for, 6,699,923; against 172,576; abstained, 7,623.

Proposal 2 passes as indicated by the aforementioned vote.

The vote for proposal 3 is as follows: to ratify the selection of Hacker, Johnson & Smith, P.A. as the company's independent auditor for fiscal year 2026. For, 8,947,652; against 20,338; abstain, 23,743.

The vote proposal -- that carries as well. Proposal 4 to adjourn the annual meeting, if necessary to further solicitation of proxies is not necessary as we collected enough votes for the 3 proposals we took up for consideration. We will first hear questions from our analysts, then from those here in the room. And finally, those participating remotely as will be read by one of our staff members. [ Irina ], please open the mic for the analysts.

[Operator Instructions] Your first question comes from the line of Ken Billingsley with Compass Point.

Just a few questions here. Guidance that you gave in the fourth quarter, I know you said you're going to update it after the second quarter. But just after this first quarter and the numbers that came through solidly. Are you still reiterating that? Any changes to make?

Yes, I think we're safely in a position to be between $0.78 and like $0.84, $0.86. On this quarter, our first quarter is always our worst quarter, which year-over-year, we killed last year. But if you see it compared to December, it's not as good, and that's mainly because of payroll taxes and stuff that happens in the first quarter. And then also fourth quarter, we usually have an accrual adjustment that actually makes the numbers look a little bit better. So $0.20 on our worst quarter, I would expect that every quarter should be -- should surpass that. And God willing, I think we will be towards the high end of the range.

On the headcount, I know you finished the year at 98, but obviously, with expenses being a little bit higher on the employee side, salary side, where is the number today? Or was that just a case of hiring done at the end of the quarter and that just carried over in the first quarter? Or were there new people added?

What's the exact number for today with our head...

So we are at 106.

I would say most important to be said is at this point, we have sufficient staff to be able for us to grow probably up to about $3 billion of assets. So there shouldn't be -- as we grow the next tranche of growing our balance sheet, we shouldn't be seeing an increase on the cost. And incrementally, we'll make more money on the next batch of revenue coming in the door.

Last question, if you don't mind. Just on the branch deposits, obviously, Miami drives that. Fort Lauderdale had some strong growth in the quarter. So just kind of a 2-part question. And then do you see the other branches starting to, at some point, catching up to Miami? And then the accounts themselves that are opening, are those existing customers opening accounts? Or are these new customers?

So I think really to understand that, I mean, our model really is a very, very friendly, family-oriented model. And our people coming through the door today, we don't do any real advertising. You don't see us in the PennySaver. We're not putting full page ads in the Sun-Times or any newspapers. So we're -- we have a nice cult following and derivatives of that coming in the door every day of the week to bring us business. We've built up a department that's really a white glove department to deal with, I don't know the right way to say it, because everybody should be getting white glove service here, but it's built out to be able to take care of, for better terms, whales or bigger people that we kind of chase down that are putting in $10 million at a time.

And so that department has grown and a lot of those deposits find their way in the North Miami Beach branch because they're based out of there. That being said, just like the Fort Lauderdale branch, which is our biggest branch, those are our corporate clients that are all over the country or all over the world, and that continues to grow at a very large clip. The only true real branch that we have today is Deerfield. And Deerfield is holding their own. They've gone up and down over the years, but I don't want to say it because I live there, but since I move there, the numbers are up. And so yes, I mean, I think things should continue the way they're going. It's literally every day of the week, people coming to us to give us deposits and people coming to us to bring us loans for us to do. And it's for us is to be able to handle everybody with the same white glove, good service that we want to be able to provide. And that's our engine for growth.

Your next question comes from the line of Gaurav Mehta with Alliance Global Partners. [Operator Instructions]

I want to go back to your comments around guidance. I think you said $0.78 to $0.86 of EPS in 2026. Can you remind us, I think in the past, you have said 25% loan growth expected in '26. Is that still the driver behind that guidance? Are you expecting higher loan growth?

Yes. Honestly, we -- our original numbers are based on a 25% growth. That's what our budgets are based on. That's our baseline goal. Right now, I think we're already killing that number. And if things continue with the pipeline we have and what we're doing, that number is going to be a lot higher, which is going to be a cause for us to bring in more equity and to grow our business. That being said, that -- when we sell more equity, the EPS goes down, obviously, because there's more shares to have to share the income with. But at a stable number of where we are today, with the assumption of new equity coming in to be able to handle growth and everything being accretive growth, that's why I feel firm that I can say that we should be able to hit at least $0.20 a quarter and really probably closer to $0.22 a quarter. That's why the high end of the number is $0.88.

And that's not putting in any of the -- I didn't sit there in the room figuring out the math on what the new equity with the new growth, what that's going to -- how accretive that's going to be if that turns into instead of $0.88 or $0.86, that might bring it over $0.90. I haven't figured out that math. But I would bet -- that's why if you give a range, $0.76 was what we said last year, $0.78, I'm certain we're going to hit, $0.84, $0.86. I'm pretty sure we're going to hit that too, but I give you that range, and I expect we'll probably exceed that.

All right. Maybe a follow-up on the expense side. Can you remind maybe on the salaries and employee benefits, you quoted $4.9 million, which is higher than last quarter. As we go forward, the number that you reported in 1Q, is that the right run rate?

Yes, I believe that to be the right run rate. We don't have -- we're not really adding -- there's going to be a little overlap in some senior management position that will add a little bit, but it's not material enough to make a real dent. And so things should be relatively flat for this year based on the first quarter. So you can take it or extrapolate that out 4 quarters, and it should -- we should be able to be married to that number.

Okay. On the OptimumFunding side, can you maybe provide some color on what your goals are for that division this year? How much of the loan growth you expect to see there?

So yes. So there's no secret to the world, right? Our company, a lot of the engine of growth is relationships and all the Board members here have really good relationships in the world, and everyone helps contribute towards bringing business to the bank. And Michael and I, Michael Blisko, is my partner, who is on the board here. We're both very well known in the health care business. And years ago, we started doing health care lending to the more secure stuff, which is AR lending. And as years have gone on, people have asked for conventional debt, and we've been very selective and not really done that.

Firstly, because there's an education to understand health care, and it's taken a bunch of years for the credit people to really understand what we're lending to and even the Board had to get more comfortable with that kind of lending and how it goes. So we started small like $1 million loans, and it was a smallish portfolio. And once everyone got more comfortable and understand a little bit more, so the amount of leads that are generated by both Michael and I when it comes to health care is sizable.

And with that, the next step to grow that would be for us to do the conventional loans. And if we're doing conventional loans, the typical exit in the health care world is to take those loans and then take long-term perm financing with HUD, which typically have between 30- and 40-year straight line M at a pricing of 10-year treasury plus 175, which is a great exit for folks. HUD is a little bit difficult to deal with at the time. So it's a little bit of pain. But ignoring that, it's cheap money for long term. And so like that's the exit and there's money to be made there.

And I have a lot of friends that have made a lot of money over the years being lenders in that field. And so we said, for our strategy, it makes sense. We already have that customer base with AR lines.

We already have a demand from customers that want to have conventional, which we did a few loans. I think we're probably somewhere $60 million may be lent to it, $70 million lent, small piece of our portfolio. And we have a lot of demand. And over the years, I helped a lot of people and I placed them elsewhere. And so this is just an ability for us to grow based on the leads without having to do any advertising, just be able to take what already comes to us and be able to satisfy their -- the demand and then [ may continuing it ].

The same goes with Optimum Finance, Gaurav. That's for years, as someone who refers business to the bank as well as the other Board members, we give it to the bank. We rely on the bankers. We have good people that we hire, and they take good care of the custodian of the bank. And if they don't do a deal, we -- there's very little follow-up asking what happens to that deal, Why? We didn't do the loan. Why we didn't do the loan. We support the management to decide we don't want to do the loan, but what happens to the loan.

So typically, what ends up really happening with the loan is the lender tells the person, we can't do it, I'm sorry. And that's the end of the conversation. And I was thinking all along, we have this pool of leads that somebody is a lender to lend that, maybe it doesn't fit the bank box so -- but there's a lender somewhere that could feel comfortable with enough security, with enough things that are not regulated by the FDIC or OFR or Federal Reserve or whatever else, OCC. So you get out of that regulatory box and you get out of the banking thinking box, you think of someone who's a lender who says, okay, this deal makes sense. I can't do it at the bank. So we're saying we're going to go create that vertical to be able to take all of the leads.

Not everyone is going to want to borrow money at 15% interest or higher rates. But there will be people that will take that money because it fits their needs, short-term financing. And we want to be able to capitalize on that. With that, I found someone I know a long time to lead that force and is well known in the world and well known and well liked and loved by most. And I feel that me and him are going to be -- we're going to make some magic together, and it's going to be good for business. And so that's that vertical. We previously announced that we were going to do a vertical with factoring, and that has somewhat sputtered only because there's more money in some of these other verticals, and we have enough volume of stuff.

All along, the strategy has been -- and I hope we're not putting anyone to sleep out there, but the strategy has been where we want to do these things, but at the same token, we're doing so well in our core business and we don't want to distract current management and current employees from doing their thing. Meaning I don't want to lose -- take the eye off the [ ear ], do well there and then have a problem with the core. And so we've been very, very slow, maybe to a knock on me, but we've been relatively slow on starting to take care of these strategies because of -- because we're doing so well at the core that you don't want to risk that core getting hurt. And so opportunities came how they came. And so now that we have the other 2 verticals up, we already closed the first loan. We have a second one already brewing God willing for Optimum Finance.

And OptimumFunding is still -- we've hired the people. We're not paying them just yet. They have to finish where they're currently employed. And so we should be up and running by the end of the year. And as far as volume, Gaurav, I would say, I think on the Optimum Finance side, we're probably looking at getting that like $10 million a month as a baseline that could be higher, it could be lower. And net spread on that is probably 5 to 10 points of net income from top line to bottom line.

And then on funding -- and then funding, we -- I would say that we should hope to maybe get 1 or 2 deals done end of the year, fourth quarter. Also probably average loan size somewhere between 5 and maybe 15, all underwritten to a HUD standard. So we know that we have an exit on that deal, all expected to be on the books for less than 2 years. Again, those are the things that banks wouldn't want. Banks don't want to make all the effort and have a loan only on the books for 6 months. It's too much work. So for -- Gaurav, I think I answered your question at the end of the day. It was a little long-winded. I got lost in my thoughts, I'm sorry.

Yes, that's great. One more last one, if I may. Moishe, can you maybe grow the bank, can you comment on how you think about common dividend policy?

Well, that is a really good question. In the last year, there have been a lot of shareholders that actually reached out and said that they want a dividend. And I argue with them saying, but don't you think we're better with our capital staying in the bank and then earning 21% return on equity. And the answer, we like that, but there's a metric that we could then follow even if you did $0.01, they said. So I would say to you that it's a discussion point at the Board. We recognize that we have free cash flow. If you look at our growth, we don't really have a lot of free cash flow. We actually need to bring in equity to support our growth. But we act for the shareholders and so it's a debate that still has to happen here. We -- in theory, we could do a dividend because we're making enough money.

Even if we're making $0.80, we could give away -- we could get back $0.20 of it. I mean -- but as an example, I'm not suggesting anything. But we still have to debate it further. Those are the two sides of the argument. I'm on the side of really not to do a dividend, but I'm also on the side of I do whatever the shareholders want. So if the shareholders -- it's been a couple of shareholders that told me that, but I'm not sure it's like wrong of shareholders are saying, "Hey, let's do this. So we'll see where it goes, Gaurav.

There are no further questions on this side at this time. I will now turn the call back to Mr. Gubin for further Q&A.

Thank you. Anybody in this room have any questions? Marty, you have a question?

Yes, let me try. First, am I understanding right that in the last quarter $160 million of new deposits came into the bank in 1 quarter.

Yes, I think whatever it says, yes, I'm pretty sure.

It sounds wonderful, almost like maybe it's...

No, we have a good steady support from our...

That kind of volume before $160 million in 1 quarter of new deposits.

Yes, because some of those deposits are deposits that we're able to get online, they're not necessarily customers [ walking in the street ] from the -- and so we have availability based on our own policies. We can probably take another couple of hundred million of that tomorrow if we needed it. We don't typically take it because it's not really sticky money. It's not money that's -- those customers are not necessarily -- they're not drinking the OptimumBank [ Kool-Aid ] but -- yes, but our regular -- the number to watch would be our noninterest-bearing...

Which would be like checking accounts, is that?

Yes, yes. And we're sitting with like about 30%, which beats most of our peers.

It's amazing.

Yes, thank God. I mean a lot of that is the Board members have friends and any -- it's like it's a random thing, right? If I ran to you and old friends and I see you -- when I see you at Grand Central Station getting a bowl of my soup at Zaro's and I say to you, "Where do you bank?" And you say, "Bank of America." I say, "Martin, what do you have Bank of America for?" No, no, nothing wrong with Bank of America, but why aren't you banking with me? Make it easy for me and I'll bank with you. So I go, okay, [ David Siegel, call Martin Granoff ]. And next thing, you're banking it with me.

But I did.

But that's our point of that white glove area is really to make it as easy as possible for a guy -- because I mean, I can tell you from my own house, my own wife, still wanted to bank at 1st Source Bank, which was our bank that we started with in the South when we the -- haven't lived there in 10 years. And for her, moving over bill pay and typing in all the different invoices for the electric bill was a pain. So I provided her somebody to go and do the work for her, and then we get deposits at the end of the day.

Okay.

Regarding the 2 subsidiaries, the one you described where you're taking the loans that were declined and doing something with them. I may have missed a little bit from the speaker to get over here. Do you like brokering those to other lenders in effect? Is that what you're doing?

No. We're opening up another shop that has 3 -- it's going to have 3...

Different underwriting requirements.

Yes, different under -- exactly...

And where is the money coming for the...

So we're either -- it's either going to flow down from the holding company at a 10% preferred return okay? So basically, we're building out the model. We're putting equity in, whether it's equity from the holding company or equity by way of a loan from a related party into the company, okay? And then we're levering that with a line of credit with another bank. And so our cost of money is going to average out somewhere below 10%.

Which is not your typical loan that you make to a typical client. [ Is it not ] where the money going to the subsidiary?

Here's an example. You got a guy that buys a building at 50% LTV, but it's a turnaround and doesn't have good historical cash flow. So the bank says, okay, based on global cash flow, we could give this amount of money because it fits the box up to this dollar amount. Person says, well, I still need to do TI improvements and I need an extra $10 million. So they're going to go looking on the street for $10 million because they have plenty of equity to do -- to buy it and they have plenty of equity to do part of it, but they don't have the extra piece that they need.

So they come along and say, in this example, let's say they say, will your bank lend me? So our typical banking rule, we don't really do seconds. It's only that's extra collateral. It's not -- we're not going to do a primary deal on a second generally. I guess the HELOC is a second, but that's a separate product for someone who lives there. So from that point of view, that's not a bankable deal for us. But if somebody else goes and says, okay, checking a box on the person, the project.

It's a lot more handholding, a little bit more kicking the tires, understanding exactly what the plan is, going through stuff that a regulator doesn't -- will not be happy if we rely on as a credit admin, but where you're not [ policed ] by the regulator and you're just [ police ] by common sense and you go hold on, you got this, this and this and you got a guarantee from a guy who is a billionaire, just as an example, right, it's a deal that you should do. And if you make a deal, you tell the guy we're going to give you -- we're going to charge you 18%, 2 points...

But that money is not coming from the bank.

It's not coming from the bank. It's coming -- if it comes from anywhere, it will come from the holding company that will fund and then they'll lever that with that equity. So it's actually God willing, it should build up a nice balance sheet. In theory, it should either be something that feeds the holding company long-term really good residual returns or it's something that could be spun off at some point in the future as its own stand-alone finance company. We'll see how it plays out. In the meantime, there there's an active management of it, like meaning I'm looking at stuff and the committee that's taking care of those loans to approve them, 3 of them are in this room. So we're looking at the deals, and we're actually actively being part of it and not just relying on a system to occur and run.

And with the other subsidiary with the health care, I think those aren't normal bankable but you need a separate subsidiary to do that?

So it's an interesting point, okay, because they kind of are where -- I'll tell you. The exit allows for 100% refinance of existing debt up to 85% leverage, okay? So typically, the normal bank by us, we're not lending more than 75%. Most of the time, it's probably 70% or 65%. But -- so a guy that wants to be highly levered so that he could be 30, 40 years fixed, okay, which makes sense in that example to a lot of people. It doesn't make sense to banking, but it makes sense to someone who's a real estate guy. If I could lock in 40-year money, right at 85% LTV, I want to get to 85% LTV. So if the bank is stuck at 75% or 70%, right? So they need either a tranche behind the bank for that 10%, 15%, even if it's sitting in a sinking fund, the money doesn't even have to actually go to the guy. I mean the borrower says, "Just add debt to my property so that I can go and refinance the total debt." And then I have long-term debt at the treasury plus 175, which is like 6% today.

I imagine -- I mean 6% is not great. I mean I have debt that's sitting at 3% that I have another 26 years on, right, backed by the U.S. government, of course, which is God bless America. But that being said, so that guy says, "I want to take 6% for the next 40 years" and then set it and forget it, right, and just do an auto debit for the next 40 years for the mortgage payment all the day. And so the bank can't do -- they can't do that last 10%, 15%. So either they come to us and we do us being funding, we do the 10%, 15% as a second.

Where does that money come from?

Also a holding company. And that's all money that -- in the grand scheme of things, like most finance companies, we're going to have a line of credit that's going to fund most of the loan that we're putting out the door. So we're going to be -- so for our haircut or you want to call the piece that we're going to do, we're probably in for like 10% of the actual loan amount. So if we lend $10 million, we're doing $1 million -- or I say it better. If the property was $10 million and we're lending and it's getting -- they're getting a loan of $8.5 million, so we're doing, let's say, $1 million, $1.5 million and then the other $7 million is coming from debt. And so in that pricing is, let's say, SOFR to something and then our money to the holding company is 10% return, and then we're getting from the client north of 15% plus 2 plus 1...

And the money in the holding company [ coming ] from success of the bank.

Well, today, the way we did the first deal was we actually just borrowed the whole money needed. We borrowed money. And then -- and so we borrowed and we lent down.

Your borrowed from another bank?

We borrowed from somewhere. Yes, we borrowed money and our spread was -- is good that we're making good money on the money that we borrowed. And actually, I've been speaking to some of our stronger or larger shareholders, and I said, "Hey, you want to fund one of these things." There's people that are interested in that is "I'm putting money in the bank anyway, and I trust you, I'll give you some more money at a bigger -- at a higher yield than what you could get from a CD," simple enough. And so there's a little bit of -- there's a business to be [ had ] here. And so we're working it. And this is what I'm spending a lot of time on. I am willing in the long run, it will be good for all of us.

Last question. Remember...

You brought the donuts. You can ask as many questions as you want. Brought 4 boxes...

After [ GALA ], which was just fabulous, by the way. You mentioned about Newtek, which is -- I understand is [ an effective ] online bank. Some kind of relationship that Optimum has with Newtek. Do I have that right? I...

Yes. Newtek is an SBA -- it's like one of the largest SBA lenders, I think, in the country, okay? But they do all of their whole model is without branches. They're doing everything electronically. So when we first started, and we still have a little bit of relationship left with them, is they did a lot of our back-end SBA stuff for us because management correctly believes that you need to be exact in dealing with the SBA because the SBA will look for any excuse not to honor a guarantee that they provide. So you want to rely -- and we had a document with them for them to do certain back-office stuff.

And in fact, I believe in their documents, they gave us some kind of guarantee that they're going to -- that anything that they have their hands on, they're almost ensuring that if something went wrong, the SBA would honor their word. So we use them. We're still using them, I think, a little bit. I don't think we use them because we got preferred status, as you know, already now more than a year ago. And our SBA department is turning pretty good. We're doing better, but doing good. Anybody else? All right, Seth. Any questions from the Peanut Gallery?

Yes, I do. We have a total of 9, but a lot of these went over already. So I'm just going to stick with 2 that are a little different. So question number one is, Moishe said in the past that he's looking to do M&A but wouldn't use OPHC's currency below par. Given that the bank's relatively high returns, there's a good argument that 1x book is still far too low a bar. If you guys are still interested in M&A, why not use cash or wait things out until the valuation gets better?

Well, first of all, I appreciate the engagement that we have 9 questions. Like Martin, you've been here years, but no one's here, right? You're the only guy. So I appreciate the engagement, which is a testament to Seth and I running around the country going to conferences and meeting people where people are interested about our story. We have good volume. That being said, whoever that came from is 100% correct. We -- and I have this battle all the time because people want to invest, but they're stuck with saying, well, the market is trading in here, I want to discount to market. And I say, so the market has got it wrong, I'm not going to sell stock and dilute our shareholders below book.

So today, our book and my version of book is higher than the book that the public sees because I add back OCI, which is an accounting entry, which I believe is relatively big because it's just an entry because if we were to have to sell off our securities portfolio, we would take a loss today because the interest rate is at 2.5% versus the marketplace. So -- but it's not a real loss. It's an investment that we made 5 to 10 years ago that still has to bleed out based on its duration.

So I add that back to book because I don't take that paper loss. And so my book number today is about [ $5.57 ], which is exactly where we're trading. So that being said, if there was an opportunity to do M&A where we could use our stock at [ $5.57 ] and we could buy a company at a fair price and knowing full well that the day after we make the deal or shortly thereafter, it will be accretive because I could cut out senior management or something or other things that are part of their portfolio or we have the access to their cash that they can't get the money out at a good rate, I could stop their lending and use their cash to be able to do our lending, which is at a better rate, it's good for business.

So I wouldn't -- I would say that whoever asked the question is 100% in line in tune with what I'm thinking. And I think the Board agrees with me, like there's no reason for us to dilute ourselves. If we stop doing what we're doing right now and we can cut out some of our -- because part of our staff that we have on our books today is for growth. If we stopped wanting to grow and just stay low, we could probably cut out some of our labor and we could churn the butter at a good 20%, 25% return a year, which is not bad. I'd be very happy with that. But primary is growth. And just because that's -- we're on this world, God wants us to be growing. If we're not growing, we're not -- we're dying. And I don't want to be dying, I want to be growing. All right. What's the next question?

With OptimumBank trading at a 52-week high today and significant preferred stock conversion potential, how should investors think about dilution and true per share economics?

So I think everybody who's on this call or whoever reads this should go and look at the Q and understand exactly our common equity per share today is what I said, which is I think we announced that [ $5.38 ] is the true book value, my number because of OCI, like I said, is [ $5.57 ]. And if the marketplace would understand that, they would also see that our true market cap is right about $130 million. And that's why we had this proposal today is that this proposal cleans up the capital stack for those that are out there that look at and get confused and say, what's going on there, this preferred because the normal person that's an investor looks at preferred and thinks, okay, I'm behind the preferred guy. And they don't even bother necessarily researching, understanding what the preferred series looks like. They just say preferred before them and they don't like it and people stay away from that.

Our preferred was really only created so that I can put money into the bank and not have voting rights so that the regulators would allow that equity in the door and they still started me at some point after that about it, but that worked out. But nevertheless, it was never meant for anybody to not have the same exact rights as the common. It was meant to be that everyone is on the same footing.

So with this move, we'll end up moving everything to nonvoting common in essence. And so then everyone could see that everyone -- it's all one -- it's 2 classes of common, but it's one's voting, one's nonvoting. There's no differences otherwise. And that should make it easier for investors that are not investors today to become investors because it will become simpler for them to understand.

Good. There's one more question that you haven't touched on yet, and then I think we're done with the questions here. Your strong NIM suggests attractive loan yields. Are you moving up the risk curve to achieve this, particularly with larger CRE exposures?

Absolutely not. We -- our CRE has grown because that's our regular customer. On a regular loan demand, 9 out of 10 -- I mean, I guess, I carved out SBA and I carve out nursing home lines of credits and I carve out HELOCs. So if you look at our regular -- the rest of it is our regular portfolio. Out of regular portfolio, I would say like 90-something percent of that is CRE. That's just typically how it works. That's South Florida. We've maintained same standard easily for, let's say, 5, 10 years, maybe longer.

Like we're -- we haven't changed that at all. And part of that is we don't have a reason to, right? We get such loan demand without having the effort. We don't have to go and do wonky. If we do something wonky, it's really because it's a relationship that we want to try to help somebody and we're looking beyond the numbers in some form or another. And those are still like really far and few between. There's not -- we don't -- it's rare.

That being said, we expect to continue with the same way we've been going, which is the same credit quality that we've had, which has been very good. It's almost immaculate. And the same type of borrowers, the same type of collateral and hopefully, in the same geography for the most part. And that's that.

Those are all the questions that we have available at the moment.

Okay. On behalf of all the directors and officers of the company, I wish to express our appreciation to all of you for attending this meeting. Is there any other business to come before the meeting? There does not appear to be any other business. So I will therefore entertain a motion to adjourn. Anybody?

Mr. Chairman, I adjourn the meeting.

I think Michael [indiscernible].

I second the motion.

Okay. We've got a trifecta here. Anybody opposed? All right. We have a first -- tie for first, a tie for second. And nobody has opposed. Motion is carried. The meeting is adjourned. Thank you, everybody. Appreciate your time and efforts...

This concludes today's call. Thank you for attending. You may now disconnect.

Ladies and gentlemen, thank you for joining us, and welcome to the OptimumBank Holdings Inc. Fourth Quarter 2025 Earnings Call. [Operator Instructions]

I will now hand the conference over to Seth Denison, Managing Director of Investor Relations. Please go ahead.

Good morning, everybody, and welcome to OptimumBank Holding Company Inc.'s Fourth Quarter 2025 Earnings Call. I'm joined here today with our CFO, Elliot Nunez; the Chairman of our bank, Moishe Gubin; and the CEO of our bank, Tim Terry. And today, we're going to spend some time going over some of the details for the last quarter and the last year of OptimumBank's performance.

This quarter marks a defining period for OptimumBank, not just in terms of financial performance, but in terms of strategic progress across the franchise. As of December 31, 2025, we closed the year having surpassed $1.1 billion in total assets while delivering record quarterly and annual earnings, the strongest performance in the company's history.

Beyond the financial results, 2025 was a milestone year for OptimumBank in several important ways. We celebrated our 25th anniversary, including the honor of ringing the opening bell at the New York Stock Exchange, a moment that reflects both the longevity of the franchise and its evolution into a scaled, high-performing institution.

During the year, we continued to strengthen our leadership lending capabilities with the appointment of Jeni Chokron as Chief Lender, an exceptionally experienced and highly sought-after banking executive, further enhancing our ability to drive disciplined loan growth and deepen client relationships. We also achieved SBA Preferred Lender Program status in the first quarter of 2025, a designation that meaningfully expands our ability to serve small business clients more efficiently while supporting fee income and relationship-based growth.

During 2025, we formed a new wholly owned subsidiary to deliver a bridge to HUD and FHA HUD insured financing solutions for multifamily and health care properties. We expect to roll this platform out in early 2026, leveraging our specialized expertise in skilled nursing, senior housing and multifamily sectors to further diversify revenue and expand our lending capabilities.

Equally important, we made significant progress on the capital markets front. Our largest institutional investor, AllianceBernstein, took deliberate action to increase its economic ownership in OptimumBank, including converting common equity into preferred stock in order to build additional exposure to the company. We view this as a strong long-term vote of confidence in our strategy, governance and earnings power.

At the same time, one of our directors, Michael Blisko, elected to convert a portion of his Series B preferred equity into common stock, increasing liquidity and market capitalization while remaining below the 9.9% ownership threshold. This threshold is a regulatory constraint rather than an economic preference, and we are hopeful that regulators will reconsider their position over time, which would allow both Moishe Gubin and Michael Blisko to convert additional Series B preferred equity in the future.

The remaining 1,295 shares of Series B preferred are held entirely by long-standing Board members, with Moishe Gubin holding 680 shares convertible into approximately 5.56 million common equity shares and Michael Blisko holding 615 shares convertible into approximately 5.02 million common shares. In total, the remaining Series B preferred represents approximately 10.6 million common shares on an if-converted basis.

Importantly, under GAAP, this structure now allows us to present standard diluted earnings per share figures that fully and transparently reflect both common and preferred equity, making our capital structure, ownership alignment and earnings power far cleaner, more understandable and easier for the market to model. Taken together, these milestones reflect not just growth and scale, but strategic execution, growing institutional confidence, improved liquidity and enhanced capital markets clarity.

I want to give a cautionary note regarding forward-looking statements on today's call. Based on management's current expectations, assumptions and beliefs about OptimumBank's business and the environment in which it operates, these statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. The call is being recorded, and we refer you to our SEC filings, including our most recent Form 10-Q, for additional information regarding risk factors and forward-looking statements. Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as identified in the presentation deck.

Before moving into the results, I'd like to take a moment to reflect on the leadership of the team we have installed here today. Earlier, I introduced you to Moishe Gubin, the Chairman of the Board; Tim Terry, our President and CEO; and Elliot Nunez, our Chief Financial Officer. Collectively, these gentlemen have nearly a century of experience. And more details can be found on this page, which I encourage you to take the time to review. The leadership team has built the culture, stability and performance we're discussing today.

And with that, I'll turn it over to Moishe to begin the presentation.

Thank you, Seth, and good morning, everyone. At the close of 2025, I want to start with a simple observation. This was the best year in OptimumBank's history. This wasn't just a year of growth, it was a year of elite execution. As you can see on this time line, the 25th anniversary coincided with our strongest financial performance ever, where we didn't just cross the $1.1 billion asset threshold, we dominated it, delivering full year net income of approximately $16.65 million. Our profitability metrics are frankly staggering. We've achieved a return on average equity of nearly 15% on a GAAP basis and a massive 21.6% on a core basis.

But more important than any single metric is what those results represent. They reflect a bank that has successfully evolved from a fast-growing community institution into a scaled, high-performance and durable franchise. We have proven that we can achieve aggressive best-ever scale while maintaining the same conservative discipline that has defined us for 25 years. We are no longer just participating in the South Florida market, we are leading it. What began with $5 million in equity in November 2000 has grown to $126 million, if you include OCI as of 12/31/2025.

Turning to our fourth quarter performance. The momentum we built throughout the year accelerated further and culminated in a record quarter. Net income for the fourth quarter was $4.85 million, increasing by about $0.5 million from the third quarter and by more than $900,000 from the prior year's quarter. This growth was driven by continued core banking strength and disciplined execution across the franchise. The earnings per share grew from $0.18 last year fourth quarter to $0.21 this past quarter. We are expecting to be able to maintain a range of $0.18 to $0.21 a quarter going forward.

Net interest income rose by more than $800,000 quarter-over-quarter to $11.87 million, supported by higher loan balances, disciplined pricing and continued improvement in funding costs. This past quarter versus same quarter 2024 had an increase of over $2.6 million. We hope to break $50 million this year in net interest income, God willing.

While noninterest expenses increased modestly during the quarter as we continue to invest in personnel, technology and infrastructure, revenue growth once again outpaced those costs. Noninterest income totaled $1.73 million for the quarter, remaining well above year ago levels despite lower loan prepayment activity. Going forward, we expect our staffing to be able to stay flat while being able to support our growth until around $3 billion in assets. As a result, profitability strengthened further, with pretax income increasing by approximately $800,000 from the third quarter. These results reflect balanced revenue growth, disciplined cost management and the operating leverage of a scaled banking platform.

On Slide 6, we show our strong fourth quarter results translated into record profitability for the full year. For 2025, pretax pre-provision earnings reached approximately $24.21 million, an increase of about $4.35 million or nearly 22% compared to 2024. This reflects both strong revenue growth and disciplined expense management. Our core return on average equity for the year was approximately 21.6% with fourth quarter core ROE of 22.9%. These are exceptional levels of profitability, particularly for a bank that continues to grow at this pace. I am very proud of these year-over-year numbers, to go from $4.2 million in 2021 to $24 million, a 600% growth in 4 years.

Slide 7 captures the continued transformation of OptimumBank as both a franchise and an organization. Our employee base expanded further during 2025 as we invested in talent across lending, operations and technology to support our growing platform. These investments are intentional and are already translating into stronger execution and operating leverage.

On the balance sheet side, total assets grew to approximately $1.11 billion at year-end, representing nearly $179 million year-over-year growth during 2025 and a multiyear compound annual growth rate of 33.3% since 2021. From a profitability standpoint, full year net interest margin reached 4.28%, up 45 basis points from 2024, while core pretax pre-provision earnings of $24.2 million demonstrate how investments in people, systems and lending capabilities are driving sustained performance.

This slide also reflects the continued evolution of our franchise footprint. Each phase of our expansion has been deliberate and aligned with where our customers live and do business, supporting relationship-driven growth and long-term franchise value. Collectively, these elements reinforce a simple message. OptimumBank is operating at a higher level of scale, efficiency and capability than at any point in its history, and we are well positioned for the next phase of disciplined growth.

With that, I'll turn it over to Elliot to walk through the financial drivers behind these results in more detail.

Thank you, Moishe. As you discussed in Slide #5, the fourth quarter reflected strong growth in net income and net interest income. I'll build on that overview by walking through the underlying revenue drivers, funding costs and expense trends shown on Slide #8.

Total interest income increased during the quarter, driven by continued loan growth, disciplined pricing and strong asset yields. Diversified interest income streams remain consistent and supported the expansion of our earnings asset base. When we look at noninterest income, it totaled $1.73 million for the quarter. While lower than the third quarter due to the reduced loan prepayment activity, core fee income, including service charges, remained strong and well above year ago levels. Funding costs continue to improve on a rate basis, while total interest expense increased modestly due to the balance growth, lower deposit pricing and disciplined funding mix supported margin expansion.

Total noninterest expense increased to $6.74 million, reflecting planned investments in personnel and technology to support growth and scale. Importantly, revenue growth continued to outpace expense growth, resulting in $794,000 sequential increase in pretax income. This translated into sequential earnings growth for shareholders, with basic earnings per share increasing to approximately $0.42 and diluted earnings per share increasing to approximately $0.21 for the quarter.

Now looking at Slide #9. Here, we see that it provides a year-over-year view of our full year performance and highlights the scale of OptimumBank's earnings growth in 2025. Net income for the year totaled $16.65 million, an increase of $3.52 million or nearly 27% compared to 2024. This profitability was driven by strong balance sheet growth, improved margins and disciplined expense management. Net interest income increased by $7.9 million year-over-year, reflecting continued loan growth and net interest margin expansion.

We also achieved meaningful improvement in funding costs during the year. Total interest expense declined on a year-over-year basis, reflecting disciplined liability management and an improved funding mix. In addition, total noninterest income increased by $2.15 million compared to 2024, driven by growth in service charges, SBA-related activity and other fee-based revenue streams. Taken all together, these full year results confirm that our strategy is focused on managing funding costs, expanding high-quality loan growth and scaling fee-based income, which are delivering significant improvements in core profitability and the bottom line.

Now as we move over to Slide #10, let us review the growth and momentum across our key areas of loans, deposits and noninterest income. Gross loans ended the year at $958.79 million at December 31, 2025, reflecting a year-over-year growth of $154.55 million or 19.2% as compared to December 31, 2024. Loan growth remained well diversified and relationship-driven, consistent with our focus on asset quality and disciplined underwriting. Our loan growth compound annual growth rate since 2021 is 39.75%. And our yield on loans averaged 6.98% for the year, reflecting strong pricing discipline and portfolio performance.

On the deposit side, total deposits ended the year at $931.75 million, representing year-over-year growth of $159.56 million or 20.7%. Noninterest-bearing demand deposits totaled $266.52 million or 28.6% of total deposits. The cost of interest-bearing deposits averaged 3.47%, supporting a favorable funding mix across all deposits.

We also continue to see strong momentum in noninterest income. For 2025, total noninterest income was $6.77 million, representing 46.5% year-over-year growth and a 39.79% compound annual growth rate since 2021. This growth continues to be driven by service charges, SBA-related activity and other relationship-based fee income, reflecting the increasing diversification and scalability of our revenue mix.

Next, on Slide #11, we highlight our consistently well-managed credit trends. Our allowance for credit losses to loans ratio stood at 1.07% at December 31, 2025, reflecting appropriate reserving levels and continued discipline in credit risk management. Our nonperforming assets to total asset ratio stood at 0.32%, positioning us well below national peer levels and underscoring the conservative underwriting standards applied across the loan portfolio. Most importantly, our net charge-offs to average loans for the year were 0.04%, reinforcing the high quality and conservative underwriting that define our loan book.

Turning to the balance sheet now on Slide #12. We closed 2025 having surpassed the $1 billion asset milestone. Total assets increased by $178.75 million year-over-year to $1.11 billion at December 31, 2025. This strong asset growth was well funded, with total deposits increasing by $159.56 million to $931.75 million over the same period.

On the funding side, we maintained strong balance sheet discipline, supported by ample on and off-balance sheet liquidity. Finally, reflecting on strong earnings retention and disciplined capital management, total stockholders' equity increased by $18.71 million year-over-year to $121.9 million at December 31, 2025.

Finally, as we move over to Slide #13, we wrap up with a summary of our compelling investment opportunity. Our rapid organic growth continues to significantly outpace peers, as demonstrated by our loan growth compound annual growth rate of 39.75% and our deposit growth compound annual growth rate of 33.6% from December 31, 2021, through December 31, 2025. Tangible book value per diluted share increased to $5.18 at year-end. The efficiency ratio remains highly competitive at 49.59%, well below the peer levels of 67.3%. Our net interest margin of 4.28% also compares favorably to the peer level of 3.83%, highlighting the strength of our earning capacity relative to peers.

In short, this was another strong and disciplined year. We maintain solid capital, a well-managed balance sheet and the flexibility to continue delivering consistent long-term value. Moishe, now back to you.

Thank you, Elliot. As we conclude today's presentation, I want to reflect on the significance of this year for OptimumBank. In 2025, we marked our 25th anniversary, and we did so while delivering the strongest financial performance in the company's history. For a century, OptimumBank has remained focused on disciplined growth, conservative risk management and building long-term relationships with our customers and communities. This year's results demonstrate that those principles continue to scale effectively as the franchise grows.

Looking ahead, our priorities remain unchanged. We will continue to deploy capital prudently, invest in our people and infrastructure and position the bank to deliver sustainable long-term value for our shareholders.

With that, I'll turn it back to Seth to open the call for questions.

Thank you, Moishe. Before we open it up for questions, I'd like to thank Moishe, Elliot and Tim for their insights today. OptimumBank continues to deliver strong financial performance, and we appreciate those taking the time to learn more about us.

Now let us open it up for questions.

[Operator Instructions] As we currently have no questions in the queue, I will hand it back to Seth to handle the written Q&A.

Thank you, Aidan. Appreciate that. Well, we've got quite a number of questions that have come in over e-mail. I encourage those that are watching and listening that should they have any additional questions, they can feel free to e-mail me at this moment. My e-mail address, for anybody that needs it, is [email protected]. And before we get started with a few of the written questions, I see that one of our analysts, Ken Billingsley, has a question. So let me turn it over to Ken for our first question. Ken, I think we got you.

I guess, could you expand on the opportunity for the bridge to HUD financing to FHA and just the platform for loans to skilled nursing and senior housing? Can you talk about the potential and where you see that fits in and how large that can get?

Yes. So Ken, thank you for the coverage. Thank you for the question. And so -- this is Moishe. So the strategy behind it, first of all, just to give you an idea is our bank as a stand-alone bank is thriving. And one of our areas where we're thriving is the nursing home space, skilled nursing facility space, their need for accounts receivable financing. And separately for lending on property companies, the landlords.

So we started doing that. That's my background, as most people that are on this call probably know. And we're well known in the space, and we've so far accumulated between 50 and 100 clients at the bank that are -- have accounts receivable loans or facilities. And it's continuing to grow. We go to the conferences. And we had stayed away from the property lending because of the risk associated with the building getting decertified, that's a big risk for a bank. We stayed away from that for the most part. But we started doing it recently, knowing full well that the transition would be to go from the regular propco loan to a bridge or a propco plus a bridge and then go take to HUD, where that takes us out.

So what we expect to occur -- and I can elaborate on this. If anybody wants to talk about it separately offline, I'm glad to go into the real details on how this thing grows. But easily, this would bring value to the holding company as a separate vertical outside of the bank. The -- all the transactions as far as bank accounts, escrows and all the servicing, the bank would be earning fee income and would have noninterest-bearing deposits at the bank.

And our side of our balance sheet, that's a separate vertical, we expect that easily to get to within like 2 years, 3 years to get to $0.25 billion. And exponentially, that portfolio should grow. And in the long run, we expect to be able to make a SOFR 5, SOFR 6 handle on the interest rate. And in the long run, the residual value will be the servicing that the bank is going to have where we could build up a whole servicing portfolio. And that should hopefully grow $1 billion, $2 billion, even larger.

Really, sky is the limit here. We have good relationships. We're well known in the marketplace, and it should grow. And the way we're going to handle the growth is we will be lending based on HUD standards. That's going to be the HUD lending protocol, which is not what the bank does. Banks -- we're doing -- we have loan policies on how we lend. And on the HUD protocols, we're going to be following along their guidelines with only exceptions based on look-back period of how long we're looking at for the financials or some minor thing that we're able to underwrite to. And again, we expect to be able to get a line of credit from, at this point, the big banks that want to lend us, CIBC, Huntington Bank and others that potentially will be a lender for that vertical. And we expect it to be a really strong contributor to our bottom line. So Ken, I hope that answered your question.

Okay. Aidan, unless you have any others from any of the analysts, I'm going to move on to a couple of e-mail questions that we've received.

Yes. There is no one else in the queue, so please go ahead.

Okay. Fantastic. Very good. So first e-mail question that we have has to do with our EPS. So it says you were guiding to roughly $0.18 to $0.21 quarterly EPS going forward. What assumptions on loan growth, margin and funding costs underpin that range?

Okay. So we're guiding to $0.18 to $0.21 because that's what we're currently running. Like we said earlier in the remarks, we really don't expect labor or payroll to increase, other than inflationary cost increases. We expect that to stay relatively flat. So everything going forward for the next $1 billion of growth, we should be able to add mainly to the bottom line. Again, I add back provisioning as we haven't had a bad loan in many, many years. So I had that back in my thought process.

So I would say that we really expect to grow our loan portfolio between 25 -- 25% is really the bogey, but we expect to beat that. The funding, we expect to be able to maintain our spread that we have, which today is like 4 -- our NIM is like a 4.28%, which is what we said. We expect to be able to keep that. All loans -- we still have loans that are repricing that are from where rates were at 5% that are getting repriced at 7% plus. And all of our new loans are at still SOFR 350, SOFR 400 for the most part.

So we expect our margins to stay the same. And to model out, we're just going to be modeling out the increase in interest income between the top line and the cost of our money. And so that's why we're giving that guidance. We expect to beat it, but even more so, first quarter will really be -- and really, first quarter probably ain't the best judge. Second quarter, we'll know really how the whole year, and I'll probably revise what we expect the year number to be as $0.80 seems like something that we should be able to beat. And so we'll see where that goes.

Okay. Very good. What is -- I got another question here regarding loan growth. The question is loan growth was around $155 million in 2025, seemingly around 20%. What is sustainable long-term growth rate without compromising on credit quality?

So again, our portfolio and our borrowing base, the people that come to us, our borrowers are loyal customers of the bank. And like we had at the client appreciation, we called it a family reunion as our borrowers really are part of the family. And so we really expect that our growth should be 25% or higher. And I don't see us having a problem doing that. I think we already closed out January with more than $60 million in loans out the door. So we're already on our way to hitting and breaking 25%.

Very good. The next question we have here is regarding AllianceBernstein and their increased economic exposure via preferred equity or preferred stock. How should we interpret that? And could you -- could further conversions occur?

Okay. So that's a good question because we're trying to make it simpler for the investor so they understand our preferreds. Our preferreds was only a mechanism to be able to allow certain insiders like myself to own more than 9.9% and not get in trouble with the regulators. The regulators have not approved where anybody can own more than 9.9%.

And so the preferreds really just act as a nonvoting common. The reason why we use preferreds back when we used them was that our original charter only allowed for common and preferred and was never allowed for any other kind of series of equity. And so that's how we did it, and we continue to -- it just sits there. As we continue, we expect everybody to convert at some point to common stock, new shares that we issue on new investors that come in. We continue to hold firm and not sell stock that's dilutive to our current shareholders.

We know that we're worth a lot more than our stock is trading at. So when we give somebody book or a little bit above book, that's a great discount for them also. And so we're going to hold firm on that. And as more shares get sold, more preferreds could get converted. And so -- and really, we understand that the shareholder out there might have a hard time understanding because it is kind of complicated. And it wasn't supposed to be. It was only just supposed to be a guy like me that wanted to support the bank that I love, and I had no other way to put money into equity outside of common that was voting was we had to create something for me to buy the stock and put the equity in the company. And that's what that is. Hopefully, that answers the question.

Okay. So Moishe, we have one person that asked a series of questions that is somewhat aligned with the question regarding AllianceBernstein. So I'm going to do my best to kind of simplify some of these questions, but they go hand in glove to what we were just talking about here.

So the questions start with regarding the 10.6 million shares of Series B preferred that you and one of our other directors, Michael Blisko, own. And the question talks about dilution and timing of potential conversion and just walking through what that looks like in terms of EPS versus diluted EPS and how investors should think about all of that.

Well, that's why we made a change, I think it was last quarter, and that's how it was presented. Really for the investor public, the easiest way to follow what our numbers are is by looking at the diluted EPS. That diluted EPS -- and this is what we're giving guidance on is the 18 to 21 -- is the true number. There's nothing else confusing that number. That's showing all the shares between common and converted preferred, divided by the net income. And that's the easiest thing, and we restated in the last quarter's deck and now this quarter, year-end deck, you're able to see what the diluted earnings per share was. And you could see how our growth has been and how we've increased the return by share quarter-over-quarter or year-over-year.

So I think that answers for the most part, that series of questions. I'm just going to ask -- the question has to do with how that instrument has supported the growth over the years. When did sort of the Series B preferreds start? And you already accomplished why it started, but how has that supported the bank's capital position?

Well, again, most bank investors understand, right, that you need capital based on ratios, you need to have the capital to handle growth -- handle a balance sheet. So -- and we've been holding to about a 10% as a minimum, maybe 9.75% as a minimum. And we've been running over 11% actually. So we have the capital we need to do what we got to do. But with some of these new objectives, the HUD, bridge to HUD and a couple of other verticals that we're hoping to get accomplished in 2026, we will need to raise equity or sub debt or a mixture of the 2. And our friends at Piper Sandler, I'm sure, will be glad to help us with that, as well as the other guys that we deal with.

That being said, this is as simple as it comes. A balance sheet that's producing money in the door with no dividend yield -- the money in the door is, for us, the earnings per share or they are rather the ROE, GAAP ROE, 14%, 15%, 16%. Core is probably 20-something percent, like we talked about. So for me, the cost of money is that. If I sell equity and again, the cost of equity is 20%, but I'm able to take that dollar and lend it out 10x and we're making a 4% spread, that's a 40% return on a 17%, 20% cost, which is good. Sub debt, of course, cost us 6.5% to 7%. And the money is out the door with, again, the 4% NIM. You're bringing in, again, 40% on the cost of 7%, that should help us make our earnings grow and handle the growth. We have this regular organic growth that's coming in the door every day of the week. And so that equity is what supports our growth at the end of the day.

Okay. Very good. I got 2 more questions here that came in by e-mail, and then we'll hand it back to see if anybody else in the audience has questions before wrapping up. So second to last e-mailed question is, which sectors are driving loan growth today? And are you seeing any emerging stress in South Florida commercial real estate or health care segments?

So to answer that -- this question has been asked in other earnings calls. The starting point is to understand our customer. Our customer, I call it the cult following. The people that bank by us are friends. They're part of the family. And we don't have the stresses and we don't have bad loans. We don't have that -- and it's based on relationship at the end of the day. These guys might have a little bit of stress in their portfolio or what they do, but they don't -- it doesn't hurt our bank because they don't want to hurt us. And so they will keep paying us.

And we have good credit admin to start with, Tim and Elliot and Ryan and others from the management team and the workers bees themselves do a really good job. Very proud of the team that we have. That being said, the growth has been the same since at least the last 5 years, which is relationships. People are constantly e-mailing us scenarios on loans in South Florida, in Florida and then other areas. I mean, we look like our community is 5 counties in South Florida, but as well as the Jewish communities all over the country.

And so we're amongst the people. People come to us and talk to us. And like today, we're in Tampa at an event, and we're supporting the local communities and lending money locally. And that's what's been driving our growth, and that should continue. And that's scalable in the long run. That's scalable probably through $3 billion, $5 billion, $10 billion of assets.

Okay. Very good. Last e-mail question I have here for you, Moishe, is as you continue to scale beyond $1 billion in assets, what balance sheet or regulatory thresholds should investors be mindful of that could influence growth pace, capital needs or profitability?

So I would say for this in detail -- whoever sent the question, feel free to reach out to us. Elliot probably can get more detail, but the most important thing for an investor to know is we've taken a point of view of building infrastructure to support our growth. And so we already have for us, the cost of doing business is the same cost that we are going to have when we double or triple what we are today. So for an investor, you look at our results today, our results are only going to improve. We're going to grow without it costing us more money to grow.

And so from that point of view, I wouldn't be wary at all as an investor, at least to $2 billion or $3 billion. And I think -- and even from the accounting department, I think we're all set through $3 billion. I don't know past that, Elliot can elaborate on that now or somebody could just reach out afterwards, and we're glad to talk about it. But that's -- but we're ready to go. I mean, we're -- we could keep growing, and it's not going to cost us any -- other than the cost of money, it's not going to cost us any real dollars and cents that would impact an investor.

Okay. Well, I don't have any more e-mailed questions. So I think where we're going to leave it at this point is, Aidan, if you see any further questions either coming in from your side or any of our analysts that would like to pipe up and ask any questions live, we can certainly do that. If Elliot or Tim have any additional thoughts that they would like to share with us, we can certainly close out with them as well. Otherwise, we're going to wrap up.

Absolutely. Yes. I can just give our instructions again. [Operator Instructions] No one has queued up so far. So I will pass it back to you, Seth.

Very good, Aidan. Well, I don't have anything more from our side. Elliot or Tim, do you have any final words of wisdom?

No, sir.

Moishe, Elliot, Tim, we appreciate everybody's insights today and appreciate everybody joining us, and we look forward to having you guys on for our first quarter 2026 call. Feel free to reach out any time. Thank you.

This concludes today's call. Thank you for attending. You may now disconnect.

Ladies and gentlemen, thank you for joining us, and welcome to OptimumBank Holdings, Inc. Q3 Earnings Call. [Operator Instructions] I will now hand the conference over to Seth Denison, Managing Director of Investor Relations. Please go ahead.

Good morning, everyone. My name is Seth Denison, the Managing Director of Investor Relations for OptimumBank Holdings, and we're here for our third quarter earnings call. To my left is Moishe Gubin, the Chairman of the Board. To Moishe's left is Tim Terry, our President and CEO; and to Tim's left is Elliot Nunez, who's our CFO.

This quarter carries special significance as November marks OptimumBank's 25th anniversary. Since our founding in 2000, we've grown from a single branch in Plantation, Florida, into a $1.1 billion institution serving businesses and families across South Florida. It's a proud milestone that reflects the dedication of our team and the trust of our clients and shareholders.

Today's call may include forward-looking statements based on management's current expectations, assumptions and beliefs about OptimumBank's business and the environment in which it operates. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated. The call is being recorded, and we refer you to our SEC filings, including our most recent Form 10-Q for additional information regarding risk factors and forward-looking statements. Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as identified in the presentation deck.

Before I move into the results, I'd like to take a moment to introduce the leadership from our team. Here, you can see Moishe Gubin as the Chairman of the Board; Tim Terry, our President and CEO; and Elliot Nunez, our Chief Financial Officer and Executive Vice President. This leadership team has built the culture, stability and performance we're discussing today. I'm joined on the call by Moishe and Elliot, and Tim is also with us and will be available for Q&A following our prepared remarks.

With that, I'll turn it over to Moishe Gubin to begin the presentation.

All right. Thank you, Seth, and good morning, everyone. This quarter carries special meaning as we celebrate 25 years of service to our communities. Since opening our doors in November 2000, OptimumBank has grown from a single branch in Plantation into a thriving financial institution with total assets approximately $1.1 billion as of September 30, 2025. As you see on this slide, it shows the time line of that journey from our founding vision to where we stand today. Our growth has been built on conservative lending, strong capital management and deep community relationships that reflect the core mission of a true community bank.

Turning to Slide 5. Our net earnings for the third quarter were strong. I believe it's our best quarter we've ever had, increasing by just over $700,000 to about $4.3 million compared with roughly $3.6 million in the second quarter. This gain was driven by core banking strength and disciplined execution. Net interest income rose by about $800,000 quarter-over-quarter from a little over $10.2 million to just over $11 million, supported by a $733,000 increase in total interest income to approximately $16.3 million.

While noninterest expenses increased modestly, up around $400,000 to about $6.6 million, revenue growth outpaced those costs. Noninterest income also improved sequentially, up nearly $150,000 to around $2 million. Profitability strengthened again this quarter with net earnings before income taxes up just over $800,000 from the prior period, a testament to balanced revenue growth and cost control.

On Slide 6, we highlight how these results translate into profitability. Pretax pre-provision income reached approximately $17.35 million year-to-date, representing an annualized run rate of about $23.1 million. Our core return on average equity ROE, which adjusts for tax expense and provision for credit losses, was approximately 22.6% for the quarter, one of the highest levels among community banks nationwide. This performance demonstrates the resilience of our earnings engine and the effectiveness of our balance sheet strategy.

On Slide 7, Slide 7 captures the transformation of OptimumBank as a franchise and as a team. Our employee base has expanded to close to 100 people from about 73 people a year ago, which underscores the culture of momentum and the depth of talent driving our performance. On the balance sheet side, total assets, like I said earlier, have now surpassed $1.08 billion, close to $1.1 billion, representing close to 35% compounded annual growth rate since 2021. That's a number we're very proud of. That acceleration reflects not just scale, but disciplined execution over multiple years.

From a profitability standpoint, our net interest margin of 4.24% year-to-date and core pretax pre-provision earnings of $17.35 million or $23.1 million annualized show how the investments we have made in our people, our systems and our lending platforms are translating into sustained performance.

This slide also highlights the evolution of our physical footprint. From our beginning in Plantation in 2000 to Deerfield in Fort Lauderdale in 2004 and now to the opening of Northland Beach in 2024, each step reflects an intentional expansion strategy. We have continuously aligned our branch presence with where our customers live, work and do business, ensuring that our growth remains anchored in community connectivity and long-term franchise value.

Taken together, our growing team, our expanding asset base, our profitability trajectory and our broadened geographic reach tell the story of a franchise that is stronger, more resilient and more capable today than at any point in its history. It speaks to the discipline of our execution and the ambition of our vision as we move toward the next stage of our growth.

With that, I'll turn it over to Elliot to walk through the financial details behind this momentum and discuss how these results position us for the quarters ahead. Elliot?

Thank you, Moishe. Let us look at the drivers behind this quarter's strong financial momentum, which you see detailed here on Slide #8. Moishe highlighted the strong growth in net earnings and net interest income. I'll focus on the engine driving that performance and the nuances in our expense management.

Our total interest income increase of $733,000 was primarily fueled by a significant jump of $682,000 in other interest income, reaching $2.09 million for the quarter, an important indicator of diversified yield generation. On the noninterest side, the total increase of $148,000 was driven by strong improvement in service charges and fees, up $153,000 to $1.25 million.

Regarding funding costs, total interest expense declined modestly by $73,000, reflecting a $49,000 drop in deposit interest expense and the virtual elimination of borrowing costs for this quarter. While total noninterest expenses increased by $423,000 to $6.6 million, this was mainly driven by planned investment in the franchise and in our personnel with a rise of $266,000 in salaries and employee benefits costs and $163,000 increase in data processing, all supporting our operational scale.

High revenue growth successfully outpaced this planned operating expenses, resulting in the $808,000 increase in net earnings before income taxes. This growth translated into sequential increases for our shareholders. First, basic net earnings per share increased by $0.06 to $0.37. Undiluted net earnings per share increased by $0.03 to $0.18.

Shifting to a year-over-year view for the first 9 months on Slide #9, the numbers illustrate the scale of our ongoing transformation. Net earnings year-to-date totaled $11.8 million, a strong $2.6 million increase compared to the first 9 months of 2024. This success was driven by a $5.2 million increase in net interest income compared to the prior year period. We achieved impressive control over our funding costs with total interest expense decreasing by $2.3 million year-over-year, reflecting strategic management of our liability structure.

Total noninterest income also showed excellent growth by increasing nearly $1.5 million. In short, the year-to-date results confirm that our strategies focused on managing funding costs and expanding high-quality loan growth are delivering significant improvements in core profitability and the bottom line.

Next, as we move on to Slide #10, let's review the growth and momentum across the key areas of loans and deposits. Gross loans ended the quarter at $813.7 million, up from $784.6 million last quarter. This increase of $29.1 million represents a strong acceleration of loan growth compared to last quarter, affirming our commitment to quality asset generation.

Our loan compounded annual growth rate remains robust at 36.8% since 2021. Our portfolio is well diversified and our yield on loans remained strong at 6.95%. On the deposit side, total deposits grew to $959.5 million, meaning we brought in $80.6 million in new deposits during the third quarter alone. This growth included an increase in low-cost noninterest-bearing deposits, which represents 33% of the total mix, helping to keep our cost of interest-bearing deposits low at 3.51%.

We also continue to see strong drive in noninterest income, which, on an annualized basis, is $6.7 million, representing a 42.7% compounded annual growth rate since 2021. Importantly, the composition of this income stream continues to expand and diversify.

Of the year-to-date total of $5.1 million, approximately $3.4 million came from service charges, $903,000 from SBA loan sales and $755,000 from loan prepayment fees. This mix reflects both the stability of our core fee businesses and the incremental contribution from strategic lending activities.

Next, as we look at Slide #11, we highlight our consistently well-managed credit trends. Our allowance for credit losses to loans ratio stands at 1.23%, ensuring we are appropriately reserved and above the national peer average of 1.17%. Our nonperforming assets to total assets ratio stands at just 0.33%, positioning us well below the national peer average of 0.56%. Most importantly, our year-to-date net charge-offs to average loan remains exceptionally low at 0.03%, underscoring the high quality and conservative underwriting that defines our loan book.

Now turning to the balance sheet on Slide #12. We successfully crossed the $1 billion in total assets mark this quarter. Total assets grew by $83.9 million to $1.08 billion as of September 30, 2025. This strong asset growth was well funded as total deposits grew by $80.6 million to $959.5 million. We saw strong growth in noninterest-bearing demand deposits, which increased by $54.2 million and across time deposits, savings, NOW and money market deposits. We saw a rise of over $26.5 million.

On the funding side, we maintain an excellent balance sheet discipline, reflecting no Federal Home Loan borrowings during the quarter. Finally, reflecting on strong earnings retention and capital management, total stockholders' equity increased by $5.5 million sequentially to a grand total of $116.9 million.

As we move forward and we take a look at Slide #13, we can wrap up with a summary of our compelling investment opportunity. Our rapid organic growth continues to satisfy to significantly outpace peers as demonstrated by our loan growth compounded annual growth rate of 36.8% and deposit growth compounded annual growth rate of 37.3% since 2021, both far exceeding national peers. Tangible book value per share rose to $4.97 at quarter end on a fully diluted basis. The efficiency ratio remains highly competitive at 50.7%, well below the peer average of 68.02%.

Our net interest margin of 424% year-to-date further highlights our strong earning capacity relative to peers. In short, this was another strong and disciplined quarter. We maintained solid capital, a well-managed balance sheet and the flexibility to continue delivering on consistent long-term value. At this moment, Moishe, back to you.

Thanks, Elliot. As we conclude this presentation, I want to just add a few comments. One comment being that this was the first quarter where we cleaned up our capital stack and now the earnings per share is reads right of a diluted basis versus a nondiluted basis, and that should make it a lot easier for investors to see the value in our stock as we're trading at a very low multiple based on earnings.

With that being said, most important for today is to reiterate how proud we are that November is our 25th anniversary year, and we're looking forward to making the next 25 years a lot better than these past 25 years. And for a quarter century, OptimumBank hasn't just been growing. We've been building a relationship-driven culture and a strategic operational model that truly punches above its weight.

Our focus remains clear, which is utilizing our strong capital and dedicated team to reinforce our position as one of the most dynamic and rapidly growing community banks in South Florida, all while staying true to the roots we established in the year 2000.

With that, I'll hand it back to Seth to open up Q&A.

Thank you, Moishe. Before we open it up for questions, I'd like to thank Moishe, Tim and Elliot for their insights today. OptimumBank continues to deliver strong financial performance, and we appreciate those taking the time to learn more about us. With that, let's open it up for questions.

[Operator Instructions] We have no questions in queue. I'll turn it over to Seth for any written Q&A provided.

Fantastic. Thanks, John. So we've had here with the 3 questions that have been e-mailed in so far. I'm going to read those e-mailed questions for anybody else who's listening that might want to e-mail any questions in, feel free to do so. Anybody who doesn't have my e-mail address, you can reach me at [email protected], that's [email protected].

So with that, I'm going to start with our first e-mailed question. Moishe, this one is addressed to you. Q3 NIM increased to 4.37%, while year-to-date NIM stands at 4.24%. What drove that expansion in Q3? And how does year-to-date performance compare with margin levels going forward?

Well, that's a good question. Our model that we see is that as older loans are running off that are at a lower interest rate, newer loans are being put on the books and at a faster clip at a higher interest rate. And that's really helping our NIM. Our model or what we do is really we're a lender, right? So we're out there lending folks. And today's pricing in the marketplace is a SOFR, let's say, SOFR 350 to SOFR 400. And we're out there with a lot of loans in our pipeline and a lot of business that's being brought to us, and we should be able to keep doing that.

At the same time, while that's going on, the folks in ALCO at the bank are actively looking at any opportunity to lower what our interest expense, right? So if our money gets cheaper and our money going out the door stays somewhat flat, right, that's your NIM expansion right there. In a nutshell, really nothing more complicated than that, easy banking.

Very good. Okay. This question is -- it's not addressed anybody in particular, so I'll just ask it and the 3 of you can opine. It has to do with deposit mix. Deposits grew by approximately $81 million, roughly a 9.25% quarter-over-quarter growth. What's driving this type of growth? And how is the deposit mix evolving interest-bearing versus noninterest-bearing? And any thoughts on future funding growth?

So I'll answer that one also. Easy enough. We've talked about year-over-year where our customer base is like a cult following. And that remains true. We -- as we continue to grow, we continue to add members to the family here, and we continue to grow our deposit base. And historically, if you look at our numbers year in and year out, we run about 1/3 of noninterest-bearing deposits.

And then from the other 2/3, we run half of that is really relationship money that wants a higher interest rate, bigger depositors or this or that. So 2/3 of our real customers are our people. The last 1/3 is really quick rate and raising money where we don't really have a relationship so much with the customer. So we have to be within a market range to be able to attract deposits.

So that being said, month-over-month, quarter-over-quarter, it remains true that the folks that are our people are -- their businesses are thriving and growing. And I think you see it nationally as well. I think deposits are up. And that's the same thing by us.

And if we need more deposits, we're able to raise them and raise and quick rate. And so that's how our model works. And it's really centric to taking care of our people, and they remain loyal to us, and that's where our deposits come from.

Okay. Very good. Next question is asking about loan growth. It says total loans grew about $29 million. Which loan segments are driving that growth? Which segments are contracting? And how do you feel about overall credit risk?

I'll let Tim answer that.

Well, I wouldn't say that any categories are necessarily contracting. But as has been the case in the past, the majority of our growth is in commercial real estate. And in addition to the growth that's seen there through 9/30, we funded $50 million in new loans in October. We'll do $50 million probably in November and $50 million in December, also. As far as asset quality goes, our asset quality is strong. We haven't changed our underwriting metrics, and we hold our borrowers to a relatively high standard.

I would add to what Tim said is that, again, our borrowers are also kind of part of the family that are the call following. And we get vanilla deals from people that want to bank with us, and they could reach shop and probably find 0.5 point cheaper than us or 0.25 point cheaper, but they don't get what they get in our bank and our white glove service. And with that, when they come in with a deal that -- and like Tim said, it's mainly CRE. But when they come in with a deal that's for multifamily and then the next guy is coming in for a hotel deal and the third guy after that is coming in for a health care deal, right?

We're not saying that concentration limit stops us for that segment, and we just take care of our customers and we manage concentration risk differently outside of that point because we want to get -- we want to take care of our family members and give them what they need. And especially like we know we're not getting burnt on any of these deals. These are all people that are our customers that know us, we know them.

And the theme, by the way, of family, which is we're having our 25-year celebration. So the theme of family is the -- was what I'm pushing because that's how I feel certainly the way it's been here for at least the last 10 years. I've been involved in the bank about 16 years. And maybe not day 1 was family centered, but certainly within the last 10 years, everyone came together. And really, it's a testament to our results is really the people that are part of the family here, the employees, management, Board members, customers, depositors, borrowers, it's all to that. So when somebody comes with a need, as long as it fits our policies, and we'll find a way to do it. And so that I just add a little color to how the pipeline and the lending goes.

Okay. Our next question e-mailed was dealing with our capital to total assets. We ended the quarter at 11.7%. How does management evaluate capital adequacy relative to regulatory requirements and internal targets? And does this create room for additional balance sheet growth or M&A?

You want to answer that, Elliot?

I'll answer whatever you say. So just say whatever you want to. No, that's fine. In terms of the capital, I mean, when you look at our numbers versus peers versus our results, we have a very robust capital structure. We ended up at 11.71%. When we look at our bank, we are under the community bank leverage ratio, which mandates a well-capitalized bank to be 9%. So we're well above that. In terms of our own internal policies, we do take a consideration in our loan portfolio. We do some stress testing of our loans, and we make sure we have a little bit of buffer above that. But definitely, our capital on a go-forward basis, we expect it to be higher than 10% for sure, probably higher than 11% by the time we get to year-end.

So -- and what I would add to that outside of this point is that we've never had a problem raising equity whether it be friends or family or open market if the stock price is where it should be. That being said, we are aggressively searching for mergers and purchases of banks to grow our bank besides for what we're doing in regular growth, which, like we said, over the last 5 years, is about 35% growth. So we're looking actively for that. And at some point, we will raise capital in the open market with the investment bankers that we have already made relationships with. And we expect to not have a problem to raise the money that we need to be able to handle our balance sheet growth that we expect to have.

Very good. I have one last question here. How is the bank positioning itself competitively amid regional CRE dynamics, deposit competition and the broader economic environment?

So I mean that's the same answer to like everything else. It's all family. Our -- we -- if a guy is a rate shopper and they come to us and they're looking for a better rate, I personally, if I talk to them, say go to the other bank. Like it's -- if that's what's your metric that matters to you, then go get cheaper money. If you're -- what matters to you is for you to have a lender that you can call at 8:00 at night, 9:00 at night and you can have someone that could turn something around quickly that even before committee approval, already have the appraisal order and start on loan docs, right, you want to use our bank at the end of the day.

Not to say that we want every deal to be like that, but the point is, is that we're not -- what differentiates us is really our white glove and our culture that we have here and how we take care of our people. And the -- and our results is a testament that we're doing -- what we're doing is doing right by our customers and that's why we're growing the way we're growing. So I think that's really the answer. It comes down to the family concept again, and that's where our success lies.

That was supposed to be our last question, but I just got a last one here e-mailed now. Do you feel like you can attract New York City depositors given recent events? And is Florida an attractive destination anyway for New Yorkers and feel this could be a catalyst the bank could expand on? By the way, great work just thinking of some of the out-of-the-box ideas.

All right. God bless whoever that's from. So the starting point for us is our customer base today is not necessarily South Florida clientele. For the lending side of it, we want to have a connection in South Florida. But for the deposit side of it, really, it's the world at large. And as long as we know the customer, which is our #1 standard, we're able to open up accounts for people that could be in Israel, it could be in Japan, it could be Indian, it could be New York.

I think we have a lot of opportunity, assuming I'm alive and I'm well. We should be able to take this bank and at some point, be in New York, at some point, be in Illinois, at some point, maybe a couple of other places throughout the country where our network from our Board, including myself, is strong and where there's people that would support us, right, because it's all about doing good business, right?

The general thought is -- for us, we're Floridians today. My heart I still a little bit in New York, but relatively, I'm a Floridian today. And good banking, you got to know your customer, you got to know your market and you got to know really what's going on where you are. And so for us to really go crazy and start lending in New York, we do a little bit of loans in New York, but it's really a Florida customer or someone we know, part of the family, like I say, I'm going to keep drilling in the next 12 months.

But yes, I don't think the current political situation in New York, particularly is going to change our bank and where people are going to come to us because I think the people already come to us are our customers. I think Florida and all is going to benefit because I think people are going to flock here. who needs to -- that's the straw on the camels back. [indiscernible] was like visible beforehand walking over homeless people on 7h Avenue. I was like, I'm done with this.

I can't give up the Rangers that easy or the Mets, but yes, I think it will be -- I don't think it will be necessarily a big boom to us. It will be a boom to Florida, and Florida is booming to start with.

Okay. Gentlemen, unless you have any parting words, that was the last question that we had. Let me just check my e-mail one last time to see if -- that was it. That was the last question. So with that, I appreciate everybody taking the time today, and this will wrap up our Q3 earnings call. John, I'll hand it back to you to tie it off.

Thank you. This concludes today's call. Thank you for attending. You may now disconnect.