OptimumBank Holdings, Inc.

Good morning. The meeting will please come to order. I would like to start our meeting by introducing myself to you, for the three people that might not know who I am. I'm Moshe Gubin, chairman of Optum 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 Optum Bank 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, our scene 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. We'll go from there. All persons entitled to vote as shareholders or as proxies, please give their names to Elliot Nunez, who's 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 Optimec Holdings along with our officers whom I shall ask to stand upon being introduced. First is Michael Bliscoe. Good morning. Avi Zwelling. Good morning. Tom Percelli.

Good morning.

Joel Klein. Good morning. Steve Newman. Good morning. Management President and CEO Tim Terry. Good morning. And our delightful CFO Elliot Nunez. In the back of the room over there, we have Chief Lender, Jenny, 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 27th, 2026 to shareholders of record as of the close of business on March 9th, 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 percent 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 percent voting that's that's pretty good for a publicly traded company uh there's a quorum present and the meeting can now proceed to consider the matters that come before it the meeting now want to take consideration of proposal one the election of directors and set forth in the notice of stockholders Each director elected will hold office until the annual meeting in 2027, 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 be, shall have been duly elected and qualified. Moshe Govan, Joel Klein, Thomas Porcelli, Abby Swelling, Michael Bliscoe, and Steve Newman.

I second the nominations.

A motion has been made and seconded for the nominations of myself, Moshe Gubin, Mr. Klein, Mr. Percelli, Mr. Dwelling, Mr. Glisco, 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 Order and Corporation to authorize a class of non-voting 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 number four to approve the adjournment of the annual meeting, if necessary, to commit 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 one, two, three, and four. 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? And now to clear the polls, close. While the inspector of election is completing 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 email that the audience is free to send during or after my presentation. Email questions can be sent to sdenison, S-D-E-N-I-S-O-N, at optimumbank.com. And that email will also appear on the slide at the end of the presentation. So 2025 was another defining year for Optimum Bank 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, Optimum Bank was ranked number 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 a dollar higher than than where the stock is currently trading, which we believe further validates the strength and growing visibility of our platform. On slide five, you see a balance sheet. This graph tells a 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 billion-dollar milestone. The 26 versus 25 slide, slide six, Momentum is 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 seven, Altman Bank'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 non-interest 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 a 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. For ROE... Excuse me. 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 Daniel Monti MDC- presented anyway our deposit base is both diversified and high quality as of Q1 2026 nearly 305 million is a non interest bearing deposit. Daniel Monti MDC- Demand deposits representing a highly efficient source of funding, and I think that's actually higher than most of our peers. Daniel Monti MDC- Like most of our numbers this mix supports stability liquidity and long term earnings power our footprint remains focused but impactful with three 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 and low cost deposit demands, demand deposits alongside growth and 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 loan represents 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, where 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 discipline approach that has defined our success. I'm pleased to share that earlier this month, Optum 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 Optum 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 for diluted share over the past five 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 OptumBank. 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 Optimum Bank'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 matter 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 one year and until their successes are elected and qualified. Moshe Gubin, Joel Klein, Tom Percelli, Avi Zwelling, Michael Blisco, and Stephen 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 non-voting common stock for $6,699,923 against $172,576, abstaining $7,623.

Proposal 2 passes as indicated by the aforementioned vote.

The vote for proposal three is as follows. To ratify the selection of Hacker Johnson and Smith PA as the company's independent auditor for fiscal year 2026. For 8,947,652 against 20,338 abstain 23,743. The vote for proposal three.

So that carries as well. Proposal four to adjourn the annual meeting if necessary and further solicitation of proxies is not necessary as we collected enough votes for the three 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.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please raise your hand now. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. Please stand by while we compile the Q&A roster. Your first question comes from the line of Ken Billingsley with Compass Point. Your line is now open. Please go ahead.

Good morning. Thank you for taking my call. 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?

Yeah, I think we're safely in a position to be between 78 cents and like 84 cents, 86 cents. This quarter, our first quarter is always our worst quarter, which year over year, we killed last year. But if you can 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 20 cents on our worst quarter, I would expect that every quarter should surpass that. And God willing, I think we'll 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's the number today? Or was that just a case of hiring done at the end of the quarter and that just carried over into the first quarter? Or were there new people added?

What's the exact number for today?

We're 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 three million three billion dollars of assets so there shouldn't be as we grow the next tranche of you know uh growing our balance sheet we shouldn't be seeing an increase on the cost and incrementally we'll make more money on the on the next batch of revenue coming in the door last question if you don't mind um just under the branch deposits obviously miami drives that um

Fort Lauderdale had some strong growth in the quarter. So this is kind of a two-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 business. model and our people coming through the door today we don't do any real advertising you don't see us in the penny saver we're not we're not we're not we're not putting pay full page ads in the in in the sun times or any newspapers so we're we're we have a nice cult following and and derivatives of that coming in the door every day of the week to bring us business um we've built up a department that's really a white glove uh department to deal with uh not a right say because everybody should be getting white glove service here but but it's built out to be able to take care of you know, for better terms, you know, whales or bigger, bigger, bigger people that we got to chase down that are putting in $10 million at a time. And so that department has grown and, and, 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 moved there, they've numbered the rough. And so, yeah, I mean, I think things should continue the way they're going. It's literally every day of the week, you know, 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.

Well, thank you for taking my questions and congratulations on another strong quarter.

Thank you, Ken. Appreciate you.

Your next question comes from the line of Gaurav Mehta with Alliance Global Partners. A kind reminder to press star six to unmute. Your line is open. Please go ahead. Mr. Mehta, a kind reminder to press star 6 to unmute. Your line is open. Please go ahead.

Hi, good morning. 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 said 25% loan growth expected in 2026. Is that still the driver behind that guidance or are you expecting higher loan growth?

Yeah, I honestly, we, we, our original numbers are based on a 25% growth. That's what, that's what, what our budgets are based on. That's what, that's our baseline goal. Right now, I think we're really 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 and to grow our business. That being said, you know, that, 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 20 cents a quarter and really probably closer to 22 cents a quarter. That's why the high end of the number is 88, and that's not putting in any of the, I didn't sit there in a 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, you know, instead of, you know, 88 or 86, that might, you know, bring it over 90. I haven't figured out that math, but I would bet, that's why if you give it a range, 76 was what we said last year, 78, I'm certain we're going to hit, you know, 84, 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, thanks for that color. Maybe a follow-up on the expense side. Can you remind me again the salaries and employee benefits? You reported 4.9 million, which is higher than last quarter. As you go forward, the number that you reported in one queue, is that the right one, right?

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

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

So yeah, 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, you know, Michael and I, Michael Bliss goes, my partner was on the board here. We both very well known in the healthcare business. And years ago, we started doing healthcare lending to the more secure stuff, which is AR lending. And as years have gone on, you know, people, 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 healthcare and it's taken a you know, what we're lending to. And, and, and, and even the board had to get more comfortable with that kind of lending and how it goes. So we started small, like million dollar loans and, and it was a small, smaller, smallish portfolio. And, and once everyone got more comfortable and understand a little bit more you know, so the, the amount of leads that are generated by both Michael and I, when it comes to healthcare, you know, is, is sizable. And with that, you know, the, the, the you know, the, 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 healthcare world is to take those loans and then take long-term perm financing with Hyde, which typically have between 30 and 40 year straight line M at a, you know, pricing of 10 year treasury plus 175, which is a great exit for folks. Um, You know, HUD's a little bit difficult to deal with at times, so it's a little bit of pain. But ignoring that, it's cheap money for long term. And so 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, you know, 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, maybe lent to it, 70 million lent, small piece of our portfolio. And we have a lot of demand. And over the years I've helped a lot of people and I placed them elsewhere. And so this is just an ability for us to grow you know, based from the leads without having to do any advertising, just be able to take what already comes to us and be able to satisfy their, you know, the demand and then make money doing it. The same goes with optimum finance, Gaurav. That's, that's for years, for years, you know, as someone who referred business to the bank, you know, 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 good custodian of the bank. And, And if they don't do a deal, there's very little follow-up asking what happened to that deal. We didn't do the loan. We don't know why we didn't do the loan. We support the management who decides 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. 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 whoever 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. 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 the leads. Not everyone's going to want to borrow money you know, 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 who's 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 that 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 here, do well there, and then, you know, have a problem, you know, 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 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 two verticals up, we've already closed the first loan. We have a second one already brewing, God willing, for Optima Finance. And Optima Funding 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, Guarev, I would say, I think on the optimum finance side, we're probably looking at getting at like $10 million a month as a baseline. That could be higher, it could be lower. And net spread on that is probably, you know, five to 10 points of net income from top line to bottom line. And then on funding, I would say that we should hope to maybe get one or two deals done end of the year, fourth quarter. Also, probably average loan size somewhere between five 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 two years. Again, those are things that banks wouldn't want. Banks don't want to make all the effort and have a loan only on the books for six months. It's too much work, you know. So, Raurabh, I think I answered your question at the end of the day. I was a little long-winded. I got lost in my thoughts. I'm sorry.

Yeah, that's great. Thanks for all that color. One more last, and if I may, Moishe, can you maybe, you know, as you 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%, you know, return on equity? And they answered, we like that, but there's a metric that we can then follow, even if you did one penny, 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. Um, but you know, we act for the shareholders and so, um, it's, it's a, it's a, it's a, it's a debate that still has to happen here. When we, in theory, we could do, we could do a dividend because we're making enough money, you know, even if we. you know, if we're making 80 cents, we could give away, we could, we could get back 20 of it. You know what 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, I, 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, if the shareholders, you know, it's, it's been a couple of shareholders that told me that, but I'm not sure it's like wrong. A shareholder is saying, Hey, let's do this. So we'll see, we'll see where it goes. Yeah.

All right, that's all I have. Thanks for taking my questions.

Thank you.

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

Thank you. Anybody in this room have any questions? Marty, you have a question? Let me try. All right.

First, am I understanding right that in the last quarter, $160 million of new deposits came into the bank in one quarter? Yeah, I think whatever it says, yeah.

I'm pretty sure.

That sounds wonderful. It's almost like maybe it's YouTube.

No, we have a good, steady support.

That kind of volume before, $160 million in one quarter of the deposits?

Yeah, because some of those deposits are deposits that we're able to get online. They're not necessarily customers looking in the street. And so we have availability based on our own policies. We could probably take another couple 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 Optum Bank Kool-Aid. I see. But yeah, but our regular, the number to watch would be our non-interest bearing. Which would be like checking accounts. Yeah, yeah. And we're sitting with like about 30%, which beats most of our peers. It's amazing. Yeah, thank God. I mean, a lot of that is, you know, the board members have friends and, you know, any, it's like, it's a random thing, right? If I ran into you and we're 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, I'm at Bank of America. And I say, Marty, what do you have Bank of America for? No, no, no, nothing wrong with Bank of America, but why aren't you banking with me? You go, Moshe, make it easy for me and I'll bank with you. So I go, okay, David Siegel, call Marty Granoff. The next thing you know, you're banking it with me. Exactly. And, but that's our point of that white glove area is really to make it as easy as possible for a guy. Cause I mean, I can tell you from my own house, my, my own wife still wanted a bank at first source bank, which was our bank that we started with in South Bend when we lived there, you know, haven't lived there in 10 years. And for her, you know, 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, you know, we get deposits at the end of the day.

Regarding the two 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. Are you like brokering those to other lenders in effect? Is that what you're doing?

No, we're, we opened, we're opening up another shop that has three.

It's going to have three different underwriting requirements.

Yeah. Different other. Exactly.

Where's the money coming for that?

So, so we're either, if 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, um, 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. 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%.

So it's not your typical loan that you'd make to a typical client. It's not where the money is going to the subsidiary.

Here's an example. You got a guy that buys a building at 50% LTV. but it's a turnaround that doesn't have good historical cashflow. So the bank says, okay, based on global cashflow, 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, they have plenty of equity to do, you know, to buy it. And they have plenty of equity to do part of it, but they don't have the extra, the extra piece that they need. So they, so they come along and say, you know, in this example, let's say they say, will your bank, 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 a 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 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 policed by common sense and you go, hold on, you got this, this, this, this, this, and you got a guarantee from a guy who's a billionaire, just as an example, right? It's a deal that you should do. And so you make a deal, you tell the guy, we're going to give you, we're going to charge you 18%, two points in, you know.

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'll come from the holding company that'll fund it. fund equity, 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 standalone finance company. We'll see how it plays out. In the meantime, there's a... there's an active management of it, meaning I'm looking at stuff and the committee that's taking care of those loans to approve them, three 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.

With the other subsidiary, with the healthcare, those aren't normal bankable that you need to I put a subsidiary to do that.

So, so it's an interesting point. Okay. Cause, cause they kind of are, they kind of are where, where, so I'll tell you the, the exit allows for a hundred percent, a hundred percent, uh, um, 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. So a guy that wants to be highly levered so that he could be 30, 40 years fixed, 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 at 85 LTV, I want to get to 85 LTV. So if the bank is stuck at 75% or 70%, 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 in and refinance the total debt. And then I have long-term debt at the treasury plus 175, which is like 6% today. Imagine, I mean, 6% is not as great, but I mean, I have debt that's sitting at 3% that I have another 26 years on, right? backed by the US government, of course, which is God bless America. But that being said, so that guy says, you know, I want to take 6% for the next 40 years and then, you know, set it and forget it. Right. And just do an auto debit for the next 40 years for the, for the mortgage payment call today. And so the bank can't do, they can't do that last 10, 15%. So either, either they come to us and we do us being funding. We do the 10, 15% as a second. Where's that money come from? Also Holden 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 better. if the property was 10 million and we're lending and it's getting, they're getting a loan of eight and a half. So we're doing, let's say one, one and a half. And then the other seven is coming from, is coming from debt. And so in that pricing, let's say so for two something and then our money to the holding company is 10% return. And then we're getting from the client, you know, north of 15 plus two plus one, you know.

And the money in the holding company came from

success of the bank well today today the way we did the first deal was we actually just borrowed the whole money needed we borrowed money and then and and so we borrowed and we lent out we borrowed from another bank we borrowed from somewhere yes we borrowed money and and our spread was was is is uh is good that um that uh we're making good money on the money that we borrowed and you know actually i've been speaking to some of our you know, stronger or larger, you know, shareholders. And I said, hey, you want to fund one of these things? There's people that are interested in that. If I'm putting money in the bank anyway, and I trust you, you know, 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. God willing, in the long run, it'll be good for all of us. Last question. Remember, you brought the donuts. You can ask as many questions as you want.

Four boxes. After Gala, which was just fabulous. You mentioned about NewTek, which is an online bank. Some kind of relationship that Optimum has with NewTek?

Yeah.

Do I have that right?

Yeah. New tech is an SBA is, is like the law. 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, so when we first started and we still have a little bit of relationship left with them is they did a lot of our backend SBA stuff for us because management correctly believes that, you know, you need to be exact and, 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, you know, that anything that they have their hands on, they're almost ensuring that if something went wrong, The SBA went on to 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 more than a year ago. And our SBA department is churning pretty good. We're doing better, but doing good. Thank you. You're welcome. Anybody else? All right, Seth. All right. Any questions from the peanut gallery?

Yeah, I do. We... have a total of nine, but a lot of these went over already. So I'm just going to stick with two that are a little different. So question number one is, Moshe 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 one time's 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 nine questions. Like, Marty, you've been here a year, but no one's here, right? You're the only guy. So I appreciate the engagement, which is a testament to, you know, 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. And I have this bet all the time because people want to invest. but they're stuck with saying, well, the market's trading in here. I want to discount the market. And I say, well, the market's 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 fake 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%. you know, versus, you know, marketplace, you know, so, so, but it's not a real loss. It's an investment that we made, you know, five to 10 years ago that still has to bleed out based on its duration. Um, so I add that back to book because I don't take that paper loss. And so my book number today is about five 57, which is exactly where we're trading. Um, so that being said, um, if there was an opportunity to do M and a, where we could use our stock at five 57 and we could buy a company, um, You know, at a fair price and knowing full well that the day after we make the deal, you know, or shortly thereafter, it'll be accretive because I could, you know, cut out, you know, you know, senior management or something or, you know, 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, it's good for business. So I wouldn't, I would say that whoever asked the question is a hundred percent 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 stopped 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, is for growth. If we stopped wanting to grow and just lay low, we could probably cut out some of our labor and, 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, you know, primary is growth. And, you know, just because, you know, that's, that's, we're on this world, you know, God wants us to be growing. If we're not growing, we're, we're, we're not, we're dying. And I don't want to be dying. I want to be growing. So, all right. What's the next question?

With optimum bank trading at a 52 week high today and significant potential, how should investors think about dilution and true per share economics?

So I think, I think everybody, everybody who's on this call or whoever reads this should go and look at the queue and understand exactly our, our common equity per share today is what I said, which is, is I think we announced that 538 is true per the true book value, my number because of OCI, like I said, is 557. 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 it and get confused and say, What's going on there that's 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 fighting 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 non-voting common in essence. And so then everyone could see that everyone is all one. It's two classes of common, but it's one's voting, one's non-voting. There's no differences otherwise. And that should make it easier for investors that are not investors today to become investors because it becomes simpler for them to understand.

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 name suggests attractive loan yields. Are you moving up the risk curve to achieve this, particularly with larger CRE exposures?

Absolutely not. Absolutely not. We, we, our CRE has grown because that's our regular customer on a regular loan demand, nine out of 10 loan borrow. I mean, I guess I'm, I carved out SBA and I carved out, you know, nursing home lines of credits and I carved out HELOCs. So 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, I'd say, five, 10 years, maybe longer. We haven't changed that at all. And part of that is we don't have a reason to. 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 there's a relationship that we want to try to help somebody and we're looking beyond the numbers in some form or another. Those are still really far and few between. 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 is 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. I will therefore entertain a motion to adjourn. Anybody? Mr. Chairman, I move to adjourn the meeting. I think Mike will beat you to it. He wants done.

I second the motion.

Okay. We've got a trifecta here. Anybody opposed? All right. We have a first, a tie for first, a tie for second. And nobody's opposed. Motion carried. The meeting is adjourned. Thank you, everybody.

Appreciate your time and effort.

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