All right, welcome back, everyone. Next, we have OptimumBank Holdings, trades on the NYSE American under the symbol OPHC. Founded in 2000 in Fort Lauderdale, committed to supporting economic development and social progress through responsible banking and community partnerships. Happy to welcome the Chairman, Moishe Gubin, and everyone, please submit questions, and I will give you the floor, Moishe, and then we'll jump in with some questions throughout. So the floor is yours. Take it away.
All right, thank you so much. Like Anna said, I'm Moishe Gubin. I'm the chairman of OptimumBank. Our stock ticker is OPHC, traded on the NYSE American. I lead a bank of about a billion, billion one, and we're growing very rapidly in assets. Together with my team of Tim Terry, who's our President and CEO, Elliot Nunez, who's our Executive Vice President and CFO, we just celebrated our 25th year anniversary. As you can see from the timeline here, we've been in business since 2000, and we're centered in South Florida. Florida, as a state, is really a great state for us. It's great for everybody. There's a slide on eight that talks about how well South Florida is doing. As everyone knows, people are migrating down there, which provides for a great economic situation for businesses, for real estate, and people need banks.
Our bank is willing to open accounts for anybody all over the world, actually. We do everything. We do things virtually. I mean, we have three branches in South Florida, in Fort Lauderdale, in North Miami Beach, and in Deerfield Beach. We don't require people to come in person for them to open up accounts. So therefore, we're able to bank a lot of people all over the place. We have a lot of New Yorkers, we have people in the Midwest, and we have people in Israel. Our highlights are we reached at December 31, 2023, and this deck is as of December 31, 2023, $1.1 billion total assets. With that, our loan-to-deposit ratio is right over 100%. Our gross loan portfolio is about $959 million, and we have $932 million in deposits. Like I said, our three locations are in Fort Lauderdale, Deerfield Beach, and North Miami Beach.
And we trade on the ticker OPHC, like I said. There is a little bit of confusion, which we did a press release regarding, which is the preferred shares. When you look at our bank, you should be looking at the total diluted shares of over 23 million, which gives us a market cap of somewhere at this point, we're trading below book, around $90 million. Our true equity on our balance sheet is probably about $130 million or so, $135 million. Our profitability for 2025 ended the year with GAAP income of 14.83% for return on equity, and our core of right below 22%. The ROAE core adds back our provision for loan loss. We haven't had any bad loans in many, many years.
A couple of dollars here and there. Most of the stuff that we have on our financial statements is an accounting entry for consumer loans that we've been doing for many years. We're actually now winding down that portfolio, so that should go away, and we have a very drop of bad debt when we have to record something that should turn around. Nothing really to talk about there. Our NIM, which beats most of our peers, is at 4.28%, and that's rising. Our highlights for 2025, we surpassed $1 billion. Probably the biggest highlight for us is we made it 25 years. I've only been involved with the bank for about 16 years, and I got indoctrinated through fire, and the bank was in trouble from the 2007, 2008 financial crisis. But we've come through it, and we're strong. We're a strong bank.
Our net earnings for the year was $16.6 million, which was an increase of about 27% almost from 2024. Our earnings per share, I look at diluted, is $0.72, which is higher than we expected it to be. Beat $0.63 previous year, and we expect that to be a better number year in, year out. Pre-tax, pre-provision earnings, which we talked about, $24 million, which is an increase of $4.4 million of almost 22%. $122 million. Talked about that already. Our net interest margin for 2026, like I said, up 45 basis points from last year. Net interest income, another great number, up 23%. Non-interest income up 46% from the year before. Net loans up about 19% at $947 million. We feel we're doing great. Our Q4 is the best quarter I think we ever had. We expect that to continue, please God.
Net earnings of $4.9 million, which again is a sizable increase from the same quarter last year. Earnings per share of $0.21. Now that, if we have that continue, that'll be a run rate of $0.84 for next year. God willing, God willing, God willing. I'm not going to say it, but that's a number that we're looking to hit. Tangible book value increase as well. Really, we're doing amazing, and we're super, super proud of what we're doing. And there's no reason why this won't continue. In fact, as we continue to have runoff from when we had low interest rates five years ago on rates that repriced over five years, our NIM should get stronger and stronger. Our bank's Tier 1 leverage ratio ended the year at 11.39%. That's way past regulatory requirements.
Again, most of our portfolio, which we'll talk about a little bit later, is in commercial real estate. Not the commercial real estate that people are afraid of. This is owner-occupied strip malls, smaller deals. I think our average loan size today is right around $5 million. Not to be worried about our portfolio of $950 million divided into chunks of $5 million apiece.
Hey, Moishe, let me jump in here real quick. Congratulations on a very successful 2025. I want to go back a little bit. So talk about your loan book. It grew nearly 20% in a single year. So which verticals are driving that growth, and how are you managing concentration risk?
So that's a great question. Our CRE portfolio grows literally organically. As we've talked about in other conferences and other presentations, we have a cult following. Our customer base, whether it be deposits or lending, they bleed OptimumBank, and they come to us deal after deal. We expect every year to have a growth rate of 25%. That's what we budget. This year was a little bit light because we got into a slow start beginning of the year. This year already in 2026, we're only 21 days in. We've already closed $60 million of lending. Most of our customers, and I call them family members. When we did our event, we called it the family reunion. This is a family-type environment. Most of the loans, like I said, are CRE in South Florida. We'll follow our customers into other places.
Most of the stuff we see, multifamily, we don't do big buildings for the most part. We don't do stuff like in Miami. We do stuff like a little bit outside of Miami, smaller deals with an average, like I said, an average loan size of $5 million. Our lending limit today is close to $35 million. Our biggest loan we've done so far, I think, is somewhere between $25 million and $30 million, but that's few and far between. I expect the loan portfolio to grow in 2026, probably another 25%-30%. I hope to end the year at $1.5 billion-$1.6 billion, and that'll put us back on target, so hopefully I answered what you asked.
A nd I know it's important to you to take viewer questions, so I want to jump in with some of these. Shane wants to know, what are the key drivers of the recent deposit and loan growth, and how sustainable are those drivers?
So we see that our customer base has stayed with us as things have evolved. Our deposits, there's not a day that goes by that we're not, we give a white glove product. So keep that in mind. We don't do wealth management, but we take care of wealthy people and less wealthy people the same way. And we're giving everybody white glove treatment. So I'm not a sociologist, but it seems like what we're doing is working, and people are coming to us, and every day we're getting leads and generating new business. And it's not even odd things. It's regular, run-of-the-mill customer base, people that live in the communities we serve, people that are part of our network between the board members and other interested parties. So people support us. And really, the biggest issue for us this year is our capital.
We are looking to grow our capital base by getting out there and attracting new investors. We believe that at some point, our stock will trigger and will be included in the funds, index funds, and the stock should start trading in normal pricing. Now we're trading below book, which is discounted multiple book. T hat's really what it is. I think it's totally sustainable. As long as we keep doing things the same way and take care of our customers the way we've been taking care of them, there's no reason why this shouldn't continue.
Carl wants you to break down the trends in the net interest margin and what assumptions underlie future NIM projections.
Okay. So actually, the screen that we're on right here shows the NIM and how it's moved over the years. The simple of it is we've held firm on our pricing. Our pricing today is about SOFR 350, and that goes across the board of every type of product. With the exceptions of certain lines of credit that we do, like HELOCs are usually prime, and lines of credit for like AR are usually prime plus three with the floor. Today on the NIM, we expect it to continue to expand because we are holding firm at our pricing, and we have a lot of demand. And again, what people are buying into is not just rate.
Coming into the bank because of what we do in total, which is someone needs something in the middle of the night, they're able to call somebody and talk to somebody and not just, and there's a relationship, and for that, people want to pay a quarter of a point higher, half a point higher, but you're getting all these other things that are included there with the relationship, and once we lend somebody money, literally the checkbook is open. We're not willy-nilly, but we're easy to give them more money and help them grow, and as long as they continue to succeed, we support them, and a lot of this also comes with advice. People want to talk to somebody that's a completely objective third party, and we're providing that to them.
So with that, it really stays up at a SOFR 350, and our cost of money goes down. We typically have a third of non-core deposits, and the other two-thirds usually a mix between money markets and CDs. And that should continue to expand. Those loans get paid off at a lower interest rate. Things are getting repriced at higher interest rates. And depending on what happens next year with interest rates altogether, we should be able to stay where we are.
Talk about what are the key credit risk concerns in your loan portfolio in regards to real estate concentration?
So again, when you know your customer, it really makes a difference. We don't have a portfolio full of loans of borrowers that we don't know. That being said, we're in touch with our borrowers. I mean, we're not paying them. We don't drive them crazy, but we're in touch with our borrowers because we want to lend them more money, and we want to be of their banking relationship. We don't have bad loans. We don't have trouble with that. And there's no set that we see people flocking to us for a certain product because our pricing is off. It's a nice mixed bag of stuff that comes in. But again, we're in South Florida, and the South Florida real estate market is great. Great.
And the referral business that we're getting and the people that are coming to us are usually not deals where the borrower themselves are substantial. And so because of that, we don't see our credit trend getting any worse. Everything we have is just from provisioning. We don't have losses. We haven't had losses in a lot of years. The only losses you see on our income statement are from consumer loans where GAAP requires us to record it as bad debt. And then we record the income at a higher. The way that model worked out for consumer lending was we got a 14% interest rate, but it had a 5% bad debt in it, so we netted out to 9%. Under GAAP accounting, we were forced to separate the bad debt from the top line revenue number. I would have made it as a contra account.
I'm an accountant at the end of the day, but that's not how it works in banking. And so therefore, you end up seeing a bad debt number, but really that number should have been netted out when you're looking at that portfolio as a whole.
If you can talk about your geographic expansion strategy beyond Fort Lauderdale in South Florida, what is it?
At this point, we really want to go where our customers are and where our relationships are. I think that makes regular common business sense, and with that, we have relationships as a group and the board. We have relationships in the Midwest. We have relationships in New York, New Jersey, but just to stay organic with Florida, our biggest demand today relationship-wise is the Tampa area, and so we're going to continue to march north. We started as just Broward and Miami-Dade, and now we're ready up to five, six counties. Not with branches, but with really where our customer base concentration is, and we're going to now move north, northwest because that's where the demand is, and where we're lending money is where we want to have a branch so we could support the people, and so that's really the next.
I mean, 2026 growth is not going to be with branches. There might be a branch. There might be us purchasing a bank. But our growth for 2026 really is finally doing the strategy that we talked about over the last bunch of years, which is to create the verticals for our holding company to own sister companies, all of them supporting the bank by having bank products that the bank, from the treasury side of it, the bank can make money taking care of. But from the banking side, that being factoring, I think we've already announced the fact that we plan on going into HUD and bridge lending. And we have a couple of other verticals that'll be sister companies to the bank. And that's really where our growth is going to come in 2026.
I think 2026 is finally the year where our balance sheet gets to sizable proportion where the marketplace understands us, and we're able to then raise equity, and we're able to then have growth that's a little bit more bigger growth, not from the bank side, but from the overall holding company which owns the bank, where the holding company then grows. And that 2026, I think, is going to be finally the year where we're going to hit our strategy, and then we'll mature that strategy in 2027, 2028. And so hopefully things will work out as planned. Usually, man plans and God laughs. In this case, we wanted this to happen probably five years ago or maybe longer, and things just worked out the way they worked out. And now we have a powerful bank that's producing major income and growth.
Now we need stockholders to buy our stock and grow our capital base.
Do you have any plans for future capital raises or share issuance?
The general parameters are we don't sell stock below book. But to sustain our growth, come between $15-20 million and us growing 20-30%, there's a shortfall every year of about $10 million at minimum. And that's without some of the growth strategies. I'm thinking that the marketplace likes us at some point, and then we're able to raise equity. And I'm thinking of doing something sizable because do something sizable, take that money, put it into one of the verticals, and then start producing better returns. Now, we have a great return. Truth is, we have an argument to be had to say, don't do anything. Making 24% or 22% core ROE is an argument to say, let's just stay firm, keep doing what we're doing, and just do more of it.
But I think in the long-term goal, in the long-term strategy, the return will be supersized by going to these other verticals that will all feed the bank and bring in a high double-digit return that's sustainable year in, year out, and also build up brand value and also build up a balance sheet that's worth something. So that's the way we're going here.
Talk a little bit more. Is there a dividend policy plan or consideration for returning cash to shareholders?
That's a funny, funny comment. I mean, giving out dividends is, first of all, never got brought up before like six months ago. In the last six months, there has to be five or 10 shareholders that came to me and said, you know, even if you did a dividend of like 1% or 2%, it would change everything and would make us really interested. We've started having dialogue about that because if I can make the shareholders happy that way, and then that'll grow us into a segment of the marketplace that invests in dividend stocks, maybe that's a move. The problem with dividends is it's the opposite of capital raising. You're giving capital, and for us to grow, we need capital. That's the argument back and forth. We'll always do what the shareholders want us to do.
So if shareholders are out there that want us to do a dividend, please send me an email. Reach out to us. Let me know. Because as of right now, I'm a shareholder of like 30-35% of the company. And my point of view is not stronger than the next one's. I want to hear other people's opinions. And my point of view here is not to do a dividend, but I do what's best for the shareholders. So if the others are out there and tell me that I should, it's something that we need to debate as a board-level conversation. And I wouldn't be opposed. I would go along with what the market wants. These are good problems to have. At the end of the day, we have such a strong company, and all these different choices are only to make it better.
And all the while having a strong core business model that my bankers that work for us are great guys, and they do, and girls, and they do a good job managing a bank and running a bank and taking care of the customer, which is number one. And so all while that's going on, we're doing all this other stuff to just try to enhance our investment profile for investors out there.
Talk about your technology. How does your technology compare to your peers, online banking and your app?
So our technology has been like a thorn in my side. It's something that we knew we needed to improve five years ago. And we made a ton of effort. We spent, I don't know, between $1 million and $2 million over the last few years. And that doesn't even include all the labor. We brought in people to train and do this and do that, and we have redundancy. We're finally almost there. Like March or April, we should unveil finally our latest and greatest, which would be totally different than what we've been producing. Our product has been average for years, and we've been wanting it to be above average for years. And we're finally, hopefully, after all this time and effort, we feel that probably March, April time, we will have a product that's superior to average. It'll be above average.
Hopefully, that'll attract a bunch of power users. Right now, if you're a power user that does 500 ACHs a day and this and that, we have a workaround, but it's not such a great product. Also the desktop, what the forward-looking person, what the consumer is seeing is it's user-friendly, but it doesn't have the bells and whistles of all the different kinds of reporting you could get and all the different things. I mean, you could do wires, you could do ACHs online, you could do transfers of money, but we know it could be a lot better. We're working on that, and we expect that to happen Q1, Q2 of this year finally after all this time and effort that we've put into it.
Great. I wanted to go back to this question. Your GAAP ROE is 14.8%, while core ROE is 21.6%. So what explains the gap, and which metric should investors underwrite?
The true return is probably somewhere in the middle because the GAAP ROE is after provisioning, and we haven't had any bad loans in many years. Thinking about true cash flow, it's somewhere in the middle of that number. If you want to think of just accounting, it's the other number. I don't want to try to, I don't want to confuse the public here. The reality is, our ROE, when you stack it against everybody else, we're beating everybody for the most part. I think we're top 100 banks in the country with ROE. The true number, really what our number is, because other banks are S corps and we're a C corp, and we look at it as the core number, and that's what you should be comparing against. If you're investing your money and you're putting it into. We want to be conservative.
The bank is double-digit return. And I stand behind that firmly. And I would say to you, if you were trying to compare us to other banks from the point of view of just accounting, you use the GAAP number. But if you really want to compare us to, if you're making an investment somewhere and you want to know what your real return is, you should look at the core ROE.
Can you talk about how? Anything else?
No, go on. I'm sorry.
Anything to say about your balance sheet, specifically how resilient is it in a potential downturn or credit stress scenario?
I would just continue with some of these slides. If you look at our growth, we're resilient because of, again, our cult following. Our customers, I have this conversation all the time. And the common response that I hear from people is, "Moishe, if something goes wrong in my business, the last guy that's getting burnt is you. If I have trouble somewhere in my world, I will manage my trouble and deal with everybody else, but you will get paid every pay." And part of that is the goodwill. I act as a, I'm not. So the bank, I refer a lot of business to other board members and other interested parties that are shareholders or whatever.
I act like as another force that's out there that when I meet with a lot of the customers and when I feel like there's somebody here that it's compelling that we should lend them money and where another bank maybe would give them a hard time or something to do with the background. Somebody that has a bankruptcy from, they won't lend them ever again. They'll be never allowed in their bank. In our case, someone had a bankruptcy five, ten years ago, and they were honorable about it. They didn't hurt their creditors. They filed because something happened. I don't hold that against them. I'll go and act as the lawyer to try to convince the lending department that overlook that. It's not a knock on their character trait that makes them somebody that we shouldn't bank.
It's something that happened in their past, and they're over that. Whatever happened was a divorce and things went brutal and their credit went down because they had a nasty divorce with their spouse. Something else, like I'm out there fighting for the borrower. Same thing with depositors. People that are part of our world, they could be in our synagogues, they could be on school bodies, and they have something in their past that makes it so that a bank doesn't want to bank them for their deposit. It could be an ex-con. A lot of banks won't bank a person who went to prison, but it could be a very good guy that had a good reason why they went. I'm out there trying to fight the good fight and bank people like that if I know about it.
Like this customer has just come randomly through the front door and because they heard about us or their referral from somebody and they go through the normal routine and then we bank them. But if I hear about it on where there's somebody that the organization doesn't like something in their past or something, I'm out there acting as their advocate to try to bring them in the bank. And I'm optimistic and I'm a positive person to start with. So it's easy for me to find a way to say something positive and try to support somebody. That being said we got a good thing going here. I would mention as a.
I want you to end on a note, maybe near-term catalysts. What should investors be looking for? However you'd like to end.
I would just say, I mean, it happens to be the screen that I stopped on. This is page 10. I would tell everyone to take a look at the deck. There's 20 pages in this deck. There's plenty of other things to look at. But I mean, it happens to be the one that I'm on is the growth rate for lending deposits, non-interest income. That really is our story. Our story is today, we're all about growth, doing it very controlled and stable and taking care of people that are part of our family, that are people that want to be taken care of, that have needs, and that we're able to take care of them. And because of that, this growth is totally sustainable. It's something unless some disaster happens and then we all have troubles to start with.
I think we would have less troubles than our peers. The reality is that the relationship we have with our customers is what's the catalyst to take us to where we're going. When it talks about the stock, the real catalyst is to get into a true market cap of $75 million, which we'll do with a capital raise or we'll do just from earnings this next year. Once we get there and we're put into all these funds, the volume that today is between 30 and 50,000 shares a day should turn into 100,000 shares a day, and that should allow for investors to be able to buy and trade larger positions.
That is the catalyst because when the stock trades and the stock goes to where it's supposed to trade, then that gives us a checkbook for us to write new equity out there and bring in cash to go and grow the bank. I would ask people to just make an effort, take a look at the deck and become an investor, become a shareholder, become a depositor or a borrower, and then tell your friends how great it is.
Perfect. Moishe, thank you so much for this presentation. Love your personal approach as well. It's always good to see you, and we look forward to continuing on with these conversations in 2026.
Thank you so much for having me.