Midyear Numbers Show Bright Start to 2020
Fort Lauderdale, FL, Sept. 10, 2020 (GLOBE NEWSWIRE) -- OptimumBank Holdings, Inc. (OPHC-NASDAQ)
Select First Half Results
Half year net Income: $57,000, excluding Allowance for Loan and Lease Losses (“ALLL”) of $712,000.
Balance Sheet Trends
Last year, OptimumBank (the “Bank”) implemented various strategies to improve its earnings which yielded significant growth. Specifically, as of June 30, 2020, loans increased by $33,609,000 from end of year 2019. Cash and securities rose by $19,277,000. This is on top of substantial growth in the 4th quarter of 2019 and despite the emerging COVID-19 pandemic.
In preparation for this growth, the Bank had undertaken a significant program of increasing non-maturity deposits such as checking accounts and Money Market accounts. This reduced the need to generate higher priced time deposits (CD’s). It also allows the Bank to adjust prices to the current market which have recently fallen to near zero percent.
Income Statement
Interest income increased by $695,000 for the six-month period ended June 30, 2020 compared to the six-month period ended June 30, 2019. Interest expense increased by $51,000 for the six-month period ended June 30, 2020 compared to the prior period, thereby contributing an increase of $644,000 to net interest income for the six-month period ended June 30, 2020. This improving performance is the result of balance sheet changes mentioned above. The enhanced liquidity also allows the Bank to quickly respond to borrowers’ needs.
Noninterest income amounted to $106,000 for the six-month period ended June 30, 2020. This was a result of loan fees along with planned wire and ACH fees. More is planned as the Bank achieves greater penetration with new business acquired via the Small Business Administration’s Payment Protection Program.
Total noninterest expenses decreased $59,000 to $2.2 million for the six-month period ended June 30, 2020 as compared to $2.3 million for the six-month period ended June 30, 2019. Chairman Moishe Gubin commented, “Reaching core earnings in such a big way will almost guarantee perpetual profitability. Having stable profits should be accretive to our stock price.”
It should also be noted (as mentioned above) that the Bank took a non-cash charge to earnings to fund the ALLL of $712,000 in the first half. This pays for itself as the loan portfolio matures but will be regulatory non-cash drag on earnings during periods of rapid growth.
Safe Harbor Statement
This press release contains forward-looking statements that can be identified by terminology such as "believes," "expects," "potential," "plans," "suggests," "may," "should," "could," "intends," or similar expressions. Many forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results or implied by such statements. These factors include, but are not limited to, our limited operating history, managing our expected growth, risks associated with integration of acquired websites, possible inadvertent infringement of third party intellectual property rights, our ability to effectively compete, our acquisition strategy, and a limited public market for our common stock, among other risks. OptimumBank Holdings, Inc.'s future results may also be impacted by other risk factors listed from time-to-time in its SEC filings. Many factors are difficult to predict accurately and are generally beyond the company's control. Forward looking statements speak only as to the date they are made and OptimumBank Holdings, Inc. does not undertake to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made.
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