UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2021~~2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to _________

Commission File Number: 000-50755

OPTIMUMBANK HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Florida		55-0865043
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2929 East Commercial Boulevard, Fort Lauderdale, FL 33308

(Address of principal executive offices)

954-900-2800

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $.01 Par Value		OPHC		NASDAQ Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~4,730,709~~6,027,105 shares of common stock, $.01 par value, issued and outstanding as of ~~October 29, 2021.~~August 8, 2022.

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

INDEX

	Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	1

Condensed Consolidated Balance Sheets - ~~September~~June 30, ~~2021~~2022 (unaudited) and December 31, ~~2020~~2021	1

Condensed Consolidated Statements of ~~Operations~~Earnings - Three and ~~Nine~~Six Months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	2

Condensed Consolidated Statements of Comprehensive ~~Income (Loss) -~~(loss) income – Three and ~~Nine~~Six Months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	3

Condensed Consolidated Statements of Stockholders’ Equity - Three and ~~Nine~~Six Months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	4

Condensed Consolidated Statements of Cash Flows – ~~Nine~~Six Months ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021 (unaudited)	5

Notes to Condensed Consolidated Financial Statements (unaudited)	6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 4. Controls and Procedures	25

PART II. OTHER INFORMATION

Item ~~1. Legal Proceedings~~	25

~~Item~~ 2. Unregistered Sales of Equity Securities and Use of Proceeds	25

~~Item 3. Defaults on Senior Securities~~	25

~~Item 4. Mine Safety Disclosures~~	25

~~Item 5. Other Information~~	25

Item 6. Exhibits	25

SIGNATURES	26

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

							June 30,			December 31,
	September 30, 2021			December 31, 2020			2022			2021
	(Unaudited)							(Unaudited)
Assets:
Cash and due from banks	$	16,563		$	25,523		$	17,666		$	13,681
Interest-bearing deposits with banks		67,020			29,106			59,603			45,289
Total cash and cash equivalents		83,583			54,629			77,269			58,970
Debt securities available for sale		35,738			18,893			27,211			34,394
Debt securities held-to-maturity (fair value of $1,375 and $3,549)		1,327			3,399
Loans, net of allowance for loan losses of $2,695 and $1,906		205,865			152,469
Debt securities held-to-maturity (fair value of $629 and $1,071)								648			1,040
Loans, net of allowance for loan losses of $4,243 and $3,075								348,948			247,902
Federal Home Loan Bank stock		793			1,092			2,725			793
Premises and equipment, net		1,571			1,413			840			843
Right-of-use lease assets		969			904			1,520			1,737
Accrued interest receivable		863			1,336			997			971
Deferred tax asset								4,324			3,442
Other assets		4,364			977			2,117			1,786

Total assets	$	335,073		$	235,112		$	466,599		$	351,878
Liabilities and Stockholders’ Equity:

Liabilities:
Noninterest-bearing demand deposits	$	114,011		$	58,312		$	137,106		$	124,119
Savings, NOW and money-market deposits		153,406			110,704			159,725			155,102
Time deposits		14,329			21,743			44,988			13,236

Total deposits		281,746			190,759			341,819			292,457

Federal Home Loan Bank advances		18,000			23,000			68,000			18,000
Junior subordinated debenture		-			2,068
Repurchase agreements								5,000			—
Official checks		491			142			1,030			140
Operating lease liabilities		998			923			1,564			1,775
Other liabilities		666			386			1,156			996

Total liabilities		301,901			217,278			418,569			313,368

Commitments and contingencies (Notes 1, 8 and 11)		-
Commitments and contingencies (Notes 8 and 11)								-
Stockholders’ equity:
Preferred stock, 0 par value; 6,000,000 shares authorized:		—			—			—			—
Designated Series B, 0 par value, 760 shares authorized, 760 and 400 shares issued and outstanding		—			—
Common stock, $.01 par value; 10,000,000 shares authorized, 4,524,509 and 3,203,455 shares issued and outstanding		45			32
Series A Preferred, 0 par value, 0 shares issued and outstanding								—			—
Series B Convertible Preferred, 0 par value, 1,020 shares authorized, 1,020 and 760 shares issued and outstanding								—			—
Preferred stock value								—			—

Common stock, $.01 par value; 10,000,000 shares authorized, 6,027,105 and 4,775,281 shares issued and outstanding								60			48
Additional paid-in capital		64,146			50,263			77,300			65,193
Accumulated deficit		(30,683	)		(32,392	)		(24,296	)		(26,096	)
Accumulated other comprehensive loss		(336	)		(69	)		(5,034	)		(635	)

Total stockholders’ equity		33,172			17,834			48,030			38,510
Total liabilities and stockholders’ equity	$	335,073		$	235,112		$	466,599		$	351,878

See accompanying notes to condensed consolidated financial statements.

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of ~~Operations~~Earnings (Unaudited)
(in thousands, except per share amounts)

											2022		2021		2022		2021
	Three Months Ended					Nine Months Ended					Three Months Ended				Six Months Ended
	September 30,					September 30,					June 30,				June 30,
	2021		2020			2021		2020			2022		2021		2022		2021
Interest income:
Loans	$	2,795	$	1,723		$	6,820	$	4,697		$	3,764	$	2,178	$	7,027	$	4,025
Debt securities		150		41			327		136			159		86		322		177
Other		28		7			81		67			102		26		139		53

Total interest income		2,973		1,771			7,228		4,900			4,025		2,290		7,488		4,255

Interest expense:
Deposits		146		290			480		1,047			170		153		345		334
Borrowings		62		96			241		322			102		81		163		179

Total interest expense		208		386			721		1,369			272		234		508		513

Net interest income		2,765		1,385			6,507		3,531			3,753		2,056		6,980		3,742

Provision for loan losses		582		524			955		1,236			991		397		1,383		373

Net interest income after provision for loan losses		2,183		861			5,552		2,295			2,762		1,659		5,597		3,369

Noninterest income:
Service charges and fees		375		1			816		52			680		270		1,269		441
Other		48		63			86		118			84		32		145		37

Total noninterest income		423		64			902		170			764		302		1,414		478

Noninterest expenses:
Salaries and employee benefits		921		582			2,347		1,616			1,307		727		2,642		1,425
Professional fees		141		121			393		368			142		140		289		252
Occupancy and equipment		156		146			467		435			175		159		342		311
Data processing		195		132			542		381			285		169		562		347
Insurance		23		21			69		66			24		23		48		46
Regulatory assessment		20		59			147		129			23		66		100		127
Other		233		360			780		621			304		233		617		547

Total noninterest expenses		1,689		1,421			4,745		3,616			2,260		1,517		4,600		3,055

Net earnings (loss) before income taxes		917		(496	)		1,709		(1,151	)
Net earnings before income taxes												1,266		444		2,411		792

Income taxes		—		—			—		—			321		—		611		—

Net earnings (loss)	$	917	$	(496	)	$	1,709	$	(1,151	)
Net earnings											$	945	$	444	$	1,800	$	792

Net earnings (loss) per share - basic and diluted	$	0.21	$	(0.17	)	$	0.47	$	(0.39	)
Net earnings per share - Basic and diluted											$	0.16	$	0.14	$	0.33	$	0.24

See accompanying notes to condensed consolidated financial statements.

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Comprehensive ~~Income (Loss)~~(loss) income (Unaudited)
(In thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020

Net earnings (loss) $ 917 $ (496 ) $ 1,709 $ (1,151 )

Other comprehensive income (loss):
Change in unrealized gain on debt securities:
Unrealized gain (loss) arising during the period 233 (30 ) (340 ) 36

Amortization of unrealized loss on debt securities transferred to held-to-maturity 18 35 98 83

Other comprehensive income (loss) before income taxes 251 5 (242 ) 119

Deferred income taxes — (2 ) (25 ) (30 )

Total other comprehensive income (loss) 251 3 (267 ) 89

Comprehensive income (loss) $ 1,168 $ (493 ) $ 1,442 $ (1,062 )
2022 2021 2022 2021
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021

Net earnings $ 945 $ 444 $ 1,800 $ 792

Other comprehensive (loss) income:
Change in unrealized loss on debt securities:
Unrealized (loss) gain arising during the period (3,124 ) 349 (5,905 ) (573 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity 4 33 11 80

Other comprehensive (loss) income before income taxes (3,120 ) 382 (5,894 ) (493 )

Deferred income taxes 792 — 1,495 (25 )

Total other comprehensive (loss) income (2,328 ) 382 (4,399 ) (518 )

Comprehensive (loss) income $ (1,383 ) $ 826 $ (2,599 ) $ 274

See accompanying notes to condensed consolidated financial statements.

3

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Stockholders’ Equity
Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021
(Dollars in thousands)

Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity
Preferred Stock Additional
Accumulated
Other
Preferred Stock
Series A Series B Common Stock
Paid-In
Accumulated
Comprehensive
Stockholders’ Series A Series B Common Stock Additional
Paid-In Accumulated Accumulated Comprehensive Stockholders’
Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity Shares Amount Shares Amount Shares Amount Capital Deficit Loss Equity

Balance at December 31, 2019 - $ - -- $ - 2,853,171 $ 28 $  38,994 $ (31,610 ) $ (205 ) $            7,207
Proceeds from the sale of preferred stock (unaudited)
Proceeds from the sale of preferred stock (unaudited), shares

Proceeds from the sale of common stock (unaudited) - - - - 98,182 1 538 - - 539
Common stock issued for junior subordinated debenture interest payable (unaudited)
Common stock issued for junior subordinated debenture interest payable (unaudited),shares

Net loss for the three months ended March 31, 2020 (unaudited) - - - - - - - (308 ) - (308 )

Net change in unrealized loss on debt securities available for sale, net of income taxes (unaudited) - - - - - - - - 35 35

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited) - - - - - - - - 18 18

Balance at March 31, 2020 (unaudited) - - - - 2,951,353 29 39,532 (31,918 ) (152 ) 7,491

Proceeds from the sale of preferred stock (unaudited) — — 100 — — — 2,500 — — 2,500

Net loss for the three months ended June 30, 2020 (unaudited) — — — — — — — (347 ) — (347 )

Net change in unrealized gain on debt securities available for sale, net of income taxes (unaudited) — — — — — — — — 15 15

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited) — — — — — — — — 18 18

Balance at June 30, 2020 (unaudited) — — 100 — 2,951,353 29 42,032 (32,265 ) (119 ) 9,677

Proceeds from the sale of preferred stock (unaudited) - - 180 - - - 4,500 - - 4,500

Net loss (unaudited) - - - - - - - (496 ) - (496 )

Net change in unrealized gain on debt securities available for sale, net of income taxes (unaudited) - - - - - - - - (23 ) (23 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited) - - - - - - - - 26 26

Balance at September 30, 2020 (unaudited) - $ - 280 $ - 2,951,353 $ 29 $ 46,532 $ (32,761 ) $ (116 ) $ 13,684

Balance at December 31, 2020 — — 400 — 3,203,455 32 50,263 (32,392 ) (69 ) 17,834 — $ — 400 $ — 3,203,455 $ 32 $ 50,263 $ (32,392 ) $ (69 ) $               17,834

Proceeds from the sale of preferred stock (unaudited) — — 160 — — — 4,000 — — 4,000 — — 160 — — — 4,000 — — 4,000

Common stock issued for junior subordinated debenture interest payable (unaudited) — — — — 11,042 — 41 — — 41 — — — — 11,042 — 41 — — 41

Net change in unrealized gain on loss securities available for sale (unaudited) — — — — — — — — (922 ) (922 )
Net change in unrealized loss on debt securities available for sale (unaudited) — — — — — — — — (922 ) (922 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited) — — — — — — — — 22 22 — — — — — — — — 22 22

Net earnings (unaudited) — — — — — — — 348 — 348 — — — — — — — 348 — 348

Balance at March 31, 2021 (unaudited) — $ — 560 $ — 3,214,497 $ 32 $ 54,304 $ (32,044 ) $ (969 ) $ 21,323 — $ — 560 $ — 3,214,497 $ 32 $ 54,304 $ (32,044 ) $ (969 ) $ 21,323

Proceeds from the sale of preferred stock (unaudited) — — 200 — — — 5,000 — — 5,000 — — 200 — — — 5,000 — — 5,000

Proceeds from the sale of common stock (unaudited) — — — — 262,417 3 1,173 — — 1,176 — — — — 262,417 3 1,173 — — 1,176

Common stock issued for junior subordinated debenture (unaudited) — — — — 282,377 3 844 — — 847 — — — — 282,377 3 844 — — 847

Net change in unrealized gain on debt securities available for sale (unaudited) — — — — — — — — 349 349 — — — — — — — — 349 349

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited) — — — — — — — — 33 33 — — — — — — — — 33 33

Net earnings for three months ended June 30, 2021 (unaudited) — — — — — — — 444 — 444 — $ — — $ — — $ — $ — $ 444 $ — $ 444

Balance at June 30, 2021 (unaudited) — — 760 — 3,759,291 38 61,321 (31,600 ) (587 ) 29,172 — $ — 760 $ — 3,759,291 $ 38 $ 61,321 $ (31,600 ) $ (587 ) $ 29,172

Balance at December 31, 2021 (unaudited) — $ — 760 $ — 4,775,281 $ 48 $ 65,193 $ (26,096 ) $ (635 ) $ 38,510

Proceeds from the sale of preferred stock (unaudited) — — 260 — — — 6,500 — — 6,500

Proceeds from the sale of common stock (unaudited) — — — — 358,023 3 1,608 — — 1,611 — — — — 1,227,331 12 5,511 — — 5,523

Common stock issued for junior subordinated debenture (unaudited) — — — — 407,195 4 1,217 — — 1,221

Net change in unrealized gain on debt securities available for sale (unaudited) — — — — — — — — 233 233
Net change in unrealized loss on debt securities available for sale (unaudited) — — — — — — — — (2,078 ) (2,078 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited) — — — — — — — — 18 18 — — — — — — — — 7 7

Net earnings for three months ended September 30, 2021 (unaudited) — — — — — — — 917 — 917
Net earnings for three months ended March 31, 2022 (unaudited) — $ — — $ — — $ — $ — $ 855 $ — $ 855

Net earnings (loss) — — — — — — — 917 — 917
Balance at March 31, 2022 (unaudited) — $ — 1,020 $ — 6,002,612 $ 60 $ 77,204 $ (25,241 ) $ (2,706 ) $ 49,317

Balance at September 30, 2021 (unaudited) — $ — 760 $ — 4,524,509 $ 45 $ 64,146 $ (30,683 ) $ (336 ) $ 33,172
Stock-based Compensation (unaudited) — — — — 24,493 — 96 — — 96

Net change in unrealized loss on debt securities available for sale (unaudited) — — — — — — — — (2,332 ) (2,332 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited) — — — — — — — — 4 4

Net earnings (unaudited) — — — — — — — 945 — 945

Balance at June 30, 2022 (unaudited) — $ — 1,020 $ — 6,027,105 $ 60 $ 77,300 $ (24,296 ) $ (5,034 ) $ 48,030

See accompanying notes to condensed consolidated financial statements.

4

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Condensed Consolidated Statements of Cash Flows (Unaudited)
(In thousands)

2022 2021
Nine Months Ended Six Months Ended
September 30, June 30,
2021 2020 2022 2021
Cash flows from operating activities:
Net earnings (loss) $ 1,709 $ (1,151 )
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Net earnings $ 1,800 $ 792
Adjustments to reconcile net earnings to net cash provided by in operating activities:
Provision for loan losses 955 1,236 1,383 373
Depreciation and amortization 156 132 115 104
Stock - based compensation 200 200
Deferred income taxes 613 —
Net accretion of fees, premiums and discounts (586 ) (27 ) (252 ) (175 )
Decrease (increase) in accrued interest receivable 473 (1,112 )
Stock-based compensation expense 96 —
(Increase) decrease in accrued interest receivable (26 ) 245
Amortization of right of use asset 126 113 217 83
Net decrease in operating lease liabilities (116 ) (103 ) (211 ) (75 )
Increase in other assets (3,412 ) (270 ) (332 ) (75 )
Increase (decrease) in official checks and other liabilities 470 (1,063 )
Net cash used in operating activities (25 ) (2,045 )
Increase in official checks and other liabilities 1,050 220
Net cash provided by operating activities 4,453 1,492

Cash flows from investing activities:
Purchase of debt securities available for sale (19,513 ) (3,638 ) — (5,193 )
Principal repayments of debt securities available for sale 2,184 1,585 1,177 1,443
Principal repayments of debt securities held-to-maturity 2,113 1,276 398 1,690
Net increase in loans (53,564 ) (44,109 ) (102,070 ) (38,397 )
Purchases of premises and equipment (314 ) (165 ) (112 ) (238 )
Redemption (purchase) of FHLB stock 299 (450 )
(Purchase) redemption of FHLB stock (1,932 ) 299

Net cash used in investing activities (68,795 ) (45,501 ) (102,539 ) (40,396 )

Cash flows from financing activities:
Net increase in deposits 90,987 66,344 49,362 53,246
Net (decrease) increase in FHLB Advances (5,000 ) 10,000
Net increase (decrease) in FHLB Advances 50,000 (5,000 )
Net change in repurchase agrements 5,000 —
Proceeds from sale of preferred stock 9,000 7,000 6,500 9,000
Proceeds from sale of common stock 2,787 539 5,523 1,176

Net cash provided by financing activities 97,774 83,883 116,385 58,422

Net increase in cash and cash equivalents 28,954 36,337 18,299 19,518

Cash and cash equivalents at beginning of the period 54,629 8,934 58,970 54,629

Cash and cash equivalents at end of the period $ 83,583 $ 45,271 $ 77,269 $ 74,147

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 776 $ 2,354 $ 473 $ 490

Income taxes $ — $ — $ — $ —

Noncash transactions:
Change in accumulated other comprehensive loss, net change in unrealized (loss) gain on debt securities available for sale, net of income taxes $ (267 ) $ 89
Change in accumulated other comprehensive loss, net change in unrealized loss on debt securities available for sale, net of income taxes $ (4,399 ) $ (518 )

Amortization of unrealized loss on debt securities transferred to held-to-maturity $ 98 $ 83 $ 11 $ 80

Right-of use lease assets obtained in exchange for operating lease liabilities $ 191 $ — $ — $ 191

Transfer of loans to foreclosed real estate $ — $ 681
Increase in other liabilities for Stock-based compensation $ 200 $ 200
Increase in other liabilities for stock-based compensation $ 96 $ —
Issuance of common stock for Junior Subordinated Debenture $ 2,068 $ — — 847
Issuance of common stock for Junior Subordinated Debenture interest payable $ 41 $ — $ — $ 41

See accompanying notes to condensed consolidated financial statements

5

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) General. OptimumBank Holdings, Inc. (the “Company”) is a one-bank holding company and owns ~~100~~100%% of OptimumBank (the “Bank”), a Florida-chartered community bank. The Company’s only business is the operation of the Bank. The Bank’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (“FDIC”). The Bank offers a variety of community banking services to individual and corporate customers through its two banking offices located in Broward County, Florida.

Basis of Presentation. In the opinion of management, the accompanying condensed consolidated financial statements of the Company contain all adjustments (consisting principally of normal recurring accruals) necessary to present fairly the financial position at ~~September~~June 30, ~~2021,~~2022, and the results of operations and cash flows for the three and ~~nine~~ six month periods ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021. All significant intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the three and ~~nine~~ six months ended ~~September~~June 30, ~~2021,~~2022, are not necessarily indicative of the results to be expected for the full year.

Subsequent Events. . The Company has evaluated subsequent events through ~~November 9, 2021,~~August 8, 2022, which is the date the condensed consolidated financial statements were ~~issued.~~
~~Coronavirus Global Pandemic~~ ~~(“COVID-19”)~~. The Company is subject to risks related to the public health crisis associated with COVID-19. COVID-19 has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption in financial markets. The extent to which COVID-19 impacts the Company’s business, results of operations, and financial condition, as well as loan quality, regulatory capital and liquidity ratios, will depend on future developments, the duration of the pandemic, and actions taken by governmental authorities to slow the spread of the disease or to mitigate its effects.
~~Junior Subordinated Debenture~~~~. In 2004, the Company formed OptimumBank Capital Trust I (the “Trust’’) for the purpose of raising capital through the sale of trust preferred securities. At that time, the Trust raised $5,155,000~~ ~~through the sale of~~ ~~5,000~~ ~~trust preferred securities (the “Trust Preferred Securities”) to a third-party investor and the issuance of~~ ~~155~~ ~~common trust securities to the Company. The Trust utilized the proceeds of $5,155,000~~ ~~to purchase a junior subordinated debenture from the Company (the “Junior Subordinated Debenture”).~~
~~The outstanding principal amount of the Junior Subordinated Debenture at December 31, 2020, was $2,068,000, together with accrued interest of $30,000~~ ~~at December 31, 2020. The accrued interest is presented on the accompanying condensed consolidated balance sheet under the caption “Other liabilities”.~~
~~During the first nine months of 2021, the Company acquired all of the outstanding Trust Preferred Securities and paid all accrued interest in exchange for~~ ~~700,614~~ ~~shares of the Company’s common stock. These shares were~~ issued, ~~in the following transactions:~~
~~During the first quarter of 2021, the Company issued~~ ~~11,042~~ ~~shares of common stock to pay approximately $41,000~~ ~~of accrued interest associated with the Junior Subordinated Debenture.~~
~~During the second quarter of 2021, the Company issued~~ ~~282,377~~ ~~shares of common stock in exchange for~~ ~~840~~ ~~Trust Preferred Securities. For accounting purposes, the Trust Preferred Securities acquired by the Company were deemed to be cancelled. As a result, the Company cancelled $840,000~~ ~~in principal amount of the Trust Preferred Securities, together with accrued interest of $7,000, and increased its stockholders’ equity by the same amount.~~
~~During the third quarter of 2021, the Company issued~~ ~~407,195~~ ~~shares of common stock in exchange for the remaining~~ ~~1,228~~ ~~Trust Preferred Securities. For accounting purposes, the Trust Preferred Securities acquired by the Company were deemed to be cancelled. As a result, the Company cancelled $1,221,000~~ ~~in principal amount of the Trust Preferred Securities and increased its stockholders’ equity by the same amount.~~
~~As of September 30, 2021, the Company had acquired all of the Trust Preferred Securities. Accordingly, there was~~determining no ~~principal or accrued interest owed by the Company with respect to the Junior Subordinated Debenture or the Trust Preferred Securities at September 30, 2021.~~additional events required disclosure.

(continued)

6

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(1) General, Continued.

Comprehensive (Loss) Income ~~(Loss)~~.. ~~GAAP~~ Generally Accepted Accounting Principles generally requires that recognized revenue, expenses, gains and losses be included in net ~~earnings (loss).~~earnings. Although certain changes in assets and liabilities, such as unrealized gains and losses on available-for-sale debt securities, are reported as a separate component of the equity section of the condensed consolidated balance sheets, such items along with net earnings, ~~(loss),~~ are components of comprehensive ~~income (loss).~~loss.

Accumulated other comprehensive loss consists of the following (in thousands):
Schedule of Accumulated Other Comprehensive Loss
September 30, December 31, June 30, December 31,
2021 2020 2022 2021

Unrealized (loss) gain on debt securities available for sale $ (290 ) $ 50
Unrealized loss on debt securities available for sale $ (6,721 ) $ (816 )
Unamortized portion of unrealized loss related to debt securities available for sale transferred to securities held-to-maturity (46 ) (144 ) (23 ) (34 )
Income tax benefit — 25 1,710 215

Accumulated other comprehensive loss $ (336 ) $ (69 ) $ (5,034 ) $ (635 )

Income Taxes. ~~The~~
During the fourth quarter of 2021 the Company assessed its earnings history and ~~trends~~trend over the past year and ~~estimates~~its estimate of future earnings, and the Company determined that it was more likely than not that the deferred tax ~~asset could not~~assets would be realized asin the near term. Accordingly, in the fourth quarter of ~~September 30, 2021. Accordingly, a~~2021, the valuation allowance ~~was~~in the amount of $4 million that had been previously recorded against the net deferred tax ~~asset.~~asset for the amount not expected to be realized in the future was fully reversed. Therefore, there was no provision for income taxes for the three and six months ended June 30, 2021.

Reclassifications. Certain amounts have been reclassified to allow for consistent presentation for the periods presented.
Recent Pronouncements.

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13 Financial Instruments-Credit Losses (Topic 326). The ASU improves financial reporting by requiring timelier recording of credit losses on loans and other financial instruments held by the Company. The ASU requires the Company to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. The Company will continue to use judgment to determine which loss estimation method is appropriate for their circumstances. The ASU requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide additional information about the amounts recorded in the condensed consolidated financial statements. Additionally, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The ASU will take effect for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022. The Company ~~is in~~has executed an implementation plan through adoption date, implemented a software solution to assist with the estimation process, and has completed a data analysis. The Company expects that the impact of ~~determining~~this ASU will not have a material effect to the ~~effect of the ASU on its condensed consolidated financial statements.~~Company’s Condensed Consolidated Financial Statements.

(continued)

7

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(2) Debt Securities. Debt Securities have been classified according to management’s intent. The carrying amount of debt securities and approximate fair values are as follows (in thousands):
Schedule of Amortized Cost and Approximate Fair Values of Debt Securities
Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value

At September 30, 2021:
At June 30, 2022:
Available for sale:
SBA Pool Securities $ 1,139 $ 1 $ (27 ) $ 1,113 $ 978 $ 1 $ (21 ) $ 958
Collateralized mortgage obligations 237 13 — 250 164 — (10 ) 154
Taxable municipal securities 16,776 58 (165 ) 16,669 16,748 — (4,252 ) 12,496
Mortgage-backed securities 17,876 31 (201 ) 17,706 16,041 — (2,438 ) 13,603
Total $ 36,028 $ 103 $ (393 ) $ 35,738 $ 33,931 $ 1 $ (6,721 ) $ 27,211

Held-to-maturity:
Collateralized mortgage obligations $ 1,061 $ 43 — $ 1,104 $ 563 $ — $ (19 ) $ 544
Mortgage-backed securities 266 5 — 271 85 — — 85
Total $ 1,327 $ 48 — $ 1,375 $ 648 $ — $ (19 ) $ 629

Gross Gross Gross Gross
Amortized Unrealized Unrealized Fair Amortized Unrealized Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value

At December 31, 2020:
At December 31, 2021:
Available for sale:
SBA Pool Securities $ 1,338 $ — $ (41 ) $ 1,297 $ 1,097 $ 1 $ (26 ) $ 1,072
Collateralized mortgage obligations 458 27 — 485 210 7 — 217
Taxable municipal securities 5,063 29 (7 ) 5,085 16,766 19 (359 ) 16,426
Mortgage-backed securities 11,984 53 (11 ) 12,026 17,137 19 (477 ) 16,679
Total $ 18,843 $ 109 $ (59 ) $ 18,893 $ 35,210 $ 46 $ (862 ) $ 34,394

Held-to-maturity:
Collateralized mortgage obligations $ 2,420 $ 116 — $ 2,536 $ 854 $ 28 $ — $ 882
Mortgage-backed securities 979 34 — 1,013 186 3 — 189
Total $ 3,399 $ 150 — $ 3,549 $ 1,040 $ 31 $ — $ 1,071

There were 0no sales of debt securities during the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

(continued)

8

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(2) Debt Securities Continued.

Debt Securities available for sale with gross unrealized losses, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position, is as follows (in thousands):
Schedule of Debt Securities with Gross Unrealized Losses, by Investment Category
At September 30, 2021 At June 30, 2022
Over Twelve Months Less Than Twelve Months Over Twelve Months Less Than Twelve Months
Gross Gross Gross Gross
Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Fair
Losses Value Losses Value Losses Value Losses Value

Available for Sale :
Available for Sale:
SBA Pool Securities (27 ) 907 — — $ (21 ) $ 768 $ — $ —
Collateralized mortgage obligation — — (10 ) 153
Taxable municipal securities — — (165 ) 12,124 (1,717 ) 4,832 (2,535 ) 7,663
Mortgage-backed securities (39 ) 1,613 (162 ) 15,205 (1,323 ) 6,959 (1,115 ) 6,644
Total $ (66 ) $ 2,520 $ (327 ) $ 27,329 $ (3,061 ) $ 12,559 $ (3,660 ) $ 14,460

At December 31, 2020 At December 31, 2021
Over Twelve Months Less Than Twelve Months Over Twelve Months Less Than Twelve Months
Gross Gross Gross Gross
Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Fair
Losses Value Losses Value Losses Value Losses Value

Available for Sale :
SBA Pool Securities (41 ) 1,297 — — $ (26 ) $ 895 $ — $ —
Taxable municipal securities — — (7 ) 1,413 (81 ) 1,853 (278 ) 12,828
Mortgage-backed securities — — (11 ) 3,583 (242 ) 6,179 (235 ) 9,984
Total $ (41 ) $ 1,297 $ (18 ) $ 4,996 $ (349 ) $ 8,927 $ (513 ) $ 22,812

Management evaluates debt securities for other-than-temporary impairment at least on a quarterly basis, and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospectus of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the unrealized losses on ~~twenty-nine~~thirty-seven and ~~eleven~~twenty-nine debt securities, respectively, were caused by market conditions. It is expected that the debt securities ~~would~~will not be settled at a price less than the book value of the investments. Because the decline in fair value is attributable to market conditions and not credit quality, and because the Company has the ability and intent to hold these investments until a market price recovery or maturity, these investments are not considered other-than-temporarily impaired.

(continued)

9

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans. The components of loans are as follows (in thousands):
Schedule of Components of Loans
September 30, December 31, June 30, December 31,
2021 2020 2022 2021

Residential real estate $ 30,721 $ 28,997 $ 33,823 $ 32,583
Multi-family real estate 41,159 19,210 56,265 48,592
Commercial real estate 102,416 74,398 222,818 129,468
Land and construction 4,694 4,750 7,099 3,772
Commercial 18,269 21,849 7,355 14,157
Consumer 12,085 5,715 26,237 22,827

Total loans 209,344 154,919 353,597 251,399

Deduct:
Net deferred loan fees, costs and premiums (784 ) (544 ) (406 ) (422 )
Allowance for loan losses (2,695 ) (1,906 ) (4,243 ) (3,075 )

Loans, net $ 205,865 $ 152,469 $ 348,948 $ 247,902

An analysis of the change in the allowance for loan losses follows (in thousands):
Schedule of Change in Allowance for Loan Losses
Real Estate Real Estate
Commercial
Real Estate

Land and
Construction
Commercial Consumer Unallocated Total
Residential
Real
Multi-Family Real Commercial Land and
Residential Multi-Family Estate Estate Real Estate Construction Commercial Consumer Unallocated Total
Real Estate Real Estate
Commercial
Real Estate

Land and
Construction
Commercial Consumer Unallocated Total
Three Months Ended September 30, 2021: ��
Three Months Ended June 30, 2022:

Beginning balance $ 472 $ 392 $ 938 $ 57 $ 58 $ 314 $ — $ 2,231 $ 575 $ 549 $ 1,607 $ 79 $ 68 $ 530 $ — 3,408
(Credit) provision for loan losses (29 ) 102 349 (10 ) 39 131 — 582 (61 ) 70 733 (8 ) 33 224 — 991
Charge-offs — — — — (10 ) (111 ) — (121 ) — — — — (90 ) (136 ) — (226 )
Recoveries 3 — — — — — — 3 — — — — 56 14 — 70

Ending balance $ 446 $ 494 $ 1,287 $ 47 $ 87 $ 334 $ — $ 2,695 $ 514 $ 619 $ 2,340 $ 71 $ 67 $ 632 — $ 4,243

Three Months Ended September 30, 2020:
Three Months Ended June 30, 2021:
Beginning balance $ 717 $ 153 $ 888 $ 50 $ 620 $ 236 $ — $ 2,664 $ 396 $ 238 $ 843 $ 46 $ 99 $ 268 — $ 1,890
Provision (credit) for loan losses 85 75 84 (5 ) 292 (7 ) — 524
Provision (Credit) for loan losses 74 154 95 7 (31 ) 98 — 397
Charge-offs (259 — — — (775 ) (17 ) — (1,051 ) — — — — (10 ) (60 ) — (70 )
Recoveries 1 — — 6 — 1 — 8 2 — — 4 — 8 — 14

Ending balance $ 544 $ 228 $ 972 $ 51 $ 137 $ 213 $ — $ 2,145 $ 472 $ 392 $ 938 $ 57 $ 58 $ 314 — $ 2,231

Nine Months Ended September 30, 2021:
Six Months Ended June 30, 2022:

Beginning balance $ 482 $ 535 $ 1,535 $ 32 $ 74 $ 417 $ — $ 3,075
Provision for loan losses 32 84 805 39 27 396 — 1,383
Charge-offs — — — �� — (90 ) (209 ) — (299 )
Recoveries — — — — 56 28 — 84

Ending balance $ 514 $ 619 $ 2,340 $ 71 $ 67 $ 632 $ — $ 4,243

Six Months Ended June 30, 2021:

Beginning balance $ 463 $ 253 $ 884 $ 52 $ 103 $ 151 $ — $ 1,906 $ 463 $ 253 $ 884 $ 52 $ 103 $ 151 $ — $ 1,906
(Credit) provision for loan losses (46 ) 241 403 (13 ) 4 366 — 955 (17 ) 139 54 (3 ) (35 ) 235 — 373
Charge-offs — — — — (20 ) (191 ) — (211 ) — — — — (10 ) (80 ) — (90 )
Recoveries 29 — — $ 8 — 8 — 45 26 — — 8 — 8 — 42

Ending balance $ 446 $ 494 $ 1,287 $ 47 $ 87 $ 334 $ — $ 2,695 $ 472 $ 392 $ 938 $ 57 $ 58 $ 314 $ — $ 2,231

Nine Months Ended September 30, 2020:

Beginning balance $ 531 $ 82 $ 624 $ 21 $ 573 $ 152 $ 26 $ 2,009
Provision (credit) for loan losses 264 146 348 12 339 153 (26 ) 1,236
Charge-offs (259 ) — — — (775 ) (94 ) — (1,128 )
Recoveries 8 — — 18 — 2 — 28

Ending balance $ 544 $ 228 $ 972 $ 51 $ 137 $ 213 $ - $ 2,145

(continued)

10

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued.

Multi- Residential Multi-Family
Residential Family Real Real Commercial Land and

Real
Estate
Real Estate
Commercial
Real Estate

Land and
Construction
Commercial Consumer Unallocated Total Estate Estate Real Estate Construction Commercial Consumer Total
At September 30, 2021:
At June 30, 2022:
Individually evaluated for impairment:
Recorded investment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
Balance in allowance for loan losses $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —

Collectively evaluated for impairment:
Recorded investment $ 30,721 $ 41,159 $ 102,416 $ 4,694 $ 18,269 $ 12,085 $ — $ 209,344 $ 33,823 $ 56,265 $ 222,818 $ 7,099 $ 7,355 $ 26,237 $ 353,597
Balance in allowance for loan losses $ 446 $ 494 $ 1,287 $ 47 $ 87 $ 334 $ — $ 2,695 $ 514 $ 619 $ 2,340 $ 71 $ 67 $ 632 $ 4,243

At December 31, 2020:
At December 31, 2021:
Individually evaluated for impairment:
Recorded investment $ — $ — $ 2,193 $ — $ — $ — $ — $ 2,193 $ — $ — $ — $ — $ — $ — $ —
Balance in allowance for loan losses $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —

Collectively evaluated for impairment:
Recorded investment $ 28,997 $ 19,210 $ 72,205 $ 4,750 $ 21,849 $ 5,715 $ — $ 152,726 $ 32,583 $ 48,592 $ 129,468 $ 3,772 $ 14,157 $ 22,827 $ 251,399
Collectively evaluated for impairment, Recorded investment $ 32,583 $ 48,592 $ 129,468 $ 3,772 $ 14,157 $ 22,827 $ 251,399
Balance in allowance for loan losses $ 463 $ 253 $ 884 $ 52 $ 103 $ 151 $ — $ 1,906 $ 481 $ 535 $ 1,535 $ 32 $ 72 $ 420 $ 3,075
Collectively evaluated for impairment, Balance in allowance for loan losses $ 481 $ 535 $ 1,535 $ 32 $ 72 $ 420 $ 3,075

(continued)

11

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued. The Company has divided the loan portfolio into six portfolio segments, each with different risk characteristics and methodologies for assessing risk. All loans are underwritten based upon standards set forth in the policies approved by the Company’s Board of Directors (the “Board”). The Company identifies the portfolio segments as follows:

Residential Real Estate, Multi-Family Real Estate, Commercial Real Estate, Land and Construction. Residential real estate loans are underwritten based on repayment capacity and source, value of the underlying property, credit history and stability. The Company offers first and second one-to-four family mortgage loans; the collateral for these loans is generally the clients’ owner-occupied residences. Although these types of loans present lower levels of risk than commercial real estate loans, risks do still exist because of possible fluctuations in the value of the real estate collateral securing the loan, as well as changes in the borrowers’ financial condition. Multi-family and commercial real estate loans are secured by the subject property and are underwritten based upon standards set forth in the policies approved by the Board. Such standards include, among other factors, loan to value limits, cash flow coverage and general creditworthiness of the obligors. Construction loans to borrowers finance the construction of owner occupied and leased properties. These loans are categorized as construction loans during the construction period, later converting to commercial or residential real estate loans after the construction is complete and amortization of the loan begins. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Real estate development and construction loan funds are disbursed periodically based on the percentage of construction completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien waivers on funds advanced. Development and construction loans are typically secured by the properties under development or construction, and personal guarantees are typically obtained. Further, to assure that reliance is not placed solely on the value of the underlying property, the Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sales information. The Company also makes loans on occasion for the purchase of land for future development by the borrower. Land loans are extended for future development for either commercial or residential use by the borrower. The Company carefully analyzes the intended use of the property and the viability thereof.

Commercial. Commercial business loans and lines of credit consist of loans to small- and medium-sized companies in the Company’s market area. Commercial loans are generally used for working capital purposes or for acquiring equipment, inventory or furniture. Primarily all of the Company’s commercial loans are secured loans, along with a small amount of unsecured loans. The Company’s underwriting analysis consists of a review of the financial statements of the borrower, the lending history of the borrower, the debt service capabilities of the borrower, the projected cash flows of the business, the value of the collateral, if any, and whether the loan is guaranteed by the principals of the borrower. These loans are generally secured by accounts receivable, inventory and equipment. Commercial loans are typically made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business, which makes them of higher risk than residential loans and the collateral securing loans may be difficult to appraise and may fluctuate in value based on the success of the business. The Company seeks to minimize these risks through its underwriting standards. ~~The Company has supported small business owners by making loans through the Small Business Administration Paycheck Protection Program (“PPP”). As of September 30, 2021, the Bank had originated~~ ~~502~~ ~~PPP loans for a total dollar amount of $37.4~~ ~~million. These loans are 100% guaranteed by the Small Business Administration (the “SBA”). At September 30, 2021 outstanding PPP loans total approximately $14.3~~ ~~million.~~

Consumer. Consumer loans are extended for various purposes, including purchases of automobiles, recreational vehicles, and boats. Also offered are home improvement loans, lines of credit, personal loans, and deposit account collateralized loans. Repayment of these loans is primarily dependent on the personal income of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Loans to consumers are extended after a credit evaluation, including the creditworthiness of the borrower(s), the purpose of the credit, and the secondary source of repayment. Consumer loans are made at fixed and variable interest rates. Risk is mitigated by the fact that the loans are of smaller individual amounts.

(continued)

12

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued. The following summarizes the loan credit quality (in thousands):
Schedule of Loans by Credit Quality

OLEM
(Other Loans Especially
Sub- Pass
OLEM
(Other Loans Especially
Mentioned)

Sub-
Standard
Doubtful Loss Total
Pass Mentioned) Standard Doubtful Loss Total

At September 30, 2021:
At June 30, 2022:
Residential real estate $ 28,212 $ — $ 2,509 $ — $ — $ 30,721 $ 33,823 $ — $ — $ — $ — $ 33,823
Multi-family real estate 41,159 — — — — 41,159 56,265 — — — — 56,265
Commercial real estate 99,825 2,591 — — — 102,416 220,071 1,492 1,255 — — 222,818
Land and construction 4,694 — — — — 4,694 7,099 — — — — 7,099
Commercial 17,992 277 — — — 18,269 6,783 572 — — — 7,355
Consumer 12,085 — — — — 12,085 26,237 — — — — 26,237

Total $ 203,967 $ 2,868 $ 2,509 $ — $ — $ 209,344 $ 350,278 $ 2064 $ 1,255 $ — $ — $ 353,597

At December 31, 2020:
At December 31, 2021:
Residential real estate $ 28,151 $ — $ 846 $ — $ — $ 28,997 $ 30,080 $ — $ 2,503 $ — $ — $ 32,583
Multi-family real estate 19,210 — — — — 19,210 47,962 630 — — — 48,592
Commercial real estate 66,089 4,449 3,860 — — 74,398 125,620 3,848 — — — 129,468
Land and construction 4,750 — — — — 4,750 3,772 — — — — 3,772
Commercial 20,735 1,114 — — — 21,849 13,960 197 — — — 14,157
Consumer 5,715 — — — — 5,715 22,827 — — — — 22,827

Total $ 144,650 $ 5,563 $ 4,706 $ — $ — $ 154,919 $ 244,221 $ 4,675 $ 2,503 $ — $ — $ 251,399

Internally assigned loan grades are defined as follows:

Pass – a Pass loan’s primary source of loan repayment is satisfactory, with secondary sources very likely to be realized if necessary. These are loans that conform in all aspects to bank policy and regulatory requirements, and no repayment risk has been identified.

OLEM – an Other Loan Especially Mentioned has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date.

Substandard – a Substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Included in this category are loans that are current on their payments, but the Bank is unable to document the source of repayment. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – a loan classified as Doubtful has all the weaknesses inherent in one classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. The Company charges off any loan classified as Doubtful.

Loss – a loan classified Loss is considered uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future. The Company fully charges off any loan classified as Loss.

(continued)

13

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued. Age analysis of past-due loans is as follows (in thousands):
Schedule of Age Analysis of Past-due Loans
Accruing Loans
Greater Accruing Loans
30-59 60-89 Than 90 Greater

Days
Past

Days
Past
Days Past
Total
Past
Nonaccrual Total 30-59 60-89 Than 90 Total
Due Due Past Due Current Loans Loans
Days
Past

Days
Past
Days Past Past Nonaccrual Total
Due Due Past Due Current Loans Loans
At September 30, 2021:

At June 30, 2022:
Residential real estate $ — $ — $ — $ — $ 30,721 $ — $ 30,721 $ — $ — $ — $ — $ 33,823 $ — $ 33,823
Multi-family real estate — — — — 41,159 — 41,159 — — — — 56,265 — 56,265
Commercial real estate — — — — 102,416 — 102,416 — — — — 222,818 — 222,818
Land and construction — — — — 4,694 — 4,694 — — — — 7,099 — 7,099
Commercial — — — — 18,269 — 18,269 — — — — 7,355 — 7,355
Consumer 21 22 — 43 12,042 — 12,085 93 174 — 267 25,970 — 26,237

Total $ 21 $ 22 $ — $ 43 $ 209,301 $ — $ 209,344 $ 93 $ 174 $ — $ 267 $ 353,330 $ — $ 353,597

Accruing Loans Accruing Loans
Greater

30-59 Days
Past
Due

60-89
Days
Past
Due

Greater
Than 90 Days
Past
Due

Total
Past
Due

Current

Nonaccrual
Loans

Total
Loans

30-59 Days
60-89
Days
Than 90 Days Total
Past Past Past Past Nonaccrual Total
Due Due Due Due Current Loans Loans
At December 31, 2020:
At December 31, 2021:
Residential real estate $ 977 $ — $ — $ 977 $ 28,020 $ — $ 28,997 $ 198 $ — $ — $ 198 $ 32,385 $ — $ 32,583
Multi-family real estate — — — — 19,210 — 19,210 — — — — 48,592 — 48,592
Commercial real estate — — — — 72,205 2,193 74,398 — — — — 129,468 — 129,468
Land and construction — — — — 4,750 — 4,750 — — — — 3,772 — 3,772
Commercial — — — — 21,849 — 21,849 — — — — 14,157 — 14,157
Consumer 6 — — 6 5,709 — 5,715 69 — — 69 22,758 — 22,827

Total $ 983 $ — $ — $ 983 $ 151,743 $ 2,193 $ 154,919 $ 267 $ — $ — $ 267 $ 251,132 $ — $ 251,399

There were no impaired loans at ~~September~~June 30, ~~2021. The following summarizes the amount of impaired loans at~~2022 or December 31, ~~2020 (in thousands):~~2021.
~~Schedule of Impaired Loans~~
December 31, 2020
Unpaid
Recorded Principal Related
Investment Balance Allowance
With no related allowance recorded:
Commercial real estate $ 2,193 $ 2,193 —

(continued)

14

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(3) Loans, Continued. The average recorded investment in impaired loans and interest income recognized and received on impaired loans are as follows (in thousands):
Schedule of Interest Income Recognized and Received on Impaired Loans
Three Months Ended September 30, Three Months Ended June 30,
2021 2020 2022 2021
Average Interest Interest Average Interest Interest Average Interest Interest Average Interest Interest
Recorded Income Income Recorded Income Income Recorded Income Income Recorded Income Income
Investment Recognized Received Investment Recognized Received Investment Recognized Received Investment Recognized Received

Residential real estate $ — $ — $ — $ 626 $ — $ — $ — $ — $ — $ — $ — $ —
Commercial real estate $ — $ — $ — $ 2,193 $ 26 $ — $ — $ — $ — $ — $ — $ —
Commercial $ — $ — $ — $ 270 $ — $ — $ — $ — $ — $ — $ — $ —
Total $ — $ — $ — $ 3,089 $ 26 $ — $ — $ — $ — $ — $ — $ —

Nine Months Ended September 30, Six Months Ended June 30,
2021 2020 2022 2021
Average Interest Interest Average Interest Interest Average Interest Interest Average Interest Interest
Recorded Income Income Recorded Income Income Recorded Income Income Recorded Income Income
Investment Recognized Received Investment Recognized Received Investment Recognized Received Investment Recognized Received

Residential real estate $ — $ — $ — $ 846 $ 18 $ 11 $ — $ — $ — $ — $ — $ —
Commercial real estate $ 658 $ 7 $ 7 $ 2,194 $ 78 $ 60 $ — $ — $ — $ 940 $ 7 $ 7
Commercial $ — $ — $ — $ 649 $ — $ 18 $ — $ — $ — $ — $ — $ —
Total $ 658 $ 7 $ 7 $ 3,689 $ 96 $ 89 $ — $ — $ — $ 940 $ 7 $ 7

No loans have been determined to be troubled debt restructurings (TDR’s) during the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021. At ~~September~~June 30, ~~2021~~2022 and ~~2020,~~2021, there were no loans modified and entered into as TDR’s within the past twelve months, that subsequently defaulted during the three and ~~nine~~six month periods ended ~~September~~June 30, ~~2021~~2022 or ~~2020.~~2021.

(4) Earnings ~~(Loss)~~ Per Share. Basic earnings ~~(loss)~~ per share have been computed on the basis of the weighted-average number of shares of common stock outstanding during the ~~period.~~periods. During the three and ~~nine~~six month periods ended ~~September~~June 30, 2022 and 2021, basic and diluted earnings per share is the same as there were no outstanding potentially dilutive securities. ~~During the three and nine month periods ended September 30, 2020, basic and diluted loss per share is the same due to the net loss incurred by the Company.~~ Earnings ~~(loss)~~ per common share have been computed based on the following:
Schedule of Basic and Diluted Loss Per Share
2021 2020 2021 2020
Three Months Ended Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Weighted-average number of common shares outstanding used to calculate basic and diluted loss per common share 4,346,211 2,951,353 3,611,814 2,920,961
2022 2021 2022 2021
Three Months Ended Six Months Ended
June 30, June 30,
2022 2021 2022 2021
Weighted-average number of common shares outstanding used to calculate basic and diluted earnings per common share 6,007,484 3,273,098 5,455,406 3,239,615

(continued)

15

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(5) Stock-Based Compensation

The Company is authorized to grant stock options, stock grants and other forms of equity-based compensation under its 2018 Equity Incentive Plan (the “2018 Plan”). The plan has been approved by the shareholders. The Company is authorized to issue up to 550,000shares of common stock under the 2018 Plan, of which ~~250,096~~ 225,603shares remain available for grant. NaN stock options are outstanding at ~~September~~June 30, ~~2021.~~2022.

During the ~~first~~ quarter ~~of 2021,~~ended June 30, 2022, the Company ~~agreed~~recognized $96,000 of stock-based compensation with respect to ~~issue~~ ~~62,112~~ 24,493shares issued to ~~a director~~employees for services ~~performed and recorded compensation expense of $200,000. At September 30, 2021 the director had not yet taken delivery of the shares. As such, at September 30, 2021, the $200,000~~ ~~is presented on the accompanying condensed consolidated balance sheets under the caption of “other liabilities”. During October 2021, the director took delivery of the shares.~~performed.

(6) Fair Value Measurements. There were 0no impaired collateral dependent loans measured at fair value on a nonrecurring basis at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020.~~2021.

Debt securities available for sale measured at fair value on a recurring basis are summarized below (in thousands):
Schedule of Debt Securities Available-for-sale Measured at Fair Value on Recurring Basis

Fair Value Measurements Using
Quoted Prices Significant
In Active Markets for Other Observable
Significant
Unobservable

Fair Value Identical Assets
(Level 1) Inputs
(Level 2)
Inputs
(Level 3)

At September 30, 2021 :
SBA Pool Securities $ 1,113 $ — $ 1,113 —
Collateralized mortgage obligations 250 — 250 —
Taxable municipal securities 16,669 — 16,669 —
Mortgage-backed securities 17,706 — 17,706 —
Total $ 35,738 — $ 35,738 —
Fair Value Measurements Using Fair Value (Level 1) (Level 2) (Level 3)
Quoted Prices In Active Markets for Identical Assets Significant Other Observable Inputs Significant Unobservable Inputs Fair Value Measurements Using
Fair Value (Level 1) (Level 2) (Level 3) Quoted Prices
In Active Markets for Significant Other Significant
At December 31, 2020 :
Identical
Assets Observable Inputs Unobservable Inputs
Fair Value (Level 1) (Level 2) (Level 3)
At June 30, 2022 :
SBA Pool Securities $ 1,297 $ — $ 1,297 — $ 958 $ — $ 958 —
Collateralized mortgage obligations 485 — 485 — 154 — 154 —
Taxable municipal securities 5,085 — 5,085 — 12,496 — 12,496 —
Mortgage-backed securities 12,026 — 12,026 — 13,603 — 13,603 —
Total $ 18,893 — $ 18,893 — $ 27,211 — $ 27,211 —

At December 31, 2021 :
SBA Pool Securities $ 1,072 $ — $ 1,072 —
Collateralized mortgage obligations 217 — 217 —
Taxable municipal securities 16,426 — 16,426 —
Mortgage-backed securities 16,679 — 16,679 —
Total $ 34,394 — $ 34,394 —

(7) Fair Value of Financial Instruments. The estimated fair values and fair value measurement method with respect to the Company’s financial instruments were as follows (in thousands):
Schedule of Estimated Fair Value of Financial Instruments
Carrying Amount Fair Value Level Carrying Amount
Fair
Value
Level
At September 30, 2021 At December 31, 2020
Carrying Amount Fair Value Level Carrying Amount
Fair
Value
Level

Financial assets:
Cash and cash equivalents $ 83,583 $ 83,583 1 $ 54,629 $ 54,629 1
Debt securities available for sale 35,738 35,738 2 18,893 18,893 2
Debt securities held-to-maturity 1,327 1,375 2 3,399 3,549 2
Loans 205,865 205,807 3 152,469 153,276 3
Federal Home Loan Bank stock 793 793 3 1,092 1,092 3
Accrued interest receivable 863 863 3 1,336 1,336 3

Financial liabilities:
Deposit liabilities 281,746 281,813 3 190,759 191,011 3
Federal Home Loan Bank advances 18,000 18,185 3 23,000 23,254 3
Junior subordinated debenture — — 3 2,068 N/A (1) 3
Off-balance sheet financial instruments — — 3 — — 3

~~(1)~~ ~~The Company is unable to determine value based on significant unobservable inputs required in the calculation.~~
At June 30, 2022 At December 31, 2021
Carrying Amount Fair Value Level Carrying Amount
Fair
Value
Level

Financial assets:
Cash and cash equivalents $ 77,269 $ 77,269 1 $ 58,970 $ 58,970 1
Debt securities available for sale 27,211 27,211 2 34,394 34,394 2
Debt securities held-to-maturity 648 629 2 1,040 1,071 2
Loans 348,948 348,607 3 247,902 247,788 3
Federal Home Loan Bank stock 2,725 2,725 3 793 793 3
Accrued interest receivable 997 997 3 971 971 3

Financial liabilities:
Deposit liabilities 341,819 341,687 3 292,457 292,537 3
Federal Home Loan Bank advances 68,000 67,368 3 18,000 18,021 3
Repurchase agreements 5,000 5,000 3 — — 3
Off-balance sheet financial instruments — — 3 — — 3

(continued)

16

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(8) Off- Balance Sheet Financial Instruments. The Company is party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments are commitments to extend credit, unused lines of credit, and standby letters of credit and may involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the condensed consolidated balance sheet. The contract amounts of these instruments reflect the extent of involvement the Company has in these financial instruments.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments.

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company, upon extension of credit, is based on management’s credit evaluation of the counterparty.

Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of a customer to a third party. The credit risk involved in issuing letters of credit to customers is essentially the same as that involved in extending loan facilities to customers. The Bank generally holds collateral supporting those commitments. Standby letters of credit generally have expiration dates within one year.

Commitments to extend credit, unused lines of credit, and standby letters of credit typically result in loans with a market interest rate when funded. A summary of the contractual amounts of the Company’s financial instruments with off-balance-sheet risk at ~~September~~June 30, ~~2021~~2022 follows (in thousands):
Schedule of Off-Balance Sheet Risks of Financial Instruments

Commitments to extend credit $ 16,153 $ 16,448

Unused lines of credit $ 11,532 $ 18,030

Standby letters of credit $ 4,550 $ 4,144

(9) Regulatory Matters. The Bank is subject to various regulatory capital requirements administered by the bank regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

In 2019, the federal banking agencies jointly issued a final rule that provides for an optional, simplified measure of capital adequacy, the community bank leverage ratio framework (CBLR framework), for qualifying community banking organizations. The final rule became effective on January 1, 2020 and was elected by the Bank. In April 2020, the federal banking agencies issued an interim final rule that makes temporary changes to the CBLR framework, pursuant to section 4012 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, and a second interim final rule that provides a graduated increase in the community bank leverage ratio requirement after the expiration of the temporary changes implemented pursuant to section 4012 of the CARES Act.(continued)

The community bank leverage ratio removes the requirement for qualifying banking organizations to calculate and report risk-based capital but rather only requires a Tier 1 to average assets (leverage) ratio. Qualifying community banking organizations that elect to use the community bank leverage ratio framework and that maintain a leverage ratio of greater than required minimums will be considered to have satisfied the generally applicable risk based and leverage capital requirements in the agencies’ capital rules (generally applicable rule) and, if applicable, will be considered to have met the well capitalized ratio requirements for purposes of section 38 of the Federal Deposit Insurance Act. Under the interim final rules, the community bank leverage ratio minimum requirement is 8~~% as of December 31, 2020,~~ ~~8.5% for calendar year 2021, and~~ 9% for calendar year 2022 and beyond. The interim rule allows for a two-quarter grace period to correct a ratio that falls below the required amount, provided that the Bank maintains a leverage ratio of 7~~% as of December 31, 2020,~~ ~~7.5% for calendar year 2021, and~~ 8% for calendar year 2022 and beyond. Under the final rule, an eligible community banking organization can opt out of the CBLR framework and revert back to the risk-weighting framework without restriction.
~~(continued)~~
17

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(9) Regulatory Matters, Continued.

Management believes, as of ~~September 30, 2021~~June 31, 2022 and December 31, ~~2020,~~2021, that the Bank meets all capital adequacy requirements to which it is subject. The Bank’s actual capital amounts and percentages are presented in the table ($ in thousands):

Schedule of Capital Amounts, Ratios and Regulatory Thresholds
Actual To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework)
Amount % Amount %
As of September 30, 2021:
Tier I Capital to Total Assets 32,980 10.96 % 25,567 8.5 %

Actual To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework) Actual To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework)
Amount % Amount % Amount % Amount %
As of December 31, 2020:
As of June 30, 2022:
Tier I Capital to Total Assets 19,261 9 % 17,116 8 % $ 50,092 12.85 % $ 35,085 9.00 %

As of December 31, 2021:
Tier I Capital to Total Assets $ 35,338 10.64 % $ 28,235 8.50 %

(10) Preferred Stock

During the first quarter of ~~2021,~~2022, the Company issued ~~160~~260 shares of Series BB-2 Participating Preferred Stock ~~(the “Series B Preferred Stock”)~~ to ~~a related~~an unrelated party at a cash price of $25,000 per share, or an aggregate of $~~4,000,000~~6,500,000. ~~The related party is a significant common stockholder.~~

~~During the second quarter of 2021, the Company issued~~OptimumBank Holding Inc. is authorized to issue ~~200~~1,020 shares of Series B Participating Preferred Stock ~~(the “Series B Preferred Stock”) to a non-related party~~ at a ~~cash~~ price of $25,000 per ~~share, or an aggregate of $5,000,000~~.
share. The ~~Series B~~ Preferred Stock has no par value. Except in the ~~case~~event of liquidation, if the Company declares or pays a dividend or distribution on the common stock, the Company shall simultaneously declare and pay a dividend on the Series B Preferred ~~Stock~~ on a pro rata basis with the common stock determined on an as-converted basis assuming all ~~Shares~~shares of Series B Preferred Stock had been converted immediately prior to the record date of the applicable dividend. ~~At September 30, 2021, the Company had~~
~~760~~ ~~shares of Series B~~
The Preferred Stock ~~outstanding, which are~~is convertible into~~7,600,000~~ shares of common stock, at the option of the Company, subject to the prior fulfilment of the following conditions: (i) such conversion shall have been approved by the holders of a majority of the outstanding common stock of the Company; and (ii) such conversion shall not result in any holder of the Series B Preferred Stock and any persons with whom the holder may be acting in concert, becoming beneficial owners of more than ~~9.9~~9.9%% of the outstanding shares of the common stock. The number of shares issuable upon conversion is subject to adjustment based on the terms of the ~~amended~~applicable Certificate of Designation infor the ~~Amendment to the Company’s Articles of Incorporation filed on June 25, 2021~~Series B Preferred (the “Certificate of Designation”) The Series B Preferred ~~Stock~~ has preferential liquidation rights over common stockholders and holders of junior securities. The liquidation price is the greater of $25,000 per share of ~~preferred stock~~Series B Preferred or such amount per share of ~~preferred stock~~Series A Preferred that would have been payable had all shares of the ~~preferred stock~~Series B Preferred had been converted into common stock ~~per~~pursuant to the terms of the Certificate of Designation immediately prior to a liquidation. The Series B Preferred ~~Stock~~ generally has no voting rights except as provided in the Certificate of Designation.
The Series B is subdivided into Series B-1 and Series B-2 Preferred Stock. The Company is authorized to issue 760 shares of Series B-1 and 260 shares of Series B-2.
Series B-2 has substantially the same rights, preferences, powers, restrictions and limitations, except that the initial conversion price of the Series B-1 is $2.50 per share and the initial conversion price for Series B-2 is $4.00 per share.

(11) Contingencies. Various claims arise from time to time in the normal course of business. In the opinion of management, none have occurred that will have a material effect on the Company’s condensed consolidated financial statements.

(continued)

18

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto presented elsewhere in this report. For additional information, refer to the consolidated financial statements and footnotes for the year ended December 31, ~~2020~~2021 in the Annual Report on Form 10-K.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the control of the Company, including adverse changes in economic, political and market conditions, losses from the Company’s lending activities and changes in market conditions, the possible loss of key personnel, the impact of increasing competition, the impact of changes in government regulation, the possibility of liabilities arising from violations of federal and state securities laws and the impact of changes in technology in the banking industry. Although the Company believes that its forward-looking statements are based upon reasonable assumptions regarding its business and future market conditions, there can be no assurances that the Company’s actual results will not differ materially from any results expressed or implied by the Company’s forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that any forward-looking statements are not guarantees of future performance.

Capital Levels

As of ~~September~~June 30, ~~2021,~~2022, the Bank is well capitalized under regulatory guidelines.

Refer to Note 9 for the Bank’s actual and required minimum capital ratios.

(continued)

19

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Financial Condition at ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021

Overview

The Company’s total assets increased by approximately ~~$100~~$114.7 million to ~~$335.1~~$466.6 million at ~~September~~June 30, ~~2021,~~2022, from ~~$235.1~~$351.9 million at December 31, ~~2020,~~2021, primarily due to increases in loans, and cash and cash ~~equivalents and debt securities.~~equivalents. The growth in assets was attributable to the success of the Company’s efforts to increase loans and deposits from new customers. ~~Total~~Net loans grew by $101 million and deposits grew by approximately ~~$91~~$49.4 million to ~~$281.7~~$341.8 million at ~~September~~June 30, ~~2021,~~2022, from ~~$190.8~~$292.5 million at December 31, ~~2020.~~2021. The Company increased the Federal Home Loan Bank advances by $50 million to $68 million at June 30, 2022. Total stockholders’ equity increased by approximately ~~$15.3~~$9.5 million to ~~$33.2~~$48.0 million at ~~September~~June 30, ~~2021,~~2022, from ~~$17.8~~$38.5 million at December 31, ~~2020,~~2021, primarily due to proceeds from the sale of preferred stock, common stock ~~the issuance of common stock in exchange for Trust Preferred Securities~~ and net earnings. The increase in stockholders’ equity was partially offset by the ~~change~~increase in accumulated other comprehensive loss of approximately $4.4 million for the ~~three and nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

The following table shows selected information for the periods ended or at the dates indicated:

Nine Months Ended
September 30, 2021 Year Ended
December 31, 2020

Average equity as a percentage of average assets 8.7 % 5.8 %

Equity to total assets at end of period 9.9 % 7.6 %

Return on average assets (1) 0.9 % (0.5 )%

Return on average equity (1) 9.5 % (7.8 )%

Noninterest expenses to average assets (1) 2.3 % 2.9 %
Six Months Ended Year Ended
30-Jun-22 31-Dec-21

Average equity as a percentage of average assets 11.1 % 9.4 %

Equity to total assets at end of period 10.3 % 11.0 %

Return on average assets (1) 0.9 % 2.2 %

Return on average equity (1) 8.3 % 23.3 %

Noninterest expenses to average assets (1) 2.3 % 2.4 %

(1) Annualized for the ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

Liquidity and Sources of Funds

The Company’s sources of funds include customer deposits, advances from the Federal Home Loan Bank of Atlanta (“FHLB”), principal repayments and sales of debt securities, loan repayments, the use of Federal Funds markets, net earnings, ~~if any,~~ and loans taken out at the Federal Reserve Bank discount window.

Deposits are our primary source of funds. In order to increase its core deposits, the Company has priced its deposit rates competitively. The Company will adjust rates on its deposits to attract or retain deposits as needed.

The Company increased deposits by approximately ~~$91~~$49.4 million during the ~~nine-month~~six-month period ending ~~September~~June 30, ~~2021.~~2022. The proceeds were used to originate new ~~loans, purchase debt securities and repay Federal Home Loan Bank advances.~~loans.

In addition to obtaining funds from depositors, the Company may borrow funds from other financial institutions. At ~~September~~June 30, ~~2021,~~2022, the Company had outstanding borrowings of ~~$18~~$68 million, against its ~~$55~~$93 million in established borrowing capacity with the FHLB. The Company’s borrowing facility is subject to collateral and stock ownership requirements, as well as prior FHLB consent to each advance. The Company has an available discount window credit line with the Federal Reserve Bank, currently $430,000. The Federal Reserve Bank line is subject to collateral requirements and must be repaid within 90 days; each advance is subject to prior Federal Reserve Bank consent. At ~~September~~June 30, ~~2021,~~2022, the Company also had available lines of credit amounting to ~~$9.5~~$19.5 million with ~~four~~six correspondent banks to purchase federal funds. Disbursements on the lines of credit are subject to the approval of the correspondent banks. We measure and monitor our liquidity daily and believe our liquidity sources are adequate to meet our operating needs.

Off-Balance Sheet Arrangements

Refer to Note 8 in the condensed consolidated financial statements for Off-Balance Sheet Arrangements.

~~Junior Subordinated Debenture~~(continued)

~~Please refer to Note 1 in the condensed consolidated financial statements for discussion on this matter.~~
~~(continued)~~
20

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Results of Operations

The following table sets forth, for the periods indicated, information regarding (i) the total dollar amount of interest and dividend income of the Company from interest-earning assets and the resultant average yields; (ii) the total dollar amount of interest expense on interest-bearing liabilities and the resultant average cost; (iii) net interest income; (iv) interest-rate spread; (v) net interest margin; and (vi) the ratio of average interest-earning assets to average interest-bearing liabilities.

Three Months Ended September 30, Three Months Ended June 30,
2021 2020 2022 2021
Interest Average Interest Average Interest Average Interest Average
Average and Yield/ Average and Yield/ Average and Yield/ Average and Yield/
(dollars in thousands) Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾
Interest-earning assets:
Loans $ 203,983 $ 2,795 5.48 % $ 142,138 $ 1,723 4.85 % $ 297,472 $ 3,764 5.06 % $ 182,136 $ 2,178 4.78 %
Securities 34,044 150 1.76 % 9,092 41 1.80 % 29,944 159 2.12 % 24,306 86 1.42 %
Other (1) 48,596 28 0.23 % 18,928 7 0.15 % 44,235 102 0.92 % 39,274 26 0.26 %

Total interest-earning assets/interest income 286,623 2,973 4.15 % 170,158 1,771 4.16 % 371,651 4,025 4.33 % 245,716 2,290 3.73 %

Cash and due from banks 12,080 14,480 15,264 23,867
Premises and equipment 1,402 1,439 863 1,326
Other 1,626 1,312 5,010 1,687

Total assets $ 301,731 $ 187,389 $ 392,788 $ 272,596

Interest-bearing liabilities:
Savings, NOW and money-market deposits $ 128,844 124 0.38 % $ 89,383 168 0.75 % $ 154,365 125 0.32 % $ 121,476 122 0.40 %
Time deposits 15,429 22 0.57 % 28,583 122 1.71 % 15,958 45 1.13 % 18,270 31 0.68 %
Borrowings (2) 18,387 62 1.35 % 26,758 96 1.44 % 24,649 102 1.66 % 20,057 81 1.62 %

Total interest-bearing liabilities/interest expense 162,660 208 0.51 % 144,724 386 1.07 % 194,972 272 0.56 % 159,803 234 0.59 %

Noninterest-bearing demand deposits 105,843 29,970 146,579 89,047
Other liabilities 1,744 2,367 2,521 1,699
Stockholders’ equity 31,484 10,328 48,716 22,047

Total liabilities and stockholders’ equity $ 301,731 $ 187,389 $ 392,788 $ 272,596

Net interest income $ 2,765 $ 1,385 $ 3,753 $ 2,056

Interest rate spread (3) 3.64 % 3.09 % 3.77 % 3.14 %

Net interest margin (4) 3.86 % 3.26 % 4.04 % 3.35 %

Ratio of average interest-earning assets to average interest-bearing liabilities 1.76 1.18 1.91 1.54

(1) Includes interest-earning deposits with banks and Federal Home Loan Bank stock dividends.
(2) Includes Federal Home Loan Bank advances and other ~~borrowings and the junior subordinated debenture.~~borrowings.
(3) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(4) Net interest margin is net interest income divided by average interest-earning assets.
(5) Annualized.

(continued)

21

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Nine Months Ended September 30, Six Months Ended June 30,
2021 2020 2022 2021
Interest Average Interest Average Interest Average Interest Average
Average and Yield/ Average and Yield/ Average and Yield/ Average and Yield/
(dollars in thousands) Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾ Balance Dividends Rate⁽⁵⁾
Interest-earning assets:
Loans $ 183,068 $ 6,820 4.97 % $ 125,090 $ 4,697 5.01 % $ 280,957 $ 7,027 5.00 % $ 172,611 $ 4,025 4.66 %
Securities 28,024 327 1.56 % 10,016 136 1.81 % 32,026 322 2.01 % 25,014 177 1.42 %
Other (1) 38,457 81 0.28 % 14,526 67 0.61 % 57,933 139 0.48 % 33,386 53 0.32 %

Total interest-earning assets/interest income 249,549 7,228 3.86 % 149,632 4,900 4.37 % 370,916 7,488 4.04 % 231,011 4,255 3.68 %

Cash and due from banks 21,338 7,748 15,277 25,967
Premises and equipment 1,344 1,423 861 1,316
Other 1,940 1,043 4,850 2,097

Total assets $ 274,171 $ 159,846 $ 391,904 $ 260,391

Interest-bearing liabilities:
Savings, NOW and money-market deposits $ 121,077 380 0.42 % $ 72,348 607 1.12 % $ 168,478 286 0.34 % $ 117,193 256 0.44 %
Time deposits 18,170 100 0.73 % 30,466 440 1.93 % 14,097 59 0.84 % 19,540 78 0.80 %
Borrowings (2) 21,023 241 1.53 % 24,990 322 1.72 % 21,324 163 1.53 % 22,341 179 1.60 %

Total interest-bearing liabilities/interest expense 160,270 721 0.60 % 127,804 1,369 1.43 % 203,899 508 0.50 % 159,074 513 0.64 %

Noninterest-bearing demand deposits 88,387 21,255 141,927 79,657
Other liabilities 1,642 2,447 2,598 1,593
Stockholders’ equity 23,872 8,340 43,480 20,067

Total liabilities and stockholders’ equity $ 274,171 $ 159,846 $ 391,904 $ 260,391

Net interest income $ 6,507 $ 3,531 $ 6,980 $ 3,742

Interest rate spread (3) 3.26 % 2.94 % 3.54 % 3.04 %

Net interest margin (4) 3.48 % 3.15 % 3.76 % 3.24 %

Ratio of average interest-earning assets to average interest-bearing liabilities 1.56 1.17 1.82 1.45

(1) Includes interest-earning deposits with banks and Federal Home Loan Bank stock dividends.
(2) Includes Federal Home Loan Bank advances and other ~~borrowings and the junior subordinated debenture.~~borrowings.
(3) Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(4) Net interest margin is net interest income divided by average interest-earning assets.
(5) Annualized.
~~(continued)~~
22

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Continued)

Comparison of the Three-Month Periods Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021

Three Months Ended Increase / Three Months Ended Increase /
September 30, (Decrease) June 30, (Decrease)
(dollars in thousands) 2021 2020 Amount Percentage 2022 2021 Amount Percentage
Total interest income $ 2,973 $ 1,771 $ 1,202 68 % $ 4,025 $ 2,290 $ 1,735 76 %
Total interest expense 208 386 (178 ) (46 )% 272 234 38 16 %
Net interest income 2,765 1,385 1,380 100 % 3,753 2,056 1,697 83 %
Provision for loan losses 582 524 58 11 % 991 397 594 150 %
Net interest income after provision for loan losses 2,183 861 1,322 154 % 2,762 1,659 1,103 66 %
Total noninterest income 423 64 359 561 % 764 302 462 153 %
Total noninterest expenses 1,689 1,421 268 19 % 2,260 1,517 743 49 %
Net earnings (loss) before income taxes 917 (496 ) 1,413 (284 )%
Net earnings before income taxes 1,266 444 822 185 %
Income taxes - - - - 321 — 321 —
Net earnings (loss) $ 917 $ (496 ) 1,413 (284 )%
Net earnings (loss) per share - basic and diluted $ 0.21 $ (0.17 )
Net earnings $ 945 $ 444 501 113 %
Net earnings per share - Basic and diluted $ 0.16 $ 0.14

Net earnings ~~(loss)~~. Net earnings for the three months ended ~~September~~June 30, ~~2021,~~2022, were ~~$917,000~~$945,000 or ~~$0.21~~$0.16 per basic and diluted share compared to a net ~~loss~~earnings of ~~$(496,000)~~$444,000 or ~~$(0.17)~~$0.14 per basic and diluted share for the three months ended ~~September~~June 30, ~~2020.~~2021. The increase in net earnings during the three months ended ~~September~~June 30, ~~2021~~2022 compared to three months ended ~~September~~June 30, ~~2020~~2021 is primarily attributed to an increase in net interest income and noninterest income, partially offset by the increase in noninterest expense.

Interest Income. Interest income increased ~~$1,202,000~~$1,735,000 for the three months ended ~~September~~June 30, ~~2021~~2022 compared to the three months ended ~~September~~June 30, ~~2020~~2021 due primarily to growth in the loan ~~portfolio.~~portfolio and increase in yield.

Interest Expense. Interest expense ~~decreased $178,000~~increased $38,000 to ~~$208,000~~$272,000 for the three months ended ~~September~~June 30, ~~2021~~2022 compared to the prior period, primarily due to ~~a decrease~~an increase in Federal Home Loan Bank advances, interest bearing deposit ~~rates.~~rates and change in the composition of deposits.

Provision for Loan Losses. Provision for loan losses was ~~$582,000~~$991,000 for the three months ended ~~September~~June 30, ~~2021~~2022 compared to ~~$524,000~~a $397,000 credit for loan losses for the three months ended ~~September~~June 30, ~~2020.~~2021. The provision for loan losses is charged to ~~operations~~earnings as losses are estimated to have occurred in order to bring the total loan allowance for loan losses to a level deemed appropriate by management to absorb losses inherent in the portfolio at ~~September~~June 30, ~~2021.~~2022. Management’s periodic evaluation of the adequacy of the allowance is based upon historical experience, the volume and type of lending conducted by us, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, loans identified as impaired, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for loan losses totaled ~~$2.7~~$4.2 million or ~~1.29%~~1.20% of loans outstanding at ~~September~~June 30, ~~2021,~~2022, compared to ~~$1.9~~$3.1 million or ~~1.23%~~1.22% of loans outstanding at December 31, ~~2020.~~2021. The increase in the provision for loan losses during the second quarter of ~~2021~~2022 was primarily due to loan volume growth and the evaluation of the other factors noted above.

Noninterest Income. Total noninterest income increased to ~~$423,000~~$764,000 for the three months ended ~~September~~June 30, ~~2021,~~2022, from ~~$64,000~~$302,000 for the three months ended ~~September~~June 30, ~~2020~~2021 due to increased wire transfer and ACH fees ~~related to an increase in business checking accounts of approximately $14.5 million~~ during the three month period ended ~~September~~June 30, ~~2021.~~2022.

Noninterest Expenses. Total noninterest expenses increased to ~~$1,689,000~~$2,260,000 for the three months ended ~~September~~June 30, ~~2021~~2022 compared to ~~$1,421,000~~$1,517,000 for the three months ended ~~September~~June 30, ~~2020~~2021 primarily due to an increase in salaries and employee benefits ~~professional fees~~ and data processing.

23

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY
Comparison of the ~~Nine-Month~~Six-Month Periods Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021

Nine Months Ended Increase / Six Months Ended Increase /
September 30, (Decrease) June 30, (Decrease)
(dollars in thousands) 2021 2020 Amount Percentage 2022 2021 Amount Percentage
Total interest income $ 7,228 $ 4,900 $ 2,328 48 % $ 7,488 $ 4,255 $ 3,233 76 %
Total interest expense 721 1,369 (648 ) (47 )% 508 513 (5 ) (1 )%
Net interest income 6,507 3,531 2,976 84 % 6,980 3,742 3,238 87 %
Provision for loan losses 955 1,236 (281 ) (23 )% 1,383 373 1,010 271 %
Net interest income after provision for loan losses 5,552 2,295 3,257 142 % 5,597 3,369 2,228 66 %
Total noninterest income 902 170 732 431 % 1,414 478 936 196 %
Total noninterest expenses 4,745 3,616 1,129 31 % 4,600 3,055 1,545 51 %
Net earnings (loss) before income taxes 1,709 (1,151 ) 2,860 (248 )%
Net earnings before income taxes 2,411 792 1,619 204 %
Income taxes - - - - 611 — 611 —
Net earnings (loss) $ 1,709 $ (1,151 ) 2,860 (248 )%
Net earnings (loss) per share - basic and diluted $ 0.47 $ (0.39 )
Net earnings $ 1,800 $ 792 1,008 127 %
Net earnings per share - Basic and diluted $ 0.33 $ 0.24

Net earnings ~~(loss)~~. Net earnings for the ~~nine~~six months ended ~~September~~June 30, ~~2021, were $1,709,000~~2022, was $1,800,000 or ~~$0.47~~$0.33 per basic and diluted share compared to a net ~~loss~~earnings of ~~$(1.2 million)~~$792,000 or ~~$(0.39)~~$0.24 per basic and diluted share for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The increase in net earnings during the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 is primarily attributed to ~~a decrease in the provision for loan losses,~~an increase in ~~net interest~~noninterest income and ~~noninterest~~net interest income, partially offset by the increase in noninterest expense.

Interest Income. Interest income increased ~~$2,328,000~~$3,233,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 due primarily to growth in the loan ~~portfolio.~~portfolio and increase in yield.

Interest Expense. Interest expense decreased ~~$648,000~~$5,000 to ~~$721,000~~$508,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to the prior ~~period, primarily due to a decrease in interest bearing deposit rates.~~period.

Provision for Loan Losses. Provision for loan losses amounted to ~~$955,000~~$1,383,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to ~~$1.2 million~~$373,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2020.~~2021. The provision for loan losses is charged to operations as losses are estimated to have occurred in order to bring the total loan allowance for loan losses to a level deemed appropriate by management to absorb losses inherent in the portfolio at ~~September~~June 30, ~~2021.~~2022. Management’s periodic evaluation of the adequacy of the allowance is based upon historical experience, the volume and type of lending conducted by us, adverse situations that may affect the borrower’s ability to repay, estimated value of the underlying collateral, loans identified as impaired, general economic conditions, particularly as they relate to our market areas, and other factors related to the estimated collectability of our loan portfolio. The allowance for loan losses totaled ~~$2.7~~$4.2 million or ~~1.29%~~1.20% of loans outstanding at ~~September~~June 30, ~~2021,~~2022, compared to ~~$1.9~~$3.1 million or ~~1.23%~~1.22% of loans outstanding at December 31, ~~2020.~~2021. The increase in the provision for loan losses during ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 was primarily due to loan volume growth and anthe evaluation of the other factors noted above.

Noninterest Income. Total noninterest income increased to ~~$902,000~~$1,414,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, from ~~$170,000~~$478,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 due to increased wire transfer and ACH fees related to an increase in business checking accounts of approximately ~~$23.7~~$22.7 million during the ~~nine~~six month period ended ~~September~~June 30, ~~2021.~~2022.

Noninterest Expenses. Total noninterest expenses increased to ~~$4,745,000~~$4,600,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 compared to ~~$3,616,000~~$3,055,000 for the ~~nine~~six months ended ~~September~~June 30, ~~2020~~2021 primarily due to an increase in salaries and employee benefits, data processing, and ~~data processing.~~other.

24

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Item 4. Controls and Procedures

The Company’s management evaluated the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report, and, based on this evaluation, the Principal Executive Officer and Principal Financial Officer concluded that these disclosure controls and procedures are effective.

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~September~~June 30, ~~2021,~~2022, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

PART II. OTHER INFORMATION

~~Item 1. Legal Proceedings~~
~~None~~
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

During the ~~third~~first quarter of ~~2021,~~2022, the Company issued ~~358,023~~1,227,331 shares of its common stock in a private placement transaction to 1811 accredited investors at a price of $4.50 per share. None of these investors was an officer, director or affiliate of the Company other than ~~Martin Schmidt,~~Michael Blisko and Moishe Gubin, who ~~is a director~~are directors of the Company. Mr. ~~Schmidt~~Blisko purchased ~~10,323~~202,000 shares and Mr. Gubin purchased 190,000 shares. The Company issued these shares in reliance on Section 4(a)(2) of the Securities Act as a transaction by an issuer not involving a public offering.

During ~~October 2021,~~the first quarter of 2022, the Company issued ~~an additional 188,660~~a total of 260 shares of ~~its common~~Series B-2 preferred stock into a ~~private placement transaction to an accredited investor at~~non-related party for a purchase price of ~~$4.50 per share.~~$6,500,000. The ~~investor was not an officer, director or affiliate~~issuance of the ~~Company. The Company issued these~~ shares ~~in reliance on~~was exempt from registration pursuant to Section 4(a)(2) of the Securities Act of 1933 as a transaction by an issuer not involving a public ~~offering~~.
~~Item 3. Defaults on Senior Securities~~offering. The Company used the proceeds to make capital contributions to the Bank in order to augment the Bank’s regulatory capital ratios.

~~Not applicable.~~
~~Item 4. Mine Safety Disclosures~~
~~Not applicable.~~
~~Item 5. Other Information~~
~~Not applicable.~~
Item 6. Exhibits

The exhibits listed in the Exhibit Index following the signature page are filed with or incorporated by reference into this report.

25

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

OPTIMUMBANK HOLDINGS, INC.
(Registrant)

Date: ~~November 9, 2021~~August 8, 2022 By: /s/ Timothy Terry
Timothy Terry
Principal Executive Officer

By: /s/ Joel Klein
Joel Klein
Principal Financial Officer

26

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

EXHIBIT INDEX

Exhibit No. Description

31.1 Certification of Principal Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

31.2 Certification of Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

32.1 Certification of Principal Executive Officer

32.2 Certification of Principal Financial Officer

27
~~OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY~~
~~EXHIBIT INDEX~~
~~Exhibit No.~~ ~~Description~~
101.INS Inline XBRL Instance Document

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
2827

																								Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Loss			Equity
	Preferred Stock												Additional					Accumulated Other						Preferred Stock
	Series A				Series B				Common Stock				Paid-In		Accumulated			Comprehensive			Stockholders’			Series A				Series B				Common Stock				Additional Paid-In		Accumulated			Accumulated Comprehensive			Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Loss			Equity			Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Loss			Equity

Balance at December 31, 2019		-	$	-		--	$	-		2,853,171	$	28		$  38,994	$	(31,610	)	$	(205	)	$	7,207
Proceeds from the sale of preferred stock (unaudited)
Proceeds from the sale of preferred stock (unaudited), shares

Proceeds from the sale of common stock (unaudited)		-		-		-		-		98,182		1		538		-			-			539
Common stock issued for junior subordinated debenture interest payable (unaudited)
Common stock issued for junior subordinated debenture interest payable (unaudited),shares

Net loss for the three months ended March 31, 2020 (unaudited)		-		-		-		-		-		-		-		(308	)		-			(308	)

Net change in unrealized loss on debt securities available for sale, net of income taxes (unaudited)		-		-		-		-		-		-		-		-			35			35

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited)		-		-		-		-		-		-		-		-			18			18

Balance at March 31, 2020 (unaudited)		-		-		-		-		2,951,353		29		39,532		(31,918	)		(152	)		7,491

Proceeds from the sale of preferred stock (unaudited)		—		—		100		—		—		—		2,500		—			—			2,500

Net loss for the three months ended June 30, 2020 (unaudited)		—		—		—		—		—		—		—		(347	)		—			(347	)

Net change in unrealized gain on debt securities available for sale, net of income taxes (unaudited)		—		—		—		—		—		—		—		—			15			15

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited)		—		—		—		—		—		—		—		—			18			18

Balance at June 30, 2020 (unaudited)		—		—		100		—		2,951,353		29		42,032		(32,265	)		(119	)		9,677

Proceeds from the sale of preferred stock (unaudited)		-		-		180		-		-		-		4,500		-			-			4,500

Net loss (unaudited)		-		-		-		-		-		-		-		(496	)		-			(496	)

Net change in unrealized gain on debt securities available for sale, net of income taxes (unaudited)		-		-		-		-		-		-		-		-			(23	)		(23	)

Amortization of unrealized loss on debt securities transferred to held-to-maturity, net of income taxes (unaudited)		-		-		-		-		-		-		-		-			26			26

Balance at September 30, 2020 (unaudited)		-	$	-		280	$	-		2,951,353	$	29	$	46,532	$	(32,761	)	$	(116	)	$	13,684

Balance at December 31, 2020		—		—		400		—		3,203,455		32		50,263		(32,392	)		(69	)		17,834			—	$	—		400	$	—		3,203,455	$	32	$	50,263	$	(32,392	)	$	(69	)	$	17,834

Proceeds from the sale of preferred stock (unaudited)		—		—		160		—		—		—		4,000		—			—			4,000			—		—		160		—		—		—		4,000		—			—			4,000

Common stock issued for junior subordinated debenture interest payable (unaudited)		—		—		—		—		11,042		—		41		—			—			41			—		—		—		—		11,042		—		41		—			—			41

Net change in unrealized gain on loss securities available for sale (unaudited)		—		—		—		—		—		—		—		—			(922	)		(922	)
Net change in unrealized loss on debt securities available for sale (unaudited)																									—		—		—		—		—		—		—		—			(922	)		(922	)

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited)		—		—		—		—		—		—		—		—			22			22			—		—		—		—		—		—		—		—			22			22

Net earnings (unaudited)		—		—		—		—		—		—		—		348			—			348			—		—		—		—		—		—		—		348			—			348

Balance at March 31, 2021 (unaudited)		—	$	—		560	$	—		3,214,497	$	32	$	54,304	$	(32,044	)	$	(969	)	$	21,323			—	$	—		560	$	—		3,214,497	$	32	$	54,304	$	(32,044	)	$	(969	)	$	21,323

Proceeds from the sale of preferred stock (unaudited)		—		—		200		—		—		—		5,000		—			—			5,000			—		—		200		—		—		—		5,000		—			—			5,000

Proceeds from the sale of common stock (unaudited)		—		—		—		—		262,417		3		1,173		—			—			1,176			—		—		—		—		262,417		3		1,173		—			—			1,176

Common stock issued for junior subordinated debenture (unaudited)		—		—		—		—		282,377		3		844		—			—			847			—		—		—		—		282,377		3		844		—			—			847

Net change in unrealized gain on debt securities available for sale (unaudited)		—		—		—		—		—		—		—		—			349			349			—		—		—		—		—		—		—		—			349			349

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited)		—		—		—		—		—		—		—		—			33			33			—		—		—		—		—		—		—		—			33			33

Net earnings for three months ended June 30, 2021 (unaudited)		—		—		—		—		—		—		—		444			—			444			—	$	—		—	$	—		—	$	—	$	—	$	444		$	—		$	444

Balance at June 30, 2021 (unaudited)		—		—		760		—		3,759,291		38		61,321		(31,600	)		(587	)		29,172			—	$	—		760	$	—		3,759,291	$	38	$	61,321	$	(31,600	)	$	(587	)	$	29,172

Balance at December 31, 2021 (unaudited)																									—	$	—		760	$	—		4,775,281	$	48	$	65,193	$	(26,096	)	$	(635	)	$	38,510

Proceeds from the sale of preferred stock (unaudited)																									—		—		260		—		—		—		6,500		—			—			6,500

Proceeds from the sale of common stock (unaudited)		—		—		—		—		358,023		3		1,608		—			—			1,611			—		—		—		—		1,227,331		12		5,511		—			—			5,523

Common stock issued for junior subordinated debenture (unaudited)		—		—		—		—		407,195		4		1,217		—			—			1,221

Net change in unrealized gain on debt securities available for sale (unaudited)		—		—		—		—		—		—		—		—			233			233
Net change in unrealized loss on debt securities available for sale (unaudited)																									—		—		—		—		—		—		—		—			(2,078	)		(2,078	)

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited)		—		—		—		—		—		—		—		—			18			18			—		—		—		—		—		—		—		—			7			7

Net earnings for three months ended September 30, 2021 (unaudited)		—		—		—		—		—		—		—		917			—			917
Net earnings for three months ended March 31, 2022 (unaudited)																									—	$	—		—	$	—		—	$	—	$	—	$	855		$	—		$	855

Net earnings (loss)		—		—		—		—		—		—		—		917			—			917
Balance at March 31, 2022 (unaudited)																									—	$	—		1,020	$	—		6,002,612	$	60	$	77,204	$	(25,241	)	$	(2,706	)	$	49,317

Balance at September 30, 2021 (unaudited)		—	$	—		760	$	—		4,524,509	$	45	$	64,146	$	(30,683	)	$	(336	)	$	33,172
Stock-based Compensation (unaudited)																									—		—		—		—		24,493		—		96		—			—			96

Net change in unrealized loss on debt securities available for sale (unaudited)																									—		—		—		—		—		—		—		—			(2,332	)		(2,332	)

Amortization of unrealized loss on debt securities transferred to held-to-maturity (unaudited)																									—		—		—		—		—		—		—		—			4			4

Net earnings (unaudited)																									—		—		—		—		—		—		—		945			—			945

Balance at June 30, 2022 (unaudited)																									—	$	—		1,020	$	—		6,027,105	$	60	$	77,300	$	(24,296	)	$	(5,034	)	$	48,030

			Gross		Gross							Gross		Gross
	Amortized		Unrealized		Unrealized			Fair		Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value		Cost		Gains		Losses			Value

At September 30, 2021:
At June 30, 2022:
Available for sale:
SBA Pool Securities	$	1,139	$	1	$	(27	)	$	1,113	$	978	$	1	$	(21	)	$	958
Collateralized mortgage obligations		237		13		—			250		164		—		(10	)		154
Taxable municipal securities		16,776		58		(165	)		16,669		16,748		—		(4,252	)		12,496
Mortgage-backed securities		17,876		31		(201	)		17,706		16,041		—		(2,438	)		13,603
Total	$	36,028	$	103	$	(393	)	$	35,738	$	33,931	$	1	$	(6,721	)	$	27,211

Held-to-maturity:
Collateralized mortgage obligations	$	1,061	$	43		—		$	1,104	$	563	$	—	$	(19	)	$	544
Mortgage-backed securities		266		5		—			271		85		—		—			85
Total	$	1,327	$	48		—		$	1,375	$	648	$	—	$	(19	)	$	629

	At September 30, 2021										At June 30, 2022
	Over Twelve Months					Less Than Twelve Months					Over Twelve Months					Less Than Twelve Months
	Gross					Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value		Losses			Value

Available for Sale :
Available for Sale:
SBA Pool Securities		(27	)		907		—			—	$	(21	)	$	768	$	—		$	—
Collateralized mortgage obligation												—			—		(10	)		153
Taxable municipal securities		—			—		(165	)		12,124		(1,717	)		4,832		(2,535	)		7,663
Mortgage-backed securities		(39	)		1,613		(162	)		15,205		(1,323	)		6,959		(1,115	)		6,644
Total	$	(66	)	$	2,520	$	(327	)	$	27,329	$	(3,061	)	$	12,559	$	(3,660	)	$	14,460

	At December 31, 2020										At December 31, 2021
	Over Twelve Months					Less Than Twelve Months					Over Twelve Months					Less Than Twelve Months
	Gross					Gross					Gross					Gross
	Unrealized			Fair		Unrealized			Fair		Unrealized			Fair		Unrealized			Fair
	Losses			Value		Losses			Value		Losses			Value		Losses			Value

Available for Sale :
SBA Pool Securities		(41	)		1,297		—			—	$	(26	)	$	895	$	—		$	—
Taxable municipal securities		—			—		(7	)		1,413		(81	)		1,853		(278	)		12,828
Mortgage-backed securities		—			—		(11	)		3,583		(242	)		6,179		(235	)		9,984
Total	$	(41	)	$	1,297	$	(18	)	$	4,996	$	(349	)	$	8,927	$	(513	)	$	22,812

	Real Estate			Real Estate		Commercial Real Estate		Land and Construction			Commercial			Consumer			Unallocated			Total			Residential Real			Multi-Family Real		Commercial			Land and
	Residential			Multi-Family																			Estate			Estate		Real Estate			Construction			Commercial			Consumer			Unallocated		Total
	Real Estate			Real Estate		Commercial Real Estate		Land and Construction			Commercial			Consumer			Unallocated			Total
Three Months Ended September 30, 2021:			��
Three Months Ended June 30, 2022:

Beginning balance	$	472		$	392	$	938	$	57		$	58		$	314		$	—		$	2,231		$	575		$	549	$	1,607		$	79		$	68		$	530		$	—		3,408
(Credit) provision for loan losses		(29	)		102		349		(10	)		39			131			—			582			(61	)		70		733			(8	)		33			224			—		991
Charge-offs		—			—		—		—			(10	)		(111	)		—			(121	)		—			—		—			—			(90	)		(136	)		—		(226	)
Recoveries		3			—		—		—			—			—			—			3			—			—		—			—			56			14			—		70

Ending balance	$	446		$	494	$	1,287	$	47		$	87		$	334		$	—		$	2,695		$	514		$	619	$	2,340		$	71		$	67		$	632			—	$	4,243

Three Months Ended September 30, 2020:
Three Months Ended June 30, 2021:
Beginning balance	$	717		$	153	$	888	$	50		$	620		$	236		$	—		$	2,664		$	396		$	238	$	843		$	46		$	99		$	268			—	$	1,890
Provision (credit) for loan losses		85			75		84		(5	)		292			(7	)		—			524
Provision (Credit) for loan losses																								74			154		95			7			(31	)		98			—		397
Charge-offs		(259			—		—		—			(775	)		(17	)		—			(1,051	)		—			—		—			—			(10	)		(60	)		—		(70	)
Recoveries		1			—		—		6			—			1			—			8			2			—		—			4			—			8			—		14

Ending balance	$	544		$	228	$	972	$	51		$	137		$	213		$	—		$	2,145		$	472		$	392	$	938		$	57		$	58		$	314			—	$	2,231

Nine Months Ended September 30, 2021:
Six Months Ended June 30, 2022:

Beginning balance																							$	482		$	535	$	1,535		$	32		$	74		$	417		$	—	$	3,075
Provision for loan losses																								32			84		805			39			27			396			—		1,383
Charge-offs																								—			—		—	��		—			(90	)		(209	)		—		(299	)
Recoveries																								—			—		—			—			56			28			—		84

Ending balance																							$	514		$	619	$	2,340		$	71		$	67		$	632		$	—	$	4,243

Six Months Ended June 30, 2021:

Beginning balance	$	463		$	253	$	884	$	52		$	103		$	151		$	—		$	1,906		$	463		$	253	$	884		$	52		$	103		$	151		$	—	$	1,906
(Credit) provision for loan losses		(46	)		241		403		(13	)		4			366			—			955			(17	)		139		54			(3	)		(35	)		235			—		373
Charge-offs		—			—		—		—			(20	)		(191	)		—			(211	)		—			—		—			—			(10	)		(80	)		—		(90	)
Recoveries		29			—		—	$	8			—			8			—			45			26			—		—			8			—			8			—		42

Ending balance	$	446		$	494	$	1,287	$	47		$	87		$	334		$	—		$	2,695		$	472		$	392	$	938		$	57		$	58		$	314		$	—	$	2,231

Nine Months Ended September 30, 2020:

Beginning balance	$	531		$	82	$	624	$	21		$	573		$	152		$	26		$	2,009
Provision (credit) for loan losses		264			146		348		12			339			153			(26	)		1,236
Charge-offs		(259	)		—		—		—			(775	)		(94	)		—			(1,128	)
Recoveries		8			—		—		18			—			2			—			28

Ending balance	$	544		$	228	$	972	$	51		$	137		$	213		$	-		$	2,145

			Multi-															Residential			Multi-Family
	Residential		Family															Real			Real			Commercial			Land and
	Real Estate		Real Estate		Commercial Real Estate		Land and Construction		Commercial		Consumer		Unallocated		Total			Estate			Estate			Real Estate			Construction			Commercial			Consumer			Total
At September 30, 2021:
At June 30, 2022:
Individually evaluated for impairment:
Recorded investment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—
Balance in allowance for loan losses	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—

Collectively evaluated for impairment:
Recorded investment	$	30,721	$	41,159	$	102,416	$	4,694	$	18,269	$	12,085	$	—	$	209,344		$	33,823		$	56,265		$	222,818		$	7,099		$	7,355		$	26,237		$	353,597
Balance in allowance for loan losses	$	446	$	494	$	1,287	$	47	$	87	$	334	$	—	$	2,695		$	514		$	619		$	2,340		$	71		$	67		$	632		$	4,243

At December 31, 2020:
At December 31, 2021:
Individually evaluated for impairment:
Recorded investment	$	—	$	—	$	2,193	$	—	$	—	$	—	$	—	$	2,193		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Balance in allowance for loan losses	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

Collectively evaluated for impairment:
Recorded investment	$	28,997	$	19,210	$	72,205	$	4,750	$	21,849	$	5,715	$	—	$	152,726		$	32,583		$	48,592		$	129,468		$	3,772		$	14,157		$	22,827		$	251,399
Collectively evaluated for impairment, Recorded investment																		$	32,583		$	48,592		$	129,468		$	3,772		$	14,157		$	22,827		$	251,399
Balance in allowance for loan losses	$	463	$	253	$	884	$	52	$	103	$	151	$	—	$	1,906		$	481		$	535		$	1,535		$	32		$	72		$	420		$	3,075
Collectively evaluated for impairment, Balance in allowance for loan losses																		$	481		$	535		$	1,535		$	32		$	72		$	420		$	3,075

			OLEM (Other Loans Especially		Sub-								Pass		OLEM (Other Loans Especially Mentioned)		Sub- Standard		Doubtful		Loss		Total
	Pass		Mentioned)		Standard		Doubtful		Loss		Total

At September 30, 2021:
At June 30, 2022:
Residential real estate	$	28,212	$	—	$	2,509	$	—	$	—	$	30,721	$	33,823	$	—	$	—	$	—	$	—	$	33,823
Multi-family real estate		41,159		—		—		—		—		41,159		56,265		—		—		—		—		56,265
Commercial real estate		99,825		2,591		—		—		—		102,416		220,071		1,492		1,255		—		—		222,818
Land and construction		4,694		—		—		—		—		4,694		7,099		—		—		—		—		7,099
Commercial		17,992		277		—		—		—		18,269		6,783		572		—		—		—		7,355
Consumer		12,085		—		—		—		—		12,085		26,237		—		—		—		—		26,237

Total	$	203,967	$	2,868	$	2,509	$	—	$	—	$	209,344	$	350,278	$	2064	$	1,255	$	—	$	—	$	353,597

At December 31, 2020:
At December 31, 2021:
Residential real estate	$	28,151	$	—	$	846	$	—	$	—	$	28,997	$	30,080	$	—	$	2,503	$	—	$	—	$	32,583
Multi-family real estate		19,210		—		—		—		—		19,210		47,962		630		—		—		—		48,592
Commercial real estate		66,089		4,449		3,860		—		—		74,398		125,620		3,848		—		—		—		129,468
Land and construction		4,750		—		—		—		—		4,750		3,772		—		—		—		—		3,772
Commercial		20,735		1,114		—		—		—		21,849		13,960		197		—		—		—		14,157
Consumer		5,715		—		—		—		—		5,715		22,827		—		—		—		—		22,827

Total	$	144,650	$	5,563	$	4,706	$	—	$	—	$	154,919	$	244,221	$	4,675	$	2,503	$	—	$	—	$	251,399

	Pass – a Pass loan’s primary source of loan repayment is satisfactory, with secondary sources very likely to be realized if necessary. These are loans that conform in all aspects to bank policy and regulatory requirements, and no repayment risk has been identified.

	OLEM – an Other Loan Especially Mentioned has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date.

	Substandard – a Substandard loan is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. Included in this category are loans that are current on their payments, but the Bank is unable to document the source of repayment. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

	Doubtful – a loan classified as Doubtful has all the weaknesses inherent in one classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. The Company charges off any loan classified as Doubtful.

	Loss – a loan classified Loss is considered uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future. The Company fully charges off any loan classified as Loss.

	Accruing Loans
					Greater										Accruing Loans
	30-59		60-89		Than 90														Greater
	Days Past		Days Past		Days Past		Total Past				Nonaccrual		Total		30-59		60-89		Than 90		Total
	Due		Due		Past		Due		Current		Loans		Loans		Days Past		Days Past		Days Past		Past				Nonaccrual		Total
															Due		Due		Past		Due		Current		Loans		Loans
At September 30, 2021:

At June 30, 2022:
Residential real estate	$	—	$	—	$	—	$	—	$	30,721	$	—	$	30,721	$	—	$	—	$	—	$	—	$	33,823	$	—	$	33,823
Multi-family real estate		—		—		—		—		41,159		—		41,159		—		—		—		—		56,265		—		56,265
Commercial real estate		—		—		—		—		102,416		—		102,416		—		—		—		—		222,818		—		222,818
Land and construction		—		—		—		—		4,694		—		4,694		—		—		—		—		7,099		—		7,099
Commercial		—		—		—		—		18,269		—		18,269		—		—		—		—		7,355		—		7,355
Consumer		21		22		—		43		12,042		—		12,085		93		174		—		267		25,970		—		26,237

Total	$	21	$	22	$	—	$	43	$	209,301	$	—	$	209,344	$	93	$	174	$	—	$	267	$	353,330	$	—	$	353,597

	Three Months Ended September 30,												Three Months Ended June 30,
	2021						2020						2022						2021
	Average		Interest		Interest		Average		Interest		Interest		Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income		Recorded		Income		Income		Recorded		Income		Income
	Investment		Recognized		Received		Investment		Recognized		Received		Investment		Recognized		Received		Investment		Recognized		Received

Residential real estate	$	—	$	—	$	—	$	626	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	$	—	$	—	$	—	$	2,193	$	26	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial	$	—	$	—	$	—	$	270	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Total	$	—	$	—	$	—	$	3,089	$	26	$	—	$	—	$	—	$	—	$	—	$	—	$	—

	Nine Months Ended September 30,												Six Months Ended June 30,
	2021						2020						2022						2021
	Average		Interest		Interest		Average		Interest		Interest		Average		Interest		Interest		Average		Interest		Interest
	Recorded		Income		Income		Recorded		Income		Income		Recorded		Income		Income		Recorded		Income		Income
	Investment		Recognized		Received		Investment		Recognized		Received		Investment		Recognized		Received		Investment		Recognized		Received

Residential real estate	$	—	$	—	$	—	$	846	$	18	$	11	$	—	$	—	$	—	$	—	$	—	$	—
Commercial real estate	$	658	$	7	$	7	$	2,194	$	78	$	60	$	—	$	—	$	—	$	940	$	7	$	7
Commercial	$	—	$	—	$	—	$	649	$	—	$	18	$	—	$	—	$	—	$	—	$	—	$	—
Total	$	658	$	7	$	7	$	3,689	$	96	$	89	$	—	$	—	$	—	$	940	$	7	$	7

			Fair Value Measurements Using
			Quoted Prices		Significant
			In Active Markets for		Other Observable		Significant Unobservable
	Fair Value		Identical Assets (Level 1)		Inputs (Level 2)		Inputs (Level 3)
At September 30, 2021 :
SBA Pool Securities	$	1,113	$	—	$	1,113		—
Collateralized mortgage obligations		250		—		250		—
Taxable municipal securities		16,669		—		16,669		—
Mortgage-backed securities		17,706		—		17,706		—
Total	$	35,738		—	$	35,738		—

			Fair Value Measurements Using						Fair Value		(Level 1)		(Level 2)		(Level 3)
			Quoted Prices In Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs				Fair Value Measurements Using
	Fair Value		(Level 1)		(Level 2)		(Level 3)				Quoted Prices
											In Active Markets for		Significant Other		Significant
At December 31, 2020 :
											Identical Assets		Observable Inputs		Unobservable Inputs
									Fair Value		(Level 1)		(Level 2)		(Level 3)
At June 30, 2022 :
SBA Pool Securities	$	1,297	$	—	$	1,297		—	$	958	$	—	$	958		—
Collateralized mortgage obligations		485		—		485		—		154		—		154		—
Taxable municipal securities		5,085		—		5,085		—		12,496		—		12,496		—
Mortgage-backed securities		12,026		—		12,026		—		13,603		—		13,603		—
Total	$	18,893		—	$	18,893		—	$	27,211		—	$	27,211		—

At December 31, 2021 :
SBA Pool Securities									$	1,072	$	—	$	1,072		—
Collateralized mortgage obligations										217		—		217		—
Taxable municipal securities										16,426		—		16,426		—
Mortgage-backed securities										16,679		—		16,679		—
Total									$	34,394		—	$	34,394		—

	Carrying Amount		Fair Value		Level		Carrying Amount		Fair Value			Level
	At September 30, 2021						At December 31, 2020
	Carrying Amount		Fair Value		Level		Carrying Amount		Fair Value			Level

Financial assets:
Cash and cash equivalents	$	83,583	$	83,583		1	$	54,629	$	54,629			1
Debt securities available for sale		35,738		35,738		2		18,893		18,893			2
Debt securities held-to-maturity		1,327		1,375		2		3,399		3,549			2
Loans		205,865		205,807		3		152,469		153,276			3
Federal Home Loan Bank stock		793		793		3		1,092		1,092			3
Accrued interest receivable		863		863		3		1,336		1,336			3

Financial liabilities:
Deposit liabilities		281,746		281,813		3		190,759		191,011			3
Federal Home Loan Bank advances		18,000		18,185		3		23,000		23,254			3
Junior subordinated debenture		—		—		3		2,068		N/A	(1)		3
Off-balance sheet financial instruments		—		—		3		—		—			3


Commitments to extend credit	$	16,153	$	16,448

Unused lines of credit	$	11,532	$	18,030

Standby letters of credit	$	4,550	$	4,144

	Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework)
	Amount		%			Amount		%
As of September 30, 2021:
Tier I Capital to Total Assets		32,980		10.96	%		25,567		8.5	%

	Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework)					Actual					To Be Well Capitalized Under Prompt Corrective Action Regulations (CBLR Framework)
	Amount		%			Amount		%			Amount		%			Amount		%
As of December 31, 2020:
As of June 30, 2022:
Tier I Capital to Total Assets		19,261		9	%		17,116		8	%	$	50,092		12.85	%	$	35,085		9.00	%

As of December 31, 2021:
Tier I Capital to Total Assets											$	35,338		10.64	%	$	28,235		8.50	%

	Nine Months Ended September 30, 2021			Year Ended December 31, 2020

Average equity as a percentage of average assets		8.7	%		5.8	%

Equity to total assets at end of period		9.9	%		7.6	%

Return on average assets (1)		0.9	%		(0.5	)%

Return on average equity (1)		9.5	%		(7.8	)%

Noninterest expenses to average assets (1)		2.3	%		2.9	%

	Six Months Ended			Year Ended
	30-Jun-22			31-Dec-21

Average equity as a percentage of average assets		11.1	%		9.4	%

Equity to total assets at end of period		10.3	%		11.0	%

Return on average assets (1)		0.9	%		2.2	%

Return on average equity (1)		8.3	%		23.3	%

Noninterest expenses to average assets (1)		2.3	%		2.4	%

	Three Months Ended September 30,														Three Months Ended June 30,
	2021							2020							2022							2021
			Interest		Average					Interest		Average					Interest		Average					Interest		Average
	Average		and		Yield/			Average		and		Yield/			Average		and		Yield/			Average		and		Yield/
(dollars in thousands)	Balance		Dividends		Rate⁽⁵⁾			Balance		Dividends		Rate⁽⁵⁾			Balance		Dividends		Rate⁽⁵⁾			Balance		Dividends		Rate⁽⁵⁾
Interest-earning assets:
Loans	$	203,983	$	2,795		5.48	%	$	142,138	$	1,723		4.85	%	$	297,472	$	3,764		5.06	%	$	182,136	$	2,178		4.78	%
Securities		34,044		150		1.76	%		9,092		41		1.80	%		29,944		159		2.12	%		24,306		86		1.42	%
Other (1)		48,596		28		0.23	%		18,928		7		0.15	%		44,235		102		0.92	%		39,274		26		0.26	%

Total interest-earning assets/interest income		286,623		2,973		4.15	%		170,158		1,771		4.16	%		371,651		4,025		4.33	%		245,716		2,290		3.73	%

Cash and due from banks		12,080							14,480							15,264							23,867
Premises and equipment		1,402							1,439							863							1,326
Other		1,626							1,312							5,010							1,687

Total assets	$	301,731						$	187,389						$	392,788						$	272,596

Interest-bearing liabilities:
Savings, NOW and money-market deposits	$	128,844		124		0.38	%	$	89,383		168		0.75	%	$	154,365		125		0.32	%	$	121,476		122		0.40	%
Time deposits		15,429		22		0.57	%		28,583		122		1.71	%		15,958		45		1.13	%		18,270		31		0.68	%
Borrowings (2)		18,387		62		1.35	%		26,758		96		1.44	%		24,649		102		1.66	%		20,057		81		1.62	%

Total interest-bearing liabilities/interest expense		162,660		208		0.51	%		144,724		386		1.07	%		194,972		272		0.56	%		159,803		234		0.59	%

Noninterest-bearing demand deposits		105,843							29,970							146,579							89,047
Other liabilities		1,744							2,367							2,521							1,699
Stockholders’ equity		31,484							10,328							48,716							22,047

Total liabilities and stockholders’ equity	$	301,731						$	187,389						$	392,788						$	272,596

Net interest income			$	2,765						$	1,385						$	3,753						$	2,056

Interest rate spread (3)						3.64	%						3.09	%						3.77	%						3.14	%

Net interest margin (4)						3.86	%						3.26	%						4.04	%						3.35	%

Ratio of average interest-earning assets to average interest-bearing liabilities		1.76							1.18							1.91							1.54

(1)	Includes interest-earning deposits with banks and Federal Home Loan Bank stock dividends.
(2)	Includes Federal Home Loan Bank advances and other ~~borrowings and the junior subordinated debenture.~~borrowings.
(3)	Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities.
(4)	Net interest margin is net interest income divided by average interest-earning assets.
(5)	Annualized.

	Three Months Ended					Increase /						Three Months Ended				Increase /
	September 30,					(Decrease)						June 30,				(Decrease)
(dollars in thousands)	2021		2020			Amount			Percentage			2022		2021		Amount		Percentage
Total interest income	$	2,973	$	1,771		$	1,202			68	%	$	4,025	$	2,290	$	1,735		76	%
Total interest expense		208		386			(178	)		(46	)%		272		234		38		16	%
Net interest income		2,765		1,385			1,380			100	%		3,753		2,056		1,697		83	%
Provision for loan losses		582		524			58			11	%		991		397		594		150	%
Net interest income after provision for loan losses		2,183		861			1,322			154	%		2,762		1,659		1,103		66	%
Total noninterest income		423		64			359			561	%		764		302		462		153	%
Total noninterest expenses		1,689		1,421			268			19	%		2,260		1,517		743		49	%
Net earnings (loss) before income taxes		917		(496	)		1,413			(284	)%
Net earnings before income taxes													1,266		444		822		185	%
Income taxes		-		-			-			-			321		—		321		—
Net earnings (loss)	$	917	$	(496	)		1,413			(284	)%
Net earnings (loss) per share - basic and diluted	$	0.21	$	(0.17	)
Net earnings												$	945	$	444		501		113	%
Net earnings per share - Basic and diluted												$	0.16	$	0.14

	OPTIMUMBANK HOLDINGS, INC.
	(Registrant)

Date: ~~November 9, 2021~~August 8, 2022	By:	/s/ Timothy Terry
		Timothy Terry
		Principal Executive Officer

	By:	/s/ Joel Klein
		Joel Klein
		Principal Financial Officer

Exhibit No.		Description

31.1		Certification of Principal Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

31.2		Certification of Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act

32.1		Certification of Principal Executive Officer

32.2		Certification of Principal Financial Officer

~~Exhibit No.~~		~~Description~~

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)