OptimumBank Holdings, Inc. ($OPHC)

Good morning. The meeting will please come to order. I would like to start our meeting by introducing myself to you. for the 3 people that might not know who I am. I'm Moishe Gubin, Chairman of OptimumBank Holdings, and I will act as Chairman of this meeting. I would like to extend to you a cordial welcome to the Annual Meeting of the Shareholders of OptimumBank Holdings, Inc. A quick reminder, we may be making forward-looking statements. These are based on current expectations, but actual results may differ. Please review the full language on this slide for more detail. Our agenda for today are seen on the screen, an introduction of the Board members. We'll go through the agenda. And at the end, we'll have questions open for the people listening, and we'll go from there. All persons entitled to vote as shareholders or as proxies, please give their names to Elliot Nunez, who's acting Secretary and file their proxies with the acting Secretary ifever they have not already done so. I'd like to introduce the other directors of OptimumBank Holdings along with us our officers, who I shall ask to stand upon being introduced. First is Michael Blisko.

Good morning.

Avi Zwelling.

Good morning.

Tom Procelli.

Good morning.

Joel Klein.

Good morning.

Steve Newman.

Good morning.

Management, President and CEO, Tim Terry.

Good morning.

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

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

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

Mr. Chairman, I find that there are 8,981,733 shares of common stock represented at this meeting, in person or by proxy, out of a total of 12,166,437 shares of common stock outstanding as of record date. Therefore, 73.906% of the outstanding shares of common stock are represented in person or by proxy at this meeting, and there is a quorum for all matters to be presented.

Virtually almost 74% voting, that's pretty good for a publicly treated company. Each director elected will hold office until the Annual Meeting in 2027 until their successors are elected and qualified. Nominations for directors are now in order.

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

I second the nominations.

A motion has been made and seconded for the nominations of myself, Moishe Gubin, Mr. Klein, Mr. Procelli, Mr. Zwelling, Mr. Blisko and Mr. Newman. Are there any other nominations? There being no other nominations, we will move to proposal 2, to approve an amendment to the company's articles of [indiscernible] Corporation to authorize a class of nonvoting common stock. We will next consider Proposal 3 to ratify the selection of [ Hacker Johnson and Smith ] as the company's independent order for fiscal year 2026. And finally, we'll consider Proposal #4 to approve the adjournment of the annual meeting, if necessary to commit further [indiscernible] of proxies. The polls are now open, and the inspector of election will proceed to distribute ballots and tabulate the votes for proposals 1, 2, 3 and 4. If you have already executed a proxy and returned it to the company, you should not execute a ballot here at the meeting unless you wish to revoke the proxy you previously executed. If you wish to execute a ballot here at the meeting, please raise your hand so that those assisted in the meeting may supply you with a ballot. Have all the ballots been collected? I now declare the polls close. While the Inspector of Election has completed the tabulation of the ballots, I would like to share a PowerPoint presentation for those in the room and those participating from remote locations. Upon conclusion of the portion of our shareholders meeting which requires the voting of shares, I will entertain questions from the floor as well as through e-mail that the audience is free to send during or after in my presentation. E-mail questions can be sent to sdenison, [email protected], and that e-mail will also appear on the slide at the end of the presentation. So 2025 was another defining year for Optimum Bank. As we surpassed the $1 billion asset milestone, ending the year with over $1.1 billion in total assets, up more than 19% year-over-year. Equity reached a record $122 million, increasing over 18%, while net earnings rose 27% to $16.6 million. Core ROA remained exceptionally strong at approximately 21.6%, and our net interest margin expanded to a new high of 4.28%. Loans grew 19% to $959 million, and deposits increased 21% to $932 million, reflecting continued franchise expansion. We also continue to invest in the platform, growing our team to 98 employees in advancing key initiatives, while institutional ownership increased approximately 17%, reflecting growing interest from sophisticated investors. Taken together, these results reflect not only strong performance but a company that has successfully transitioned into a new phase of scale, profitability and institutional relevance. Importantly, our performance is now being recognized externally. During the year, Optimum Bank was ranked on 49 of 3,465 U.S. community banks by S&P Global Market Intelligence, placing us in the top 1.4% nationwide. While this reflects our 2025 performance, we are continuing to see increased recognition in 2026, including the recent initiation of equity research [indiscernible] from Alliance Global Partners offering a buy recommendation and a price target more than $1 higher than where the stock is currently trading, which we believe further validates the strength and growing visibility of our platform. On Slide 5, you see our balance sheet. This graph tells the story of numbers. Assets, deposits and shareholders' equity have all grown significantly over time, each reaching record levels in 2025. This growth has been consistent and disciplined reflecting the strength of our franchise as we move beyond the $1 billion milestone. The '26 versus '25, Slide 6. Momentum is carried into 2026. In just the first quarter, we added meaningful assets and expanded our loan and deposit base. In particular note that on a year-over-year basis, we increased shareholder equity by $19 million and in a single quarter, we grew by approximately $5 million. This continued growth demonstrates that we are not only scaling but doing so in a disciplined and sustainable manner. On Slide 7, OptimumBank's earnings performance over the past decade tells a powerful story of sustained growth and transformation from just $4.6 million in total revenue in 2016, the bank has grown to over $71 million in 2025. More importantly, 2025 represents the highest net earnings in the bank's history, reflecting continued momentum, expanding noninterest income and disciplined credit management. This progression highlights our evolution into a consistently high-performing financial institution. The next slide is looking at year-over-year Q1 performance, you see the acceleration continuing. A clear step-up in earnings and a powerful start to 2026. Net income increased meaningfully from the prior year period, reflecting continued strength in our core operating performance. This reinforces our position not just as a strong community bank, but as a growing and consistently profitable institution. Net interest margin, our NIM trajectory over the past decade has been carefully managed and 2025 captive at 4.28%, our highest on record. This is a record of disciplined asset liability management, active loan pricing and a very well-structured deposit strategy. This margin positions us well for scale. On the next slide, ROE is the clearest measure of shareholder return. And in 2025, we continue to deliver strong results. Core ROE remained at an elevated level of approximately 21.6%, reflecting the strength and consistency of our earnings. While ROAE moderated slightly year-over-year, this was driven by meaningful growth in our equity base, not a change in underlying performance. We're not only growing, but we're also doing so efficiently and profitability. This slide is not as important to me, but it's [indiscernible] anyway. Our deposit base is both diversified and high quality as of Q1 2026, nearly $305 million is in noninterest-bearing deposit demand deposits representing a highly efficient source of funding. And I think that's actually higher than most of our peers, like most of our numbers. This mix supports stability, liquidity and long-term earnings power. Our footprint remains focused but impactful with 3 branches anchoring our growth across South Florida. The next slide reflects the deposit composition at the end of 2025 and Q1 2026. You can see that we maintain a balanced mix of funding with continued strength and low-cost deposit demand. Demand deposits alongside growth in time deposits. This reflects our ability to manage funding costs while supporting balance sheet growth which remains critical in the current rate environment. Our lending remains both strategic and selective. [indiscernible] hotel and retail loan represents around 41% of our portfolio. We have maintained diversification across both geography and borrower type. Additionally, a significant majority of our loans are concentrated in Florida, where we remain closely aligned with the market we know best. Before moving on, I want to highlight an exciting development that reflects our progress towards our strategic goal of building multiple verticals so we can meet the needs of all borrowers. We recently launched a newly wholly owned subsidiary, Optimum Finance, focused on commercial real estate bridge lending. This is a natural evolution for us. Over the past several years, we've built deep expertise in commercial real estate underwriting and asset management. Optimum Finance allows us to apply that expertise in a more flexible, higher yielding segment, short-duration bridge loans while maintaining a disciplined approach as to find our success. I'm pleased to share that earlier this month, Optimum Finance closed its first transaction, a $14.185 million loan secured by hotel property in New Jersey. This is an important milestone, demonstrating both demand for the product and our ability to execute effectively in a new vertical, we view Optimum Finance as a strategic platform that can generate attractive risk-adjusted returns, diversify revenue stream and create incremental growth opportunities beyond the traditional balance sheet. While still early, this platform represents another step in our evolution from a high-performing community bank to a broader financial institution with multiple avenues for growth. The next slide to summarize over $1.1 billion in assets, approximately $959 million in loans and a strong, well-positioned balance sheet. We've built a powerful and efficient platform with return on average equity at nearly 15% in core return on average equity over 21%. We're not just scaling the balance sheet. We're doing so with discipline and profitability. This chart highlights our tangible book value per diluted share over the past 5 years, reflecting consistent and disciplined value creation. From 311 in 2021 to 518 and 2025, we have delivered steady double-digit growth in intrinsic value, representing an annual growth rate of over 13.5%. This progression is driven by strong earnings, prudent capital management and our focus on long-term performance. As we continue to scale the balance sheet and generate profitability, we believe this foundation positions us well to drive further shareholder value. Before we close, I want to take a moment to reflect on a truly special milestone for OptimumBank. In 2025, we probably celebrated our 25th anniversary, marking a new journey defined by growth, resilience and transformation. To commemorate the occasion, we have the honor of bringing the opening bell in New York Stock Exchange a powerful symbol of how far we have come. We also hosted a celebration attended by more than 350 friends, family members, customers, investors and supporters all of whom have played a role in our success. It was an incredible reminder that what we have built extends far beyond the numbers. On behalf of our Board, leadership and the entire team, thank you for being part of this journey and for the continued confidence in our future. We are also proud to share that a majority of OptimumBank's employees are now shareholders. This milestone reflects a deep commitment of our team, and it speaks to a culture where every success is shared. Our employees believe in the future of this bank, and they are proudly invested in helping us reach it. As the inspector completed the tabulation of the votes on the matters brought before this meeting and is he ready to present his report.

Mr. Chairman, I'm ready to report Proposal 1, I report that the holders of 6,571,984 shares of common stock voted for Proposal 1. To summarize, regarding proposal 1, the following directors are, therefore, duly elected to serve for 1 year and until their successors are elected and qualified, Moishe Gubin, Joel Klein, Thomas Procelli, Avi Zwelling, Michael Blisko and Steven Newman. The [indiscernible] for Proposal 2 is as follows: to approve an amendment of the company's articles of incorporation to authorize a class of nonvoting common stock. For, 6,699,923, against 172,576, abstain 7,623.

Proposal 2 passes as indicated by the aforementioned vote.

The vote for Proposal 3 is as follows: to ratify the selection of [ Hacker Johnson and Smith PA ] as the company's independent auditor for fiscal year 2026. For, 8, 947,652 against, 20,338 abstain, 23,743.

That carries as well. Proposal for to during the annual meeting if necessary to point further solicitation of proxies is not necessary as we collected enough votes for the 3 proposals we took up for consideration. We will first hear questions from our analysts than from those here in the room and finally, those participating remotely as will be read by one of our staff members. Karina, please open the mic for the analysts.

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

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

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

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

What's the exact number for today with our hedge?

We're 106.

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

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

So I think really to understand that -- I mean, our model really is a very, very friendly family-oriented model. And our people coming through the door today, we don't do any real advertising. You don't see us in the Penny state. We're not putting full page edge in the Sun times or any newspapers. So we're -- we have a nice cold following and derivatives of that coming in the door every day of the week to bring us business. We've built up a department that's really a white glove department to deal with not right because everybody should be getting light of service here. But it's built out to be able to take care of for better terms, [ Wales ] or bigger people that we kind of chase down that are putting in $10 million at a time. And so that department has grown, and a lot of those deposits find their way in the North Main Beach branch because they're based out of there. That being said, just like Fort Lauderdale branch, which is our biggest branch. Those are our corporate clients that are all over the country or all over the world, and that continues to grow at a very large clip. The only true real branch that we have today is [ Deerfield ]. And [ Deerfield ] is holding their own. They've gone up and down over the years. But I don't want to say it because I live there, but since I moved there, [ number ] there of -- and so yes, I mean, I think things should continue the way they're going it's literally every day of the week, people coming to us to give us deposits and people coming to us to bring those loans for us to do. And it's for us is to be able to handle everybody with the same white glove, good service that we want to be able to provide -- and that's our engine for growth.

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

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

Yes. Honestly, we our original numbers are based on a 25% growth. That's what our budgets are based on. That's our baseline goal. Right now, I think we're really killing that number. And if things continue with the pipeline we have and what we're doing that number is going to be a lot higher, which is going to be a cause for us to bring in more equity and to grow our business. That being said, that -- when we sell more equity, the EPS goes down, obviously, because there's more shares to have to share the income with but at a stable number of where we are today with the assumption of new equity coming in to be able to handle growth and everything being accretive growth, that's why I feel firm that I can say that we should be able to hit at least $0.20 a quarter and really probably closer to $0.22 a quarter. That's why the high end of the number is 88%. And that's not putting in any of the -- I didn't sit there in a room figuring out the math on what the new equity, with the new growth, what that's going to -- how accretive that's going to be if that turns into instead of 88% or 86% that might bring it over 90%. I haven't figured out that, [ Matt]. But I would bet that's why we could give a range 76% was what we said last year, 78%. I'm certain we're going to hit 84%, 86%. I'm pretty sure we're going to hit that too, what I give you that range, and I expect we'll probably exceed that.

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

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

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

So yes, so there's no secret to the world, right? Our company, a lot of the engine of growth is relationships and on all the Board members here really good relationships in the world and everyone helps contribute towards bringing business to the bank. And Michael and I, Michael Blisko, my partner who is on board here, we're both very well known in the health care business. And years ago, we started doing health care lending to the more secure stuff, which is AR lending. And as years have gone on, people have asked for conventional debt. And we've been very selective and not really done that. Firstly, because there's an education to understand health care, and it's taken a bunch of years for the credit people to really understand what we're lending to. And even the Board had to get more comfortable with that kind of lending and how it goes. So we started small, like $1 million loans, and there was a smallish portfolio. And once everyone got more comfortable and understand a little bit more, so the amount of leads that are generated by both Michael and I when it comes to health care, is sizable. And with that, the next step to grow that would be for us to do the conventional loans. And if we're doing conventional loans, the typical exit in the health care world is to take those loans and then take long-term, term financing with HUD, which typically have between 30 and 40-year straight line at a pricing of 10-year treasury plus $175 million which is a great exit for folks. [indiscernible] a little bit difficult to deal at the time, so it's a little bit of payment. But ignoring that, it's cheap money for long term. And so that's the exit and there's money to be made there. And I've got a lot of friends that have made a lot of money over the years being lenders in that field. And so we said for our strategy, it makes sense. We already have that customer base with AR lines. We already have a demand from customers that want to have conventional, which we did a few loans. I think we're probably somewhere $60 million maybe lent to it, $70 million lent, small piece of our portfolio. And we have a lot of demand. And over the years, I talked a lot of people, and I placed them elsewhere. And so this is just an ability for us to grow based on the leads without having to do any advertising, just be able to take what already comes to us and be able to satisfy their -- the demand and then continuing it. The same goes with Optimum Finance, that's for years, for years, as someone who referred business to the bank as well as the other Board members, we give it to the bank, we rely on the bankers. We have good people that we hire and they take good care of the custodian of the bank. And if they don't do a deal, we -- there's very little follow-up asking what happens to that deal, why we didn't do the loan, we got wide into the loan. We support the management to decide we don't want to do the loan. But what happens to the loan? So typically, what ends up really happening with the loan is the lender tells the person, we can't do it. I'm sorry. And that's the end of the conversation. And I'm just thinking all along, we have this pool of leads that somebody is a lender to lend that, maybe it doesn't fit the bank box. So -- but there's a lender somewhere that could feel comfortable with enough security, with enough things that are not regulated by the FDIC or Better Reserve or whoever else, OCC. So you get out of that regulatory box and you get out of the banking thinking box, you think of someone who's a lender who says, okay, this deal makes sense. I can't do it at the bank. So we're saying we're going to go create that vertical to be able to take all of the leads, not everyone's going to want to borrow money at 15% interest or higher rates. But there will be people that will take that money because it fits their needs, short-term financing, and we want to be able to capitalize on that. With that, I found someone I know a long time to lead that force and is well known in the world and well-known and well-liked and loved by most. And I feel that me and him are going to be going to make magic together, and it's going to be good for business. And so that's that vertical. We previously announced that we were going to do a vertical with factoring and that has somewhat sputtered only because there's more money in some of these other verticals and we have enough volume of stuff. All along, the strategy has been -- and I'll put out putting on to sleep out there, but the strategy has been where we want to do these savings very, very slow maybe to a knock on me, but we've been relatively slow on starting to take care of these strategies because of -- because we're doing so well in the core, you don't want to risk that core getting hurt. And so opportunities came how they came. And so now that we have the other 2 verticals up, we've already closed the first loan. We have a second one already brewing god-willing for Optimum Finance. And Optimum funding is still -- we've hired the people. We're not paying them just yet. They have to finish where they're currently employed. And so we should be up and running by the end of the year. And as far as volume are, I would say, I think on the Optimum Finance side, we're probably looking at getting at like $10 million a month as a baseline that could be higher, it could be lower and net spread on that is probably 5 to 10 points of net income from top line to bottom line. And then on funding, and then funding, we -- I would say that we should hope to maybe get 1 or 2 deals done end of the year, fourth quarter, also probably average loan size, somewhere between 5 and 5 and maybe 15, all underwritten to a [ HUD ] standard. So we know that we have an exit on that deal, all expected to be on the books for less than 2 years. Again, that's the things that banks wouldn't want. Banks don't want to make all the effort and have a loan only on the books for 6 months is too much work. So for -- so I think I answered your question by the end of the day. I was put long winded. I think I lost in my thoughts, I'm sorry.

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

Well, that is a really good question. In the last year, there have been a lot of shareholders that actually reached out and said that they want a dividend. And I argue with them saying, but don't, you think we're better with our capital staying in the bank and then earning 21% return on return on equity? And they answer we like that. But there's a metric that we can then follow even if you did [ $100 ] they said. So I would say to you that it's a discussion point at the Board, we recognize that we have free cash flow. If you look at our growth, we don't really have a lot of free cash flow. We actually need to bring in equity to support our growth. But we act for the shareholders. And so -- it's a debate that still has to happen here. We -- in theory, we could do a dividend because we're making enough money. Even if we -- if we're making any sense, we could we could get back 20 -- I mean, but as an example, I'm not suggesting either. But we still have to debate it further. Those are the 2 sides of the argument. I'm on the side of really not to do a dividend, but I'm also on the side of do whatever the shareholders want. So if the shareholders -- it's been a couple of shareholders that told me that, but I'm not sure it's like on to shareholders as and has to do this. So we'll see where it goes.

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

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

Let me try. Right. First, in my understanding right that the last quarter, $160 million of new deposits came into the bank in 1 quarter?

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

I see almost like -- maybe due to --

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

That kind of volume before $160 million in 1 quarter post --

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

Which would be like checking accounts, is that it?

Yes. Yes. And we're sitting with like about 30%, which beats most of our peers. Thank God. A lot of that is the Board members have friends. And any -- it's a random thing, right? If I ran to world friends and I see you when I see you at Grand Central Station, hitting a ball of my soup at [indiscernible]. And I'd say to you, where do your bank? And you say, Bank of America and I say, Mary, why do you have Bank of America for? No, no, no the Bank America, but why aren't you begin me? You make it easy for me and I bank with you. So I go, okay, [ David ] -- so call [ Marty ] [indiscernible] and next thing you know, you're banking it with me. I do -- Exactly. But that's how a point of that white glove area is really to make it as easy as possible for a guy because I mean, I can tell you from my own house, my own wife, still wanted a bank at [ FirstSource ] Bank, which was our bank that we started with New South and when we haven't lived there in 10 years. And for her, moving over bill pay and typing in all the different invoices for the electric bill was pain. So I provided her somebody to go and do the work for her, and then we get deposits at the end of the day.

Regarding the 2 subsidiaries, but when you describe where you're thinking the loans that were declined in doing something with them. I may have missed a little bit from the speaker to get over your -- do you mind brokering those to other lenders in fact? Is that what you're doing?

No. We're open. We're opening up another shop that has 3. It's going to [indiscernible] inferring requirement. Yes, different other ex there's some money coming for the -- so we're either -- it's either going to flow down from the holding company at a 10% preferred return. So basically, we're building out the model. We're putting equity in, whether it's equity from the holding company or equity by way of a loan from a related party into the company and then we're levering that with a line of credit with another bank. And so our cost of money is going to average out somewhere below 10%.

Which is not your typical loan that should make to the top of client going to the subsea.

Here's an example. You got a guy that buys a building at 50% LTV, but it's a turnaround and doesn't have good historical cash flow. So the bank says, okay, based on global cash flow, we could give this amount of money because it fits the box up to this dollar amount. Person says, well, I still need to do TI improvements and I need an extra $10 million. So they're going to go looking on the street for $10 million because they have plenty of equity to do to buy it and they have plenty of equity to do part of it, but they don't have the extra piece that they need. So they come along and say, in this example, let's say, they say, will you bank lend me -- so our typical banking rule, we don't really do seconds. It's only -- that's extra collateral. It's not -- we're not going to do a primary deal on a second generally. I guess the [ HELOC ] is a second, but that's a set product for someone who lives there. So from that point of view, that's not a bankable deal for us, but if somebody else goes and says, okay, checking a box on the person in the project. It's a lot more handholding, a little bit more kicking the tires, understanding exactly what the plan is. Going through stuff that a regulator doesn't -- will not be happy if we rely on as a credit admin, but where you're not [indiscernible] by the regulator and just you're just posed by common sense and you go hold on, you had this business and you got a guarantee from [indiscernible] billionaire. Just as an example, right, it's a deal that you should do. And so you make a deal, you tell the guy, we're going to give you -- we're going to charge you 18%, 2 points in --

But that money is not coming to a --

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

And with the other subsidiary with the health care, those aren't normal bankable that you need to [ temper ] a subsidiary to do that?

So it's an interesting point, okay, because they kind of are they kind of are where -- so I'll tell you, the exit allows for 100% refinance of existing debt up to 85% leverage, okay? So typically, the normal bank by us, we're not nothing more than 75%, most of the time, it's probably 70% or 65%. But so a guide that wants to be highly levered so that he could be 30, 40 years fixed, okay, which makes sense in that example to a lot of people, doesn't make sense banking, but it makes sense to someone who's a real estate guy. If I can lock in 40-year money, you ride at 85% LTV, I want to get to 85% LTV. So if the bank is stuck at 75% or 70%, right? So they need either a tranche behind the bank that 10%, 15%, even if it's sitting in a sinking fund, the money doesn't have to actually go to the guy. I mean the borrower says, just add debt to my property so that I can go and refinance the total debt and then I have long-term debt at the treasury plus 175, which is 6% today. So -- I mean, 6% that grade. I mean I have debt that's sitting at 3% that I have another 26 years on, right, that by the U.S. government, of course, which is God bless America. But that being said, so that guy says, "I want to take 6% for the next 40 years and then set it and forget it, right, and just do an auto debit for the next 40 years for the mortgage payment" and call it a day. And so the bank can't do -- they can't do that last 10%, 15%. So either they come to us and we do us being funding. We do the 10%, 15% as a second. Where is that money [ comfort ] -- also a holding company. And that's all money that -- in the grand scheme of things, like most finance companies, we're going to have a line of credit that's going to fund most of the loan that we're putting out the door. So we're going to be -- so for our haircut or you want to call the piece that we're going to do, we're probably in for like 10% of the actual loan amount. So if we've done $10 million. We're doing $1 million -- or I say it better. If the property was $10 million and we're lending and it's getting -- they're getting a loan of 8.5%, so we're doing, let's say, 1%, 1.5% and then the other 7% is coming from debt. And so in that pricing of, let's say, Soft something, and then our money to the holding company is 10% return. And then we're getting from the client north of 15% plus 2%, plus 1%.

And the lending and the holding company [indiscernible] from success of the bank.

Well, today, the way we did the first deal was we actually just borrowed the whole money needed we borrow money and then and so we borrowed, and we lent out.

We borrowed from somewhere.

Yes. So we borrowed money and our spread is good that we're making good money on the money that we borrowed. The old than what you could get from a CD. Simple enough. And so there's a little bit of -- there's a business to be had here. And so we're working it. And this is what I'm spending a lot of time on.

Rolling in the long run, it will be good for all of us. The next question.

Remember -- we brought the donuts. You could ask us many questions as you want 4 boxes.

After [ Gala], which was just [indiscernible], you mentioned about [ Newtek], which is prettier online bank, some calculations that Optimum as with [ Newtek], do I have that right?

Yes. Newtek is an SBA is like the -- one of the largest SBA lenders, I think, in the country. Okay? But they do all of their whole model is without branches. They're doing everything electronically. So when we first started and we still have a little bit of relationship left with them is they did a lot of our back-end SBA stuff for us because management correctly believes that you need to be exact in dealing with the SBA because the SBA will look for any excuse to not to honor a guarantee that they provide. So you want to rely and we had a document with them for them to do certain back office stuff. And in fact, I believe in their documents, they gave us some kind of guarantee that they're going to -- that anything that they have their hands on, they're almost ensuring that if something went wrong, the SBA went on to their word. So we use them. We're still using them, I think, a little bit. I don't think we use them because we got preferred status as you know already now more than a year ago, and our SBA department is turning pretty good. Can we doing better, but doing good. Anybody else? All right, at -- any questions from the [indiscernible].

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

Well, first of all, I appreciate the engagement that we have 9 questions. Like Marty, you've been here year with no it's here, right? You're the only guy -- so I appreciate the engagement, which is a testament to set the [indiscernible] running around the country, going to conferences and meeting people where people are interested about our story. We have good volume. That being said, whoever that came from is 100% correct. We -- and I have this bet all the time because people want to invest but their stock was saying, well, the market is trading in here, I want to discount to market, and I say, so the market's got it wrong. I'm not going to sell stock and dilute our shareholders below book. So today, our book and my merchant book is higher than the book that the public sees because I add back OCI, which is an accounting entry, which I believe is relatively big because it's just an entry because if we were to have to sell off our securities portfolio, we would take a loss today because the interest rate is at 2.5% and versus marketplace. So -- but it's not a real loss. It's an investment that we made 5 to 10 years ago that still has to bleed out based on its duration. So I had that back to book because I don't take that paper loss. And so my book number today is about $5.57, which is exactly where we're trading. So that being said, if there was an opportunity to do M&A where we could use our stock at [ 557], and we could buy a company at a fair price and knowing full well that the day after we made the deal or shortly thereafter, it will be accretive because I could put out senior management or something or other things that are part of their portfolio or we have the access to their cash that they can't get the money out at a good rate, they can stop their lending and use their cash to be able to do our lending, which is at a better rate -- it's good for business. So I wouldn't -- I would say that whoever asked the question is 100% in line in tune with what I'm thinking. And I think the Board agrees with me like there's no reason for us to tie ourselves. If we stop doing what we're doing right now and we can cut out some of our -- because part of our staff that we have on our books today is for growth. If we stopped wanting to grow and just lay low, we can probably cut out some of our labor, and we could turn the butter at a good 20%, 25% return a year which is not bad. I'd be very happy with that, but primary is growth. And just because that's -- we're in this world God wants us to be growing. If we're not growing, we're not -- we're dying and I don't want to be dying. I want to be growing. All right. What's the next question?

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

So I think everybody who's on this call or whoever reads this should go and look at the queue and understand exactly our common equity per share today is what I said, which is I think we announced that [ 538 ] is true the true book value. My number because of OCI, like I said, is [ $557 ] and if the marketplace will understand that, they would also see that our true market cap is right about $130 million. And that's why we had this proposal today is that is that this proposal cleans up the capital stack for those that are out there that look at and get confused and say, what's going on there that's preferred because the normal person as an investor looks at preferred and thinks okay, I'm behind the preferred guy and they don't even bother necessarily researching, understanding what the preferred series looks like. They just say preferred before them and they don't like it and people stay away from that. Our preferred was really only created so that I can put money into the bank and not have voting rights so that the regulators would allow that equity in the door, they still start if I had me at some point after that about it, but that worked out. But nevertheless, it was never meant for anybody to not have the same exact rights as to common. It was meant to be that everyone is on the same footing. So with this move, we'll end up moving everything to nonvoting common in essence, and so then everyone could see that everyone is all one. It's 2 classes of common, but it's -- one's voting on is [ on ] voting, there's no difference those otherwise. And that should make it easier for investors that are not investors today to become investors because it becomes simpler for them to understand.

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

Absolutely not. Absolutely not. We -- our CRE has grown because that's our regular customer on a regular loan demand, not at a [ 10 ] loan -- I mean, I guess, I carve out SBA and I carve out nursing home lines of credits and I carve out HELOCs. So if you look at our regular -- the rest of it is our regular portfolio. Out of regular portfolio, I would say like 90-something percent of that -- that's just typically how count it works. That's South Florida. We've maintained same standard easily for let's say, 5, 10 years, maybe longer. Like we're -- we haven't changed that at all. And part of that is we don't have a reason to, right? We get such loan demand without having the effort. We don't have to go and do wake -- if we do something wonky, it's really because it's a relationship that we want to try to help somebody and we're looking beyond the numbers in some form or another. And those are still like really far into between. There's not -- we don't -- it's rare. That being said, we expect to continue with the same way we've been going, which is the same credit quality that we've had, which has been very good. It's almost immaculate and the same type of borrowers, the same type of collateral and hopefully, in the same geography, the most pit. And that's that.

Those are all the questions that we have moment.

Okay. On behalf of all the directors and officers of the company, I wish to express our appreciation to all of you for attending this meeting. Is there any other business to come before the meeting?

There does not appear to be any other business. But I will, therefore, entertain a motion to adjourn. Anybody? Mr. Chairman will be the one to adjourn the meeting.

I think Mike will get you to it, wants done.

I second motion.

Okay. We've got a trifecta here. Anybody opposed? All right. We have a first time for second.

I know he's opposed. Motion carried. The meeting is adjourned. Thank you, everybody. Appreciate your time and effort on.

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