Q2 2026 OptimumBank Holdings Inc Earnings Call

August 13, 2026

Marina: Marina, I am going to give you the live go on the chat. We are going to start the webinar in about 10, nine, eight.

Speaker #1: Rina, I'm going to give you the live go on the chat. We're going to start the webinar in about 10, 9, 8— Ladies and gentlemen, thank you for joining us, and welcome to the OptimumBank Holdings, Inc. Q4 2026 earnings call.

Karina: Ladies and gentlemen, thank you for joining us, and welcome to the OptimumBank Holdings, Inc. Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. You are also welcome to ask a question through the text Q&A box or via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N@optimumbank.com. I will now hand the conference over to Seth Denison, Managing Director of Investor Relations. Please go ahead.

Operator: Ladies and gentlemen, thank you for joining us, and welcome to the OptimumBank Holdings, Inc. Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. You are also welcome to ask a question through the text Q&A box or via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N@optimumbank.com. I will now hand the conference over to Seth Denison, Managing Director of Investor Relations. Please go ahead.

Speaker #1: After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please raise your hand. If you have dialed into today's call, please press *9 to raise your hand, and *6 to unmute.

Speaker #1: You are also welcome to ask a question through the text Q&A box, or via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N at optimumbank.com. I will now hand the conference over to Seth Denison, Managing Director of Investor Relations.

Speaker #1: Please go ahead.

Speaker #2: Good afternoon, everyone, and thank you for joining us today for OptimumBank Holdings' Q2 2026 earnings webcast. Q2 represents another milestone in the evolution of OptimumBank.

Seth Denison: Good afternoon, everyone, and thank you for joining us today for OptimumBank Holdings' second quarter 2026 earnings webcast. The second quarter represents another milestone in the evolution of OptimumBank. During the quarter, we continued to build upon the momentum established over the past several years, delivering record quarterly earnings while surpassing $1.4 billion in total assets for the first time in the company's history. These results reflect the continued execution of our relationship-based banking strategy, disciplined credit culture, and our focus on creating long-term value for shareholders. Beyond our financial performance, the second quarter was also transformational from a corporate perspective. In May, the company announced planned executive leadership transition with our long-serving Chairman, Moshe Gubin, assuming the additional role of Chief Executive Officer while veteran banking executive Braden Smith joined OptimumBank as President.

Speaker #2: During the quarter, we continued to build upon the momentum established over the past several years, delivering record quarterly earnings while surpassing $1.4 billion in total assets for the first time in the company's history.

Speaker #2: These results reflect the continued execution of our relationship-based banking strategy, disciplined credit culture, and our focus on creating long-term value for shareholders. Beyond our financial performance, Q2 was also transformational from a corporate perspective.

Speaker #2: In May, the company announced a planned executive leadership transition, with our long-serving chairman, Moshe Gubin, assuming the additional role of Chief Executive Officer, while veteran banking executive Braden Smith joined OptimumBank as President.

Speaker #2: This transition was designed to position the company for its next phase of growth while maintaining the continuity that has defined OptimumBank for more than 25 years.

Seth Denison: This transition was designed to position the company for its next phase of growth while maintaining the continuity that has defined OptimumBank for more than 25 years. We also completed an important simplification of our capital structure through the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock. Because the preferred shares had already been reflected in our fully diluted share count, the transaction had minimal impact on dilution while creating a simpler and more transparent capital structure for investors going forward. Operationally, we also continued expanding our lending platform. During the quarter, OptimumFinance completed its first transaction, providing another avenue for growth while allowing the company to leverage third-party capital alongside our traditional banking platform.

Speaker #2: We also completed an important simplification of our capital structure through the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock.

Speaker #2: Because the preferred shares had already been reflected in our fully diluted share count, the transaction had minimal impact on dilution, while creating a simpler and more transparent capital structure for investors going forward.

Speaker #2: Operationally, we also continue to expand our lending platform. During the quarter, Optimum Finance completed its first transaction, providing another avenue for growth while allowing the company to leverage third-party capital alongside our traditional banking platform.

Speaker #2: Combined with the earlier formation of Optimum Funding, these initiatives broadened our product offerings and create additional opportunities to serve our customers while diversifying future earnings streams.

Seth Denison: Combined with the earlier formation of OptimumFunding, these initiatives broaden our product offerings and create additional opportunities to serve our customers while diversifying future earning streams. The investment community has also continued to recognize our progress. During the quarter, OptimumBank earned two nationally recognized distinctions, including being ranked the 49th best performing community bank in the nation by S&P Global Market Intelligence and being recognized by Raymond James as Community Bankers Cup recipient, placing OptimumBank among the top-performing publicly traded community banks in the country. That recognition has also extended to the research community. During the quarter, Brean Capital and AGP, or Alliance Global Partners, initiated research coverage with buy ratings, while Compass Point upgraded its rating on OptimumBank from neutral to buy. Together, these developments expanded independent research coverage while reinforcing growing institutional awareness of the company's financial performance, disciplined execution, and long-term growth strategy.

Speaker #2: The investment community has also continued to recognize our progress. During the quarter, Optimum Bank earned two nationally recognized distinctions, including being ranked the 49th best-performing community bank in the nation by S&P Global Market Intelligence, and being recognized by Raymond James as a Community Bankers Cup recipient, placing Optimum Bank among the top-performing publicly traded community banks in the country.

Speaker #2: That recognition has also extended to the research community. During the quarter, Brain Capital, an AGP—or Alliance Global Partners—initiated research coverage with buy ratings, while Compass Point upgraded its rating on Optimum Bank from neutral to buy.

Speaker #2: Together, these developments expanded independent research coverage while reinforcing growing institutional awareness of the company's financial performance, disciplined execution, and long-term growth strategy. While external recognition is certainly encouraging, our focus remains unchanged.

Seth Denison: While external recognition is certainly encouraging, our focus remained unchanged. Every day, we remain committed to serving our customers, supporting our communities, and executing on the strategy that has produced these results. We believe that continued execution will create lasting value for our shareholders over the long term. Today's call may include forward-looking statements based on management's current expectations, assumptions, and beliefs about OptimumBank's business and environment in which it operates. These statements are subject to risk and uncertainties that could cause actual results to differ materially from those anticipated. The call is being recorded, and we refer you to our SEC filings, including our most recent Form 10-Q, for additional information regarding risk factors and forward-looking statements. Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as identified in the presentation deck.

Speaker #2: Every day, we remain committed to serving our customers, supporting our communities, and executing on the strategy that has produced these results. We believe that continued execution will create lasting value for our shareholders over the long term.

Speaker #2: Today's call may include forward-looking statements based on management's current expectations, assumptions, and beliefs about OptimumBank's business and the environment in which it operates. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.

Speaker #2: The call is being recorded, and we refer you to our SEC filings, including our most recent Form 10-Q, for additional information regarding risk factors and forward-looking statements.

Speaker #2: Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as identified in the presentation deck.

Speaker #2: Joining me today are Moshe Gubin, Chairman of the Board and Chief Executive Officer; Braden Smith, President; and Elliot Nunez, Chief Financial Officer and Executive Vice President.

Seth Denison: Joining me today are Moshe Gubin, Chairman of the Board and Chief Executive Officer, Braden Smith, President, and Elliot Nunez, Chief Financial Officer and Executive Vice President. This leadership team combines decades of banking, financial, and executive leadership experience and is well-positioned to guide the company's continued growth. After this brief presentation, Moshe, Braden, and Elliot will be available for any viewers' questions during the Q&A session. With that, I'll turn it over to Moshe to begin the presentation.

Speaker #2: This leadership team combines decades of banking, financial, and executive leadership experience and is well-positioned to guide the company's continued growth. After this brief presentation, Moshe, Braden, and Elliot will be available for any viewers' questions during the Q&A session.

Speaker #2: With that, I'll turn it over to Moshe to begin the presentation.

Speaker #3: Thank you, Seth, and good afternoon, everyone. Thank you for joining us today and for your continued support of our beloved bank. When I look at slide 4, I'm reminded that our performance this quarter is the result of a strategy we have consistently executed over many years.

Moshe Gubin: Thank you, Seth, and good afternoon, everyone. Thank you for joining us today and for your continued support of our beloved bank. When I look at slide 4, I'm reminded that our performance this quarter is a result of a strategy we have consistently executed over many years. Since opening our doors in 2000, our mission has remained the same: build a relationship-driven community bank that serves its customers while creating long-term value for shareholders. What has changed is the scale of the opportunity before us. Over the past several years, we've transformed OptimumBank into an institution that has now surpassed 1.4 billion. Along the way, we've expanded our franchise, strengthened our leadership team, broadened our lending capabilities, and significantly increased our earnings power. Today, we are not simply a larger bank. We are a stronger and more profitable bank.

Moishe Gubin: Thank you, Seth, and good afternoon, everyone. Thank you for joining us today and for your continued support of our beloved bank. When I look at slide 4, I'm reminded that our performance this quarter is a result of a strategy we have consistently executed over many years. Since opening our doors in 2000, our mission has remained the same: build a relationship-driven community bank that serves its customers while creating long-term value for shareholders. What has changed is the scale of the opportunity before us. Over the past several years, we've transformed OptimumBank into an institution that has now surpassed 1.4 billion. Along the way, we've expanded our franchise, strengthened our leadership team, broadened our lending capabilities, and significantly increased our earnings power. Today, we are not simply a larger bank. We are a stronger and more profitable bank.

Speaker #3: Since opening our doors in 2000, our mission has remained the same: build a relationship-driven community bank that serves its customers while creating long-term value for shareholders.

Speaker #3: What has changed is the scale of the opportunity before us. Over the past several years, we've transformed Optimum Bank into an institution that has now surpassed $1.4 billion.

Speaker #3: Along the way, we've expanded our franchise, strengthened our leadership team, broadened our lending capabilities, and significantly increased our earnings power. Today, we are not simply a larger bank; we are a stronger and more profitable bank.

Speaker #3: During Q2, our annualized core return on average equity reached 26.9%, reflecting the earnings power we've built while maintaining disciplined underwriting and a conservative approach to risk.

Moshe Gubin: During the Q2, our annualized core return on average equity reached 26.9%, reflecting the earnings power we have built while maintaining disciplined underwriting and a conservative approach to risk. This quarter marks another important chapter in our evolution. The additions of OptimumFunding and OptimumFinance expand our lending platform and enhance our ability to meet a broader range of our borrowers' financing needs. These capabilities allow us to deepen existing relationships, support our customers across more stages of their growth, and extend those relationships further than we have been able to in the past. At the same time, our leadership transition positions the company for its next phase while maintaining the continuity that has guided our success. As Chairman for more than 16 years and now as Chief Executive Officer, I remain extremely optimistic about our future.

Moishe Gubin: During the Q2, our annualized core return on average equity reached 26.9%, reflecting the earnings power we have built while maintaining disciplined underwriting and a conservative approach to risk. This quarter marks another important chapter in our evolution. The additions of OptimumFunding and OptimumFinance expand our lending platform and enhance our ability to meet a broader range of our borrowers' financing needs. These capabilities allow us to deepen existing relationships, support our customers across more stages of their growth, and extend those relationships further than we have been able to in the past. At the same time, our leadership transition positions the company for its next phase while maintaining the continuity that has guided our success. As Chairman for more than 16 years and now as Chief Executive Officer, I remain extremely optimistic about our future.

Speaker #3: This quarter marks another important chapter in our evolution. The additions of Optimum Funding and Optimum Finance expand our lending platform and enhance our ability to meet a broader range of our borrowers' financing needs.

Speaker #3: These capabilities allow us to deepen existing relationships, support our customers across more stages of their growth, and extend those relationships further than we have been able to in the past.

Speaker #3: At the same time, our leadership transition positions the company for its next phase by maintaining the continuity that has guided our success. As Chairman for more than 16 years, and now as Chief Executive Officer, I remain extremely optimistic about our future.

Speaker #3: While we are proud of what we have accomplished, I believe we are still in the early stages of our long-term growth opportunity. With that, let's turn to our Q2 financial results.

Moshe Gubin: While we are proud of what we have accomplished, I believe we are still in the early stages of our long-term growth opportunity. With that, let's turn to our Q2 financial results. Turning to slide 5, I believe our Q2 results demonstrate the strength and scalability of our business model. Importantly, we believe this quarter establishes a sustainable new benchmark for our financial performance going forward. Based on our current quarterly earnings run rate of approximately $0.28 per share, we believe it is reasonable to increase our forward-looking annual earnings estimate to a range of approximately $1 per share to approximately $1.15 per share. We reported record quarterly net income of $6.7 million, representing a 43% increase over the Q1 and an 85% increase over the Q2 of last year.

Moishe Gubin: While we are proud of what we have accomplished, I believe we are still in the early stages of our long-term growth opportunity. With that, let's turn to our Q2 financial results. Turning to slide 5, I believe our Q2 results demonstrate the strength and scalability of our business model. Importantly, we believe this quarter establishes a sustainable new benchmark for our financial performance going forward. Based on our current quarterly earnings run rate of approximately $0.28 per share, we believe it is reasonable to increase our forward-looking annual earnings estimate to a range of approximately $1 per share to approximately $1.15 per share. We reported record quarterly net income of $6.7 million, representing a 43% increase over the Q1 and an 85% increase over the Q2 of last year.

Speaker #3: Turning to slide 5, I believe our Q2 results demonstrate the strength and scalability of our business model. Importantly, we believe this quarter establishes a sustainable new benchmark for our financial performance going forward.

Speaker #3: Based on our current quarterly earnings run rate of approximately $0.28 per share, we believe it is reasonable to increase our forward-looking annual earnings estimate to a range of approximately $1.00 per share to approximately $1.15 per share.

Speaker #3: We reported record quarterly net income of $6.7 million, representing a 43% increase over the first quarter and an 85% increase over the second quarter of last year.

Speaker #3: As a result, profitability strengthened considerably, with pre-tax income increasing by approximately $2.6 million from the first quarter. Net interest income grew to nearly $14.7 million, driven by continued loan growth and disciplined balance sheet management.

Moshe Gubin: As a result, profitability strengthened considerably, with pretax income increasing by approximately $2.6 million from the Q1. Net interest income grew to nearly $14.7 million, driven by continued loan growth and disciplined balance sheet management. At the same time, non-interest income increased to approximately $2.5 million, reflecting the continued diversification of our revenue streams. We also recorded a reversal of credit loss expense during the quarter, highlighting the continued strength of our loan portfolio. That positive credit trend continued immediately following quarter end, and on 1 July, our one loan that had been past due was paid off and another was brought current, reducing our loans more than 30 days past due to a very modest level. I also want to briefly address our earnings per share presentation.

Moishe Gubin: As a result, profitability strengthened considerably, with pretax income increasing by approximately $2.6 million from the Q1. Net interest income grew to nearly $14.7 million, driven by continued loan growth and disciplined balance sheet management. At the same time, non-interest income increased to approximately $2.5 million, reflecting the continued diversification of our revenue streams. We also recorded a reversal of credit loss expense during the quarter, highlighting the continued strength of our loan portfolio. That positive credit trend continued immediately following quarter end, and on 1 July, our one loan that had been past due was paid off and another was brought current, reducing our loans more than 30 days past due to a very modest level. I also want to briefly address our earnings per share presentation.

Speaker #3: At the same time, non-interest income increased to approximately $2.5 million, reflecting the continued diversification of our revenue streams. We also recorded a reversal of credit loss expense during the quarter, highlighting the continued strength of our loan portfolio.

Speaker #3: That positive credit trend continued immediately following quarter-end, and on July 1, our one loan that had been past due was paid off, and another was brought current, reducing our loans more than 30 days past due to a very modest level.

Speaker #3: I also want to briefly address our earnings per share presentation. During Q2, we completed the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock.

Moshe Gubin: During the Q2, we completed the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock. Because those preferred shares had already been reflected in our fully diluted share count, the exchange had minimal impact on diluted earnings per share. Going forward, our capital structure is simpler and easier for investors to understand. Overall, I believe these results reflect the continued execution of our long-term strategy and reinforce our confidence in the opportunities that lie ahead. Turning to slide 6, this reconciliation highlights a metric that I believe best reflects the underlying earnings power of our franchise, core pretax pre-provision earnings. During the Q2, core pretax pre-provision earnings increased to $8.8 million, while our annualized core ROE reached 26.9%. These are exceptional results and demonstrate that our profitability continues to improve as we grow the balance sheet.

Moishe Gubin: During the Q2, we completed the exchange of all outstanding Series B and Series C convertible preferred stock into non-voting common stock. Because those preferred shares had already been reflected in our fully diluted share count, the exchange had minimal impact on diluted earnings per share. Going forward, our capital structure is simpler and easier for investors to understand. Overall, I believe these results reflect the continued execution of our long-term strategy and reinforce our confidence in the opportunities that lie ahead. Turning to slide 6, this reconciliation highlights a metric that I believe best reflects the underlying earnings power of our franchise, core pretax pre-provision earnings. During the Q2, core pretax pre-provision earnings increased to $8.8 million, while our annualized core ROE reached 26.9%. These are exceptional results and demonstrate that our profitability continues to improve as we grow the balance sheet.

Speaker #3: Because those preferred shares had already been reflected in our full ability to share count, the exchange had minimal impact on diluted earnings per share.

Speaker #3: Going forward, our capital structure is simpler and easier for investors to understand. Overall, I believe these results reflect the continued execution of our long-term strategy and reinforce our confidence in the opportunities that lie ahead.

Speaker #3: Turning to slide 6, this reconciliation highlights a metric that I believe best reflects the underlying earnings power of our franchise: core pre-tax, pre-provision earnings.

Speaker #3: During Q2, core pre-tax, pre-provision earnings increased to $8.8 million, while our annualized core ROE reached 26.9%. These are exceptional results, and demonstrate that our profitability continues to improve as we grow the balance sheet.

Speaker #3: Our objective has never been growth for growth's sake. Our objective is to build a larger, more profitable institution that consistently generates attractive returns for our shareholders, while maintaining disciplined underwriting and prudent risk management.

Moshe Gubin: Our objective has never been growth for growth's sake. Our objective is to build a larger, more profitable institution that consistently generates attractive returns for our shareholders while maintaining disciplined underwriting and prudent risk management. Turning to slide 7, I believe this slide best illustrates the transformation of OptimumBank over the past several years. Since 2022, total assets have grown at a compound annual growth rate of more than 28%, increasing from approximately $585 million to more than $1.4 billion today. During that same period, we have continued investing in our people, expanding our franchise, and building the infrastructure necessary to support our long-term growth. Our profitability has grown alongside the balance sheet. During Q2, net interest margin expanded to 4.57%, and we believe there is still some opportunity for further expansion. At the same time, annualized core pretax pre-provision earnings reached nearly $32 million.

Moishe Gubin: Our objective has never been growth for growth's sake. Our objective is to build a larger, more profitable institution that consistently generates attractive returns for our shareholders while maintaining disciplined underwriting and prudent risk management. Turning to slide 7, I believe this slide best illustrates the transformation of OptimumBank over the past several years. Since 2022, total assets have grown at a compound annual growth rate of more than 28%, increasing from approximately $585 million to more than $1.4 billion today. During that same period, we have continued investing in our people, expanding our franchise, and building the infrastructure necessary to support our long-term growth. Our profitability has grown alongside the balance sheet. During Q2, net interest margin expanded to 4.57%, and we believe there is still some opportunity for further expansion. At the same time, annualized core pretax pre-provision earnings reached nearly $32 million.

Speaker #3: Turning to slide 7, I believe this slide best illustrates the transformation of Optimum Bank over the past several years. Since 2022, total assets have grown at a compound annual growth rate of more than 28%, increasing from approximately $585 million to more than $1.4 billion today.

Speaker #3: During that same period, we've continued investing in our people, expanding our franchise, and building the infrastructure necessary to support our long-term growth. Our profitability has grown alongside the balance sheet.

Speaker #3: During the second quarter, net interest margin expanded to 4.57%, and we believe there is still some opportunity for further expansion. At the same time, annualized core pre-tax, pre-provision earnings reached nearly $32 million.

Speaker #3: These results demonstrate that the investments we've made in our people, technology, lending capabilities, and new business platforms are translating into stronger operating performance and increasing shareholder value.

Moshe Gubin: These results demonstrate that the investments we have made in our people, technology, lending capabilities, and new business platforms are translating into stronger operating performance and increasing shareholder value. While we are proud of what we have accomplished, we believe there remains significant opportunity ahead. We intend to continue executing the same strategy that has brought us to this point by growing responsibly, serving our customers, investing in our communities, and creating long-term value for our shareholders. With that, I will turn the presentation over to our Chief Financial Officer, Elliot Nunez, who will review our financial results in greater detail.

Moishe Gubin: These results demonstrate that the investments we have made in our people, technology, lending capabilities, and new business platforms are translating into stronger operating performance and increasing shareholder value. While we are proud of what we have accomplished, we believe there remains significant opportunity ahead. We intend to continue executing the same strategy that has brought us to this point by growing responsibly, serving our customers, investing in our communities, and creating long-term value for our shareholders. With that, I will turn the presentation over to our Chief Financial Officer, Elliot Nunez, who will review our financial results in greater detail.

Speaker #3: While we are proud of what we've accomplished, we believe there remains significant opportunity ahead. We intend to continue executing the same strategy that has brought us to this point by growing responsibly, serving our customers, investing in our communities, and creating long-term value for our shareholders.

Speaker #3: With that, I'll turn the presentation over to our Chief Financial Officer, Elliot Nunez, who will review our financial results in greater detail.

Speaker #2: Thank you, Moshe. As Moshe discussed on slide 5, Q2 reflected continued growth in earnings and profitability. I'll build on that overview by walking through the underlying revenue, funding costs, and expense trends shown on slide 8.

Elliot Nunez: Thank you, Moshe. As Moshe discussed on slide number 5, Q2 reflected continued growth in earnings and profitability. I will build on that overview by walking through the underlying revenue, funding costs, and expense trends shown on slide number 8. Total interest income increased to $21.7 million during the quarter, driven primarily by continued loan growth. Total interest expense also increased as deposit balances and borrowing supported balance sheet growth. As a result, net interest income increased to $14.7 million, up approximately $1.5 million from Q1 and $4.5 million from Q2 of last year. Net interest margin expanded to 4.57%, compared to 4.49% in the prior quarter and 4.14% a year ago. We recorded a $37,000 reversal of credit loss expense during the quarter, compared to a $770,000 provision in Q1, reflecting the continued strength of our credit quality.

Speaker #2: Total interest income increased to $21.7 million during Q2, driven primarily by continued loan growth. Total interest expense also increased as deposit balances and borrowings supported balance sheet growth.

Speaker #2: As a result, net interest income increased to $14.7 million, up approximately $1.5 million from Q1 and $4.5 million from Q2 of last year.

Speaker #2: Net interest margin expanded to 4.57%, compared to 4.49% in the prior quarter and 4.14% a year ago. We recorded a $37,000 reversal of credit loss expense during Q2, compared to a $770,000 provision in Q1.

Speaker #2: Reflecting the continued strength of our credit quality, total non-interest income increased to $2.49 million, driven by growth in service charges and other fee income. Total non-interest expense increased to $8.38 million, reflecting continued investment in personnel and technology to support the company's growth.

Elliot Nunez: Total non-interest income increased to $2.49 million, driven by growth in service charges and other fee income. Total non-interest expense increased to $8.38 million, reflecting continued investment in personnel and technology to support the company's growth. These results contributed to pretax income of $8.84 million, an increase of approximately $2.64 million from Q1. Net income increased to $6.66 million, or $0.40 per basic share and $0.28 per diluted share. Turning to slide number 9, this slide summarizes our results for H1 2026 compared to H1 2025. Total interest income increased by approximately $10.6 million to $41.2 million, while net interest income increased by approximately $8.2 million to $27.9 million. This growth was primarily driven by continued expansion of the loan portfolio and higher-earning assets. Total non-interest income increased by approximately $1.2 million to $4.3 million.

Speaker #2: This result contributed to pre-tax income of $8.84 million, an increase of approximately $2.64 million from Q1. Net income increased to $6.66 million, or $0.40 per basic share, and $0.28 per diluted share.

Speaker #2: Turning to slide 9, this slide summarizes our results for the first six months of 2026, compared to the first six months of 2025. Total interest income increased by approximately $10.6 million, to $41.2 million, while net interest income increased by approximately $8.2 million, to $27.9 million.

Speaker #2: This growth was primarily driven by continued expansion of the loan portfolio and higher earning assets. Total non-interest income increased by approximately $1.2 million, to $4.3 million.

Elliot Nunez: Non-interest expense increased by approximately $4.6 million, primarily reflecting investments in personnel, technology, and infrastructure to support the company's continued growth. Pre-tax income increased to $15 million from $10.1 million during the first six months of 2025, while net income increased to $11.3 million compared to $7.5 million in the prior year period. Basic earnings per share increased to $0.79 from $0.64, and diluted earnings per share increased to $0.48 from $0.32. Moving on now next to slide number 10. Gross loans increased to approximately $1.22 billion at 30 June 2026. Since 31 December 2022, the loan portfolio has grown at a compound annual growth rate of 30.19%. The loan yield for the first six months of 2026 was 7.11%. Total deposits increased to approximately $1.21 billion at 30 June 2026, representing a compound annual growth rate of 28.27% since 31 December 2022.

Speaker #2: Non-interest expense increased by approximately $4.6 million, primarily reflecting investments in personnel, technology, and infrastructure to support the company's continued growth. Pre-tax income increased to $15 million from $10.1 million during the first 6 months of 2025.

Speaker #2: While net income increased to $11.3 million, compared to $7.5 million in the prior year period. Basic earnings per share increased to $79 cents, from $64 cents, and diluted earnings per share increased to $0.48 cents, from $0.32 cents.

Speaker #2: Moving on now to slide 10, gross loans increased to approximately $1.22 billion at June 30, 2026. Since December 31, 2022, the loan portfolio has grown at a compound annual growth rate of 30.19%.

Speaker #2: The loan yield for the first six months of 2026 was 7.11%. Total deposits increased to approximately $1.21 billion at June 30, 2026, representing a compound annual growth rate of 28.27% since December 31, 2022.

Elliot Nunez: Annualized non-interest income totaled approximately $8.6 million through the first six months of 2026. Since 31 December 2022, non-interest income has grown at a compound annual growth rate of 35.68%. Now turning over to slide number 11. Credit quality remained strong during the second quarter. At 30 June 2026, the allowance for credit losses to loans was 0.91%. Non-performing assets represented 0.22% of total assets, and net charge-offs to average loans were 0%. This matrix continued to reflect the quality of our loan portfolio and our disciplined underwriting practices. The bank also remained well-capitalized. Our Tier 1 leverage ratio was 10.54% at quarter end. Turning now to the balance sheet. We continue building on that momentum achieved in 2025. Total assets increased by $401.8 million year over year to $1.4 billion at 30 June 2026.

Speaker #2: Annualized non-interest income totaled approximately $8.6 million through the first six months of 2026. Since December 31, 2022, non-interest income has grown at a compound annual growth rate of 35.68%.

Speaker #2: Now, turning over to slide 11, credit quality remained strong during Q2. At June 30, 2026, the allowance for credit losses to loans was 0.91%.

Speaker #2: Non-performing assets represented 0.22% of total assets, and net charges to average loans were 0%. This metric continued to reflect the quality of our loan portfolio and our disciplined underwriting practices.

Speaker #2: The bank also remained well-capitalized. Our Tier 1 leverage ratio was 10.54% at Q1 end. Turning now to the balance sheet, we continue building on the momentum achieved in 2025.

Speaker #2: Total assets increased by $401.8 million year over year, to $1.4 billion at June 30, 2026. This growth was well funded, with total deposits increasing by $335.2 million to $1.21 billion over the same period.

Elliot Nunez: This growth was well-funded, with total deposits increasing by $335.2 million to $1.21 billion over the same period. On the funding side, we maintain strong balance sheet discipline while continuing to diversify our deposit base and maintain ample on and off-balance sheet liquidity. Finally, reflecting strong earnings retention and disciplined capital management, total stockholders' equity increased by $20 million year-over-year to $134.4 million at 30 June 2026. Turning to our final slide, I believe it summarizes many of the themes we discussed throughout today's presentation. Since 31 December 2022, our loan portfolio has grown at a compound annual growth rate of 30.19%, while deposits have grown at a 28.27% compound annual growth rate. At the same time, tangible book value per diluted share has increased to $5.65. We believe that growth has been achieved without sacrificing profitability.

Speaker #2: On the funding side, we maintained strong balance sheet discipline while continuing to diversify our deposit base and maintain ample on- and off-balance sheet liquidity. Finally, reflecting strong earnings, retention, and disciplined capital management, total stockholders' equity increased by $20 million year over year, to $134.4 million at June 30, 2026.

Speaker #2: Turning to our final slide, I believe it summarizes many of the themes we discussed throughout today's presentation. Since December 31, 2022, our loan portfolio has grown at a compound annual growth rate of 30.19%, while deposits have grown at a 28.27% compound annual growth rate.

Speaker #2: At the same time, tangible book value per diluted share has increased to $5.65. We believe that growth has been achieved without sacrificing profitability. Our efficiency ratio of 48.79% continues to compare favorably to our peer group.

Elliot Nunez: Our efficiency ratio of 48.79% continues to compare favorably to our peer group, while our net interest margin of 4.57% remains well above the peer average. As discussed earlier, the exchange of our Series B and Series C convertible preferred stock during the second quarter simplified our capital structure. Although diluted earnings per share for the first six months of 2026 reflects the impact of the exchange occurring during the reporting period, future reporting periods will reflect our simplified capital structure. Overall, we believe this metrics demonstrate the continued execution of our long-term strategy and our commitment to creating value for our shareholders. Now, I will turn it over back to Moshe.

Speaker #2: While our net interest margin of 4.57% remains well above the peer average, as discussed earlier, the exchange of our Series B and Series C convertible preferred stock during Q2 simplified our capital structure.

Speaker #2: Although diluted earnings per share for the first six months of 2026 reflect the impact of the exchange occurring during the reporting period, future reporting periods will reflect our simplified capital structure.

Speaker #2: Overall, we believe this matrix demonstrates the continued execution of our long-term strategy and our commitment to creating value for our shareholders. Now, I will turn it back over to Motion.

Speaker #3: Thank you, Elliott. As we conclude today's presentation, I want to thank our employees, customers, shareholders, and board of directors for their continued trust and support.

Moshe Gubin: Thank you, Elliot. As we conclude today's presentation, I want to thank our employees, customers, shareholders, and board of directors for their continued trust and support. The results we reported today reflect the dedication of our team and the strength of the franchise we have built together. While we are proud of another record quarter, we remain focused on the opportunities ahead. We believe OptimumBank is well-positioned for continued growth, supported by a strong balance sheet, a diversified lending platform, disciplined credit culture, and an experienced management team committed to long-term value creation. As Chairman for more than 16 years and now as Chief Executive Officer, I am excited about the future of our company. We will continue to execute the same disciplined strategy that has brought us to this point while remaining focused on serving our customers, supporting our communities, and delivering sustainable returns for our shareholders.

Moishe Gubin: Thank you, Elliot. As we conclude today's presentation, I want to thank our employees, customers, shareholders, and board of directors for their continued trust and support. The results we reported today reflect the dedication of our team and the strength of the franchise we have built together. While we are proud of another record quarter, we remain focused on the opportunities ahead. We believe OptimumBank is well-positioned for continued growth, supported by a strong balance sheet, a diversified lending platform, disciplined credit culture, and an experienced management team committed to long-term value creation. As Chairman for more than 16 years and now as Chief Executive Officer, I am excited about the future of our company. We will continue to execute the same disciplined strategy that has brought us to this point while remaining focused on serving our customers, supporting our communities, and delivering sustainable returns for our shareholders.

Speaker #3: The results we reported today reflect the dedication of our team and the strength of the franchise we have built together. While we are proud of another record quarter, we remain focused on the opportunities ahead.

Speaker #3: We believe Optimum Bank is well positioned for continued growth, supported by a strong balance sheet, a diversified lending platform, disciplined credit culture, and an experienced management team committed to long-term value creation.

Speaker #3: As chairman for more than 16 years, and now as chief executive officer, I am excited about the future of our company. We will continue to execute the same disciplined strategy that has brought us to this point, while remaining focused on serving our customers, supporting our communities, and delivering sustainable returns for our shareholders.

Speaker #3: With that, I'll turn it back to Seth to open the call for questions.

Moshe Gubin: With that, I will turn it back to Seth to open the call for questions.

Moishe Gubin: With that, I will turn it back to Seth to open the call for questions.

Speaker #2: Thanks, Motion. Optimum Bank continues to deliver strong financial performance, and we appreciate those taking the time to learn more about us. Let's open it up for questions.

Seth Denison: Thanks, Moshe. OptimumBank continues to deliver a strong financial performance, and we appreciate those taking the time to learn more about us. Let's open it up for questions.

Speaker #4: We will now begin the question-and-answer session. A kind reminder: if you would like to ask a question, please raise your hand using the raise hand function at the bottom of your screen.

Karina: We will now begin the question and answer session. A kind reminder, if you would like to ask a question, please raise your hand using the raise hand function at the bottom of your screen. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. You are also welcome to ask a question via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N @optimumbank.com, and it will be read aloud. Please ensure you are unmuted locally when asking your question. Kindly stand by while we compile the Q&A roster. Your first question comes from the line of Gaurav Mehta with Alliance Global Partners. Kind reminder to press star six to unmute. Your line is open. Please go ahead.

Operator: We will now begin the question and answer session. A kind reminder, if you would like to ask a question, please raise your hand using the raise hand function at the bottom of your screen. If you have dialed in to today's call, please press star nine to raise your hand and star six to unmute. You are also welcome to ask a question via email at sdenison@optimumbank.com. That is S-D-E-N-I-S-O-N @optimumbank.com, and it will be read aloud. Please ensure you are unmuted locally when asking your question. Kindly stand by while we compile the Q&A roster. Your first question comes from the line of Gaurav Mehta with Alliance Global Partners. Kind reminder to press star six to unmute. Your line is open. Please go ahead.

Speaker #4: If you have dialed in to today's call, please press *9 to raise your hand and *6 to unmute. You are also welcome to ask a question via email at sdenison@optimumbank.com.

Speaker #4: That is s-d-e-n-i-s-o-n at optimumbank.com. It will be read aloud. Please ensure you are unmuted locally when asking your question. Kindly stand by while we compile the Q&A roster.

Speaker #4: Your first question comes from the line of Gaurav Mehta with Alliance Global Partners. A kind reminder to press star-6 to unmute. Your line is open.

Speaker #4: Please go ahead.

Speaker #5: Yeah, thank you. I wanted to start with the annual runway guidance that you talked about, and dollar-to-dollar 15, just to clarify. Is that number are you expecting for '26, or that's the annual run rate going forward?

Gaurav Mehta: Yeah, thank you. I wanted to start with the annual run rate guidance that you talked about, $1 to $1.15. Just to clarify, is that number, are you expecting for 2026 or that is the annual run rate going forward?

Speaker #3: Yeah. So, Gaurav, thank you. Thank you for joining us. Well, I wanted to keep to the $0.28 that we had in Q2. That should be easily matched going forward.

Moshe Gubin: Yeah. Gaurav, thank you for joining us. The $0.28 that we had in Q2, that should be easily matched going forward. The reason why I gave a guidance the way I did it is, at some point, we are going to raise equity to sustain the growth of the balance sheet. At some point, the math to figure out what I raise and then what that new money out the door at a multiple, keeping with a 10% capital ratio, what that turns into, I have not done the math. I kept it to a simple range of $1, $1.15, but if things remain totally constant with nothing else, that $0.28 is easily able to be replicated going forward.

Moishe Gubin: Yeah. Gaurav, thank you for joining us. The $0.28 that we had in Q2, that should be easily matched going forward. The reason why I gave a guidance the way I did it is, at some point, we are going to raise equity to sustain the growth of the balance sheet. At some point, the math to figure out what I raise and then what that new money out the door at a multiple, keeping with a 10% capital ratio, what that turns into, I have not done the math. I kept it to a simple range of $1, $1.15, but if things remain totally constant with nothing else, that $0.28 is easily able to be replicated going forward.

Speaker #3: The reason why I gave the guidance the way I did is, at some point, we're going to raise equity and sustain the growth of the balance sheet.

Speaker #3: And at some point, the math to figure out what I raise and then what that new money out the door at a multiple, keeping with a 10% capital ratio, what that turns into—I haven't done the math.

Speaker #3: So I kept it to a simple range of $1.00 to $1.15. But if things remain totally constant, with nothing else changing, that 28 cents is easily able to be replicated going forward.

Gaurav Mehta: In that $0.28, there was nothing non-recurring. Everything was recurring in that number?

Speaker #5: And so, in that 28 cents, there was nothing non-recurring? Everything was recurring in that number?

Gaurav Mehta: In that $0.28, there was nothing non-recurring. Everything was recurring in that number?

Speaker #3: Yeah, it’s a nice, clean month. Right now we have, already, in this quarter—we already have more money out the door. I mean, we're running at this point, I think we did $300 million over the first six months.

Moshe Gubin: Yeah. It is a nice clean month. Already in this quarter, we already have more money out the door. We are running at this point, I think we did 300 million over the first six months. You figure that is 50 million extra a month. 50 million at a NIM of 457, which we think we could kind of squeeze a little more out of. That is bringing us some sizable accretion to our net income.

Moishe Gubin: Yeah. It is a nice clean month. Already in this quarter, we already have more money out the door. We are running at this point, I think we did 300 million over the first six months. You figure that is 50 million extra a month. 50 million at a NIM of 457, which we think we could kind of squeeze a little more out of. That is bringing us some sizable accretion to our net income.

Speaker #3: So you figure that's $50 million extra a month—$50 million at a NIM of $457—which we think we could kind of squeeze a little more out of.

Speaker #3: That's bringing us some sizable accretion to our net income.

Speaker #5: Okay. I mean, as a follow-up on that 28-cent number, what do you think drove that sort of performance in Q2? I remember in the first quarter, I think you were talking about 18 to 21 cents, so that number is higher.

Gaurav Mehta: Okay. As a follow-up on that $0.28 number, what do you think drove that sort of performance in Q2? I remember in Q1, I think you were talking about $0.18 to $0.21, so that number is higher. Maybe talk about what the surprise is, if you saw anything in the quarter that sort of surprised you to the upside.

Speaker #5: Maybe talk about some of the surprises. If you saw anything in the quarter that sort of surprised you to the upside?

Moshe Gubin: No. If you look at our quarter-over-quarter trends on the financial statement, the costs of the non-interest expenses has been flat so far quarter over quarter for 2026. We are at full employment today, so we are not looking really to add any payroll. We do not really expect payroll to go up, maybe something immaterial here and there. But with that, the revenue or the total net interest income continues to rise because we are getting money out the door. Every loan that gets paid off is being paid off at most likely a rate around 5% or below 5%, and the money going out the door is 7%+. So every day our financial strength is getting better and better.

Moishe Gubin: No. If you look at our quarter-over-quarter trends on the financial statement, the costs of the non-interest expenses has been flat so far quarter over quarter for 2026. We are at full employment today, so we are not looking really to add any payroll. We do not really expect payroll to go up, maybe something immaterial here and there. But with that, the revenue or the total net interest income continues to rise because we are getting money out the door. Every loan that gets paid off is being paid off at most likely a rate around 5% or below 5%, and the money going out the door is 7%+. So every day our financial strength is getting better and better.

Speaker #3: No, I think I mean, if you look at our quarter-over-quarter trends on the financial statement, the cost of the non-interest expenses has been flat so far, quarter over quarter, for '26.

Speaker #3: And we're at full employment today, so we're not really looking to add any payroll. We don't really expect payroll to go up.

Speaker #3: Maybe something immaterial here and there. But with that, the revenue or the total net interest income continues to rise because we're getting money out the door.

Speaker #3: Every loan that gets paid off is being paid off at, most likely, a rate around 5% or below 5%. And the money going out the door is 7% plus.

Speaker #3: So, every day our financial strength is getting better and better.

Speaker #5: Okay, thanks for those details. A follow-up question—maybe on the Optimum Financing—can you provide some color on how you're viewing that platform and what kind of demand you’re seeing there? Which sectors do you plan to lend in?

Gaurav Mehta: Okay. Thanks for those details. A follow-up question maybe on the OptimumFinance. Can you provide some color on how you are viewing that platform and what kind of demand you are seeing there, which sectors do you plan to lend in?

Speaker #3: Yeah. That is literally—if I had a fast-forward button, that's the one that I'd want to fast-forward, because I think that, to me, is—they might even overshadow the bank.

Moshe Gubin: Yeah. If I had a fast-forward button, that is the one that I would want to fast-forward because I think that to me is they might even overshadow the bank 5, 10 years from now as far as what they are going to make and what the size of that portfolio is going to be. It is without having the guardrails of bank regulation, we are being able to act prudently and lend money to deals that are not bankable deals but are deals that make a lot of sense. Certainly for me as a businessman, not necessarily a banker, they are deals that make a lot of sense with good coverage, full recourse loans at LTVs that are not crazy. So we are lending against real estate. So far, every deal that we have done, they are all CRE loans throughout the country. We have done already I think now four loans.

Moishe Gubin: Yeah. If I had a fast-forward button, that is the one that I would want to fast-forward because I think that to me is they might even overshadow the bank 5, 10 years from now as far as what they are going to make and what the size of that portfolio is going to be. It is without having the guardrails of bank regulation, we are being able to act prudently and lend money to deals that are not bankable deals but are deals that make a lot of sense. Certainly for me as a businessman, not necessarily a banker, they are deals that make a lot of sense with good coverage, full recourse loans at LTVs that are not crazy. So we are lending against real estate. So far, every deal that we have done, they are all CRE loans throughout the country. We have done already I think now four loans.

Speaker #3: Five, ten years from now, as far as what they're going to make and what the size of that portfolio is going to be, it's without having the guardrails of bank regulation.

Speaker #3: We're able to act prudently and lend money to deals that aren't bankable deals, but are deals that make a lot of sense. Certainly, for me as a businessman—not necessarily a banker—they're deals that make a lot of sense with good coverage.

Speaker #3: Full recourse loans at LTVs that are not crazy. And so, really, we're lending against real estate. So far, every deal that we've done—they're all CRE loans.

Speaker #3: Throughout the country, we've done already, I think, now four loans. One of them is a hotel in New Jersey. One is backed by someone's personal residence here in Miami.

Moshe Gubin: One of them is a hotel in New Jersey. One is backed by someone's personal residence here in Miami. One of them is a smaller hotel deal, I think, also in New Jersey. I forgot the fourth one. The fourth one was a $6 million loan. I forgot already what that was, too. But good deals, strong deals. We have good governance how we are managing for it. We have a little bit of growing pains on operational and to do it because the group of people working here are bankers, so they are used to doing banking way of doing things. This is a finance company and therefore a little different. That being said, I am really long. The deals that we have made so far, already expecting the first payoff. Our average yield is over 18%, two points in, one point out.

Moishe Gubin: One of them is a hotel in New Jersey. One is backed by someone's personal residence here in Miami. One of them is a smaller hotel deal, I think, also in New Jersey. I forgot the fourth one. The fourth one was a $6 million loan. I forgot already what that was, too. But good deals, strong deals. We have good governance how we are managing for it. We have a little bit of growing pains on operational and to do it because the group of people working here are bankers, so they are used to doing banking way of doing things. This is a finance company and therefore a little different. That being said, I am really long. The deals that we have made so far, already expecting the first payoff. Our average yield is over 18%, two points in, one point out.

Speaker #3: One of them is a hotel—a smaller hotel deal, I think—also in New Jersey. And I forgot the fourth one. The fourth one was a $6 million loan.

Speaker #3: I forgot already what that was, too. But good deals, strong deals. We have good governance, how we're managing for it. We have a little bit of growing pains on operational to do it because it's we're the group of people working here are bankers, so they're used to doing banking way of doing things.

Speaker #3: And so this is a finance company, and therefore, a little different. That being said, I mean, I'm really, really long. The deals that we've made so far—we're already expecting the first payoff.

Speaker #3: Our average yield is over 18%, 2 points in and 1 point out. These are deals that are not meant to be long-term deals, so potentially, they could be a pipeline for the bank.

Moshe Gubin: They are deals that are not meant to be long-term deals, so potentially they could be a pipeline for the bank. Potentially it could be an A and B deal where the bank will take an A position on something and then they will take the B position behind it. This is a conversation not really meant for this call, but if anyone wants to talk to me about it individually, I can go on and on about this. I am really long on this. It is not more risky, but it is stuff that we are able to get a better price because it does not fit the traditional banker's box of our normal policies at the bank. So I am really long. I would be glad to elaborate further if anyone wants to talk to me offline.

Moishe Gubin: They are deals that are not meant to be long-term deals, so potentially they could be a pipeline for the bank. Potentially it could be an A and B deal where the bank will take an A position on something and then they will take the B position behind it. This is a conversation not really meant for this call, but if anyone wants to talk to me about it individually, I can go on and on about this. I am really long on this. It is not more risky, but it is stuff that we are able to get a better price because it does not fit the traditional banker's box of our normal policies at the bank. So I am really long. I would be glad to elaborate further if anyone wants to talk to me offline.

Speaker #3: Potentially, it could be an A and B deal, where the bank will take an A position on something, and then they'll take the B position behind it.

Speaker #3: There's a lot to this. This is a conversation not really meant for this call, but if anyone wants to talk to me about it individually, I could go on and on about this.

Speaker #3: I'm really, really long on this. It's not more risky, but it's stuff that we're able to get at a better price because it doesn't fit the traditional banker's box of our normal policies at the bank.

Speaker #3: So I'm running long. I'd be glad to elaborate further if anyone wants to talk to me offline.

Speaker #5: All right. Thanks for those details. That's all I had.

Gaurav Mehta: All right. Thanks for those details. That is all I have.

Moshe Gubin: You are welcome. Thank you.

Moishe Gubin: You are welcome. Thank you.

Speaker #3: Welcome. Thank you.

Karina: A kind reminder, if you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine. You can also email your question to sdenison@optimumbank.com. Again, that is S-D-E-N-I-S-O-N@optimumbank.com. Your next question comes from the line of Kenneth Billingsley with Compass Point Research and Trading. Your line is open. Please go ahead.

Operator: A kind reminder, if you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star nine. You can also email your question to sdenison@optimumbank.com. Again, that is S-D-E-N-I-S-O-N@optimumbank.com. Your next question comes from the line of Kenneth Billingsley with Compass Point Research and Trading. Your line is open. Please go ahead.

Speaker #1: A kind reminder: if you would like to ask a question, please raise your hand. If you have dialed in to today's call, please press star 9.

Speaker #1: You can also email your question to sdenison@optimumbank.com. Again, that is s-d-e-n-i-s-o-n at optimumbank.com. Your next question comes from the line of Kenneth Billingsley with Compass Point Research & Trading.

Speaker #1: Your line is open. Please go ahead.

Speaker #6: Hi. Good afternoon.

Kenneth Billingsley: Hi, good afternoon.

Speaker #3: Hi, good afternoon, Ken. Thanks for joining us.

Moshe Gubin: Hi, good afternoon, Ken. Thanks for joining us.

Moishe Gubin: Hi, good afternoon, Ken. Thanks for joining us.

Speaker #6: Oh, thank you. I do have an Optimum Finance question, so I'll go there first. Why was it that it did not fit the bank?

Kenneth Billingsley: Thank you. I do have an OptimumFinance, LLC question, so I will go there first. Why did it not fit the bank? Was it just because of the timing? Did they have a short-term funding need? You said it could provide loans to the bank in the future, but could you just talk about why it did not fit the bank?

Speaker #6: Was it just because of the timing? Did they have a short-term funding need? You said it could provide loans to the bank in the future, but could you just talk about why it didn't fit the bank?

Speaker #3: Yeah. So, let's start with understanding strategy, right? We're a relationship bank. We make friends with our borrowers, we get to know our borrowers, and we want to do everything for our borrowers.

Moshe Gubin: Yeah. Start with understanding strategy, right? We are a relationship bank. We make friends with our borrowers. We get to know our borrowers, and we want to do everything for our borrowers in every vertical that we could possibly do where we can manage that. We have a borrower at the bank. They borrowed money at 40% LTV, and it is a deal that the guarantor strength was worth $1 billion. It is a deal that everybody in the room from loan committee knew the asset. They basically said, "We want to take care of this guy." Then the borrower comes back 3 months later and says, "I have a partner. We already are seeing great results. Here is all of our bookings." It is a hotel, so, "Here is all of our deals, and this thing is going to be a home run, best deal ever.

Moishe Gubin: Yeah. Start with understanding strategy, right? We are a relationship bank. We make friends with our borrowers. We get to know our borrowers, and we want to do everything for our borrowers in every vertical that we could possibly do where we can manage that. We have a borrower at the bank. They borrowed money at 40% LTV, and it is a deal that the guarantor strength was worth $1 billion. It is a deal that everybody in the room from loan committee knew the asset. They basically said, "We want to take care of this guy." Then the borrower comes back 3 months later and says, "I have a partner. We already are seeing great results. Here is all of our bookings." It is a hotel, so, "Here is all of our deals, and this thing is going to be a home run, best deal ever.

Speaker #3: In every vertical that we could possibly do, where we can manage that. So we have a borrower at the bank that borrows—they borrowed money at 40% LTV.

Speaker #3: And it's a deal where the guarantor's strength was worth a billion dollars. And it's a deal that everybody in the room, from the loan committee, knew the asset.

Speaker #3: And they basically said, "We want to take care of this guy." And then the borrower comes back three months later and says, "I have a partner."

Speaker #3: We already are seeing great results. Here’s all of our bookings—it’s a hotel, so here’s all of our deals. And this thing is going to be a home run.

Speaker #3: Best deal ever. And it's going to be worth double, triple what we originally appraised the deal at, which, again, was a loan at about 40% LTV.

Moshe Gubin: It is going to be worth double, triple what we originally appraised the deal at," which again, the loan was at like 40% LTV. They come along and then say, "I want to buy out my investor that invested in this deal, and I could get out basically at his cost. Can you just extend me some more money?" Now, typically at the bank, when we give somebody financing, we are not looking to go back to the well on a loan and reopen a loan and modify a loan once the loan closes, certainly not for the first year. It does not look right where you do a deal and then you change something a couple of months later.

Moishe Gubin: It is going to be worth double, triple what we originally appraised the deal at," which again, the loan was at like 40% LTV. They come along and then say, "I want to buy out my investor that invested in this deal, and I could get out basically at his cost. Can you just extend me some more money?" Now, typically at the bank, when we give somebody financing, we are not looking to go back to the well on a loan and reopen a loan and modify a loan once the loan closes, certainly not for the first year. It does not look right where you do a deal and then you change something a couple of months later.

Speaker #3: They come along and then say, "I want to buy out my investor that invested in this deal, and I could get out basically at his cost."

Speaker #3: Can you just extend me some more money? Now, typically, at the bank, when we give somebody financing, we're not looking to go back to the well on a loan and reopen a loan and modify a loan once it's been closed, certainly not for the first year.

Speaker #3: It doesn't look right—where you do a deal and then you change something a couple of months later. So that was a deal where, instead of him finding another bank—and a lot of banks don't want to do a second mortgage—but for us, since we had the first at the bank level, we were okay putting a second behind it.

Moshe Gubin: That was a deal where instead of him finding another bank, and a lot of banks do not want to do a second mortgage, but for us, since we had the first in the bank level, we were okay putting a second behind it, and we were able to extend out a little bit more money, all underwritten, all already based on a few months of operations. We were able to underwrite the deal again, saying, "Well, we see this deal that as soon as he has that same stability from the first couple of months of operation, this thing will appraise out double, triple what was originally appraised out." Certainly, he is credit worthy and the LTV is still down, so we were able to then do a loan for him. They are the happiest people because they wanted that loan, and they now own 100% of the deal.

Moishe Gubin: That was a deal where instead of him finding another bank, and a lot of banks do not want to do a second mortgage, but for us, since we had the first in the bank level, we were okay putting a second behind it, and we were able to extend out a little bit more money, all underwritten, all already based on a few months of operations. We were able to underwrite the deal again, saying, "Well, we see this deal that as soon as he has that same stability from the first couple of months of operation, this thing will appraise out double, triple what was originally appraised out." Certainly, he is credit worthy and the LTV is still down, so we were able to then do a loan for him. They are the happiest people because they wanted that loan, and they now own 100% of the deal.

Speaker #3: And we were able to extend out a little bit more money. All underwritten, all already based on a few months of operations. We were able to underwrite the deal again, saying, "Well, we see this deal, that as soon as he has that same stability from the first couple of months of operation, this thing will appraise out double, triple what was originally appraised out." And certainly, he's creditworthy, and the LTV is still down.

Speaker #3: And so we were able to then do a loan for him. They're the happiest people because they wanted that loan, and they now own 100% of the deal.

Speaker #3: They got rid of their partner, and they have an operating business that's doing amazing. Instead of them having to change out the first, have a prepayment penalty, and go to find another lender, they're able to then do that deal. So now we fit a need.

Moshe Gubin: They got rid of their partner, and they have an operating business that is doing amazing. Instead of them having to change out the first, have a prepayment penalty, and go to find another lender, they are able to then do that deal. We fit a need, and now already, once the thing is going to be stable, they are going to come back to us and say, "Okay, can we refinance the first and second at a different interest rate for a longer period of time, more fixed?" In which case, we are going to try to figure out whether or not we want to, we want or we could lend at the bank level, or do we want to help them find a different lender that wants to do a bigger deal than we usually what we are going to do. Just for that color, right?

Moishe Gubin: They got rid of their partner, and they have an operating business that is doing amazing. Instead of them having to change out the first, have a prepayment penalty, and go to find another lender, they are able to then do that deal. We fit a need, and now already, once the thing is going to be stable, they are going to come back to us and say, "Okay, can we refinance the first and second at a different interest rate for a longer period of time, more fixed?" In which case, we are going to try to figure out whether or not we want to, we want or we could lend at the bank level, or do we want to help them find a different lender that wants to do a bigger deal than we usually what we are going to do. Just for that color, right?

Speaker #3: And now already, once the thing is going to be stable, they're going to come back to us and say, "Okay, can we refinance the first and second at a different interest rate for a longer period of time, more fixed?" In which case, we're going to try to figure out whether or not we want, or we could, lend at the bank level, and/or do we want to help them find a different lender that wants to do a bigger deal—that's a bigger deal than usually what we're going to do.

Speaker #3: So just for that color, right? Really, it stems from the strategy of meeting the borrower's needs, making friends with our people, and then doing a deal. In this case, we just couldn't do it through the bank, and it didn't make sense for them to go to a different lender.

Moshe Gubin: Really, it stems from strategy, of meeting the borrower's needs, making friends with our people, and then doing a deal. In this case, we couldn't do it through the bank, and it didn't make sense for them to go to a different lender. For that, we are able to get a better yield, and we are able to meet the need of our customer. They are happy, we are happy, and it falls under a different silo. That silo was able to be profitable based on that kind of loan at that percentage, and the bank has no effect. We have a happy customer out of it.

Moishe Gubin: Really, it stems from strategy, of meeting the borrower's needs, making friends with our people, and then doing a deal. In this case, we couldn't do it through the bank, and it didn't make sense for them to go to a different lender. For that, we are able to get a better yield, and we are able to meet the need of our customer. They are happy, we are happy, and it falls under a different silo. That silo was able to be profitable based on that kind of loan at that percentage, and the bank has no effect. We have a happy customer out of it.

Speaker #3: And for that, we're able to get a better yield, and we're able to meet the needs of our customer. They're happy, we're happy, and it falls under a different silo. That silo was able to be profitable based on that kind of loan at that percentage.

Speaker #3: And the bank has no effect, and we have a happy customer out of it.

Kenneth Billingsley: When you mention that, are most of the loans so far to existing customers of the bank?

Speaker #6: That's great. When you mentioned that, are most of the loans so far to customers existing customers of the bank?

Kenneth Billingsley: When you mention that, are most of the loans so far to existing customers of the bank?

Moshe Gubin: They are known to us. We are not really lending risky money to random strangers. It is risky from the sense of it doesn't fit bank policy, but it is not risky in the sense of common sense, lending, of knowing your borrower and taking care of the borrower. I think people have been telling me, I really meant to be born 20, 30 years earlier and have been a bank executive in the days when relationship banking was more normal. Today, everyone has a box, and they try to push away from relationships. I push that we are a community bank, and our community, again, is a Jewish community as well as the South Florida and Florida community. I push to take care of our people. We have a different deal that we made.

Moishe Gubin: They are known to us. We are not really lending risky money to random strangers. It is risky from the sense of it doesn't fit bank policy, but it is not risky in the sense of common sense, lending, of knowing your borrower and taking care of the borrower. I think people have been telling me, I really meant to be born 20, 30 years earlier and have been a bank executive in the days when relationship banking was more normal. Today, everyone has a box, and they try to push away from relationships. I push that we are a community bank, and our community, again, is a Jewish community as well as the South Florida and Florida community. I push to take care of our people. We have a different deal that we made.

Speaker #3: So they're known to us. They're not we're not really lending risky money to random strangers. It's not it's risky from the sense of it doesn't fit bank policy, but it's not risky in the sense of common sense lending of knowing your borrower and taking care of the borrower.

Speaker #3: I think people have been telling me, like, "I really meant to be born 20 or 30 years earlier and have been a bank executive in the days when relationship banking was more normal."

Speaker #3: Today, everyone has a box, and they try to push away from relationships. I would like to emphasize that we're a community bank, and our community is not only the Jewish community, but also the South Florida and broader Florida community.

Speaker #3: And so I push to take care of our people. So we have a different deal that we made. The borrower is very wealthy, but he's in a very messy divorce.

Moshe Gubin: The borrower is very wealthy, but he is in a very messy divorce, and his wife won't sign documents, and there are all kinds of issues. We were able to find a way to collateralize and give and take basically first and second mortgages and personal residences, at lower than a 75% or 80% LTV, which is typical HELOC policies in most banks, including ours. We found a way to do it at a higher interest rate, and that is another happy customer, and hopefully his divorce ends well. The point is, we were able to meet his need. Another happy guy. It is CRE that happens to be in South Florida. Again, it is somebody we know, and we know that besides for the way it is underwritten, morally and ethically, that borrower is not going to burn us.

Moishe Gubin: The borrower is very wealthy, but he is in a very messy divorce, and his wife won't sign documents, and there are all kinds of issues. We were able to find a way to collateralize and give and take basically first and second mortgages and personal residences, at lower than a 75% or 80% LTV, which is typical HELOC policies in most banks, including ours. We found a way to do it at a higher interest rate, and that is another happy customer, and hopefully his divorce ends well. The point is, we were able to meet his need. Another happy guy. It is CRE that happens to be in South Florida. Again, it is somebody we know, and we know that besides for the way it is underwritten, morally and ethically, that borrower is not going to burn us.

Speaker #3: And his wife won't sign documents and there's all kinds of issues. So we were able to find a way to collateralize and give and take, basically first and second mortgages on personal residences at lower than a 75% or 80% LTV, which is typical HELOC policies in most banks, including ours.

Speaker #3: And we found a way to do it at a higher interest rate. And that's another happy, happy customer. And hopefully, his divorce ends well.

Speaker #3: But the point is, we were able to meet his need—the happy guy. It's CRE that happens to be in South Florida.

Speaker #3: And again, it's somebody we know. And we know that, besides the way it's underwritten, morally and ethically, that borrower is not going to burn us.

Moshe Gubin: They are going to take care of us, and we will get paid off sooner than later. Most of these loans are probably a 1-year term. I think one of the loans we made a little bit longer, but they are really relatively shorter-term loans where the bank, our normal loan, is a 10-year loan with a fixed period at the beginning of the loan, 3 years, 5 years, 7 years.

Moishe Gubin: They are going to take care of us, and we will get paid off sooner than later. Most of these loans are probably a 1-year term. I think one of the loans we made a little bit longer, but they are really relatively shorter-term loans where the bank, our normal loan, is a 10-year loan with a fixed period at the beginning of the loan, 3 years, 5 years, 7 years.

Speaker #3: They're going to take care of us, and we'll get paid off sooner rather than later. Most of these loans are probably a one-year term. I think one of the loans we made is a little bit longer, but they're really relatively short-term loans, whereas our normal loan is a 10-year loan.

Speaker #3: With a fixed period at the beginning of the loan—three years, five years, seven years.

Kenneth Billingsley: All right. In the press release, I believe it said that you had a note at 10%, and I think your comment was that the yield so far is about 18%. Is the 10% just the timing, or could you just talk about the financing side of it and the spread?

Speaker #6: Got it. And in the press release, I believe it said that you had a note at 10%. And I think your comment was that the yield so far is about 18%.

Speaker #6: So, is it 10% just the timing, or could you just talk about the financing side of it and the spread?

Moshe Gubin: So no. The note payable is where we are borrowing the money to fund those loans.

Speaker #3: Oh, no. So the note payable is where we're borrowing the money to fund those loans. We're borrowing the money today at 10%. We're in negotiations with a couple of banks to do note-to-note financing.

Moishe Gubin: So no. The note payable is where we are borrowing the money to fund those loans.

Kenneth Billingsley: Right.

Moshe Gubin: We are borrowing the money today at 10%. We are in negotiations with a couple of banks to do note-on-note financing. I want these balance sheets, when I am talking about funding and finance, because the bank already stands on their own. I want finance to stand on their own, have their own line of credit with the bank, and be able to borrow. The money out the door to the borrower at the end of the day is 18 with 2 points in and 1 point out. Our cost of money today is 10%. We are making a spread. I think right now the portfolio is up to 24.1 or something like that, and on that 24.1, our coupon is between 18% and 20% total. It is probably 18.5, something like that.

Moishe Gubin: We are borrowing the money today at 10%. We are in negotiations with a couple of banks to do note-on-note financing. I want these balance sheets, when I am talking about funding and finance, because the bank already stands on their own. I want finance to stand on their own, have their own line of credit with the bank, and be able to borrow. The money out the door to the borrower at the end of the day is 18 with 2 points in and 1 point out. Our cost of money today is 10%. We are making a spread. I think right now the portfolio is up to 24.1 or something like that, and on that 24.1, our coupon is between 18% and 20% total. It is probably 18.5, something like that.

Speaker #3: To give, I want these balance sheets when I'm talking about funding and finance because the bank already stands on their own. I want finance to stand on their own, have their own line of credit with the bank.

Speaker #3: And be able to borrow the money out the door to the borrower at the end of the day is 18%, with two points in and one point out.

Speaker #3: And our cost of money today is 10%. So we're making a spread. I think right now the portfolio is up to $24.1 million or something like that.

Speaker #3: And on that 24.1, our coupon is between 18 and 20 percent total, so it's probably 18 and a half, something like that. And our cost of money is, like I said, 10% on the money borrowed.

Moshe Gubin: Our cost of money is, like I said, 10% on the money borrowed, then we have overhead. Right now, we are already profitable. I think you will see that in Q3. We will present a slide specific on how OptimumFinance is doing. You will see it will be profitable. It is already profitable as far as cash flow. As far as paperwork, we are treating some on the GAAP rules. We have allowances for bad debt and some other paper expenses to kind of eat up some of the income. This is going to be a home run for our shareholders, and it diversifies and takes care of our borrowers to meet their needs across the board. I am happy about that.

Moishe Gubin: Our cost of money is, like I said, 10% on the money borrowed, then we have overhead. Right now, we are already profitable. I think you will see that in Q3. We will present a slide specific on how OptimumFinance is doing. You will see it will be profitable. It is already profitable as far as cash flow. As far as paperwork, we are treating some on the GAAP rules. We have allowances for bad debt and some other paper expenses to kind of eat up some of the income. This is going to be a home run for our shareholders, and it diversifies and takes care of our borrowers to meet their needs across the board. I am happy about that.

Speaker #3: And then we have overhead. So, right now, we're already profitable. I think you'll see that in the third quarter, and we'll present a slide specific to how finance is doing.

Speaker #3: And you'll see, it'll be profitable. It's already profitable as far as cash flow. As far as paperwork, we're treating some under the GAAP rules.

Speaker #3: We have allowances for bad debt, and some other paper expenses to kind of eat up some of the income. But this is going to be a home run for our shareholders.

Speaker #3: And the diversifies and takes care of our and takes care of our borrowers to meet their needs across the board. And I'm happy about that.

Kenneth Billingsley: Last question, if you do not mind. Just a capital question. It looks like you tapped the ATM during the quarter. Was it just opportunistic and anything specific? If you could add, you mentioned about raising capital. If you are looking to raise capital soon, would it be to primarily support bank growth? Would a large portion of this opportunity that you see in OptimumFinance, LLC, would most of it go to supporting OptimumFinance, LLC opportunities?

Speaker #6: Last question, if you don't mind. Just a capital question. So, it looks like you tapped the ATM during the quarter. Was that just opportunistic, or was there anything specific?

Speaker #6: And if you could add, you mentioned about raising capital. With your looking to raise capital soon, would it be to primarily support bank growth or would a large portion of this opportunity that you see in Optimum Finance would most of it go to supporting Optimum Finance opportunities?

Moshe Gubin: No, our primary business today is the bank. Whatever we do, we do not lose focus on the bank. The bank is the core engine for the whole business. What we are looking at is, and it might be a little bit backwards in the way other folks do it. I am not using a budget, I am using demand. Our marketplace and our current customers and our, I call them our family, has demand today where our pipeline is, I think it is north of like $700 million, which is crazy. It is all vanilla, it is all customers we know. It is clean deals at our pricing, which is crazy. I am sure for any folks on this call, they have other banks that they are following or investing. No one has this kind of demand. We have this demand.

Moishe Gubin: No, our primary business today is the bank. Whatever we do, we do not lose focus on the bank. The bank is the core engine for the whole business. What we are looking at is, and it might be a little bit backwards in the way other folks do it. I am not using a budget, I am using demand. Our marketplace and our current customers and our, I call them our family, has demand today where our pipeline is, I think it is north of like $700 million, which is crazy. It is all vanilla, it is all customers we know. It is clean deals at our pricing, which is crazy. I am sure for any folks on this call, they have other banks that they are following or investing. No one has this kind of demand. We have this demand.

Speaker #3: No. Our primary business today is the bank. So whatever we do is the bank; we don't lose focus on the bank. The bank is the core engine for the whole business.

Speaker #3: So what we're looking at is, and it might be a little bit backwards from the way other folks do it, I'm not using a budget.

Speaker #3: I'm using demand. And our marketplace and our current customers and our I call them our family, has demand today where our pipeline is I think it's north of like 700 million dollars, which is crazy.

Speaker #3: And it's all vanilla. It's all customers we know. It's clean deals at our pricing, which is crazy. And I'm sure for any folks on this call, they have other banks that they are following or investing in.

Speaker #3: No one has this kind of demand. We have this demand. It's unexplainable other than the fact that I call it our cult following, where people support us and they take care of us, and we take care of them.

Moshe Gubin: It is unexplainable other than the fact that I call it our cult following, where people support us, and they take care of us, and we take care of them. That being said, based on demand, I know that to hold up the balance sheet, thinking with a minimum 10% capital ratio. That means if we were to close half of that $350 million over the next six months, for argument's sake, which again, is a crazy growth number, but let us assume that number just because. That means at some point, I need $35 million to cover the growth of that $350 million, assuming half. If there is less than that, then we will have a little bit more capital, then we will have money for next year. If it is more than that, I will have to figure out what to do. The ATM strategy all along has been based on opportunity.

Moishe Gubin: It is unexplainable other than the fact that I call it our cult following, where people support us, and they take care of us, and we take care of them. That being said, based on demand, I know that to hold up the balance sheet, thinking with a minimum 10% capital ratio. That means if we were to close half of that $350 million over the next six months, for argument's sake, which again, is a crazy growth number, but let us assume that number just because. That means at some point, I need $35 million to cover the growth of that $350 million, assuming half. If there is less than that, then we will have a little bit more capital, then we will have money for next year. If it is more than that, I will have to figure out what to do. The ATM strategy all along has been based on opportunity.

Speaker #3: That being said, based on demand, I know that to hold up the balance sheet, right, thinking with a minimum 10% capital ratio, right, that means if we were to close half of that—$350 million—over the next six months, for argument’s sake, which again is a crazy growth number.

Speaker #3: But let's assume that number just because, right? So that means, at some point, I need $35 million to cover the growth of that $350 million, assuming half.

Speaker #3: If there's less than that, then we'll have a little bit more capital, and then we'll have money for next year. If it's more than that, I'll have to figure out what to do.

Speaker #3: The ATM strategy all along has been based on opportunity, and the biggest goal for me there is that I want to have more liquidity in the stock.

Moshe Gubin: And the biggest goal for me there is that I want to have more liquidity in the stock, and I want to have more ability for bigger institutions and investors to be shareholders. So I get an opportunity to sell stock above book, where it is accretive to our book equity, then I do that, and that is really mainly looking out for shareholders so there are more shares outstanding so people could trade more. So that is part of managing a stock for the marketplace, not really the business. The fact that it adds a little equity and that it helps us less of an equity need later down the road is really ancillary to the fact that I am just getting more shares out there so that guys at bigger shops. And I have had people come to me and say, "We want to invest $25-plus million.

Moishe Gubin: And the biggest goal for me there is that I want to have more liquidity in the stock, and I want to have more ability for bigger institutions and investors to be shareholders. So I get an opportunity to sell stock above book, where it is accretive to our book equity, then I do that, and that is really mainly looking out for shareholders so there are more shares outstanding so people could trade more. So that is part of managing a stock for the marketplace, not really the business. The fact that it adds a little equity and that it helps us less of an equity need later down the road is really ancillary to the fact that I am just getting more shares out there so that guys at bigger shops. And I have had people come to me and say, "We want to invest $25-plus million.

Speaker #3: And I want to have more ability for bigger institutions and investors to be shareholders. And so, if I get an opportunity to sell stock above book, where it's accretive to our book equity, then I do that.

Speaker #3: And that's really mainly looking out for shareholders—that is, more shares outstanding so people could trade more. So that's part of managing a stock for the marketplace, not really the business.

Speaker #3: The fact that it adds a little equity and that it helps us with less of an equity need later down the road is really ancillary to the fact that I'm just getting more shares out there, so that guys at bigger shops—and I've had people come to me and say, "We want to invest $25-plus million."

Speaker #3: We love your bank, but we can't because you don't have enough liquidity and we can't own such a large percentage of your bank." And so that being said, so more shares that I get out the door, the more likely and able to get someone to invest a $10 million chunk assuming we could get where 4.9%, which right now our market cap would have that.

Moshe Gubin: We love your bank, but we cannot because you do not have enough liquidity, and we cannot own such a large percentage of your bank." That being said, the more shares that I get out the door, the more likely and able to get someone to invest a $10 million chunk, assuming we could get where 4.9%, which right now our market cap would have that. Someone could spend $10 million and own less than 5%, which is good for a lot of the guys that do not want to end up on a proxy with over 5%, so they keep themselves at 4.9%. We are getting there now finally, where we could sell those shares to somebody.

Moishe Gubin: We love your bank, but we cannot because you do not have enough liquidity, and we cannot own such a large percentage of your bank." That being said, the more shares that I get out the door, the more likely and able to get someone to invest a $10 million chunk, assuming we could get where 4.9%, which right now our market cap would have that. Someone could spend $10 million and own less than 5%, which is good for a lot of the guys that do not want to end up on a proxy with over 5%, so they keep themselves at 4.9%. We are getting there now finally, where we could sell those shares to somebody.

Speaker #3: Someone could spend $10 million and own less than 5%. Which is good for a lot of the guys that don't want to end up on a proxy with over 5%, so they keep themselves at 4.9%.

Speaker #3: We're getting there now, finally, where we can sell those shares to somebody, and so this is really good in the long run for the shareholders. Because once we're able to be traded similar to our peers, then our valuation should be similar to our peers.

Moshe Gubin: And so this is really good in the long run for the shareholders because once we are able to be traded similar to our peers, then our valuation should be similar to our peers. And I think on even a $1 run rate, which is the low end of my number, our peers are trading easily 8 to 12, 8 to 14 times the PE. So our PE ratio is 8 to 14 times. So with that, we should be providing shareholder value to shareholders. And most of my investors that I have sold stock to over the years, no one wants to sell. Everyone is like, "We are riding this thing. And Moshe, when you are ready to sell, we are going to sell with you. But in the meantime, I am behind you, pal. We are never selling." And that is what I hear from a lot of investors.

Moishe Gubin: And so this is really good in the long run for the shareholders because once we are able to be traded similar to our peers, then our valuation should be similar to our peers. And I think on even a $1 run rate, which is the low end of my number, our peers are trading easily 8 to 12, 8 to 14 times the PE. So our PE ratio is 8 to 14 times. So with that, we should be providing shareholder value to shareholders. And most of my investors that I have sold stock to over the years, no one wants to sell. Everyone is like, "We are riding this thing. And Moshe, when you are ready to sell, we are going to sell with you. But in the meantime, I am behind you, pal. We are never selling." And that is what I hear from a lot of investors.

Speaker #3: And I think, even on a $1 run rate, which is the low end of my number, our peers are trading easily at 8 to 12, 8 to 14 times the P/E.

Speaker #3: So, the P/E ratio is 8 to 14 times. With that, we should be providing shareholder value to shareholders. Most of my investors that I've sold stock to over the years—no one wants to sell.

Speaker #3: Everyone's like, "We're riding this thing in MoSHA. When you're ready to sell, we're going to sell with you." But in the meantime, I'm behind you, pal.

Speaker #3: We're never selling, and that's what I hear from a lot of investors. But I'm sure there are others out there who are happy that the stock is up—and it's still way lower than it should be.

Moshe Gubin: But I am sure there are others out there that are happy that the stock is up, and it is still way lower than it should be. The stock is up, and people can make a profit on their stock trade if they wanted to trade instead of invest. So hopefully that answers your question, Ken.

Moishe Gubin: But I am sure there are others out there that are happy that the stock is up, and it is still way lower than it should be. The stock is up, and people can make a profit on their stock trade if they wanted to trade instead of invest. So hopefully that answers your question, Ken.

Speaker #3: The stock is up, and people can make a profit on their stock trade if they want to trade instead of invest. So, hopefully, that answers your question, Ken.

Kenneth Billingsley: It does. Thank you. Congratulations to you and your team.

Speaker #6: It does. Thank you. Congratulations to you and your team.

Speaker #3: Thank you, sir. I appreciate your support.

Moshe Gubin: Thank you, sir. Appreciate your support.

Moishe Gubin: Thank you, sir. Appreciate your support.

Speaker #1: And there are no further audio questions at this time. I will turn it over to Seth for email Q&A.

Karina: There are no further audio questions at this time. I will turn it over to Seth for email Q&A.

Operator: There are no further audio questions at this time. I will turn it over to Seth for email Q&A.

Seth Denison: Very good. Thank you, Karina. Guys, we have a question that was emailed to me from Chris Marinac, who, as you know, is another one of the analysts that covers us from Brean Capital. It is two different questions, and there is a bit of an A and a B to it. Question 1A, and I will break it down into A and B. So 1A is, can you elaborate on what is making OptimumBank successful in recent quarters at raising new deposits? I am going to have Braden answer since me and Elliot presented. Braden has not had a chance yet to talk. So we are going to let Braden give an answer to that question.

Speaker #5: Very good. Thank you, Karina. So, guys, we have a question that was emailed to me from Chris Marinac, who, as you know, is another one of the analysts that covers us from Green Capital.

Speaker #5: It's two different questions, and there's a bit of an A and a B to it. Question 1A—and I'll break it down into A and B.

Speaker #5: So, 1A is: Can you elaborate on what is making Optimum Bank successful in recent quarters at raising new deposits?

Speaker #3: Okay. So I'm going to have Braden answer, since Elliott and I presented. Braden hasn't had a chance yet to talk, so we're going to let Braden give an answer to that question.

Moishe Gubin: I am going to have Braden answer since me and Elliot presented. Braden has not had a chance yet to talk. So we are going to let Braden give an answer to that question.

Speaker #4: Yeah, I think, thanks, Moshe, first. And then, I think when you look at this, when we kind of got involved on May 1st, you looked at this—being very relationship focused—we took a look at the existing portfolio.

Braden Smith: Yeah. Thanks, Moshe, first. When you look at this, when we kind of got involved on 1 May, you looked at this. Being very relationship-focused, we took a look at the existing portfolio and really said, if there's an opportunity just with some low-hanging fruit to go into the portfolio, look to expand existing relationships we had, we dedicated a team internally to achieve that. I would say part of that success has been that team being very successful in expanding existing relationships that we had, where we didn't have a lot in the operating accounts or even on the personal side that we went after. Secondly, the team has done a really fantastic job, especially on the treasury side, of bringing in new relationships to OptimumBank. That has been a really nice surprise for the first, well, through the Q2.

Speaker #4: And really said, if there's an opportunity, just with some low-hanging fruit, to go into the portfolio, look to expand existing relationships we had. We dedicated a team internally to achieve that.

Speaker #4: So, I would say part of that success has been that team being very successful and expanding existing relationships that we had, where we didn't have a lot in the operating accounts, or even on the personal side, that we went after.

Speaker #4: And secondly, the team has done a really fantastic job, especially on the treasury side, of bringing in new relationships to the bank. And that has been a really nice surprise for the second quarter.

Seth Denison: So 1B to that question is, do you attribute this to customer acceptance to a broader, deeper bank relationship, new customers, or a focus on paying specific rates?

Speaker #5: So, 1B to that question is: Do you attribute this to customer acceptance of a broader, deeper bank relationship, new customers, or a focus on paying specific rates?

Braden Smith: Well, on two of the three there in terms of customer acceptance of broader and deeper relationships, absolutely. New relationships, absolutely. We've been very disciplined, like we are on the lending side. We've been very disciplined on the deposit pricing standpoint as well. I think the team's done a very good job of managing that as best they can.

Speaker #4: So, on two of the three there, in terms of customer acceptance of broader and deeper relationships, absolutely. New relationships, absolutely. And we've been very disciplined, like we are on the lending side.

Speaker #4: We've been very disciplined on the deposit pricing standpoint as well. And so, I think the team's done a very good job of managing that as best they can.

Seth Denison: Okay. We've got question 2, and I'll break that up again to 2A and 2B. 2A is, how do you approach loan concentrations at OptimumBank?

Speaker #5: Okay. So we've got question two, and I'll break that up again into 2A and 2B. 2A is: How do you approach loan concentrations at Optimum Bank?

Speaker #3: Well, I'll start with that, and then I'll give it to you. Okay?

Moshe Gubin: I'll start with that, then I'll give it to you.

Moishe Gubin: I'll start with that, then I'll give it to you.

Braden Smith: Yeah.

Speaker #5: Okay.

Moshe Gubin: No, I think in Ken's question to me, kind of touched on that. The reality is that we, I guess I'm going to elaborate on it, is that our lending basically has three different types and pricing. We have HELOCs, which are a flat, it's a prime plus a half program. Same program for everybody across the board. So that pricing stays that. Then we have the AR lending, which we do for the nursing home world. That pricing sits to prime plus 3 pricing, and that sits. Everything else that we have is basically the same price. We don't change our pricing to kind of get a certain type of loan in the door. With that, we play it as it lies. Whatever comes in the door, we act on. We know who the borrowers are anyway, like I said earlier.

Moishe Gubin: No, I think in Ken's question to me, kind of touched on that. The reality is that we, I guess I'm going to elaborate on it, is that our lending basically has three different types and pricing. We have HELOCs, which are a flat, it's a prime plus a half program. Same program for everybody across the board. So that pricing stays that. Then we have the AR lending, which we do for the nursing home world. That pricing sits to prime plus 3 pricing, and that sits. Everything else that we have is basically the same price. We don't change our pricing to kind of get a certain type of loan in the door. With that, we play it as it lies. Whatever comes in the door, we act on. We know who the borrowers are anyway, like I said earlier.

Speaker #3: No, and I think in Ken's question to me, kind of touched on that is the reality is that I guess I'm going to elaborate on it.

Speaker #3: Is that our lending basically has three different types and pricing we have HELOCs, which are a flat it's a prime plus a half. Program same program for everybody across the board.

Speaker #3: And so that pricing stays at that. Then we have the AR lending, which we do for the nursing home world, and that pricing sits at a prime plus three pricing.

Speaker #3: And that sits. Everything else that we have is basically the same price. We don't change our pricing to kind of get a certain type of loan in the door.

Speaker #3: And with that, we play it as it lives. Whatever comes in the door, we act on. We know who the borrowers are, anyway, like I said earlier.

Speaker #3: And so, from that, we have set concentration limits from a risk management perspective, and that's held through credit. We look at that at the board level regularly.

Moshe Gubin: From that, we have set concentration limits from a risk management perspective, and that's held through credit, and we look at that on the board level regularly. But when it comes to actual lending and making a lending decision, it's not part of the decision process, where people coming in the door with a loan. The loan makes sense, we're going to do the loan regardless of where we are in the concentration of that specific segment. If it's a CRE deal, so that we also have sub-concentrations when it comes to CRE stuff. Regardless, if it comes in the door, we look at the deal, the deal underwrites, low LTV, meets all of our criteria. So it makes no difference whether that finds its way under retail, multifamily, hospitality. It doesn't matter to us.

Moishe Gubin: From that, we have set concentration limits from a risk management perspective, and that's held through credit, and we look at that on the board level regularly. But when it comes to actual lending and making a lending decision, it's not part of the decision process, where people coming in the door with a loan. The loan makes sense, we're going to do the loan regardless of where we are in the concentration of that specific segment. If it's a CRE deal, so that we also have sub-concentrations when it comes to CRE stuff. Regardless, if it comes in the door, we look at the deal, the deal underwrites, low LTV, meets all of our criteria. So it makes no difference whether that finds its way under retail, multifamily, hospitality. It doesn't matter to us.

Speaker #3: But when it comes to actual lending and making the lending decision, it's not part of the decision process. People coming in the door with a loan—if the loan makes sense.

Speaker #3: We're going to do the loan. Regardless of where we are in the concentration of that specific segment, if it's a CRE deal—so that we also have sub-concentrations when it comes to CRE stuff.

Speaker #3: But regardless, if it comes in the door, we look at the deal. If the deal underwrites, low LTV, meets all of our criteria, it makes no difference whether that finds its way under retail, multifamily, or hospitality.

Speaker #3: It doesn't matter to us.

Speaker #4: And I would add, too, I mean, as we've mentioned in the past, pricing discipline is something that we keep a very close eye on and we stick to it.

Braden Smith: I would add, too, as we've mentioned in the past. Pricing discipline is something that we keep a very close eye on, and we stick to it. When you look at the marketplace in which we're in between Palm Beach and Miami, there are, and I forgot the exact number of how many C&I businesses that have 35, 40 million in annual revenue or more. You've got every bank in the world that's got a commercial team down here, and deals on the C&I side that should get priced at SOFR plus 300 that might be close to fitting our bucket because of the competition is getting priced at SOFR plus 150. Our viewpoint is taking into account shareholder value and risk and reward. It's just not there.

Speaker #4: And when you look at the marketplace of which we're in, between Palm Beach and Miami, there are—and I forgot the exact number—CNI businesses that have $35 million, $40 million in annual revenue or more.

Speaker #4: And you've got every bank in the world that's got a commercial team down here. And deals on the C&I side that should get priced at SOFR plus 300, that might be close to fitting our bucket, because of the competition, are getting priced at SOFR plus 150.

Speaker #4: Our viewpoint is that, taking into account shareholder value and risk and reward, it's just not there. It just doesn't make sense to put capital out at 5% when we've got the pipeline that we do, where we're able to get 7% or north of that.

Braden Smith: It just doesn't make sense to put capital out at 5% when we've got the pipeline that we do that we're able to get 7% north. Frankly, I think in our opinion, it's less risk. We get asked the concentration question all the time. It's something that we'd love to be a little more broad-based. But we're also not going to do deals that don't make sense and at pricing that doesn't fit our model.

Speaker #4: And frankly, I think in our opinion, it's less risk. We get asked the concentration question all the time. It's something that we'd love to be a little more broad-based.

Speaker #4: But we're also not going to do deals that don't make sense, and pricing that doesn't fit our model.

Seth Denison: I think you guys, for the most part, answered 2B. I'll leave 2B out if you want to add anything to it, but I think that was a pretty comprehensive response. 2B is, particularly how do you consider the maximum size of any given borrower loan or relationships relative to portfolio, capital, and regulatory guidelines?

Speaker #5: So I think you guys, for the most part, answered 2B. I'll read 2B out if you want to add anything to it, but I think that was a pretty comprehensive response.

Speaker #5: So 2B is, particularly, how do you consider the maximum size of any given borrower, loan, or relationship relative to the portfolio, capital, and regulatory guidelines?

Moshe Gubin: Well, the technical answer to that starts with we have legal lending limits that's defined, and we put a little bit of a governor on that number. As opposed to 100% of our legal lending limit, we lend a little bit less than that. That being said, if a deal underwrites and the coverage is there and the LTV is fine, and there's cash flow to support repayment of loan, it doesn't matter to us. I think we differ in opinion with maybe some conventional wisdom that a bigger loan people think is more risky. I think it's less risky. You do a bigger loan to a guy that's worth a lot more money. He has the wherewithal if something goes bad to be able to meet it, take care of his obligations to us.

Moishe Gubin: Well, the technical answer to that starts with we have legal lending limits that's defined, and we put a little bit of a governor on that number. As opposed to 100% of our legal lending limit, we lend a little bit less than that. That being said, if a deal underwrites and the coverage is there and the LTV is fine, and there's cash flow to support repayment of loan, it doesn't matter to us. I think we differ in opinion with maybe some conventional wisdom that a bigger loan people think is more risky. I think it's less risky. You do a bigger loan to a guy that's worth a lot more money. He has the wherewithal if something goes bad to be able to meet it, take care of his obligations to us.

Speaker #3: Well, the technical answer to that starts with, we have legal lending limits that are defined, and we put a little bit of a governor on that number as opposed to 100% of our legal lending limit.

Speaker #3: We lend a little bit less than that. That being said, if a deal underwrites and the coverage is there, and the LTV is fine, and there's cash flow to support repayment alone, it doesn't matter to us.

Speaker #3: I think we differ in opinion with maybe some conventional wisdom that a bigger loan, people think, is more risky. I think it's less risky.

Speaker #3: You do a bigger loan to a guy that's worth a lot more money; he has the wherewithal, if something goes bad, to be able to meet it, take care of his obligations to us.

Speaker #3: A guy who's thinner on the deal and his own asset is this one item—he might care more because it's his own asset. But he doesn't have the well to draw from to try to meet a need if he doesn't have the money to pay his mortgage or if something goes wrong.

Moshe Gubin: A guy who's thinner on the deal and his only asset is this one item, he might care more because it's his only asset, but he doesn't have the well to draw from to try to meet a need if he doesn't have the money to pay his mortgage or something goes wrong. We'll lend as much as the request is for, up to our lending limit, with our pricing for the right borrower every day of the week.

Moishe Gubin: A guy who's thinner on the deal and his only asset is this one item, he might care more because it's his only asset, but he doesn't have the well to draw from to try to meet a need if he doesn't have the money to pay his mortgage or something goes wrong. We'll lend as much as the request is for, up to our lending limit, with our pricing for the right borrower every day of the week.

Speaker #3: And so, we'll lend as much as the request is for, up to our lending limit, with our pricing, for the right borrower—every day of the week.

Braden Smith: I would only add too, when you look at the portfolio too, every deal that we have in there has full personal recourse back to the.

Speaker #4: And I would only add too, when you look at the portfolio too, every deal that we have in there has full personal recourse to back to the.

Braden Smith: I would only add too, when you look at the portfolio too, every deal that we have in there has full personal recourse back to the.

Speaker #3: Yeah. We were on an investor call and somebody asked that question. And I don't know how we realized we've never told the world that. We should.

Moshe Gubin: Yeah. We were on an investor call and somebody asked that question, and I do not know how we realized, we have never told the world that we should. We do not do non-recourse lending. Every loan we have has recourse to it, full recourse. We have to remember to keep telling people that, because I guess people think the automatic assumption doing this kind of CRE, that they think it is big office building in downtown Manhattan or somewhere, and there is maybe a bad boy carve-out, but no guarantees. That cannot be further away from the truth for us. The CRE we are doing is stuff that is some owner-occupied, some not owner-occupied, some owner-occupied, but by regulations, it is considered not owner-occupied. The point is they are all recourse deals, all strong deals. That is why we have not had a bad loan in many years.

Moishe Gubin: Yeah. We were on an investor call and somebody asked that question, and I do not know how we realized, we have never told the world that we should. We do not do non-recourse lending. Every loan we have has recourse to it, full recourse. We have to remember to keep telling people that, because I guess people think the automatic assumption doing this kind of CRE, that they think it is big office building in downtown Manhattan or somewhere, and there is maybe a bad boy carve-out, but no guarantees. That cannot be further away from the truth for us. The CRE we are doing is stuff that is some owner-occupied, some not owner-occupied, some owner-occupied, but by regulations, it is considered not owner-occupied. The point is they are all recourse deals, all strong deals. That is why we have not had a bad loan in many years.

Speaker #3: We don't do non-recourse lending. Every loan we have has recourse to it—full recourse. And so we have to remember to keep telling people that.

Speaker #3: Because, I guess, people assume when we talk about doing this kind of CRE, they think it's big office buildings in downtown Manhattan or somewhere like that.

Speaker #3: And there's no maybe a bad boy carve out, but no guarantees. And that's that can't be further away from the truth for us. The CRE we're doing is stuff that's some owner occupied, some non-owner occupied, some owner occupied, but by regular regulations.

Speaker #3: It's considered non-owner occupied. And the point is, they're all recourse deals— all strong deals. And that's why we haven't had a bad loan in many, many, many years.

Braden Smith: I would only add too, since the time I have been here, I have been pleasantly surprised at the strength of the guarantors that we have on the loan portfolio. These are individuals that have 3 to 10 times the loan amount, plus a decent percentage in cash and marketable securities and significant cash flow from other businesses. So it is one of the reasons why our credit metrics continue to be as strong as they are.

Speaker #4: And I would only add too, I mean, since the time I've been here, I've been pleasantly surprised at the strength of the guarantors that we have.

Speaker #4: On the loan portfolio, these are individuals that have three to ten times the loan amount, plus a decent percentage in cash or marketable securities, and significant cash flow from other businesses.

Speaker #4: So it's one of the reasons why our credit metrics continue to be as strong as they are.

Speaker #5: Okay. I've got two more questions that have come in. So, the first one is: your allowance for credit losses has declined from 1.2% of loans in 2022 to 0.91% today.

Seth Denison: Okay, I have got two more questions that have come in. The first one is, "Your allowance for credit losses has declined from 1.2% of loans in 2022 to 0.91% today, while the portfolio has more than doubled. Why is 91 basis points adequate given the pace of loan growth and concentration in commercial real estate?

Speaker #5: While the portfolio has more than doubled, why is 91 basis points adequate given the pace of loan growth and concentration in commercial real estate?

Speaker #3: Okay, so I'll let Elliot elaborate, but I'll just start by saying, first things first—we haven't changed our policy on how we create our allowance.

Moshe Gubin: Okay. I will let Elliot elaborate, but I will just start it by saying, first things first is we haven't changed our policy on how we create our allowance. Our allowance has been measured with environmental factors and quantitative and qualitative factors that have been using historical bad debt, as well as environmental factors that create some kind of metric going forward. And we have maintained consistency. We haven't changed anything. Our battle is the fact that we have no bad loans. So the history is dictating we should be at zero bad debt and therefore zero allowance. But we are fighting that.

Moishe Gubin: Okay. I will let Elliot elaborate, but I will just start it by saying, first things first is we haven't changed our policy on how we create our allowance. Our allowance has been measured with environmental factors and quantitative and qualitative factors that have been using historical bad debt, as well as environmental factors that create some kind of metric going forward. And we have maintained consistency. We haven't changed anything. Our battle is the fact that we have no bad loans. So the history is dictating we should be at zero bad debt and therefore zero allowance. But we are fighting that.

Speaker #3: Our allowance has been measured with environmental factors and quantitative and qualitative factors that have been using historical bad debt as well as environmental factors that create some kind of metric going forward.

Speaker #3: And we've maintained consistency. We haven't changed anything. Our battle is the fact that we have no bad loans, so the history is dictating we should be at zero.

Speaker #3: Bad debt, and therefore zero allowance. But we are fighting that. In fact, at the last couple of board meetings, I've been suggesting, let's put extra money into the allowance, just because people in the marketplace—whoever wrote that question—it's exactly a metric that I would think someone's going to look at and say, "Hold on."

Moshe Gubin: In fact, the last couple of board meetings I have been suggesting let's put extra money into the allowance just because people in the marketplace, whoever wrote that question, is exactly a metric that I would think someone's going to look at and say, "Hold on, your number is too low." But reality is based on our history, it's way too high. Elliot, why don't you elaborate on that?

Moishe Gubin: In fact, the last couple of board meetings I have been suggesting let's put extra money into the allowance just because people in the marketplace, whoever wrote that question, is exactly a metric that I would think someone's going to look at and say, "Hold on, your number is too low." But reality is based on our history, it's way too high. Elliot, why don't you elaborate on that?

Speaker #3: Your number is too low, but reality is based on our history—it's way too high. So, that being said, Elliot, why don't you elaborate on that?

Braden Smith: Unless I already solved everything, you have nothing to add.

Moishe Gubin: Unless I already solved everything, you have nothing to add.

Speaker #3: It's almost as if, unless I've already solved everything, you have nothing to add.

Speaker #2: I'll add a little bit. You covered most of it, but when you look at the allowance for loan losses, you have to realize there are three components: there's the historical loss, there are the qualitative factors, and then there is the forward look.

Braden Smith: I will add a little bit.

Elliot Nunez: I will add a little bit.

Braden Smith: A little bit.

Operator: A little bit.

Elliot Nunez: You covered most of it. When you look at the allowance for loan losses, you got to realize there are two components. There is the historical loss, there are the qualitative factors, and then there is the forward look. As you go back in time, I was mentioning the question, we were at 1.20. There was a point in time we did have some specific reserves on the books. As the quality of those loans has increased, those specific reserves have come off and off. What you are left with nowadays is mostly general reserve. That general reserve in the last few quarters of this year has been positively impacted by two things, an improvement in Q factors, number one, and also on the forward look.

Speaker #2: So, as you go back in time, as was mentioned in the question, we were at 1.2 to zero. There was a point in time when we did have some specific reserves on the books.

Speaker #2: As the quality of those loans has increased, those specific reserves have come off and off and off. So what you're left with nowadays is mostly general reserve.

Speaker #2: That general reserve in the last few quarters of this year has been positively impacted by two things: an improvement in Q factors, number one, and also on the forward look.

Speaker #2: Now, as we head into the second half of 2026, we do expect that that forward look is going to shrink. And probably the qualitative factors, when it comes to concentration and growth, will get a little bit higher.

Elliot Nunez: Now, as we head into the H2 2026, we do expect that forward look is going to shrink, and probably the qualitative factors when it comes to concentration and growth will get a little bit higher. I think we are going to be rising above that 91 and getting much closer to the 1% for the rest of the year.

Speaker #2: So I think we're going to be rising above that 91 and getting much closer to the 1% for the rest of the year.

Speaker #4: And I would only add that we've got a very disciplined approach to this. We look at the past two reports on a daily basis.

Braden Smith: I would only add that we have got a very disciplined approach to this. We look at the past due report on a daily basis. If a borrower gets to be 10 to 15 days past due, they are getting a phone call from either Moshe or myself or our chief lending officer. At 30 days, they are getting a demand to bring current, and at 45 days they are getting a demand to pay in full. We keep a very close eye on the portfolio. We are monitoring it on daily basis, and like I said, it has worked out well. I have been pleasantly surprised at how quickly if Moshe or I call and say, "Hey, you are 15 days past due," they do not usually get to 16.

Speaker #4: If a borrower gets to be 10 to 15 days past due, they're getting a phone call from either Moishe or myself, or our chief lending officer. At 30 days, they're getting a demand to bring current.

Speaker #4: And at 45 days, they're getting a demand to pay in full. And so, we keep a very close eye on the portfolio. We are monitoring it on a daily basis.

Speaker #4: And like I said, it's worked out well. I've been pleasantly surprised at how quickly, if Moishe or I call and say, "Hey, you're 15 days past due," they don't usually get to 16.

Speaker #5: Okay, this is the last question that we have submitted. Following the preferred stock exchange, can you clarify what investors should use as the normalized share count for calculating EPS going forward?

Seth Denison: Okay. This is the last question that we have submitted. Following the preferred stock exchange, can you clarify what investors should use as the normalized share count for calculating EPS going forward, and how investors should think about annual book value per share under the new capital structure?

Speaker #5: And how should investors think about tangible book value per share under the structure?

Moshe Gubin: That is a good question, and I don't have a good answer. Seth, maybe you have an answer for that.

Moishe Gubin: That is a good question, and I don't have a good answer. Seth, maybe you have an answer for that.

Speaker #3: That is a good question, and I don't have a good answer. Maybe you have an answer for that.

Seth Denison: I do.

Speaker #5: I do. So, who has half an hour? It was explained by one of Elliot's lieutenants, Natasha, who's a very gifted, capable accountant. Essentially, because the conversion occurred in the middle of the second quarter, there was a portion of the second quarter where we did still have the preferred share structure.

Moshe Gubin: Oh, boy. Who has a half an hour?

Moishe Gubin: Oh, boy. Who has a half an hour?

Seth Denison: It was explained by one of Elliot's lieutenants, Natasha, who is a very gifted, capable accountant. Essentially, because the conversion occurred in the middle of Q2, there was a portion of Q2 where we did still have the preferred share structure. To normalize it for Q2, we still had to present it as a fully diluted number because it does not just turn on a dime. It is not like at the end of the quarter it was all common equity. That will ultimately further normalize into Q3, and by the time you get to the end of the year, it is basically all going to be considered common equity, and there is not going to be a distinction between.

Speaker #5: And so, to normalize it for the second quarter, we still had to count—we still had to present it as a fully diluted number because it doesn't just turn on a dime.

Speaker #5: It's not like, at the end of the quarter, it was all common equity. So that will ultimately further normalize in Q3. And by the time you get to the end of the year, it's basically all going to be considered common equity.

Speaker #5: And there's not going to be a distinction between

Moshe Gubin: Our investors should still use a diluted EPS number, not the regular number.

Speaker #2: But our investors should still use a diluted EPS number, not the regular number.

Moishe Gubin: Our investors should still use a diluted EPS number, not the regular number.

Speaker #5: But for the time being, that is right. Yes.

Seth Denison: For the time being, that is right. Yes.

Moshe Gubin: Yeah. For their question, they asked what is our amount of shares that we have outstanding today.

Moishe Gubin: Yeah. For their question, they asked what is our amount of shares that we have outstanding today.

Speaker #3: Yeah. So, for their question, they asked, what is our amount of shares that we have outstanding today?

Seth Denison: It is roughly 24,790,000 something.

Speaker #5: It's roughly $24,790,000-something.

Moshe Gubin: There you go. 24,800,000 rounded.

Moishe Gubin: There you go. 24,800,000 rounded.

Speaker #3: There you go. $24,800,000 rounded.

Seth Denison: Yes. It is in the presentation, and it is on our investor website. It is in our Q2 deck. It is in our earnings release. It is not difficult to find the exact numbers if somebody wants the exact numbers.

Speaker #5: Yes, and it's in the presentation and it's on our investor website. It's in our second quarter deck. It's in our earnings release. So it's not difficult to find the exact numbers or something like that.

Speaker #3: Okay.

Moshe Gubin: Okay.

Moishe Gubin: Okay.

Speaker #5: Or they can always email me, and I'm happy to give them the exact number.

Seth Denison: They can always email me, and I am happy to give them exact numbers.

Moshe Gubin: Hopefully, that answers their question.

Moishe Gubin: Hopefully, that answers their question.

Speaker #3: Hopefully that answers their question.

Speaker #5: Okay, I think that's going to be it. I think we can wrap up the second quarter earnings call.

Seth Denison: Okay.

Moshe Gubin: Anything else?

Moishe Gubin: Anything else?

Seth Denison: I think that is going to be it. I think we can wrap up the Q2 earnings call.

Moshe Gubin: I want to thank everybody for joining us today. Thank you for your support. Thank you for your interest. Anyone needing any follow-up, please feel free to reach out to Seth, myself, or even Braden, I guess, and we would be glad to schmooze it up with you and let you know why Optimum is a good investment. With that, wish everybody a good day. Again, just thank you, thank you, thank you, and be well.

Moishe Gubin: I want to thank everybody for joining us today. Thank you for your support. Thank you for your interest. Anyone needing any follow-up, please feel free to reach out to Seth, myself, or even Braden, I guess, and we would be glad to schmooze it up with you and let you know why Optimum is a good investment. With that, wish everybody a good day. Again, just thank you, thank you, thank you, and be well.

Speaker #2: I want to thank everybody for joining us today. Thank you for your support. Thank you for your interest. Anyone needing any follow-up, please feel free to reach out to Seth, myself, or even Braden, I guess.

Speaker #2: And we'd be glad to schmooze it up with you and let you know why Optimum is a good investment. With that, I wish everybody a good day.

Speaker #2: And again, just thank you. Thank you, thank you, and be well.

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

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

Speaker #1: This concludes today's call. Thank you for attending. You may now disconnect.

Moshe Gubin: All right.

Moishe Gubin: All right.