OptimumBank(US:OPHC)2026-02-18 16:02Financial Data and Key Metrics Changes - As of December 31, 2025, the company surpassed $1.1 billion in total assets, achieving record quarterly and annual earnings, with full-year net income of approximately $16.65 million, reflecting a nearly 27% increase compared to 2024 [2][9][18] - The return on average equity reached nearly 15% on a GAAP basis and 21.6% on a core basis, indicating strong profitability metrics [9][10] - Net income for the fourth quarter was $4.85 million, an increase of about $500,000 from the third quarter and over $900,000 from the prior year's quarter [10][11] Business Line Data and Key Metrics Changes - Net interest income rose by more than $800,000 quarter-over-quarter to $11.87 million, supported by higher loan balances and improved funding costs [11][16] - Non-interest income totaled $1.73 million for the quarter, remaining well above year-ago levels despite lower loan prepayment activity [12][16] - Gross loans ended the year at $958.79 million, reflecting a year-over-year growth of 19.2% [19] Market Data and Key Metrics Changes - Total deposits reached $931.75 million, representing year-over-year growth of 20.7% [19] - Non-interest income for 2025 was $6.77 million, showing a 46.5% year-over-year growth [20] - The allowance for credit losses to loans ratio stood at 1.07%, with non-performing assets to total assets ratio at 0.32%, indicating strong credit quality [21][22] Company Strategy and Development Direction - The company aims to roll out a new subsidiary for HUD and FHA-insured financing solutions in early 2026, targeting multifamily and healthcare properties to diversify revenue [3][4] - The focus remains on disciplined growth, conservative risk management, and building long-term relationships with customers [26] - The company is positioned for the next phase of disciplined growth, with expectations to maintain profitability while expanding its asset base [15][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining a quarterly earnings per share range of $0.18-$0.21, driven by loan growth and stable funding costs [40][41] - The company anticipates loan growth of 25% or higher, supported by strong relationships with loyal customers [43][56] - Management highlighted that the infrastructure is in place to support growth without significantly increasing costs, indicating a positive outlook for scaling operations [57][58] Other Important Information - The company celebrated its 25th anniversary in 2025, marking a milestone in its evolution into a high-performing institution [2][3] - The largest institutional investor, AllianceBernstein, increased its economic ownership in the company, reflecting confidence in its strategy and governance [4][5] Q&A Session Summary Question: Opportunities for bridge to HUD financing - Management discussed the potential for growth in the skilled nursing and senior housing sectors, expecting to reach $250 million in two to three years, with long-term goals of $1 billion to $2 billion [31][33] Question: EPS guidance assumptions - Management indicated that the EPS guidance of $0.18-$0.21 is based on current performance, with expectations for loan growth and stable margins [40][41] Question: Loan growth sustainability - Management expects sustainable loan growth of 25% or higher, supported by strong customer relationships [43] Question: AllianceBernstein's increased exposure - Management clarified that the preferred equity structure is designed to simplify ownership and that further conversions to common stock are anticipated [44][45] Question: Sectors driving loan growth - Management emphasized that strong relationships with customers mitigate stress in portfolios, driving consistent loan growth [54][56] Question: Regulatory thresholds impacting growth - Management reassured investors that the infrastructure is in place to support growth without significant cost increases, indicating readiness for scaling beyond $1 billion in assets [57][58]