OptimumBank Expects 2027 Annual Earnings of $48 Million to $50 Million and Seeks HUD License
Key Facts
OptimumBank management said on its third-quarter earnings call on November 13 that its subsidiary OptimumFunding is seeking a HUD license and expects to receive it in 2027. On the same call, the chief executive forecast annual pre-tax, pre-provision earnings of $48 million to $50 million in 2027, saying that level should be sustainable. Management set a loan growth budget of $500 million to $600 million for the same year. It said the expansion assumes lending in Florida continues without adding branches or new infrastructure. Management thus tied its profitability outlook to loan growth and the expected license.
The outlook followed OptimumBank's report of net income of $7.2 million in the third quarter of 2026, compared with $6.7 million in the second quarter and $4.3 million in the same period of 2025. Diluted earnings per share rose to $0.30, from $0.28 in the previous quarter and $0.18 a year earlier. The company said earnings per share increased about 7% quarter over quarter and 67% year over year. The latest quarterly results provide a basis for comparison with management's 2027 profitability forecast. The company announced the earnings call date in a statement, scheduling it for November 13, 2026, at 10:00 a.m. Eastern Time.
Lending activity expanded in the third quarter, with gross loans rising $150.2 million, or 12.3% from the end of June, to $1.37 billion on September 30. Deposits increased $128.8 million, or 10.6% from the previous quarter, to $1.34 billion on the same date. The company said the increase covered all loan segments, with commercial real estate loans growing $91.4 million and residential real estate loans $28.8 million during the quarter. It attributed continued growth in the loan portfolio to its relationship-based banking model, along with OptimumFinance's expansion during the period. These figures show the scale of activity underpinning management's announced loan growth budget for the coming year.
Net interest margin improved to 4.63% in the third quarter, compared with 4.57% in the second quarter and 4.37% in the third quarter of 2025. The company said the margin widened 26 basis points year over year, attributing the change mainly to a 47 basis-point increase in yields on interest-earning assets. But credit loss expense was $1.1 million in the third quarter, after the company recorded a $37,000 provision reversal in the previous quarter. Net charge-offs were $11,000 during the quarter, while the allowance for credit losses reached 0.89% of total loans at the end of September. These indicators put the wider margin alongside the period's recorded cost of credit.
The company bolstered its capital base during the quarter by issuing $35 million in subordinated notes, followed by a $31 million capital contribution to the bank to support balance-sheet growth. The chief executive said the company also raised $25.4 million through private placement transactions with individual and institutional investors since September 30. Management said the additional funds strengthen its ability to finance growth. At the same time, the company said it had identified further opportunities to improve operating efficiency and contain expenses. Management expects the benefits of those measures to begin showing in the coming quarters.
The company's shares rose 4.02% in premarket trading on November 13, according to Investing.com, after the results were announced. Management outlined its plans for a HUD license and its operating and financial outlook for 2027 on that day's call. The annual earnings forecast of $48 million to $50 million comes alongside a loan growth budget of $500 million to $600 million, assuming activity in Florida continues without additional branches or infrastructure. The company also expects to receive a HUD license in 2027, though the call did not specify a more precise date. The company had announced that its third-quarter earnings call would take place on November 13 at 10:00 a.m. Eastern Time.