Debt Securities

3 Months Ended

Mar. 31, 2025

Debt Securities

Debt Securities

(2) Debt Securities. Debt securities have been classified according to management’s intent. The amortized cost of debt securities and fair values are as follows (Dollars in thousands):

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
At March 31, 2025:
Available for sale:
SBA Pool Securities	$	547	$	-	$	(14	)	$	533
Collateralized mortgage obligations		124		-		(15	)		109
Taxable municipal securities		16,644		-		(4,408	)		12,236
Mortgage-backed securities		12,640		-		(2,475	)		10,165
Total	$	29,955	$	-	$	(6,912	)	$	23,043
Held-to-maturity:
Collateralized mortgage obligations	$	269	$	-		(28	)	$	241
Total	$	269	$	-		(28	)	$	241

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
At December 31, 2024:
Available for sale:
SBA Pool Securities	$	581	$	-	$	(14	)	$	567
Collateralized mortgage obligations		128		-		(17	)		111
Taxable municipal securities		16,654		-		(4,740	)		11,914
Mortgage-backed securities		12,883		-		(2,702	)		10,181
Total	$	30,246	$	-	$	(7,473	)	$	22,773
Held-to-maturity:
Collateralized mortgage obligations	$	281	$	-		(34	)	$	247
Total	$	281	$	-		(34	)	$	247

As of March 31, 2025, debt securities with a fair value of $1.7 million were pledged as collateral to the Federal Reserve Bank. There were no sales of debt securities during the three months ended March 31, 2025, and 2024.

Debt securities available for sale with gross unrealized losses, aggregated by investment category and length of time that individual debt securities have been in a continuous loss position, is as follows (Dollars in thousands):

	Over Twelve Months					Less Than Twelve Months
	Gross					Gross
	Unrealized			Fair		Unrealized		Fair
	Losses			Value		Losses		Value
At March 31, 2025:
Available for Sale:
SBA Pool Securities	$	(14	)	$	533	$	-	$	-
Collateralized mortgage obligation		(15	)		109		-		-
Taxable municipal securities		(4,408	)		12,236		-		-
Mortgage-backed securities		(2,475	)		10,165		-		-
Total	$	(6,912	)	$	23,043	$	-	$	-

(continued)

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Condensed Consolidated Financial Statements (Unaudited)

(2) Debt Securities, Continued.

	Over Twelve Months					Less Than Twelve Months
	Gross					Gross
	Unrealized			Fair		Unrealized		Fair
	Losses			Value		Losses		Value
At December 31, 2024:
Available for Sale:
SBA Pool Securities	$	(14	)	$	567	$	-	$	-
Collateralized mortgage obligation		(17	)		111		-		-
Taxable municipal securities		(4,740	)		11,914		-		-
Mortgage-backed securities		(2,702	)		10,181		-		-
Total	$	(7,473	)	$	22,773	$	-	$	-

At March 31, 2025 and December 31, 2024, the unrealized losses on forty investment debt securities, respectively, were caused by interest-rate changes.

The Company performed an analysis that determined that the mortgage-backed securities, collateralized mortgage obligations, and U.S. government securities, have a zero expected credit loss as they have the full faith and credit backing of the U.S. government or one of its agencies. Municipal bonds that do not have a zero expected credit loss are evaluated at least quarterly to determine whether there is a credit loss associated with a decline in fair value. At March 31, 2025 and December 31, 2024 all municipal securities were rated as investment grade. All debt securities in an unrealized loss position as of March 31, 2025 and December 31, 2024 continue to perform as scheduled and the Company does not believe that there is a credit loss or that credit loss expense is necessary. Also, as part of our evaluation of our intent and ability to hold investments for a period of time sufficient to allow for any anticipated recovery in the market, the Company considers our investment strategy, cash flow needs, liquidity position, capital adequacy and interest rate risk position. The Company does not currently intend to sell the investments within the portfolio, and it is not more-likely-than-not that a sale will be required.

Management continues to monitor all of our investments with a high degree of scrutiny. There can be no assurance that in a future period, conditions may exist at that time indicating that some or all of the Company’s securities may be sold that would require a charge to earnings as credit loss expense in such period.