EXHIBIT 99.1



                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY
                            Fort Lauderdale, Florida

                    Audited Consolidated Financial Statements
           At December 31, 2005 and 2004 and for the Years Then Ended

     (Together with Report of Independent Registered Public Accounting Firm)







                          INDEX TO FINANCIAL STATEMENTS



Independent Auditors'
Report....................................................................   F-2

Consolidated Balance Sheets, December 31, 2005 and 2004...................   F-3

Consolidated Statements of Earnings
         for the Years Ended December 31, 2005 and 2004 ..................   F-4

Consolidated Statements of Stockholders' Equity
         for the Years Ended December 31, 2005 and 2004...................   F-5

Consolidated Statements of Cash Flows
         for the Years Ended December 31, 2005 and 2004 ..................   F-6

Notes to Financial Statements, December 31, 2005 and 2004
         and for the Years Then Ended ...................................    F-8






<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM




OptimumBank Holdings, Inc.
Fort Lauderdale, Florida:

         We have audited the accompanying consolidated balance sheets of
OptimumBank Holdings, Inc. and Subsidiary (the "Company") at December 31, 2005
and 2004, and the related consolidated statements of earnings, stockholders'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

         We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

         In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
at December 31, 2005 and 2004, and the results of its operations and its cash
flows for the years then ended, in conformity with U.S. generally accepted
accounting principles.


/s/ Hacker, Johnson & Smith PA

HACKER, JOHNSON & SMITH PA
Fort Lauderdale, Florida
March 10, 2006




                                       F-2
<PAGE>


                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)


<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                    -------------------------
                                                                       2005            2004
                                                                    ---------       ---------
<S>                                                                 <C>             <C>
    ASSETS

Cash and due from banks .........................................   $     502       $     383
Federal funds sold ..............................................         652           2,840
                                                                    ---------       ---------
              Total cash and cash equivalents ...................       1,154           3,223

Securities held to maturity (fair value approximates $25,096
    and $24,065) ................................................      25,618          24,134
Security available for sale .....................................         243             247
Loans, net of allowance for loan losses of $777 and $628 ........     170,226         128,810
Loans held for sale .............................................          --             509
Federal Home Loan Bank stock ....................................       2,712           1,965
Premises and equipment, net .....................................       4,074           4,114
Accrued interest receivable .....................................       1,030             878
Other assets ....................................................         987             678
                                                                    ---------       ---------
              Total assets ......................................   $ 206,044       $ 164,558
                                                                    =========       =========

    LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
    Noninterest-bearing demand deposits .........................   $     390       $     558
    Savings, NOW and money-market deposits ......................       7,050           8,091
    Time deposits ...............................................     106,624          89,345
                                                                    ---------       ---------
              Total deposits ....................................     114,064          97,994

    Federal Home Loan Bank advances .............................      52,950          37,650
    Other borrowings ............................................      12,950           5,000
    Junior subordinated debenture ...............................       5,155           5,155
    Official checks .............................................       1,593           1,209
    Other liabilities ...........................................         735             522
    Deferred income tax liability ...............................         187             305
                                                                    ---------       ---------
              Total liabilities .................................     187,634         147,835
                                                                    ---------       ---------
Commitments and contingencies (Notes 4, 8 and 15)

Stockholders' equity:
    Common stock, $.01 par value; 6,000,000 shares authorized,
         2,663,775 and 2,650,102 shares issued and outstanding ...         27              27
    Additional paid-in capital ...................................     14,141          14,051
    Retained earnings ............................................      4,249           2,648
    Accumulated other comprehensive income (loss) ................         (7)             (3)
                                                                    ---------       ---------
              Total stockholders' equity .........................     18,410          16,723
                                                                    ---------       ---------
              Total liabilities and stockholders' equity .........  $ 206,044       $ 164,558
                                                                    =========       =========
</TABLE>

           See Accompanying Notes to Consolidated Financial Statements

                                       F-3

<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                       CONSOLIDATED STATEMENTS OF EARNINGS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                        YEAR ENDED DECEMBER 31,
                                                                     ----------------------------
                                                                        2005               2004
                                                                     ---------            -------
<S>                                                                  <C>                  <C>
Interest income:
    Loans........................................................    $   9,928            $ 7,876
                                                                     ---------            -------
    Securities...................................................        1,260                838
    Other........................................................          146                101
                                                                     ---------            -------
              Total interest income..............................       11,334              8,815
                                                                     ---------            -------
Interest expense:
    Deposits  ...................................................        3,700              2,837
    Borrowings...................................................        2,141              1,195
                                                                     ---------            -------
              Total interest expense.............................        5,841              4,032
                                                                     ---------            -------
Net interest income..............................................        5,493              4,783

              Provision for loan losses..........................          149                136
                                                                     ---------            -------
Net interest income after provision for loan losses..............        5,344              4,647
                                                                     ---------            -------
Noninterest income:
    Service charges and fees.....................................           65                129
    Loan prepayment fees.........................................          522                541
    Other........................................................           48                 20
                                                                     ---------            -------
              Total noninterest income...........................          635                690

Noninterest expenses:
    Salaries and employee benefits...............................        1,684              1,577
    Occupancy and equipment......................................          621                468
    Provision for losses on foreclosed assets....................          243                  -
    Data processing..............................................          200                161
    Professional fees............................................          169                161
    Insurance ...................................................           69                 58
    Stationary and supplies......................................           42                 55
    Other........................................................          368                321
                                                                     ---------            -------
              Total noninterest expenses.........................        3,396              2,801
                                                                     ---------            -------
Earnings before income taxes.....................................        2,583              2,536

    Income taxes.................................................          982                966
                                                                     ---------            -------
Net earnings.....................................................    $   1,601            $ 1,570
                                                                     =========            =======

Net earnings per share:
    Basic........................................................    $     .60            $   .60
                                                                     =========            =======
    Diluted......................................................    $     .58            $   .58
                                                                     =========            =======
Dividends per share..............................................    $      --            $     --
                                                                     =========            =======
</TABLE>

          See Accompanying Notes to Consolidated Financial Statements.

                                       F-4

<PAGE>


                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

                     YEARS ENDED DECEMBER 31, 2005 AND 2004
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                                     ACCUMULATED
                                                                                                        OTHER
                                                                                                        COMPRE-
                                                        COMMON STOCK     ADDITIONAL                     HENSIVE          TOTAL
                                          -------------------------       PAID-IN        RETAINED       INCOME        STOCKHOLDERS'
                                            SHARES          AMOUNT        CAPITAL        EARNINGS        (LOSS)         EQUITY
                                          ----------      ---------      ---------      ---------      ---------       ---------
<S>                                        <C>            <C>            <C>            <C>            <C>             <C>

Balance at December 31, 2003 ...........   2,613,501      $      26      $  13,800      $   1,078      $      (4)      $  14,900
                                                                                                                       ---------
Proceeds from sale of common stock .....       1,534             --             15             --             --              15
                                                                                                                       ---------
Proceeds from exercise of common
     stock options .....................      35,067              1            236             --             --             237
                                                                                                                       ---------
Comprehensive income:
     Net earnings ......................          --             --             --          1,570             --           1,570

     Net change in unrealized loss on
         securities available for
         sale ..........................          --             --             --             --              1               1
                                                                                                                       ---------
     Comprehensive income ..............          --             --             --             --             --           1,571
                                          ----------      ---------      ---------      ---------      ---------       ---------

Balance at December 31, 2004 ...........   2,650,102      $      27      $  14,051      $   2,648      $      (3)      $  16,723
                                                                                                                       ---------
Proceeds from sale of common stock .....       1,540             --             16             --             --              16
                                                                                                                       ---------
Proceeds from exercise of common
     stock options .....................      12,133             --             74             --             --              74
                                                                                                                       ---------
Comprehensive income:
     Net earnings ......................          --             --             --          1,601             --           1,601

     Net change in unrealized loss on
         securities available for
         sale ..........................          --             --             --             --             (4)             (4)
                                                                                                                       ---------
     Comprehensive income ..............          --             --             --             --             --           1,597
                                          ----------      ---------      ---------      ---------      ---------       ---------
Balance at December 31, 2005 ...........   2,663,775      $      27      $  14,141      $   4,249      $      (7)      $  18,410
                                          ==========      =========      =========      =========      =========       =========
</TABLE>


          See Accompanying Notes to Consolidated Financial Statements.

                                       F-5
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                            YEAR ENDED DECEMBER 31,
                                                                                         ----------------------------
                                                                                            2005               2004
                                                                                         ---------           --------
<S>                                                                                      <C>                 <C>
Cash flows from operating activities:
    Net earnings.....................................................................    $   1,601           $  1,570
    Adjustments to reconcile net earnings to net cash provided by
      operating activities:
         Depreciation and amortization...............................................          258                188
         Provision for loan losses...................................................          149                136
         Provision for losses on foreclosed assets...................................          243                 --
         Net amortization of fees, premiums and discounts............................          164                214
         Deferred income tax benefit.................................................         (118)              (279)
         Repayments of loans held for sale...........................................          509                897
         (Increase) decrease in accrued interest receivable..........................         (152)               346
         Increase in other assets....................................................         (300)              (210)
         Increase in official checks and other liabilities...........................          597              1,084
                                                                                         ---------           --------
                  Net cash provided by operating activities..........................        2,951              3,946
                                                                                         ---------           --------
Cash flows from investing activities:
    Purchases of securities held to maturity.........................................       (7,843)           (11,018)
    Principal repayments and calls of securities held to maturity....................        6,384              3,440
    Net increase in loans............................................................      (42,502)           (17,857)
    Purchase of premises and equipment...............................................         (218)            (2,390)
    Purchase of Federal Home Loan Bank stock.........................................         (747)              (440)
    Proceeds from sale of foreclosed assets, net.....................................          505                 --
                                                                                         ---------           --------
                  Net cash used in investing activities..............................      (44,421)           (28,265)
                                                                                         ---------           --------
Cash flows from financing activities:
    Net increase in deposits.........................................................       16,070             17,250
    Net increase (decrease) in other borrowings......................................        7,950             (3,750)
    Proceeds from sale of common stock...............................................           16                 15
    Net increase in Federal Home Loan Bank advances..................................       15,300              8,150
    Issuance of junior subordinated debenture........................................        -                  5,155
    Proceeds from exercise of common stock options...................................           65                183
                                                                                         ---------           --------
                  Net cash provided by financing activities..........................       39,401             27,003
                                                                                         ---------           --------
Net (decrease) increase in cash and cash equivalents.................................       (2,069)             2,684

Cash and cash equivalents at beginning of the year...................................        3,223                539
                                                                                         ---------           --------
Cash and cash equivalents at end of the year.........................................    $   1,154           $  3,223
                                                                                         =========           ========

</TABLE>


                                      F-6
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                CONSOLIDATED STATEMENTS OF CASH FLOWS, CONTINUED
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                            YEAR ENDED DECEMBER 31,
                                                                                         ----------------------------
                                                                                           2005                2004
                                                                                         ---------           --------
<S>                                                                                      <C>                 <C>
Supplemental disclosure of cash flow information:
  Cash paid during the period for:
         Interest....................................................................    $   5,764           $  4,013
                                                                                         =========           ========
         Income taxes................................................................    $   1,454           $  1,033
                                                                                         =========           ========
    Noncash transactions:
         Change in accumulated other comprehensive income, net
              change in unrealized loss on security available for sale...............    $      (4)          $      1
                                                                                         =========           ========
         Tax benefit from common stock options exercised.............................    $       9           $     54
                                                                                         =========           ========
         Loan reclassified to foreclosed assets......................................    $   3,268           $     --
                                                                                         =========           ========
         Loan made in connection with sale of foreclosed assets......................    $   2,520           $     --
                                                                                         =========           ========


</TABLE>














          See Accompanying Notes to Consolidated Financial Statements.


                                       F-7
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

               DECEMBER 31, 2005 AND 2004 AND THE YEARS THEN ENDED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    ORGANIZATION. OptimumBank Holdings, Inc. (the "Holding Company") is a
         one-bank holding company and owns 100% of OptimumBank (the "Bank"), a
         state (Florida)-chartered commercial bank (collectively, the
         "Company"). The Holding Company's only business is the operation of the
         Bank. The Bank's deposits are insured by the Federal Deposit Insurance
         Corporation. The Bank offers a variety of community banking services to
         individual and corporate customers through its three banking offices
         located in Broward County, Florida.

         The Holding Company was formed on March 23, 2004 and on April 29, 2004,
         the Bank's stockholders approved a plan of corporate reorganization
         under which the Bank became a wholly-owned subsidiary of the Holding
         Company. Effective May 6, 2004, the Bank's stockholders exchanged their
         common shares for shares of the Holding Company. As a result, all of
         the previously issued $2.50 par value common shares of the Bank were
         exchanged for 2,633,310 shares of the $.01 par value common shares of
         the Holding Company. The Holding Company's acquisition of the Bank has
         been accounted for as a combination of entities under common control at
         historical cost, similar to a pooling of interests and, accordingly,
         the financial data for all periods presented include the results of the
         Bank.

    BASIS OF PRESENTATION. The accompanying consolidated financial statements
         include the accounts of the Holding Company and the Bank. All
         significant intercompany accounts and transactions have been eliminated
         in consolidation. The accounting and reporting practices of the Company
         conform to U.S. generally accepted accounting principles and to general
         practices within the banking industry. The following summarizes the
         more significant of these policies and practices:

    USE  OF ESTIMATES. In preparing consolidated financial statements in
         conformity with U.S. generally accepted accounting principles,
         management is required to make estimates and assumptions that affect
         the reported amounts of assets and liabilities as of the date of the
         consolidated balance sheet and reported amounts of revenues and
         expenses during the reporting period. Actual results could differ from
         those estimates. A material estimate that is particularly susceptible
         to significant change in the near term relates to the determination of
         the allowance for loan losses.

    CASH AND CASH EQUIVALENTS. For purposes of the consolidated statements of
         cash flows, cash and cash equivalents include cash and balances due
         from banks and federal funds sold, both of which mature within ninety
         days.

         The Company is required by law or regulation to maintain cash reserves
         in the form of vault cash or in accounts with other banks. There were
         no reserve balances required at December 31, 2005 and 2004.

                                                                     (continued)

                                      F-8
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
    SECURITIES. Securities may be classified as either trading, held to maturity
         or available for sale. Trading securities are held principally for
         resale and recorded at their fair values. Unrealized gains and losses
         on trading securities are included immediately in earnings. Held to
         maturity securities are those which management has the positive intent
         and ability to hold to maturity and are reported at amortized cost.
         Available for sale securities consist of securities not classified as
         trading securities nor as held to maturity securities. Unrealized
         holding gains and losses, on available for sale securities are reported
         as a net amount in accumulated other comprehensive income (loss) in
         stockholders' equity until realized. Gains and losses on the sale of
         available for sale securities are determined using the
         specific-identification method. Premiums and discounts on securities
         available for sale and held to maturity are recognized in interest
         income using the interest method over the period to maturity.

    LOANS. Loans that management has the intent and ability to hold for the
         foreseeable future or until maturity or pay-off are reported at their
         outstanding principal adjusted for any charge-offs, the allowance for
         loan losses, and any deferred fees or costs.

         Commitment fees, and loan origination fees are deferred and certain
         direct origination costs are capitalized. Both are recognized as an
         adjustment of the yield of the related loan.

         The accrual of interest on loans is discontinued at the time the loan
         is ninety days delinquent unless the loan is well collateralized and in
         process of collection. In all cases, loans are placed on nonaccrual or
         charged-off at an earlier date if collection of principal or interest
         is considered doubtful.

         All interest accrued but not collected for loans that are placed on
         nonaccrual or charged-off is reversed against interest income. The
         interest on these loans is accounted for on the cash-basis or
         cost-recovery method, until qualifying for return to accrual. Loans are
         returned to accrual status when all the principal and interest amounts
         contractually due are brought current and future payments are
         reasonably assured.

    ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses is established as
         losses are estimated to have occurred through a provision for loan
         losses charged to earnings. Loan losses are charged against the
         allowance when management believes the uncollectibility of a loan
         balance is confirmed. Subsequent recoveries, if any, are credited to
         the allowance.


                                                                     (continued)


                                      F-9
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
     ALLOWANCE FOR LOAN LOSSES, CONTINUED. The allowance for loan losses is
         evaluated on a regular basis by management and is based upon
         management's periodic review of the collectibility of the loans in
         light of historical experience, the nature and volume of the loan
         portfolio, adverse situations that may affect the borrower's ability to
         repay, estimated value of any underlying collateral and prevailing
         economic conditions. This evaluation is inherently subjective as it
         requires estimates that are susceptible to significant revision as more
         information becomes available.

         The allowance consists of specific and general components. The specific
         component relates to loans that are classified as either doubtful,
         substandard or special mention. For such loans that are also classified
         as impaired, an allowance is established when the discounted cash flows
         (or collateral value or observable market price) of the impaired loan
         is lower than the carrying value of that loan. The general component
         covers non-classified loans and is based on historical loss experience
         adjusted for qualitative factors. An unallocated component is
         maintained to cover uncertainties that could affect management's
         estimate of probable losses. The unallocated component of the allowance
         reflects the margin of imprecision inherent in the underlying
         assumptions used in the methodologies for estimating specific and
         general losses in the portfolio.

         A loan is considered impaired when, based on current information and
         events, it is probable that the Company will be unable to collect the
         scheduled payments of principal or interest when due. Factors
         considered by management in determining impairment include payment
         status, collateral value, and the probability of collecting scheduled
         principal and interest payments when due. Loans that experience
         insignificant payment delays and payment shortfalls generally are not
         classified as impaired. Management determines the significance of
         payment delays and payment shortfalls on a case-by-case basis, taking
         into consideration all of the circumstances surrounding the loan and
         the borrower, including the length of the delay, the reasons for the
         delay, the borrower's prior payment record, and the amount of the
         shortfall in relation to the principal and interest owed. Impairment is
         measured on a loan by loan basis for commercial real estate, developed
         land, multi-family real estate and commercial loans by either the
         present value of expected future cash flows discounted at the loan's
         effective interest rate, the loan's obtainable market price, or the
         fair value of the collateral if the loan is collateral-dependent.

         Large groups of smaller balance homogeneous loans are collectively
         evaluated for impairment. Accordingly, the Company does not separately
         identify individual consumer and residential loans for impairment
         disclosures.

    FORECLOSED ASSETS. Assets repossessed or acquired by foreclosure or deed in
         lieu of foreclosure are carried at the lower of estimated fair value or
         the balance of the loan on the assets at date of acquisition. Costs
         relating to the development and improvement of assets are capitalized,
         whereas those relating to holding the assets are charged to expense.
         Valuations are periodically performed by management and losses are
         charged to earnings if the carrying value of the assets exceeds its
         estimated fair value.

    LOANS HELD FOR SALE. Mortgage loans originated and intended for sale in the
         secondary market are carried at the lower of cost or estimated fair
         value in the aggregate. Net unrealized losses are recognized through a
         valuation allowance by charges to earnings. At December 31, 2004 fair
         value exceeded book value in the aggregate. The Company had no loans
         held for sale at December 31, 2005.

                                                                     (continued)


                                      F-10
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      PREMISES AND EQUIPMENT. Land is stated at cost. Buildings and
         improvements, furniture, fixtures, equipment, and leasehold
         improvements are stated at cost, less accumulated depreciation and
         amortization. Depreciation and amortization expense are computed using
         the straight-line method over the estimated useful life of each type of
         asset or lease term, if shorter.

      PREFERRED SECURITIES OF UNCONSOLIDATED SUBSIDIARY TRUST. On September 30,
         2004, the Company acquired the common stock of OptimumBank Holdings
         Capital Trust I (Issuer Trust), an unconsolidated subsidiary trust. The
         Issuer Trust used the proceeds from the issuance of $5,000,000 of its
         preferred securities to third-party investors and common stock to
         acquire a $5,155,000 debenture issued by the Company. This debenture
         and certain capitalized costs associated with the issuance of the
         preferred stock comprise the Issuer Trust's only assets and the
         interest payments from the debentures finance the distributions paid on
         the preferred securities. The Company recorded the debenture in "Junior
         Subordinated Debenture" and its equity interest in the business trust
         in "Other assets" on the consolidated balance sheets.

         The Company has entered into agreements which, taken collectively,
         fully and unconditionally guarantee the preferred securities of the
         Issuer Trust subject to the terms of the guarantee.

         The debenture held by the Issuer Trust currently qualifies as Tier I
         capital for the Company under Federal Reserve Board guidelines.

      TRANSFER OF FINANCIAL ASSETS. Transfers of financial assets are accounted
         for as sales, when control over the assets has been surrendered.
         Control over transferred assets is deemed to be surrendered when (1)
         the assets have been isolated from the Company, (2) the transferee
         obtains the right (free of conditions that constrain it from taking
         advantage of that right) to pledge or exchange the transferred assets,
         and (3) the Company does not maintain effective control over the
         transferred assets through an agreement to repurchase them before their
         maturity.

      INCOME TAXES. Deferred income tax assets and liabilities are recorded to
         reflect the tax consequences on future years of temporary differences
         between revenues and expenses reported for financial statement and
         those reported for income tax purposes. Deferred tax assets and
         liabilities are measured using the enacted tax rates expected to apply
         to taxable income in the years in which those temporary differences are
         expected to be realized or settled. Valuation allowances are provided
         against assets which are not likely to be realized.

         The Holding Company and the Bank file a consolidated income tax return.
         Income taxes are allocated proportionately to the Holding Company and
         subsidiary as though separate income tax returns were filed.

      ADVERTISING. The Company expenses all media advertising as incurred. Media
         advertising expense included in other in the accompanying consolidated
         statements of earnings was approximately $41,000 and $34,000 during the
         years ended December 31, 2005 and 2004, respectively.

                                                                     (continued)


                                      F-11
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      STOCK COMPENSATION PLANS. Statement of Financial Accounting Standards
         (SFAS) No. 123, Accounting for Stock-Based Compensation, as amended by
         SFAS No. 148, Accounting for Stock-Based Compensation Transition and
         Disclosure (collectively, "SFAS No. 123") encourages all entities to
         adopt a fair value based method of accounting for employee stock
         compensation plans, whereby compensation cost is measured at the grant
         date based on the value of the award and is recognized over the service
         period, which is usually the vesting period. However, it also allows an
         entity to continue to measure compensation cost for those plans using
         the intrinsic value based method of accounting prescribed by Accounting
         Principles Board Opinion No. 25, Accounting for Stock Issued to
         Employees ("APB No. 25"), whereby compensation cost is the excess, if
         any, of the quoted market price of the stock at the grant date (or
         other measurement date) over the amount an employee must pay to acquire
         the stock. The Company accounts for their stock option plans under the
         recognition and measurement principles of APB No. 25. No stock-based
         employee compensation cost is reflected in net earnings, as all options
         granted under those plans had an exercise price which approximated the
         market value of the underlying common stock on the date of grant. The
         following table illustrates the effect on net earnings if the Company
         had applied the fair value recognition provisions of SFAS No. 123 to
         stock-based employee compensation (in thousands, except per share
         amounts).
<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31,
                                                                             ------------------------
                                                                                2005           2004
                                                                             ---------      ---------
<S>                                                                          <C>            <C>
          Net earnings, as reported.......................................   $   1,601      $  1,570

          Deduct:  Total stock-based employee compensation
              determined under the  fair value based method for all
              awards, net of related tax effect...........................         647            162
                                                                             ---------      ---------
          Proforma net earnings...........................................   $     954      $   1,408
                                                                             =========      =========

          Basic earnings per share:
              As reported.................................................   $     .60      $     .60
                                                                             =========      =========
              Proforma....................................................   $     .36      $     .53
                                                                             =========      =========
          Diluted earnings per share:
              As reported.................................................   $     .58      $     .58
                                                                             =========      =========
              Proforma....................................................   $     .35      $     .52
                                                                             =========      =========
</TABLE>

                                                                     (continued)


                                      F-12
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      STOCK COMPENSATION PLANS, CONTINUED. In order to calculate the fair value
         of the options granted using the Black-Scholes option pricing model, it
         was assumed that the risk-free interest rate was 4.4% in 2005 and 5.2%
         in 2004, there would be no dividends paid by the Company over the
         exercise period, the expected life of the options would be the entire
         exercise period and stock volatility was 24% in 2005 and 11% in 2004.
         For purposes of pro forma disclosures, the estimated fair value is
         included in expense in the period vesting occurs (in thousands, except
         per share amounts).
<TABLE>
<CAPTION>
                                                                                 YEAR ENDED DECEMBER 31,
                                                                                  ---------------------
                                                                                   2005       2004
                                                                                  --------     --------
              <S>                                                                 <C>          <C>
              Grant-date fair value of options issued during the year ..........  $    469     $    427
                                                                                  ========     ========
              Per share value of options at grant date..........................  $   4.57     $   3.43
                                                                                  ========     ========
      EARNINGS PER SHARE. Basic earnings per share is computed on the basis of
         the weighted-average number of common shares outstanding. Diluted
         earnings per share is computed based on the weighted-average number of
         shares outstanding plus the effect of outstanding stock options,
         computed using the treasury stock method. Earnings per common share
         have been computed based on the following:
</TABLE>

<TABLE>
<CAPTION>
                                                                                   YEAR ENDED DECEMBER 31,
                                                                                   ---------------------
                                                                                     2005        2004
                                                                                   ---------   ---------
              <S>                                                                 <C>          <C>
             Weighted-average number of common shares outstanding
                  used to calculate basic earnings per common share.............   2,658,848   2,636,324

             Effect of dilutive stock options...................................     102,949      82,388
                                                                                   ---------   ---------
             Weighted-average number of common shares outstanding
                  used to calculate diluted earnings per common share...........   2,761,797   2,718,712
                                                                                   =========   =========
</TABLE>

      OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS. In the ordinary course of
         business the Company has entered into off-balance-sheet financial
         instruments consisting of commitments to extend credit and undisbursed
         loans in process. Such financial instruments are recorded in the
         consolidated financial statements when they are funded.

                                                                     (continued)


                                      F-13
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      FAIR VALUES OF FINANCIAL INSTRUMENTS. The fair value of a financial
         instrument is the current amount that would be exchanged between
         willing parties, other than in a forced liquidation. Fair value is best
         determined based upon quoted market prices. However, in many instances,
         there are no quoted market prices for the Company's various financial
         instruments. In cases where quoted market prices are not available,
         fair values are based on estimates using present value or other
         valuation techniques. Those techniques are significantly affected by
         the assumptions used, including the discount rate and estimates of
         future cash flows. Accordingly, the fair value estimates may not be
         realized in an immediate settlement of the instrument or may not
         necessarily represent the underlying fair value of the Company. The
         following methods and assumptions were used by the Company in
         estimating fair values of financial instruments disclosed herein:

         CASH AND CASH EQUIVALENTS. The carrying amounts of cash and cash
         equivalents approximate their fair value.

         SECURITIES. Fair values for securities are based on quoted market
         prices, where available. If quoted market prices are not available,
         fair values are based on quoted market prices of comparable
         instruments.

         FEDERAL HOME LOAN BANK STOCK. Fair value of the Company's investment in
         Federal Home Loan Bank stock is based on its redemption value, which is
         its cost of $100 per share.

         LOANS. For variable-rate loans that reprice frequently and have no
         significant change in credit risk, fair values are based on carrying
         values. Fair values for certain fixed-rate mortgage (e.g. one-to-four
         family residential), commercial real estate and commercial loans are
         estimated using discounted cash flow analyses, using interest rates
         currently being offered for loans with similar terms to borrowers of
         similar credit quality. Fair values for nonperforming loans are
         estimated using discounted cash flow analyses or underlying collateral
         values, where applicable.

         DEPOSIT LIABILITIES. The fair values disclosed for demand, NOW,
         money-market and savings deposits are, by definition, equal to the
         amount payable on demand at the reporting date (that is, their carrying
         amounts). Fair values for fixed-rate time deposits are estimated using
         a discounted cash flow calculation that applies interest rates
         currently being offered on time deposits to a schedule of aggregated
         expected monthly maturities on time deposits.

         ACCRUED INTEREST.  The carrying amounts of accrued interest approximate
         their fair values.

         FEDERAL HOME LOAN BANK ADVANCES, JUNIOR SUBORDINATED DEBENTURE AND
         OTHER BORROWINGS. Fair values of Federal Home Loan Bank advances,
         junior subordinated debenture and other borrowings which consist of
         securities sold under an agreement to repurchase are estimated using
         discounted cash flow analysis based on the Company's current
         incremental borrowings rates for similar types of borrowings.

         OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS. Fair values for
         off-balance-sheet lending commitments are based on fees currently
         charged to enter into similar agreements, taking into account the
         remaining terms of the agreements and the counterparties' credit
         standing.

                                                                     (continued)


                                      F-14
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(1)  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
      COMPREHENSIVE INCOME. Accounting principles generally require that
         recognized revenue, expenses, gains and losses be included in net
         earnings. Although certain changes in assets and liabilities, such as
         unrealized gains and losses on available for sale securities, are
         reported as a separate component of the equity section of the
         consolidated balance sheets, such items along with net earnings, are
         components of comprehensive income. The only component of other
         comprehensive income is the net change in unrealized loss on securities
         available for sale for the years ended December 31, 2005 and 2004.

    RECENT ACCOUNTING PRONOUNCEMENTS. In December 2003, the American Institute
         of Certified Public Accountants ("AICPA") issued Statement of Position
         ("SOP") 03-3, Accounting for Certain Loans or Debt Securities Acquired
         in a Transfer. This SOP requires acquired impaired loans for which it
         is probable that the investor will be unable to collect all
         contractually required payments receivable to be recorded at the
         present value of amounts expected to be received. The SOP also
         prohibits carrying over or creation of valuation allowances in the
         initial accounting for these loans. The SOP was effective for loans
         acquired in fiscal years beginning after December 15, 2004. The
         adoption of this SOP did not impact the Company's consolidated
         financial position or results of operations.

         In December 2004, the Financial Accounting Standards Board ("FASB")
         issued Statement of Financial Accounting Standards ("SFAS") No. 123
         (Revised), Share-Based Payment ("SFAS No. 123(R)"). This Statement
         replaces SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS
         No. 123"), and supersedes Accounting Principles Board ("APB") Opinion
         No. 25, Accounting for Stock Issued to Employees ("APB No. 25"). SFAS
         No. 123(R) clarifies and expands SFAS No. 123's guidance in several
         areas, including measuring fair value, classifying an award as equity
         or as a liability, accounting for nonsubstantive vesting provisions,
         and attributing compensation cost to reporting periods. Under the
         provisions of SFAS No. 123(R), the alternative to use APB No. 25's
         intrinsic value method of accounting that was provided in SFAS No. 123,
         as originally issued, is eliminated. Effective January 1, 2006, the
         Company will begin expensing the fair value of unvested stock options
         and any future grants of stock options. There were no unvested stock
         options at December 31, 2005.

         In May 2005, the FASB issued SFAS 154, Accounting Changes and Error
         Corrections, which replaces APB Opinion No. 20, Accounting Changes, and
         SFAS 3, Reporting Accounting Changes in Interim Financial Statements An
         Amendment of APB Opinion No. 28. SFAS 154 changes the requirements for
         the accounting and reporting of a change in accounting principle. SFAS
         154 is effective for accounting changes and corrections of errors made
         in fiscal years beginning after December 15, 2005.

      RECLASSIFICATIONS. Certain reclassifications of prior year amounts have
         been made to conform to the current year presentation.
                                                                     (continued)



                                      F-15
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(2)  SECURITIES
    Securities have been classified according to management's intent. The
         carrying amount of securities and approximate fair values are as
         follows (in thousands):

<TABLE>
<CAPTION>
                                                                            GROSS           GROSS
                                                         AMORTIZED        UNREALIZED      UNREALIZED        FAIR
                                                           COST             GAINS           LOSSES          VALUE
                                                         --------          --------       ---------       --------
         <S>                                             <C>               <C>            <C>             <C>
         AT DECEMBER 31, 2005:
           SECURITIES HELD TO MATURITY-
              Mortgage-backed securities.............    $ 25,618          $      2       $    (524)      $ 25,096
                                                         ========          ========       =========       ========
           SECURITY AVAILABLE FOR SALE-
              Mutual fund............................    $    250          $     --       $      (7)      $    243
                                                         ========          ========       =========       ========
         AT DECEMBER 31, 2004:
           SECURITIES HELD TO MATURITY-
              Mortgage-backed securities.............    $ 24,134          $     87       $    (156)      $ 24,065
                                                         ========          ========       =========       ========
           SECURITY AVAILABLE FOR SALE-
              Mutual fund............................    $    250          $     --       $      (3)      $    247
                                                         ========          ========       =========       ========
</TABLE>

    There were no securities sold during the years ended December 31, 2005 or
2004.

    Securities with gross unrealized losses at December 31, 2005, aggregated by
           investment category and length of time that individual securities
           have been in a continuous loss position, is as follows (in
           thousands):
<TABLE>
<CAPTION>
                                                               LESS THAN TWELVE MONTHS         OVER TWELVE MONTHS
                                                               ------------------------     ------------------------
                                                                 GROSS                        GROSS
                                                               UNREALIZED        FAIR       UNREALIZED       FAIR
                                                                LOSSES          VALUE        LOSSES          VALUE
                                                               ---------      ---------     ---------      ---------
<S>                                                            <C>            <C>           <C>           <C>
              SECURITIES HELD TO MATURITY-
                  Mortgage-backed securities..........         $    (218)     $  11,919     $    (306)     $  12,500
                                                               =========      =========     =========      =========
              SECURITY AVAILABLE FOR SALE-
                  Mutual fund.........................         $    -      $     --         $   (7)        $     243
                                                               =========      =========     =========      =========
</TABLE>
      Management evaluates securities for other-than-temporary impairment at
            least on a quarterly basis, and more frequently when economic or
            market concerns warrant such evaluation. Consideration is given to
            (1) the length of time and the extent to which the fair value has
            been less than cost, (2) the financial condition and near-term
            prospects of the issuer, and (3) the intent and ability of the
            Company to retain its investment in the issuer for a period of time
            sufficient to allow for any anticipated recovery in fair value.


                                                                     (continued)


                                      F-16
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(2)  SECURITIES, CONTINUED
      The  unrealized losses on investment securities held to maturity were
           caused by interest rate changes. It is expected that the securities
           would not be settled at a price less than the par value of the
           investments. Because the decline in fair value is attributable to
           changes in interest rates and not credit quality, and because the
           Company has the ability and intent to hold these investments until a
           market price recovery or maturity, these investments are not
           considered other-than-temporarily impaired.

(3) LOANS
    The components of loans are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                 AT DECEMBER 31,
                                                                                           --------------------------

                                                                                              2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>
              Residential real estate...........................................           $  65,016        $  61,070
              Multi-family real estate..........................................              15,135           10,853
              Commercial real estate............................................              54,286           38,064
              Land and construction.............................................              34,760           18,169
              Commercial   .....................................................                 570              581
              Consumer     .....................................................                  43              162
                                                                                           ---------        ---------
              Total loans  .....................................................             169,810          128,899

              Add (deduct):
                  Net deferred loan fees, costs and premiums....................               1,227              637
                  Loan discounts................................................                 (34)             (98)
                  Allowance for loan losses.....................................                (777)            (628)
                                                                                           ---------        ---------
              Loans, net........................................................           $ 170,226        $ 128,810
                                                                                           =========        =========
</TABLE>

    An analysis of the change in the allowance for loan losses follows (in
thousands):

<TABLE>
<CAPTION>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                           --------------------------
                                                                                             2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>
              Beginning balance.................................................           $     628        $     492
              Provision for loan losses.........................................                 149              136
                                                                                           ---------        ---------
              Ending balance....................................................           $     777        $     628
                                                                                           =========        =========
</TABLE>

                                                                     (continued)


                                      F-17
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(3) LOANS, CONTINUED
    The following is a summary of information pertaining to impaired and
nonaccrual loans (in thousands):

<TABLE>
<CAPTION>
                                                                                                 AT DECEMBER 31,
                                                                                           --------------------------
                                                                                             2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>
              Impaired loans without a valuation allowance..............................   $      --        $   3,268
              Impaired loans with a valuation allowance.................................          --               --
                                                                                           ---------        ---------
                  Total impaired loans..................................................   $      --        $   3,268
                                                                                           =========        =========
              Valuation allowance related to impaired loans.............................   $      --        $      --
                                                                                           =========        =========
              Total nonaccrual loans....................................................   $      --        $   3,268
                                                                                           =========        =========
              Total loans paid-due ninety days or more and still accruing...............   $      --        $      --
                                                                                           =========        =========
</TABLE>
<TABLE>
<CAPTION>

                                                                                             YEAR ENDED DECEMBER 31,
                                                                                           --------------------------
                                                                                              2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>

              Average investment in impaired loans......................................   $     844        $     928
                                                                                           =========        =========
              Interest income recognized on impaired loans..............................    $     --        $      --
                                                                                           =========        =========
              Interest income recognized on a cash basis on impaired loans..............    $     --        $      --
                                                                                           =========        =========
</TABLE>

    During the year ended December 31, 2005 the Company recorded a $243,000
         provision for losses on foreclosed assets with respect to one
         foreclosed residential real estate loan which was also sold during the
         year ended December 31, 2005 at no additional loss to the Company.

(4)  PREMISES AND EQUIPMENT
    A summary of premises and equipment follows (in thousands):

<TABLE>
<CAPTION>
                                                                                                  AT DECEMBER 31,
                                                                                           --------------------------
                                                                                              2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>
              Land......................................................................   $   1,371        $   1,371
              Buildings and improvements................................................       2,330            2,187
              Furniture, fixtures and equipment.........................................         853              843
              Leasehold improvements....................................................         109              107
                                                                                           ---------        ---------
                  Total, at cost........................................................       4,663            4,508

                  Less accumulated depreciation and amortization........................        (589)            (394)
                                                                                           ---------        ---------
                  Premises and equipment, net...........................................   $   4,074        $   4,114
                                                                                           =========        =========
</TABLE>
                                                                     (continued)

                                      F-18
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(4)  PREMISES AND EQUIPMENT, CONTINUED
    The  Company leases one branch facility under an operating lease. The lease
         contains two five-year renewal options and requires the Company to pay
         an allowable share of common area maintenance and real estate taxes.
         Rent expense under operating leases during each of the years ended
         December 31, 2005 and 2004 was $70,000. At December 31, 2005, the
         future minimum lease payments are approximately as follows (in
         thousands):

              YEAR ENDING                               AMOUNT
              -----------                               ------
              2006...................................   $   71
              2007...................................       71
              2008...................................       77
              2009...................................       77
              2010...................................       77
              Thereafter.............................      224
                                                        ------
                                                        $  597
                                                        ======

(5)  DEPOSITS
    The  aggregate amount of time deposits with a minimum denomination of
         $100,000, was approximately $39.9 million and $27.0 million at December
         31, 2005 and 2004, respectively.

    A schedule of maturities of time deposits follows (in thousands):

              YEAR ENDING
              DECEMBER 31,                              AMOUNT

                  2006........................................    $  57,194
                  2007........................................       13,968
                  2008........................................       20,934
                  2009........................................       10,576
                  2010........................................        3,952
                                                                  ---------
                                                                  $ 106,624
                                                                  =========

                                                                     (continued)

                                      F-19
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(6) FEDERAL HOME LOAN BANK ADVANCES AND JUNIOR SUBORDINATED DEBENTURE
    The  maturities and interest rates on the Federal Home Loan Bank ("FHLB")
         advances were as follows (dollars in thousands):
<TABLE>
<CAPTION>
               MATURITY                                                                        AT DECEMBER 1,
              YEAR ENDING                          CALL                INTEREST          --------------------------
             DECEMBER 31,                          DATE                  RATE              2005              2004
             ------------                         ------               --------          --------          --------
                  <S>                                <C>                 <C>             <C>               <C>
                  2006......................         --                  4.44%           $  6,300          $     --
                  2006......................         --                  2.44               2,200             2,200
                  2007......................         --                  3.48               2,500             2,500
                  2007......................         --                  3.70               2,000             2,000
                  2008......................        2005                 2.03                 --              3,000
                  2012......................        2007                 4.05               3,000             3,000
                  2013......................        2008                 3.42               2,000             2,000
                  2013......................        2008                 3.09               3,000             3,000
                  2013......................        2008                 2.80               1,950             1,950
                  2013......................        2008                 2.56               3,000             3,000
                  2013......................        2008                 3.44               3,000             3,000
                  2014......................        2007                 3.14               4,000             4,000
                  2014......................        2009                 3.64               8,000             8,000
                  2008......................         --                  4.34               7,000                --
                  2008......................         --                  4.91               5,000                --
                                                                                         --------          --------
                                                                                         $ 52,950          $ 37,650
                                                                                         ========          =========
</TABLE>
     Certain of the above advances are callable by the FHLB at the dates
indicated.

     At  December 31, 2005 and 2004, the FHLB advances were collateralized by a
         blanket lien on qualifying residential one-to-four family mortgage
         loans, commercial and multi-family real estate loans and all of the
         Company's Federal Home Loan Bank stock.

     On  September 30, 2004, the Company issued a $5,155,000 junior subordinated
         debenture to an unconsolidated subsidiary. The debenture has a term of
         thirty years. The interest rate is fixed at 6.4% for the first five
         years, and thereafter, the coupon rate will float quarterly at the
         three-month LIBOR rate plus 2.45%. The junior subordinated debenture,
         due in 2034, is redeemable in certain circumstances after October 2009.

                                                                     (continued)

                                      F-20

<PAGE>


                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(7)  OTHER BORROWINGS
    Other borrowings consists of securities sold under an agreement to
       repurchase. The securities sold under the agreement to repurchase were
       delivered to the broker-dealer who arranged the transactions. Information
       concerning the securities sold under an agreement to repurchase is
       summarized as follows (dollars in thousands):
<TABLE>
<CAPTION>
                                                                                              YEAR ENDED DECEMBER 31,
                                                                                             -------------------------
                                                                                               2005             2004
                                                                                             --------         --------
             <S>                                                                             <C>              <C>
             Balance at year end........................................................     $ 12,950         $  5,000
             Average balance during the year............................................     $ 10,392         $  7,719
             Average interest rate during the year......................................         3.28%            2.25%
             Maximum month-end balance during the year..................................     $ 12,950         $  8,750
             Securities held to maturity pledged as collateral..........................     $ 15,174         $  5,672
</TABLE>

    The maturities and interest rates on securities sold under an agreement to
       repurchase are as follows (dollars in thousands):

<TABLE>
<CAPTION>
              MATURING                                                  AT DECEMBER 31,
              YEAR ENDE                                 INTEREST   --------------------------
              DECEMBER 31,                                RATE        2005             2004
              ------------                                         ---------         --------
              <S>                                        <C>       <C>               <C>
              2005...................................    2.33%     $      --         $  3,000
              2006 ..................................    2.95%         2,000            2,000
              2006 ..................................    4.41%         2,600               --
              2007 ..................................    4.02%         5,350               --
              2007 ..................................    4.85%         3,000               --
                                                                   ---------         --------
                                                                   $  12,950         $  5,000
                                                                   =========         ========
</TABLE>
    At December 31, 2005, the Company also had $6 million available under a line
       of credit. There were no amounts outstanding in connection with this
       agreement at December 31, 2005.

(8) FINANCIAL INSTRUMENTS
    The estimated fair values of the Company's financial instruments were as
follows (in thousands):

<TABLE>
<CAPTION>
                                                                  AT DECEMBER 31, 2005         AT DECEMBER 31, 2004
                                                                -----------------------    ---------------------------
                                                                  CARRYING       FAIR       CARRYING           FAIR
                                                                   AMOUNT       VALUE        AMOUNT            VALUE
                                                                ----------   ----------    ----------        ---------
         <S>                                                    <C>          <C>           <C>               <C>
         Financial assets:
              Cash and cash equivalents.......................  $    1,154   $    1,154    $    3,223        $   3,223
              Securities held to maturity.....................      25,618       25,096        24,134           24,065
              Security available for sale.....................         243          243           247              247
              Loans...........................................     170,226      170,020       129,319          129,376
              Federal Home Loan Bank stock....................       2,712        2,712         1,965            1,965
              Accrued interest receivable.....................       1,030        1,030           878              878

         Financial liabilities:
              Deposit liabilities.............................     114,064      113,283        97,994           98,404
              Federal Home Loan Bank advances.................      52,950       50,793        37,650           38,075
              Other borrowings................................      12,950       12,858         5,000            4,952
              Junior subordinated debenture...................       5,155        5,190         5,155            5,383
</TABLE>

                                                                     (continued)


                                      F-21
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(8) FINANCIAL INSTRUMENTS, CONTINUED
    The  Company is party to financial instruments with off-balance-sheet risk
         in the normal course of business to meet the financing needs of its
         customers. These financial instruments are commitments to extend credit
         and undisbursed loans in process and may involve, to varying degrees,
         elements of credit and interest-rate risk in excess of the amount
         recognized in the consolidated balance sheet. The contract amounts of
         these instruments reflect the extent of involvement the Company has in
         these financial instruments.

    The  Company's exposure to credit loss in the event of nonperformance by the
         other party to the financial instrument for commitments to extend
         credit and undisbursed loans in process is represented by the
         contractual amount of those instruments. The Company uses the same
         credit policies in making commitments as it does for on-balance-sheet
         instruments.

    Commitments to extend credit are agreements to lend to a customer as long as
         there is no violation of any condition established in the contract.
         Commitments generally have fixed expiration dates or other termination
         clauses and may require payment of a fee. Because some of the
         commitments are expected to expire without being drawn upon, the total
         commitment amounts do not necessarily represent future cash
         requirements. The Company evaluates each customer's credit worthiness
         on a case-by-case basis. The amount of collateral obtained, if deemed
         necessary by the Company, upon extension of credit, is based on
         management's credit evaluation of the counterparty.

    Commitments to extend credit typically result in loans with a market
         interest rate when funded. A summary of the amounts of the Company's
         financial instruments with off-balance-sheet risk at December 31, 2005
         follows (in thousands):
<TABLE>
<CAPTION>
                                                                                                       ESTIMATED
                                                                        CONTRACT       CARRYING          FAIR
                                                                         AMOUNT         AMOUNT           VALUE
                                                                       ---------       ========         ========
              <S>                                                      <C>             <C>              <C>
              Undisbursed loans in process.........................    $     456             --               --
                                                                       =========       ========         ========
              Commitments to extend credit.........................    $  10,015             --               --
                                                                       =========       ========         ========
</TABLE>

(9)  CREDIT RISK
    The  Company grants the majority of its loans to borrowers throughout
         Broward and portions of Palm Beach and Miami-Dade Counties, Florida.
         Although the Company has a diversified loan portfolio, a significant
         portion of its borrowers' ability to honor their contracts is dependent
         upon the economy in Broward, Palm Beach and Miami-Dade Counties,
        Florida.

                                                                     (continued)

                                      F-22
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(10)  INCOME TAXES
    Income taxes consisted of the following (in thousands):

<TABLE>
<CAPTION>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                           --------------------------
                                                                                              2005             2004
                                                                                           ---------        ---------
              <S>                                                                          <C>              <C>
              Current:
                  Federal.......................................................           $     938        $   1,071
                  State.........................................................                 162              174
                                                                                           ---------        ---------
                           Total current........................................               1,100            1,245
                                                                                           ---------        ---------
              Deferred:
                  Federal.......................................................                 (99)            (246)
                  State.........................................................                 (19)             (33)
                                                                                           ---------        ---------
                           Total deferred.......................................                (118)            (279)
                                                                                           ---------        ---------
                           Total................................................           $     982        $     966
                                                                                           =========        =========
</TABLE>

    The  reasons for the differences between the statutory Federal income tax
         rate and the effective tax rate are summarized as follows (dollars in
         thousands):
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED DECEMBER 31,
                                                                       --------------------------------------------
                                                                                2005                   2004
                                                                       --------------------    --------------------
                                                                                    % OF                    % OF
                                                                                   PRETAX                  PRETAX
                                                                       AMOUNT     EARNINGS     AMOUNT     EARNINGS
                                                                      --------    --------    --------    --------
              <S>                                                      <C>             <C>     <C>             <C>
               Income taxes at statutory rate......................    $    878        34.0%   $    862        34.0%
              Increase resulting from:
                  State taxes, net of Federal tax benefit.........          94         3.6          93         3.7
                  Other...........................................          10          .4          11          .4
                                                                      --------    --------    --------    --------
                                                                      $    982        38.0%   $    966        38.1%
                                                                      ========    ========    ========    ========
</TABLE>

                                                                     (continued)


                                      F-23
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(10)  INCOME TAXES, CONTINUED
    The  tax effects of temporary differences that give rise to significant
         portions of the deferred tax assets and deferred tax liabilities are
         presented below (in thousands).
<TABLE>
<CAPTION>
                                                                                               AT DECEMBER 31,
                                                                                           --------------------
                                                                                                2005        2004
                                                                                           --------    --------
              <S>                                                                          <C>         <C>
              Deferred tax asset:
                  Allowance for loan losses.............................................   $    182    $    126
                  Organizational and preopening costs...................................         --          28
                  Other.................................................................         --           3
                                                                                           --------    --------
                           Deferred tax assets..........................................        182         157
                                                                                           --------    --------
              Deferred tax liabilities:
                  Loan costs............................................................         38          68
                  Accrual to cash adjustment............................................        186         248
                  Premises and equipment................................................        110         129
                  Other.................................................................         35          17
                                                                                           --------    --------
                           Deferred tax liabilities.....................................        369         462
                                                                                           --------    --------
                           Net deferred income tax liability............................   $    187    $    305
                                                                                           ========    ========
</TABLE>

(11)  RELATED PARTY TRANSACTIONS
    The  Company has entered into transactions with its executive officers,
         directors and their affiliates in the ordinary course of business.
         There were no loans to related parties at December 31, 2005 or 2004. At
         December 31, 2005 and 2004, these same related parties had
         approximately $1,383,000 and $1,362,000, respectively on deposit with
         the Company.

(12)  STOCK COMPENSATION
    The  Company established an Incentive Stock Option Plan (the "Plan") for
         officers, directors and employees of the Company and reserved 522,000
         shares of common stock for the plan. Both incentive stock options and
         nonqualified stock options may be granted under the plan. The exercise
         price of the stock options is determined by the board of directors at
         the time of grant, but cannot be less than the fair market value of the
         common stock on the date of grant. The options vest over three and five
         years. However, the Company's board of directors authorized the
         immediate vesting of all stock options outstanding as of December 29,
         2005 in order to reduce noncash compensation expense that would have
         been recorded in its consolidated statements of earnings in future
         years upon adoption of SFAS No. 123R in January 2006. The options must
         be exercised within ten years from the date of grant. At December 31,
         2005, no options were available for grant.

                                                                     (continued)


                                      F-24
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(12)  STOCK COMPENSATION, CONTINUED
    A    summary of the activity in the Company's stock option plan is as
         follows (dollars in thousands, except per share amounts):
<TABLE>
<CAPTION>
                                                                              RANGE OF        WEIGHTED-
                                                                              PER SHARE        AVERAGE      AGGREGATE
                                                              NUMBER OF        OPTION         EXERCISE       OPTION
                                                               OPTIONS          PRICE           PRICE         PRICE
                                                               --------      -----------      ---------       -------
              <S>                                              <C>           <C>                <C>           <C>
              Outstanding at December 31, 2003............      287,000      $ 5.00-8.20        $  5.72       $ 1,643
              Granted.....................................      124,500            10.00          10.00         1,245
              Exercised...................................      (35,067)       5.00-6.75           5.22          (183)
              Forfeited...................................       (6,000)       6.75-8.20           7.23           (43)
                                                               --------                                       -------
              Outstanding at December 31, 2004............      370,433       5.00-10.00           7.19         2,662
              Granted.....................................      119,500      10.00-12.49          10.21         1,220
              Exercised...................................      (12,133)       5.00-6.75           5.35           (65)
              Forfeited...................................       (3,000)      6.78-10.00           8.33           (25)
                                                               --------                                       -------
              Outstanding at December 31, 2005............      474,800     $ 5.00-12.49        $  7.98       $ 3,792
                                                               ========                                       =======
</TABLE>

    The  weighted-average contractual lives of the outstanding stock options at
         December 31, 2005 and 2004 were 98 months and 91 months, respectively.
         At December 31, 2005, all of the stock options granted under the plan
         are exercisable.

    Effective January 1, 2002, the Board of Directors adopted a nonemployee
         director compensation and stock purchase plan under which each outside
         director is required to purchase Company stock with compensation for
         board meetings at a price no less than fair market value. A total of
         15,000 shares have been authorized for issuance to outside directors
         under this plan. A total of 1,540 and 1,534 shares of common stock were
         sold to outside directors under this plan during the years ended
         December 31, 2005 and 2004, respectively. A total of 9,808 shares are
         available for issuance at December 31, 2005.

                                                                     (continued)


                                      F-25
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(13) REGULATORY MATTERS
     The Company and the Bank are subject to various regulatory capital
         requirements administered by the regulatory banking agencies. Failure
         to meet minimum capital requirements can initiate certain mandatory and
         possibly additional discretionary actions by regulators that, if
         undertaken, could have a direct material effect on the Company's and
         the Bank's financial statements. Under capital adequacy guidelines and
         the regulatory framework for prompt corrective action, the Company and
         the Bank must meet specific capital guidelines that involve
         quantitative measures of their assets, liabilities, and certain
         off-balance-sheet items as calculated under regulatory accounting
         practices. The capital amounts and classification are also subject to
         qualitative judgments by the regulators about components, risk
         weightings, and other factors. Prompt corrective action provisions are
         not applicable to bank holding companies.

     Quantitative measures established by regulation to ensure capital adequacy
         require the Company and the Bank to maintain minimum amounts and
         percentages (set forth in the following table) of total and Tier 1
         capital (as defined in the regulations) to risk-weighted assets (as
         defined) and of Tier 1 capital (as defined) to average assets (as
         defined). Management believes, as of December 31, 2005, the Company and
         the Bank met all capital adequacy requirements to which they are
         subject.

     As  of December 31, 2005, the most recent notification from the regulatory
         authorities categorized the Bank as well capitalized under the
         regulatory framework for prompt corrective action. To be categorized as
         well capitalized, an institution must maintain minimum total
         risk-based, Tier I risk-based, and Tier I leverage percentages as set
         forth in the following tables. There are no conditions or events since
         that notification that management believes have changed the Bank's
         category. The Company's and the Bank's actual capital amounts and
         percentages are also presented in the table (dollars in thousands).
<TABLE>
<CAPTION>
                                                                                                       MINIMUM
                                                                                                      TO BE WELL
                                                                                                   CAPITALIZED UNDER
                                                                    FOR CAPITAL ADEQUACY           PROMPT CORRECTIVE
                                                ACTUAL                    PURPOSES                 ACTION PROVISIONS
                                       ----------------------     -----------------------      -----------------------
                                        AMOUNT           %         AMOUNT            %          AMOUNT           %
                                       --------       -------     --------         ------      --------       --------
     <S>                               <C>              <C>       <C>               <C>        <C>               <C>
     AS OF DECEMBER 31, 2005:
         Total capital to Risk-
           Weighted assets:
              Company...............   $ 24,169         16.45%    $ 11,751          8.00%           N/A          10.00%
              Bank..................     23,891         16.27       11,746          8.00       $ 14,684          10.00
         Tier I Capital to Risk-
           Weighted Assets:
              Company...............     23,392         15.93        5,873          4.00            N/A            N/A
              Bank..................     23,114         15.74        5,874          4.00          8,811           6.00
         Tier I Capital
           to Total Assets:
              Company...............     23,392         11.64        8,247          4.00            N/A            N/A
              Bank..................     23,114         11.50        8,040          4.00         10,050           5.00
</TABLE>

                                                                     (continued)

                                      F-26
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(13) REGULATORY MATTERS, CONTINUED

<TABLE>
<CAPTION>
                                                                                                       MINIMUM
                                                                                                      TO BE WELL
                                                                                                   CAPITALIZED UNDER
                                                                    FOR CAPITAL ADEQUACY           PROMPT CORRECTIVE
                                                ACTUAL                    PURPOSES                 ACTION PROVISIONS
                                       ----------------------     -----------------------      -----------------------
                                        AMOUNT           %         AMOUNT            %          AMOUNT           %
                                       --------       -------     --------         ------      --------       --------
     <S>                               <C>              <C>       <C>               <C>        <C>               <C>
     AS OF DECEMBER 31, 2004:
         Total capital to Risk-
           Weighted assets:
              Company...............   $ 22,329         20.68%     $ 8,639          8.00%           N/A          10.00%
              Bank..................     22,207         20.57        8,636          8.00       $ 10,795          10.00
         Tier I Capital to Risk-
           Weighted Assets:
              Company...............     21,701         20.10        4,320          4.00            N/A            N/A
              Bank..................     21,579         19.99        4,318          4.00          6,477           6.00
         Tier I Capital
           to Total Assets:
              Company...............     21,701         13.49        6,433          4.00            N/A            N/A
              Bank..................     21,579         13.42        6,433          4.00          8,041           5.00
</TABLE>

(14)  DIVIDENDS
     The Company is limited in the amount of cash dividends that may be paid.
         Banking regulations place certain restrictions on dividends and loans
         or advances made by the Bank to the Holding Company. The amount of cash
         dividends that may be paid by the Bank to the Holding Company is based
         on the Bank's net earnings of the current year combined with the Bank's
         retained earnings of the preceding two years, as defined by state
         banking regulations. However, for any dividend declaration, the Company
         must consider additional factors such as the amount of current period
         net earnings, liquidity, asset quality, capital adequacy and economic
         conditions. It is likely that these factors would further limit the
         amount of dividend which the Company could declare. In addition, bank
         regulators have the authority to prohibit banks from paying dividends
         if they deem such payment to be an unsafe or unsound practice.

(15)  CONTINGENCIES
     Various claims also arise from time to time in the normal course of
         business. In the opinion of management, none have occurred that will
         have a material effect on the Company's consolidated financial
         statements.

(16)  SIMPLE IRA
     The Company has a Simple IRA Plan whereby substantially all employees
         participate in the Plan. Employees may contribute up to 15 percent of
         their compensation subject to certain limits based on federal tax laws.
         The Company makes matching contributions equal to the first 3% of an
         employee's compensation contributed to the Plan. Matching contributions
         vest to the employee immediately. For the years ended December 31, 2005
         and 2004, expense attributable to the Plan amounted to $36,737 and
         $32,124, respectively.

                                                                     (continued)

                                      F-27
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(17)  HOLDING COMPANY FINANCIAL INFORMATION
     The Holding Company's unconsolidated financial information as of December
         31, 2005 and 2004 and for the years then ended follows (in thousands):

                            CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                              AT DECEMBER 31,
                                                                          ---------------------
                                                                            2005         2004
                                                                          --------     --------
               <S>                                                        <C>          <C>
                      ASSETS

              Cash.....................................................   $     35     $    105
              Investment in subsidiary.................................     23,107       21,576
              Other assets ............................................        519          282
                                                                          --------     --------
                  Total assets.........................................   $ 23,661     $ 21,963
                                                                          ========     ========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

              Other liabilities........................................   $     96     $     85
              Junior subordinated debenture............................      5,155        5,155
              Stockholders' equity.....................................     18,410       16,723

                  Total liabilities and stockholders' equity...........   $ 23,661     $ 21,963
</TABLE>


                        CONDENSED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
                                                                          YEAR ENDED DECEMBER 31,
                                                                          --------     --------
                                                                            2005         2004
                                                                          --------     --------
               <S>                                                        <C>          <C>
              Earnings of subsidiary...................................   $  1,848     $  1,651
              Interest expense.........................................       (320)         (86)
              Other expense............................................        (79)         (45)
                                                                          --------     --------
                  Earnings before income tax benefit...................      1,449        1,520

              Income tax benefit.......................................       (152)         (50)
                                                                          --------     --------
                  Net earnings.........................................   $  1,601     $  1,570
                                                                          ========     ========
</TABLE>
                                                                     (continued)

                                      F-28
<PAGE>

                    OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED


(17)  HOLDING COMPANY FINANCIAL INFORMATION, CONTINUED


                                           CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                                             YEAR ENDED DECEMBER 31,
                                                                                            ------------------------
                                                                                              2005             2004
                                                                                            -------          -------
              <S>                                                                           <C>              <C>
              Cash flows from operating activities:
                  Net earnings.........................................................     $ 1,601          $ 1,570
                  Adjustments to reconcile net earnings to net cash used in
                    operating activities:
                      Equity in undistributed earnings of subsidiary...................      (1,848)          (1,651)
                      Increase in other assets.........................................        (228)            (282)
                      Increase in accrued other liabilities............................          11               85
                                                                                            -------          -------
                      Net cash used in operating activities............................        (464)            (278)
                                                                                            -------          -------
              Cash flow from investing activities:
                      Dividend from subsidiary.........................................         394              150
                      Investment in subsidiary.........................................         (81)          (5,120)
                                                                                            -------          -------
                      Net cash provided by (used in) investing activities..............         313           (4,970)
                                                                                            -------          -------
              Cash flows from financing activities:
                  Issuances of junior subordinated debenture...........................          --            5,155
                  Proceeds from sale of common stock...................................          16               15
                  Proceeds from exercise of common stock options.......................          65              183
                                                                                            -------          -------
                      Net cash provided by financing activities........................          81            5,353
                                                                                            -------          -------
                      Net (decrease) increase in cash..................................         (70)             105

              Cash at beginning of the year............................................         105               --
                                                                                            -------          -------
              Cash at end of year   ..........................................              $    35          $   105
                                                                                            =======          =======
</TABLE>

                                      F-29