Exhibit 13.1

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

INDEX TO CONSOLIDATED
FINANCIAL STATEMENTS



|                                                                                                |  |  |          | 
|----------------------------------------------------------------------------------------------- |  |  | -------- | 
|Report of Independent Registered Public Accounting Firm                                         |  |  | F-2      | 
|                                                                                                | 
|Consolidated Balance Sheets, December 31, 2010 and 2009                                         |  |  | F-3      | 
|                                                                                                | 
|Consolidated Statements of Operations for the Years Ended December 31, 2010 and 2009            |  |  | F-4      | 
|                                                                                                | 
|Consolidated Statements of Stockholders Equity for the Years Ended December 31, 2010 and 2009  |  |  | F-5      | 
|                                                                                                | 
|Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009            |  |  | F-6-F-7  | 
|                                                                                                | 
|Notes to Consolidated Financial Statements, December 31, 2010 and 2009 and the Years Then Ended |  |  | F-8-F-41 | 



F-1



---

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) as of December 31, 2010 and 2009, and the related consolidated statements of operations, 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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, 2010 and 2009, and the results
of its operations and its cash flows for the years then ended, in conformity with U.S. generally accepted accounting principles.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the
Companys operating and capital requirements, along with recurring losses raise substantial doubt about its ability to continue as a going concern. Managements plans in regard to those matters are also described in Note 1. The
consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

HACKER,
JOHNSON & SMITH PA

Fort Lauderdale, Florida

April 14, 2011



F-2



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Consolidated Balance Sheets

(Dollars in thousands, except share amounts)



|                                                                                                                                                               |  |              |         |   |      |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                                               |  | December 31, |        
|                                                                                                                                                               |  | 2010         |         |   | 2009 |  
|Assets                                                                                                                                                         |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Cash and due from banks                                                                                                                                        |  | $            | 1,027   |   |      | $ | 1,556   |  
|Interest-bearing deposits with banks                                                                                                                           |  |              | 186     |   |      |   | 8,506   |  
|Federal funds sold                                                                                                                                             |  |              | 13,154  |   |      |   | 26,722  |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total cash and cash equivalents                                                                                                                                |  |              | 14,367  |   |      |   | 36,784  |  
|                                                                                                                                                               |  |             
|Securities held to maturity (fair value of $48,839 and $76,984)                                                                                                |  |              | 51,057  |   |      |   | 81,141  |  
|Loans, net of allowance for loan losses of $3,703 and $9,363                                                                                                   |  |              | 113,542 |   |      |   | 134,126 |  
|Federal Home Loan Bank stock                                                                                                                                   |  |              | 3,173   |   |      |   | 3,551   |  
|Premises and equipment, net                                                                                                                                    |  |              | 2,796   |   |      |   | 2,941   |  
|Foreclosed real estate, net                                                                                                                                    |  |              | 3,215   |   |      |   | 5,487   |  
|Accrued interest receivable                                                                                                                                    |  |              | 644     |   |      |   | 1,088   |  
|Deferred tax asset                                                                                                                                             |  |              |        |   |      |   | 772     |  
|Income taxes receivable                                                                                                                                        |  |              | 772     |   |      |   | 3,577   |  
|Other assets                                                                                                                                                   |  |              | 739     |   |      |   | 490     |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total assets                                                                                                                                                   |  | $            | 190,305 |   |      | $ | 269,957 |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Liabilities and Stockholders Equity                                                                                                                           |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Liabilities:                                                                                                                                                   |  |              |         |   |      |   |         |  
|Noninterest-bearing demand deposits                                                                                                                            |  |              | 309     |   |      |   | 199     |  
|Savings, NOW and money-market deposits                                                                                                                         |  |              | 36,654  |   |      |   | 44,222  |  
|Time deposits                                                                                                                                                  |  |              | 111,275 |   |      |   | 107,261 |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total deposits                                                                                                                                                 |  |              | 148,238 |   |      |   | 151,682 |  
|                                                                                                                                                               |  |             
|Federal Home Loan Bank advances                                                                                                                                |  |              | 31,700  |   |      |   | 57,700  |  
|Other borrowings                                                                                                                                               |  |              |        |   |      |   | 41,800  |  
|Junior subordinated debenture                                                                                                                                  |  |              | 5,155   |   |      |   | 5,155   |  
|Advanced payment by borrowers for taxes and insurance                                                                                                          |  |              | 806     |   |      |   | 945     |  
|Official checks                                                                                                                                                |  |              | 815     |   |      |   | 694     |  
|Other liabilities                                                                                                                                              |  |              | 756     |   |      |   | 693     |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total liabilities                                                                                                                                              |  |              | 187,470 |   |      |   | 258,669 |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Commitments and contingencies (Notes 1, 4, 9, 14 and 16)                                                                                                       |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Stockholders equity:                                                                                                                                          |  |              |         |   |      |   |         |  
|Preferred stock, no par value; 6,000,000 shares authorized, no shares issued or outstanding                                                                    |  |              |        |   |      |   |        |  
|Common stock, $.01 par value; 1,500,000 and 6,000,000 shares authorized in 2010 and 2009, 819,358 and 3,276,842 shares issued and
outstanding in 2010 and 2009 |  |              | 8       |   |      |   | 33      |  
|Additional paid-in capital                                                                                                                                     |  |              | 19,071  |   |      |   | 19,046  |  
|Accumulated deficit                                                                                                                                            |  |              | (16,244 | ) |      |   | (7,791  | )
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total stockholders equity                                                                                                                                     |  |              | 2,835   |   |      |   | 11,288  |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  
|                                                                                                                                                               |  |             
|Total liabilities and stockholders equity                                                                                                                     |  | $            | 190,305 |   |      | $ | 269,957 |  
|                                                                                                                                                               |  |              |         |   |      |   |         |  

See Accompanying Notes to Consolidated Financial Statements.



F-3



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Operations

(In thousands, except share amounts)



|                                                                                    |  |                         |        |   |      |   |         |  
|----------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------- | -
|                                                                                    |  | Year Ended December 31, |       
|                                                                                    |  | 2010                    |        |   | 2009 |  
|Interest income:                                                                    |  |                         |        |   |      |   |         |  
|Loans                                                                               |  | $                       | 6,301  |   |      | $ | 8,986   |  
|Securities                                                                          |  |                         | 2,409  |   |      |   | 4,985   |  
|Other                                                                               |  |                         | 77     |   |      |   | 35      |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Total interest income                                                               |  |                         | 8,787  |   |      |   | 14,006  |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Interest expense:                                                                   |  |                         |        |   |      |   |         |  
|Deposits                                                                            |  |                         | 2,783  |   |      |   | 3,626   |  
|Borrowings                                                                          |  |                         | 2,084  |   |      |   | 4,725   |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Total interest expense                                                              |  |                         | 4,867  |   |      |   | 8,351   |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Net interest income                                                                 |  |                         | 3,920  |   |      |   | 5,655   |  
|                                                                                    |  |                        
|Provision for loan losses                                                           |  |                         | 3,645  |   |      |   | 15,794  |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Net interest income (expense) after provision for loan losses                       |  |                         | 275    |   |      |   | (10,139 | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Noninterest income:                                                                 |  |                         |        |   |      |   |         |  
|Service charges and fees                                                            |  |                         | 39     |   |      |   | 27      |  
|                                                                                    |  |                         |        |   |      |   |         |  
|Gain on sale of securities                                                          |  |                         | 1,350  |   |      |   |        |  
|                                                                                    |  |                         |        |   |      |   |         |  
|Other                                                                               |  |                         | 5      |   |      |   | 7       |  
|                                                                                    |  |                         |        |   |      |   |         |  
|Other-than-temporary impairment on securities available for sale:                   |  |                         |        |   |      |   |         |  
|Total other-than-temporary impairment of securities                                 |  |                         |       |   |      |   | (179    | )
|Less: Portion of other-than-temporary losses recognized in other comprehensive loss |  |                         |       |   |      |   |        |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Net impairment loss recognized in operations                                        |  |                         |       |   |      |   | (179    | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Total noninterest income (expense)                                                  |  |                         | 1,394  |   |      |   | (145    | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Noninterest expenses:                                                               |  |                         |        |   |      |   |         |  
|Salaries and employee benefits                                                      |  |                         | 1,857  |   |      |   | 2,053   |  
|Occupancy and equipment                                                             |  |                         | 586    |   |      |   | 614     |  
|Data processing                                                                     |  |                         | 202    |   |      |   | 173     |  
|Professional fees                                                                   |  |                         | 1,732  |   |      |   | 605     |  
|Insurance                                                                           |  |                         | 186    |   |      |   | 42      |  
|Stationary and supplies                                                             |  |                         | 42     |   |      |   | 41      |  
|Foreclosed real estate expenses                                                     |  |                         | 469    |   |      |   | 17      |  
|Regulatory assessment                                                               |  |                         | 642    |   |      |   | 511     |  
|Loss on early extinguishment of debt                                                |  |                         | 3,699  |   |      |   |        |  
|Other                                                                               |  |                         | 358    |   |      |   | 642     |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Total noninterest expenses                                                          |  |                         | 9,773  |   |      |   | 4,698   |  
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Loss before income taxes (benefit)                                                  |  |                         | (8,104 | ) |      |   | (14,982 | )
|                                                                                    |  |                        
|Income taxes (benefit)                                                              |  |                         | 349    |   |      |   | (3,501  | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Net loss                                                                            |  | $                       | (8,453 | ) |      | $ | (11,481 | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Net loss per share:                                                                 |  |                         |        |   |      |   |         |  
|Basic                                                                               |  | $                       | (10.32 | ) |      | $ | (14.01  | )
|                                                                                    |  |                         |        |   |      |   |         |  
|                                                                                    |  |                        
|Diluted                                                                             |  | $                       | (10.32 | ) |      | $ | (14.01  | )
|                                                                                    |  |                         |        |   |      |   |         |  

See Accompanying Notes to Consolidated Financial Statements.



F-4



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Stockholders Equity

Years Ended December 31, 2010 and 2009

(Dollars in thousands)



|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|------------------------------------------------------------ |  | ------------ | ---------- | - | ----------------- | - | --- | ---------------------------- |  | - | ----------------------------- |  |  | ------------------ | ------- | - | ------ | - | -- | - |  | - | ------- | -
|                                                             |  | Common Stock |            |   | AdditionalPaid-In |   |     | RetainedEarnings(Accumulated |  |   | AccumulatedOtherComprehensive |  |  | TotalStockholders |        
|                                                             |  | Shares       |            |   | Amount            |   |     | Capital                      |  |   | Deficit)                      |  |  | Loss               |         |   | Equity |  
|                                                             |  |              |            |   |                   |  
|Balance at December 31, 2008                                 |  |              | 3,120,992  |   |                   | $ | 31  |                              |  | $ | 18,494                        |  |  | $                  | 4,244   |   |        | $ | (4 | ) |  | $ | 22,765  |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|5% stock dividend (fractional shares paid in cash)           |  |              | 155,850    |   |                   |   | 2   |                              |  |   | 552                           |  |  |                    | (554    | ) |        |   |   |   |  |   |        |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|Comprehensive loss:                                          |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|Net loss                                                     |  |              |           |   |                   |   |    |                              |  |   |                              |  |  |                    | (11,481 | ) |        |   |   |   |  |   | (11,481 | )
|                                                             |  |              |            |   |                   |  
|Net change in unrealized loss on security available for sale |  |              |           |   |                   |   |    |                              |  |   |                              |  |  |                    |        |   |        |   | 4  |   |  |   | 4       |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|Comprehensive loss                                           |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   | (11,477 | )
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|Balance at December 31, 2009                                 |  |              | 3,276,842  |   |                   | $ | 33  |                              |  | $ | 19,046                        |  |  | $                  | (7,791  | ) |        | $ |   |   |  | $ | 11,288  |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|Net loss                                                     |  |              |           |   |                   |   |    |                              |  |   |                              |  |  |                    | (8,453  | ) |        |   |   |   |  |   | (8,453  | )
|                                                             |  |              |            |   |                   |  
|Reverse stock split (1 for 4 shares)                         |  |              | (2,457,484 | ) |                   |   | (25 | )                            |  |   | 25                            |  |  |                    |        |   |        |   |   |   |  |   |        |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  
|                                                             |  |              |            |   |                   |  
|Balance at December 31, 2010                                 |  |              | 819,358    |   |                   | $ | 8   |                              |  | $ | 19,071                        |  |  | $                  | (16,244 | ) |        | $ |   |   |  | $ | 2,835   |  
|                                                             |  |              |            |   |                   |   |     |                              |  |   |                               |  |  |                    |         |   |        |   |    |   |  |   |         |  

See Accompanying Notes to Consolidated Financial Statements.



F-5



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows

(In thousands)



|                                                                                 |  |                         |         |   |      |   |         |  
|-------------------------------------------------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | -
|                                                                                 |  | Year Ended December 31, |        
|                                                                                 |  | 2010                    |         |   | 2009 |  
|Cash flows from operating activities:                                            |  |                         |         |   |      |   |         |  
|Net loss                                                                         |  | $                       | (8,453  | ) |      | $ | (11,481 | )
|Adjustments to reconcile net loss to net cash provided by operating activities:  |  |                         |         |   |      |   |         |  
|Depreciation and amortization                                                    |  |                         | 158     |   |      |   | 186     |  
|Provision for loan losses                                                        |  |                         | 3,645   |   |      |   | 15,794  |  
|Deferred income tax (benefit)                                                    |  |                         | 772     |   |      |   | (204    | )
|Decrease (increase) in income taxes receivable                                   |  |                         | 2,805   |   |      |   | (3,577  | )
|Gain on sale of securities                                                       |  |                         | (1,350  | ) |      |   |        |  
|Loss on early extinguishment of debt                                             |  |                         | 3,699   |   |      |   |        |  
|Net amortization of fees, premiums and discounts                                 |  |                         | (345    | ) |      |   | (137    | )
|Decrease in accrued interest receivable                                          |  |                         | 444     |   |      |   | 189     |  
|(Increase) decrease in other assets                                              |  |                         | (249    | ) |      |   | 317     |  
|Loss on sale of foreclosed real estate                                           |  |                         | 243     |   |      |   |        |  
|Provision for losses on foreclosed real estate                                   |  |                         |        |   |      |   | 8       |  
|Write-down of foreclosed real estate                                             |  |                         | 126     |   |      |   |        |  
|Other-than-temporary impairment of securities                                    |  |                         |        |   |      |   | 179     |  
|Increase (decrease) in official checks and other liabilities                     |  |                         | 184     |   |      |   | (73     | )
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Net cash provided by operating activities                                        |  |                         | 1,679   |   |      |   | 1,201   |  
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Cash flows from investing activities:                                            |  |                         |         |   |      |   |         |  
|Purchases of securities held to maturity                                         |  |                         | (24,328 | ) |      |   | (24,032 | )
|Principal repayments and calls of securities held to maturity                    |  |                         | 11,389  |   |      |   | 25,364  |  
|Proceeds from sale of securities                                                 |  |                         | 44,869  |   |      |   | 248     |  
|Net decrease in loans                                                            |  |                         | 16,740  |   |      |   | 5,074   |  
|Purchase of premises and equipment, net                                          |  |                         | (13     | ) |      |   | (33     | )
|Proceeds from sale of foreclosed real estate, net                                |  |                         | 1,951   |   |      |   |        |  
|Redemption (purchase) of Federal Home Loan Bank stock                            |  |                         | 378     |   |      |   | (25     | )
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Net cash provided by investing activities                                        |  |                         | 50,986  |   |      |   | 6,596   |  
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Cash flows from financing activities:                                            |  |                         |         |   |      |   |         |  
|Net (decrease) increase in deposits                                              |  |                         | (3,444  | ) |      |   | 36,757  |  
|Repayment of other borrowings                                                    |  |                         | (44,764 | ) |      |   |        |  
|Repayments of Federal Home Loan Bank advances                                    |  |                         | (26,735 | ) |      |   | (11,000 | )
|Net (decrease) increase in advanced payment by borrowers for taxes and insurance |  |                         | (139    | ) |      |   | 10      |  
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Net cash (used in) provided by financing activities                              |  |                         | (75,082 | ) |      |   | 25,767  |  
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Net (decrease) increase in cash and cash equivalents                             |  |                         | (22,417 | ) |      |   | 33,564  |  
|                                                                                 |  |                        
|Cash and cash equivalents at beginning of the year                               |  |                         | 36,784  |   |      |   | 3,220   |  
|                                                                                 |  |                         |         |   |      |   |         |  
|                                                                                 |  |                        
|Cash and cash equivalents at end of the year                                     |  | $                       | 14,367  |   |      | $ | 36,784  |  
|                                                                                 |  |                         |         |   |      |   |         |  

(continued)



F-6



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Consolidated Statements of Cash Flows, Continued

(In thousands)



|                                                                                                                         |  |                         |        |   |      |   |       | 
|------------------------------------------------------------------------------------------------------------------------ |  | ----------------------- | ------ | - | ---- | - | ----- | 
|                                                                                                                         |  | Year Ended December 31, |       
|                                                                                                                         |  | 2010                    |        |   | 2009 |  
|Supplemental disclosure of cash flow information:                                                                        |  |                         |        |   |      |   |       | 
|Cash paid (received) during the year for:                                                                                |  |                         |        |   |      |   |       | 
|Interest                                                                                                                 |  | $                       | 4,917  |   |      | $ | 8,527 | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Income taxes                                                                                                             |  | $                       | (3,228 | ) |      | $ | 300   | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Noncash transactions:                                                                                                    |  |                         |        |   |      |   |       | 
|Change in accumulated other comprehensive loss, net change in unrealized loss on security available for sale, net of
tax |  | $                       |       |   |      | $ | 4     | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Common stock dividend                                                                                                    |  | $                       |       |   |      | $ | 554   | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Loan transferred to foreclosed real estate                                                                               |  | $                       | 533    |   |      | $ | 5,400 | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Loans made in connection with sale of foreclosed real estate                                                             |  | $                       | 485    |   |      | $ |      | 
|                                                                                                                         |  |                         |        |   |      |   |       | 
|                                                                                                                         |  |                        
|Reverse stock split                                                                                                      |  | $                       | 25     |   |      | $ |      | 
|                                                                                                                         |  |                         |        |   |      |   |       | 

See Accompanying Notes to Consolidated Financial Statements.



F-7



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2010 and 2009 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. The Banks wholly-owned subsidiaries are OB Real Estate Management, LLC, OB Real Estate Holdings, LLC
and OB Real Estate Holding 1503, LLC, all of which were formed in 2009 and OB Real Estate Holdings 1695, OB Real Estate Holdings 1669, OB Real Estate Holdings 1645 and OB Real Estate Holdings 1565, all formed in 2010. The Holding Companys only
business is the operation of the Bank and its subsidiaries(collectively, the Company). The Banks deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation (FDIC). The Bank offers a
variety of community banking services to individual and corporate customers through its three banking offices located in Broward County, Florida. OB Real Estate Management, LLC is primarily engaged to manage foreclosed real estate. This subsidiary
had no activity in 2010 and 2009. All real estate holding subsidiaries are primarily engaged to hold and dispose of foreclosed real estate.

Going Concern. The Companys recent and continuing increases in nonperforming assets, declining net interest margin, continuing high levels of noninterest expenses related to the credit
problems, and eroding regulatory capital raise substantial doubt about the Companys ability to continue as a going concern.

The Company has not complied with its regulatory capital requirements set forth in the Consent Order issued by the Federal Deposit Insurance Corporation (FDIC) and the Florida Office of
Financial Regulation (OFR) and Prompt Corrective Action provisions discussed in Note 14, Regulatory Matters. The Company needs to raise substantial additional capital. Since January 2011, the Company has conducted a private placement
offering of its common stock. There can be no assurance, however, that the Company will raise sufficient capital, if any, in the private placement offering, to meet the Banks capital requirements. Further, there can be no assurance that other
financing alternatives or recapitalization plans will be available, forthcoming or successfully implemented, or receive regulatory approval.

Basis of Presentation. The accompanying consolidated financial statements include the accounts of the Holding Company, the Bank, OB Real Estate Management, LLC, OB Real Estate Holdings, LLC,
OB Real Estate Holdings 1503, LLC, OB Real Estate Holdings 1695, OB Real Estate Holdings 1669, OB Real Estate Holdings 1645 and OB Real Estate Holdings 1565. 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 (GAAP), 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 and the valuation of foreclosed real estate and the deferred tax asset.



(continued)



F-8



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Cash and Cash Equivalents. For purposes of the
consolidated statements of cash flows, cash and cash equivalents include cash and balances due from banks, interest-bearing deposits and federal funds sold, all of which mature within ninety days.

The Company may be 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, 2010 and 2009.

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 operations. 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 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.



(continued)



F-9



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Loans, Continued. 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 operations. Loan losses are
charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

The allowance for loan losses is evaluated on a regular basis by management and is based upon managements periodic review of the collectability 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 impaired. For such loans, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired
loans are lower than the carrying value of those loans. The general component covers all other loans and is based on historical loss experience adjusted for qualitative factors.

For nonspecific loans in all classes, the general component is based on historical loss experience and adjusted for certain qualitative
factors such as economic conditions and other trends or uncertainties that could affect managements estimate of probable loss.

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, land and construction and multi-family real estate 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.



(continued)



F-10



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Allowance for Loan Losses, Continued. 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 Real Estate.Real estate acquired through, or in lieu of, loan foreclosure is to be sold and is
initially recorded at fair value less estimated selling costs at the date of foreclosure establishing a new cost basis. After foreclosure, valuations are periodically performed by management and the real estate is carried at the lower of the new
cost basis or fair value less cost to sell. Revenue and expenses from operations are included in the consolidated statements of operations.

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 (See Note 7).

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.

Transfer
of Financial Assets.Transfers of financial assets or a participating interest in an entire financial asset 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. A participating interest is a portion of an entire financial asset that (1) conveys
proportionate ownership rights with equal priority to each participating interest holder (2) involves no recourse (other than standard representations and warranties) to, or subordination by, any participating interest holder, and (3) does
not entitle any participating interest holder to receive cash before any other participating interest holder.



(continued)



F-11



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Income Taxes. There are two components of income tax
expense: current and deferred. Current income tax expense reflects taxes to be paid or refunded for the current period by applying the provisions of the enacted tax law to the taxable income or excess of deductions over revenues. The Company
determines deferred income taxes using the liability (or balance sheet) method. Under this method, the net deferred tax asset or liability is based on the tax effects of the differences between the book and tax bases of assets and liabilities, and
enacted changes in tax rates and laws are recognized in the period in which they occur. Deferred income tax expense results from changes in deferred tax assets and liabilities between periods.

Deferred tax assets are recognized if it is more likely than not, based on the technical merits, that the tax position will be realized or
sustained upon examination. The term more likely than not means a likelihood of more than 50 percent; the terms examined and upon examination also include resolution of the related appeals or litigation processes, if any. A tax position that meets
the more-likely-than-not recognition threshold is initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 percent likelihood of being realized upon settlement with a taxing authority that has full
knowledge of all relevant information. The determination of whether or not a tax position has met the more-likely-than-not recognition threshold considers the facts, circumstances, and information available at the reporting date and is subject to
managements judgment. Deferred tax assets are reduced by a valuation allowance if, based on the weight of evidence available, it is more likely than not that some portion or all of a deferred tax asset will not be realized.

On January 1, 2009, the Company adopted accounting guidance relating to accounting for uncertainty in income taxes, which sets out a
consistent framework to determine the appropriate level of tax reserves to maintain for uncertain tax positions. As of December 31, 2010, management is not aware of any uncertain tax positions that would have a material effect on the
Companys consolidated financial statements.

The Company recognizes interest and penalties on income taxes as a component
of income tax (benefit) expense.

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

Advertising. The Company expenses all media advertising as incurred. Media advertising expense included in other noninterest expenses in the accompanying consolidated statements of
operations was approximately $10,100 and $15,000 during the years ended December 31, 2010 and 2009, respectively.



(continued)



F-12



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Stock Compensation Plan. The Company has adopted the fair
value recognition method and expenses the fair value of any stock options as they vest. Under the fair value recognition method, the Company recognizes stock-based compensation in the accompanying consolidated statements of operations. At
December 31, 2005, all outstanding options had vested.

Loss Per Share. Basic loss per
share is computed on the basis of the weighted-average number of common shares outstanding. In 2010 and 2009, basic and diluted loss per share is the same due to the net loss incurred by the Company. All amounts reflect the one-for-four reverse
stock split declared in October 2010 and the 5% stock dividend declared in May 2009. Loss per common share has been computed based on the following:



|                                                                                                               |  |                         |         |  |      |  |         | 
|-------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------- |  | ---- |  | ------- | 
|                                                                                                               |  | Year Ended December 31, |        
|                                                                                                               |  | 2010                    |         |  | 2009 | 
|Weighted-average number of common shares outstanding used to calculate basic and diluted loss per common share |  |                         | 819,358 |  |      |  | 819,358 | 
|                                                                                                               |  |                         |         |  |      |  |         | 

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. Such financial instruments are recorded in the consolidated financial statements when they are funded.

Fair Value Measurements. Fair value is the exchange price that would be received for an asset or paid to
transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy requires the Company to maximize the
use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The hierarchy describes three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include
quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities that are not active; and model-driven valuations whose inputs are observable or whose significant value drivers are
observable. Valuations may be obtained from, or corroborated by, third-party pricing services.

Level 3: Unobservable inputs to
measure fair value of assets and liabilities for which there is little, if any market activity at the measurement date, using reasonable inputs and assumptions based upon the best information at the time, to the extent that inputs are available
without undue cost and effort.



(continued)



F-13



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Fair Value Measurements, Continued. The following
describes valuation methodologies used for assets measured at fair value:

Impaired Loans. The Companys impaired
loans are normally collateral dependent and, as such, are carried at the lower of the Companys net recorded investment in the loan or fair market value of the collateral less estimated selling costs. Estimates of fair value are determined
based on a variety of information, including the use of available appraisals, estimates of market value by licensed appraisers or local real estate brokers and the knowledge and experience of the Companys management related to values of
properties in the Companys market areas. Management takes into consideration the type, location and occupancy of the property as well as current economic conditions in the area the property is located in assessing estimates of fair value.
Accordingly, fair value estimates for impaired loans are classified as Level 3.

Foreclosed Real Estate.Estimates of
fair values are determined based on a variety of information, including the use of available appraisals, estimates of market value by licensed appraisers or local real estate brokers and the knowledge and experience of the Companys management
related to values of properties in the Companys market areas. Management takes into consideration the type, location and occupancy of the property as well as current economic conditions in the area the property is located in assessing
estimates of fair value. Accordingly, the fair values estimates for foreclosed real estate are classified as Level 3.

Fair Values of Financial Instruments. 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 the framework for measuring fair value established by GAAP.

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.

Accrued Interest Receivable.The carrying amount of accrued interest approximates its fair value.



(continued)



F-14



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Fair Values of Financial Instruments, Continued.



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 of time deposits.

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.

Comprehensive Loss. GAAP generally requires that recognized revenue, expenses, gains and losses be included in net loss. 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 loss, are components of comprehensive loss. The only component of
other comprehensive loss is the net change in the unrealized loss on the security available for sale.

Recent Pronouncements.In January 2010, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update (ASU) 2010-06, Improving Disclosures about Fair Value Measurements (Topic 820), which amends the guidance for fair value measurements and disclosures. This guidance requires a reporting entity to
disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and to describe the reasons for the transfers. Furthermore, it requires a reporting entity to present separately information about
purchases, sales, issuances, and settlements in the reconciliation for fair value measurements using significant unobservable inputs; clarifies existing fair value disclosures about the level of disaggregation and about inputs and valuation
techniques used to measure fair value; and amends guidance on employers disclosures about postretirement benefit plan assets to require that disclosures be provided by classes of assets instead of by major categories of assets. It was
effective for annual reporting periods beginning January 1, 2010, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of activity in Level 3 fair value measurements. Those disclosures were effective
January 1, 2011. In the period of initial adoption, entities will not be required to provide the amended disclosures for any previous periods presented for comparative purposes. The adoption of this ASU had no effect on the Companys
consolidated financial statements.



(continued)



F-15



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(1) Summary of Significant Accounting Policies, Continued



Recent Pronouncements, Continued.In July 2010, the
FASB issued ASU No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. The new disclosures will require significantly more information about credit quality
in a financial institutions loan portfolio. This statement addresses only disclosures and does not change recognition or measurement of the allowance. For public entities, the disclosures as of the end of a reporting period was effective for
interim and annual reporting periods ending on December 31, 2010. The disclosures about activity that occurs during a reporting period was effective for interim and annual reporting periods beginning on or after January 1, 2011. For
nonpublic entities, the disclosures are effective for annual reporting periods ending on or after December 15, 2011. The adoption of the ASU had no material impact on the Companys consolidated financial statements.

(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):



|                             |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|---------------------------- |  | ------------- | ------ |  | -------------------- | - | ----- | --------------------- |  | - | --------- | - |  | - | ------ | 
|                             |  | AmortizedCost |        |  | GrossUnrealizedGains |   |       | GrossUnrealizedLosses |  |   | FairValue |  
|At December 31, 2010:        |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Securities Held to Maturity: |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Mortgage-backed securities   |  | $             | 50,957 |  |                      | $ | 130   |                       |  | $ | (2,348    | ) |  | $ | 48,739 | 
|State of Israel bond         |  |               | 100    |  |                      |   |      |                       |  |   |          |   |  |   | 100    | 
|                             |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|                             |  |               |        | 
|                             |  | $             | 51,057 |  |                      | $ | 130   |                       |  | $ | (2,348    | ) |  | $ | 48,839 | 
|                             |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|                             |  |               |        | 
|At December 31, 2009:        |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Securities Held to Maturity: |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|Mortgage-backed securities   |  | $             | 81,041 |  |                      | $ | 1,567 |                       |  | $ | (5,724    | ) |  | $ | 76,884 | 
|State of Israel bond         |  |               | 100    |  |                      |   |      |                       |  |   |          |   |  |   | 100    | 
|                             |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 
|                             |  |               |        | 
|                             |  | $             | 81,141 |  |                      | $ | 1,567 |                       |  | $ | (5,724    | ) |  | $ | 76,984 | 
|                             |  |               |        |  |                      |   |       |                       |  |   |           |   |  |   |        | 

The following summarizes sales of securities available for sale (in thousands):



|                                     |  |                         |   |  |      |   |     | 
|------------------------------------ |  | ----------------------- | - |  | ---- | - | --- | 
|                                     |  | Year Ended December 31, |  
|                                     |  | 2010                    |   |  | 2009 |  
|Proceeds from sales of securities    |  | $                       |  |  |      | $ | 248 | 
|                                     |  |                         |   |  |      |   |     | 
|                                     |  |                        
|Gross gains from sale of securities  |  |                         |  |  |      |   |    | 
|Gross losses from sale of securities |  |                         |  |  |      |   |    | 
|                                     |  |                         |   |  |      |   |     | 
|                                     |  |                        
|Net gains from sale of securities    |  | $                       |  |  |      | $ |    | 
|                                     |  |                         |   |  |      |   |     | 



(continued)



F-16



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(2) Securities, Continued



During the first quarter of 2010, the Company sold twenty-two held to
maturity securities in order to downsize and deleverage its balance sheet. This action was taken in an effort to comply with a significant increase in the regulatory capital requirements imposed on the Bank under a Consent Order issued by the FDIC
and OFR (see Note 14).

The following summarizes sales of securities held to maturity (in thousands):



|                                     |  |                         |        |   |      |   |   | 
|------------------------------------ |  | ----------------------- | ------ | - | ---- | - | - | 
|                                     |  | Year Ended December 31, |       
|                                     |  | 2010                    |        |   | 2009 |  
|                                     |  |                        
|Proceeds from sales of securities    |  | $                       | 44,869 |   |      | $ |  | 
|                                     |  |                         |        |   |      |   |   | 
|                                     |  |                        
|Gross gains from sale of securities  |  |                         | 1,492  |   |      |   |  | 
|Gross losses from sale of securities |  |                         | (142   | ) |      |   |  | 
|                                     |  |                         |        |   |      |   |   | 
|                                     |  |                        
|Net gains from sale of securities    |  | $                       | 1,350  |   |      | $ |  | 
|                                     |  |                         |        |   |      |   |   | 

Securities with gross unrealized losses at December 31, 2010, aggregated by investment
category and length of time that individual securities have been in a continuous loss position, is as follows (in thousands):



|                           |  |                         |     |  |                    |   |        |                       |  |   |           |  |  |   |        | 
|-------------------------- |  | ----------------------- | --- |  | ------------------ | - | ------ | --------------------- |  | - | --------- |  |  | - | ------ | 
|                           |  | Less Than Twelve Months |     |  | Over Twelve Months |  
|                           |  | GrossUnrealizedLosses   |     |  | FairValue          |   |        | GrossUnrealizedLosses |  |   | FairValue | 
|                           |  |                         |     | 
|Mortgage-backed securities |  | $                       | 268 |  |                    | $ | 19,890 |                       |  | $ | 2,080     |  |  | $ | 20,264 | 
|                           |  |                         |     |  |                    |   |        |                       |  |   |           |  |  |   |        | 



(continued)



F-17



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(2) Securities, Continued



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. A security is impaired if the fair value is less than its carrying value at the financial statement date. When a security is impaired, the
Company determines whether this impairment is temporary or other-than-temporary. In estimating other-than-temporary impairment (OTTI) losses, management assesses whether it intends to sell, or it is more likely than not that it will be
required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of these criteria is met, the entire difference between amortized cost and fair value is recognized in operations. For securities that
do not meet the aforementioned criteria, the amount of impairment recognized in operations is limited to the amount related to credit losses, while impairment related to other factors is recognized in other comprehensive loss. Management utilizes
cash flow models to segregate impairments to distinguish between impairment related to credit losses and impairment related to other factors. To assess for OTTI, management considers, among other things, (i) the severity and duration of the
impairment; (ii) the ratings of the security; (iii) the overall transaction structure (the Companys position within the structure, the aggregate, near-term financial performance of the underlying collateral, delinquencies, defaults,
loss severities, recoveries, prepayments, cumulative loss projections, and discounted cash flows); and (iv) the timing and magnitude of a break in modeled cash flows.

The unrealized losses on eighteen investment securities were caused by market conditions. It is expected that the
securities would not be settled at a price less than the book value of the investments. Because the decline in fair value is attributable to market conditions 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.

In evaluating mortgage-backed securities with unrealized losses greater than 12 months, management utilizes various resources, including input from independent third party firms to perform an analysis of
expected future cash flows. The process begins with an assessment of the underlying collateral backing the mortgage pools. Management develops specific assumptions using as much market data as possible and includes internal estimates as well as
estimates published by rating agencies and other third-party sources. The data for the individual borrowers in the underlying mortgage pools are generally segregated by state, FICO score at issue, loan to value at issue and income documentation
criteria. Mortgage pools are evaluated for current and expected levels of delinquencies and foreclosures, based on where they fall in the proscribed data set of FICO score, geographics, LTV and documentation type and a level of loss severity is
assigned to each security based on its experience. The above-described historical data is used to develop current and expected measures of cumulative default rates as well as ultimate loss frequency and severity within the underlying mortgages. This
reveals the expected future cash flows within the mortgage pool. The data described above is then input to an industry recognized model to assess the behavior of the particular security tranche owned by the Company. Significant inputs in this
process include the structure of any subordination structures, if applicable, and are dictated by the structure of each particular security as laid out in the offering documents. The forecasted cash flows from the mortgage pools are input through
the security structuring model to derive expected cash flows for the specific security owned by the Company to determine if the future cash flows are expected to exceed the book value of the security. The values for the significant inputs are
updated on a regular basis.



(continued)



F-18



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(2) Securities, Continued



The key base assumptions for mortgage-backed securities used during
2010 are in the table below:



|                        |  |  |           |      
|----------------------- |  |  | --------- | -----
|Prepayment rate         |  |  | 12-69     | % PSA
|Loss severity           |  |  | 27-68     | %    
|Cumulative default rate |  |  | 0.81-6.04 | %    
|Principal write-down    |  |  | 0 -.04    | %    

Loss
severity rates are estimated based on collateral characteristics and generally range from 27-68% for single family first mortgages.

In 2009, the Company recorded a $179,000 other-than-temporary impairment (OTTI) charge to adjust for credit losses relating to five mortgage-backed securities held to maturity with a total
remaining principal balance of $9.5 million and fair value of $8.6 million. Based on its detailed analysis, management has determined that the fair market value is not significantly depressed and therefore the remaining decline was not recorded as
an adjustment to other comprehensive loss. There was no OTTI charge in 2010.

The table below provides a
cumulative roll forward of credit losses recognized in operations for the year ended December 31, 2010 relating to the Companys held to maturity debt securities (in thousands):



|                                                                  |  |   |     | 
|----------------------------------------------------------------- |  | - | --- | 
|Balance at December 31, 2009                                      |  | $ | 179 | 
|Additions for credit losses on securities not previously impaired |  |   |    | 
|                                                                  |  |   |     | 
|                                                                  | 
|Balance at December 31, 2010                                      |  | $ | 179 | 
|                                                                  |  |   |     | 



(continued)



F-19



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(3) Loans

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



|                                           |  |                 |         |   |      |   |         |  
|------------------------------------------ |  | --------------- | ------- | - | ---- | - | ------- | -
|                                           |  | At December 31, |        
|                                           |  | 2010            |         |   | 2009 |  
|                                           |  |                
|Residential real estate                    |  | $               | 40,130  |   |      | $ | 55,915  |  
|Multi-family real estate                   |  |                 | 4,213   |   |      |   | 5,162   |  
|Commercial real estate                     |  |                 | 55,119  |   |      |   | 58,901  |  
|Land and construction                      |  |                 | 17,292  |   |      |   | 22,355  |  
|Consumer                                   |  |                 | 358     |   |      |   | 836     |  
|                                           |  |                 |         |   |      |   |         |  
|                                           |  |                
|Total loans                                |  |                 | 117,112 |   |      |   | 143,169 |  
|                                           |  |                
|Add (deduct):                              |  |                 |         |   |      |   |         |  
|Net deferred loan fees, costs and premiums |  |                 | 134     |   |      |   | 322     |  
|Loan discounts                             |  |                 | (1      | ) |      |   | (2      | )
|Allowance for loan losses                  |  |                 | (3,703  | ) |      |   | (9,363  | )
|                                           |  |                 |         |   |      |   |         |  
|                                           |  |                
|Loans, net                                 |  | $               | 113,542 |   |      | $ | 134,126 |  
|                                           |  |                 |         |   |      |   |         |  

An analysis of the change in the allowance for loan losses for the years ended
December 31, 2010 and 2009 follows (in thousands):



|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|-------------------------------------- |  | ------------------------------- | ------ | - | ---------------------- | - | ----- | -------------------- |  | - | ------------------- | - |  | -------- | ------ | - | ----- | - | --- | ---- |  | - | ------ | - |  | - | ------ | -
|                                       |  | For the Year Ended December 31, |       
|                                       |  | 2010                            |        |   |                        |  
|                                       |  | ResidentialRealEstate           |        |   | Multi-FamilyRealEstate |   |       | CommercialRealEstate |  |   | LandandConstruction |   |  | Consumer |        |   | Total |   |     | 2009 | 
|                                       |  |                                 |        |   |                        |   |      
|Beginning balance                      |  | $                               | 2,049  |   |                        | $ | 489   |                      |  | $ | 1,466               |   |  | $        | 5,227  |   |       | $ | 132 |      |  | $ | 9,363  |   |  | $ | 1,906  |  
|Provision (credit) for loan losses     |  |                                 | 878    |   |                        |   | (64   | )                    |  |   | 2,405               |   |  |          | 510    |   |       |   | (84 | )    |  |   | 3,645  |   |  |   | 15,794 |  
|Charge-offs                            |  |                                 | (1,663 | ) |                        |   | (154  | )                    |  |   | (2,330              | ) |  |          | (5,223 | ) |       |   | (54 | )    |  |   | (9,424 | ) |  |   | (8,337 | )
|Recoveries                             |  |                                 | 21     |   |                        |   | 11    |                      |  |   | 1                   |   |  |          |       |   |       |   | 86  |      |  |   | 119    |   |  |   |       |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|                                       |  |                                 |        |   |                        |   |      
|Ending balance                         |  | $                               | 1,285  |   |                        | $ | 282   |                      |  | $ | 1,542               |   |  | $        | 514    |   |       | $ | 80  |      |  | $ | 3,703  |   |  | $ | 9,363  |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|                                       |  |                                 |        |   |                        |   |      
|Individually evaluated for impairment: |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|Recorded investment                    |  | $                               | 12,608 |   |                        | $ |      |                      |  | $ | 21,215              |   |  | $        | 10,649 |   |       | $ | 249 |      |  | $ | 44,721 |   |  | $ | 43,501 |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|Balance in allowance for loan losses   |  | $                               |       |   |                        | $ |      |                      |  | $ | 11                  |   |  | $        | 75     |   |       | $ |    |      |  | $ | 86     |   |  | $ | 5,607  |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|                                       |  |                                 |        |   |                        |   |      
|Collectively evaluated for impairment: |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|Recorded investment                    |  | $                               | 27,522 |   |                        | $ | 4,213 |                      |  | $ | 33,904              |   |  | $        | 6,643  |   |       | $ | 109 |      |  | $ | 72,391 |   |  | $ | 99,668 |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  
|Balance in allowance for loan losses   |  | $                               | 1,285  |   |                        | $ | 282   |                      |  | $ | 1,531               |   |  | $        | 439    |   |       | $ | 80  |      |  | $ | 3,617  |   |  | $ | 3,756  |  
|                                       |  |                                 |        |   |                        |   |       |                      |  |   |                     |   |  |          |        |   |       |   |     |      |  |   |        |   |  |   |        |  



(continued)



F-20



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(3) Loans, Continued



The following summarizes the loan credit quality at December 31,
2010 (in thousands):



|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|------------------------------------ |  | ---- | ------ |  | ------------------------------------ | - | ------ | ----------- |  | - | -------- |  |  | ---- | - |  | ----- | - | - |  |  | - | ------- | 
|                                     |  | Pass |        |  | OLEM(Other LoansEspeciallyMentioned) |   |        | Substandard |  |   | Doubtful |  |  | Loss |   |  | Total |  
|Residential real estate:             |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|Closed-end mortgages first mortgages |  | $    | 23,542 |  |                                      | $ | 3,697  |             |  | $ | 9,691    |  |  | $    |  |  |       | $ |  |  |  | $ | 36,930  | 
|Closed-end second mortgages          |  |      | 3,200  |  |                                      |   |       |             |  |   |         |  |  |      |  |  |       |   |  |  |  |   | 3,200   | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Total residential real estate        |  |      | 26,742 |  |                                      |   | 3,697  |             |  |   | 9,691    |  |  |      |  |  |       |   |  |  |  |   | 40,130  | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Multi-family real estate             |  |      | 4,213  |  |                                      |   |       |             |  |   |         |  |  |      |  |  |       |   |  |  |  |   | 4,213   | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Commercial real estate:              |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|Owner-occupied                       |  |      | 12,960 |  |                                      |   | 1,238  |             |  |   | 1,837    |  |  |      |  |  |       |   |  |  |  |   | 16,035  | 
|Non-owner-occupied                   |  |      | 18,042 |  |                                      |   | 3,638  |             |  |   | 17,404   |  |  |      |  |  |       |   |  |  |  |   | 39,084  | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Total commercial real estate         |  |      | 31,002 |  |                                      |   | 4,876  |             |  |   | 19,241   |  |  |      |  |  |       |   |  |  |  |   | 55,119  | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Land and construction                |  |      | 4,976  |  |                                      |   | 1,667  |             |  |   | 10,649   |  |  |      |  |  |       |   |  |  |  |   | 17,292  | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Consumer:                            |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|Non-real estate secured              |  |      | 99     |  |                                      |   |       |             |  |   | 151      |  |  |      |  |  |       |   |  |  |  |   | 250     | 
|Real estate secured                  |  |      | 108    |  |                                      |   |       |             |  |   |         |  |  |      |  |  |       |   |  |  |  |   | 108     | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Total consumer                       |  |      | 207    |  |                                      |   |       |             |  |   | 151      |  |  |      |  |  |       |   |  |  |  |   | 358     | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 
|                                     |  |      |        |  |                                      |  
|Total                                |  | $    | 67,140 |  |                                      | $ | 10,240 |             |  | $ | 39,732   |  |  | $    |  |  |       | $ |  |  |  | $ | 117,112 | 
|                                     |  |      |        |  |                                      |   |        |             |  |   |          |  |  |      |   |  |       |   |   |  |  |   |         | 

Internally assigned loan grades are defined as follows:

Pass  a Pass loans primary source of loan repayment is satisfactory, with secondary sources very likely to
be realized if necessary. These are loans that conform in all aspects to bank policy and regulatory requirements, and no repayment risk has been identified.

OLEM (Other Loans Especially Mentioned)  an Other Loan Especially Mentioned has potential weaknesses that deserve managements close attention. If left uncorrected, these potential weaknesses
may result in the deterioration of the repayment prospects for the asset or the Companys credit position at some future date.

Substandard  a Substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a
well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.



(continued)



F-21



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(3) Loans, Continued



Doubtful  a loan classified Doubtful has all the weaknesses
inherent in one classified Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. This
classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be affected in the future. The
Company fully charges off any loan classified as Doubtful.

Loss  a loan classified Loss is considered
uncollectible and of such little value that continuance as a bankable asset is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing
off this basically worthless asset even though partial recovery may be affected in the future. The Company fully charges off any loan classified as Loss.

Age analysis of past-due loans is as follows at December 31, 2010 (in thousands):



|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|--------------------------- |  | ----------------- | ----- |  | ----------------- | - | - | -------------------------- |  | - | ------------ |  |  | ------- | ----- |  | --------------- | - | ------ | ---------- |  | - | ------ |  |  | - | ------- | 
|                            |  | Accruing Loans    |       |  |                   |   |   |                            | 
|                            |  | 30-59DaysPast Due |       |  | 60-89DaysPast Due |   |   | GreaterThan 90DaysPast Due |  |   | TotalPastDue |  |  | Current |       |  | NonaccrualLoans |   |        | TotalLoans | 
|Residential real estate:    |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|Closed-end first mortgages  |  | $                 |      |  |                   | $ |  |                            |  | $ |             |  |  | $       |      |  |                 | $ | 27,239 |            |  | $ | 9,691  |  |  | $ | 36,930  | 
|Closed-end second mortgages |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 3,200  |            |  |   |       |  |  |   | 3,200   | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Subtotal                    |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 30,439 |            |  |   | 9,691  |  |  |   | 40,130  | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Multi-family real estate    |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 4,213  |            |  |   |       |  |  |   | 4,213   | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Commercial real estate:     |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|Owner-occupied              |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 14,198 |            |  |   | 1,837  |  |  |   | 16,035  | 
|Non-owner-occupied          |  |                   | 3,195 |  |                   |   |  |                            |  |   |             |  |  |         | 3,195 |  |                 |   | 20,881 |            |  |   | 15,008 |  |  |   | 39,084  | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Subtotal                    |  |                   | 3,195 |  |                   |   |  |                            |  |   |             |  |  |         | 3,195 |  |                 |   | 35,079 |            |  |   | 16,845 |  |  |   | 55,119  | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Land and construction       |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 9,449  |            |  |   | 7,843  |  |  |   | 17,292  | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Consumer:                   |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|Non-real estate secured     |  |                   | 99    |  |                   |   |  |                            |  |   |             |  |  |         | 99    |  |                 |   |       |            |  |   | 151    |  |  |   | 250     | 
|Real estate secured         |  |                   |      |  |                   |   |  |                            |  |   |             |  |  |         |      |  |                 |   | 108    |            |  |   |       |  |  |   | 108     | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Subtotal                    |  |                   | 99    |  |                   |   |  |                            |  |   |             |  |  |         | 99    |  |                 |   | 108    |            |  |   | 151    |  |  |   | 358     | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 
|                            |  |                   |       |  |                   |   |  
|Total                       |  | $                 | 3,294 |  |                   | $ |  |                            |  | $ |             |  |  | $       | 3,294 |  |                 | $ | 79,288 |            |  | $ | 34,530 |  |  | $ | 117,112 | 
|                            |  |                   |       |  |                   |   |   |                            |  |   |              |  |  |         |       |  |                 |   |        |            |  |   |        |  |  |   |         | 



(continued)



F-22



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(3) Loans, Continued



Nonaccrual loans and loans past due ninety days but still accruing at
December 31, 2009 were as follows (in thousands):



|                                                          |  |   |        | 
|--------------------------------------------------------- |  | - | ------ | 
|Nonaccrual loans                                          |  | $ | 23,848 | 
|                                                          |  |   |        | 
|                                                          | 
|Past due ninety days or more, but still accruing interest |  | $ |       | 
|                                                          |  |   |        | 

The following summarizes the amount of impaired loans at December 31, 2010 (in
thousands):



|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 
|----------------------------------- |  | ------------------ | ------ |  | ---------------------- | - | ------ | ---------------- |  | - | -- | 
|                                    |  | RecordedInvestment |        |  | UnpaidPrincipalBalance |   |        | RelatedAllowance | 
|With no related allowance recorded: |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Residential real estate-            |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Closed-end first mortgages          |  | $                  | 12,608 |  |                        | $ | 14,272 |                  |  | $ |   | 
|Commercial real estate:             |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Owner-occupied                      |  |                    | 1,837  |  |                        |   | 1,857  |                  |  |   |   | 
|Non-owner-occupied                  |  |                    | 18,204 |  |                        |   | 20,466 |                  |  |   |   | 
|Land and construction               |  |                    | 9,980  |  |                        |   | 15,018 |                  |  |   |   | 
|Consumer-                           |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Non-real estate secured             |  |                    | 249    |  |                        |   | 249    |                  |  |   |   | 
|                                    |  |                    |       
|With an allowance recorded:         |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Commercial real estate-             |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Non-owner-occupied                  |  |                    | 1,174  |  |                        |   | 1,174  |                  |  |   | 11 | 
|Land and construction               |  |                    | 669    |  |                        |   | 669    |                  |  |   | 75 | 
|                                    |  |                    |       
|Total:                              |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Residential real estate-            |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Closed-end first mortgages          |  | $                  | 12,608 |  |                        | $ | 14,272 |                  |  | $ |   | 
|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Commercial real estate:             |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Owner-occupied                      |  | $                  | 1,837  |  |                        | $ | 1,857  |                  |  | $ |   | 
|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Non-owner-occupied                  |  | $                  | 19,378 |  |                        | $ | 21,640 |                  |  | $ | 11 | 
|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Land and construction               |  | $                  | 10,649 |  |                        | $ | 15,687 |                  |  | $ | 75 | 
|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Consumer-                           |  |                    |        |  |                        |   |        |                  |  |   |    | 
|Non-real estate secured             |  | $                  | 249    |  |                        | $ | 249    |                  |  | $ |   | 
|                                    |  |                    |        |  |                        |   |        |                  |  |   |    | 



(continued)



F-23



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(3) Loans, Continued



The average net investment in impaired loans and interest income
recognized and received on impaired loans are as follows (in thousands):



|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|-------------------------- |  | ------------------------------- | ------ |  | ------------------------ | - | --- | ---------------------- |  | - | --- | 
|                           |  | For the Year Ended December 31, |       
|                           |  | 2010                            |       
|                           |  | AverageRecordedInvestment       |        |  | InterestIncomeRecognized |   |     | InterestIncomeReceived | 
|Residential real estate-   |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Closed-end first mortgages |  | $                               | 7,081  |  |                          | $ | 20  |                        |  | $ | 35  | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Multi-family real estate   |  | $                               | 387    |  |                          | $ |    |                        |  | $ |    | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Commercial real estate:    |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Owner-occupied             |  | $                               | 1,266  |  |                          | $ |    |                        |  | $ | 4   | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Non-owner-occupied         |  | $                               | 15,279 |  |                          | $ | 267 |                        |  | $ | 366 | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Land and construction      |  | $                               | 9,965  |  |                          | $ | 26  |                        |  | $ | 253 | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Consumer-                  |  |                                 |        |  |                          |   |     |                        |  |   |     | 
|Non-real estate secured    |  | $                               | 9      |  |                          | $ |    |                        |  | $ |    | 
|                           |  |                                 |        |  |                          |   |     |                        |  |   |     | 

The following summarizes the amount of impaired loans at December 31, 2009 (in
thousands):



|                                                         |  |   |        |  
|-------------------------------------------------------- |  | - | ------ | -
|Collateral-dependent loans identified as impaired:       |  |   |        |  
|Gross loans with no related allowance for losses         |  | $ | 21,846 |  
|                                                         |  |   |        |  
|                                                         | 
|Gross loans with related allowance for losses recorded   |  |   | 18,032 |  
|Less allowances on these loans                           |  |   | (5,542 | )
|                                                         |  |   |        |  
|                                                         | 
|Net loans with related allowance                         |  |   | 12,490 |  
|                                                         |  |   |        |  
|                                                         | 
|Net investment in collateral-dependent impaired loans    |  |   | 34,336 |  
|                                                         |  |   |        |  
|                                                         | 
|Noncollateral-dependent loans identified as impaired:    |  |   |        |  
|Gross loans with related allowance for losses recorded   |  |   | 3,623  |  
|Less allowance on these loans                            |  |   | (65    | )
|                                                         |  |   |        |  
|                                                         | 
|Net investment in noncollateral-dependent impaired loans |  |   | 3,558  |  
|                                                         |  |   |        |  
|                                                         | 
|Net investment in impaired loans                         |  | $ | 37,894 |  
|                                                         |  |   |        |  

The average net investment in impaired loans and interest income recognized and received on
impaired loans in 2009 is as follows (in thousands):



|                                             |  |   |        | 
|-------------------------------------------- |  | - | ------ | 
|Average investment in impaired loans         |  | $ | 25,017 | 
|                                             |  |   |        | 
|                                             | 
|Interest income recognized on impaired loans |  | $ | 280    | 
|                                             |  |   |        | 
|                                             | 
|Interest income received on impaired loans   |  | $ | 584    | 
|                                             |  |   |        | 



(continued)



F-24



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(4) Premises and Equipment

A summary of premises and equipment follows (in thousands):



|                                               |  |                 |        |   |      |   |        |  
|---------------------------------------------- |  | --------------- | ------ | - | ---- | - | ------ | -
|                                               |  | At December 31, |       
|                                               |  | 2010            |        |   | 2009 |  
|                                               |  |                
|Land                                           |  | $               | 1,171  |   |      | $ | 1,171  |  
|Buildings and improvements                     |  |                 | 1,959  |   |      |   | 1,959  |  
|Furniture, fixtures and equipment              |  |                 | 1,026  |   |      |   | 1,022  |  
|Leasehold improvements                         |  |                 | 119    |   |      |   | 119    |  
|                                               |  |                 |        |   |      |   |        |  
|                                               |  |                
|Total, at cost                                 |  |                 | 4,275  |   |      |   | 4,271  |  
|                                               |  |                
|Less accumulated depreciation and amortization |  |                 | (1,479 | ) |      |   | (1,330 | )
|                                               |  |                 |        |   |      |   |        |  
|                                               |  |                
|Premises and equipment, net                    |  | $               | 2,796  |   |      | $ | 2,941  |  
|                                               |  |                 |        |   |      |   |        |  

The Company currently leases two branch facilities under operating leases. One lease
contains renewal options and requires the Company to pay an allowable share of common area maintenance and real estate taxes. The other lease only requires the Company to pay real estate taxes. Rent expense under operating leases during the years
ended December 31, 2010 and 2009 was $133,000 and $131,000 respectively. At December 31, 2010, the future minimum lease payments are approximately as follows (in thousands):



|                         |  |        |     | 
|------------------------ |  | ------ | --- | 
|Year Ending December 31, |  | Amount |    
|                         | 
|2011                     |  | $      | 133 | 
|2012                     |  |        | 84  | 
|2013                     |  |        | 80  | 
|                         |  |        |     | 
|                         | 
|                         |  | $      | 297 | 
|                         |  |        |     | 



(continued)



F-25



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(5) Foreclosed Real Estate

Foreclosed real estate is presented net of an allowance for losses. An analysis of the allowance for losses on
foreclosed real estate is as follows (in thousands):



|                                               |  |                         |     |   |      |   |    | 
|---------------------------------------------- |  | ----------------------- | --- | - | ---- | - | -- | 
|                                               |  | Year Ended December 31, |    
|                                               |  | 2010                    |     |   | 2009 |  
|                                               |  |                        
|Balance of beginning of year                   |  | $                       | 21  |   |      | $ | 13 | 
|Provision for losses on foreclosed real estate |  |                         |    |   |      |   | 8  | 
|Charge-offs                                    |  |                         | (21 | ) |      |   |   | 
|                                               |  |                         |     |   |      |   |    | 
|                                               |  |                        
|Balance at end of year                         |  | $                       |    |   |      | $ | 21 | 
|                                               |  |                         |     |   |      |   |    | 

Expenses applicable to foreclosed real estate are as follows (in thousands):



|                                               |  |                         |     |  |      |   |    | 
|---------------------------------------------- |  | ----------------------- | --- |  | ---- | - | -- | 
|                                               |  | Year Ended December 31, |    
|                                               |  | 2010                    |     |  | 2009 |  
|                                               |  |                        
|Write-down on foreclosed real estate           |  | $                       | 126 |  |      | $ |   | 
|Provision for losses on foreclosed real estate |  |                         |    |  |      |   | 8  | 
|Loss on sale of foreclosed real estate         |  |                         | 243 |  |      |   |   | 
|Operating expenses                             |  |                         | 100 |  |      |   | 9  | 
|                                               |  |                         |     |  |      |   |    | 
|                                               |  |                        
|                                               |  | $                       | 469 |  |      | $ | 17 | 
|                                               |  |                         |     |  |      |   |    | 

(6) Deposits

The aggregate amount of time deposits with a minimum denomination of $100,000, was approximately $51.3 million and $52.6 million at December 31, 2010 and 2009, respectively.

A schedule of maturities of time deposits at December 31, 2010 follows (in thousands):



|                         |  |        |         | 
|------------------------ |  | ------ | ------- | 
|Year Ending December 31, |  | Amount |        
|                         | 
|2011                     |  | $      | 87,919  | 
|2012                     |  |        | 15,939  | 
|2013                     |  |        | 4,309   | 
|2014                     |  |        | 820     | 
|2015                     |  |        | 2,288   | 
|                         |  |        |         | 
|                         | 
|                         |  | $      | 111,275 | 
|                         |  |        |         | 



(continued)



F-26



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(7) 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):



|                                  |  |          |      |  |              |      |      |                 |  |   |        |  |  |   |        | 
|--------------------------------- |  | -------- | ---- |  | ------------ | ---- | ---- | --------------- |  | - | ------ |  |  | - | ------ | 
|Maturity Year Ending
December 31, |  | CallDate |      |  | InterestRate |      |      | At December 31, | 
|                                  |  |          | 2010 |  |              | 2009 |     
|                                  |  |          |      | 
|2010                              |  |          | -    |  |              |      | 3.16 | %               |  | $ |       |  |  | $ | 5,000  | 
|2010                              |  |          | -    |  |              |      | 3.12 |                 |  |   |       |  |  |   | 5,000  | 
|2012                              |  |          | 2011 |  |              |      | 4.75 |                 |  |   | 4,000  |  |  |   | 4,000  | 
|2013                              |  |          | -    |  |              |      | 3.44 |                 |  |   |       |  |  |   | 3,000  | 
|2013                              |  |          | -    |  |              |      | 3.00 |                 |  |   |       |  |  |   | 5,000  | 
|2013                              |  |          | 2011 |  |              |      | 3.64 |                 |  |   | 7,500  |  |  |   | 7,500  | 
|2014                              |  |          | -    |  |              |      | 3.64 |                 |  |   |       |  |  |   | 8,000  | 
|2016                              |  |          | -    |  |              |      | 4.51 |                 |  |   | 5,000  |  |  |   | 5,000  | 
|2016                              |  |          | -    |  |              |      | 4.65 |                 |  |   | 8,000  |  |  |   | 8,000  | 
|2016                              |  |          | -    |  |              |      | 4.44 |                 |  |   | 5,600  |  |  |   | 5,600  | 
|2017                              |  |          | 2011 |  |              |      | 4.38 |                 |  |   | 1,600  |  |  |   | 1,600  | 
|                                  |  |          |      |  |              |      |      |                 |  |   |        |  |  |   |        | 
|                                  |  |          |      | 
|                                  |  |          |      |  |              |      |      |                 |  | $ | 31,700 |  |  | $ | 57,700 | 
|                                  |  |          |      |  |              |      |      |                 |  |   |        |  |  |   |        | 

Certain of the above advances are callable by the FHLB starting in the year indicated.

At December 31, 2010 and 2009, the FHLB advances were collateralized by $15.8 million of securities and
by a lien on qualifying residential one-to-four family mortgage loans, commercial and multi-family real estate loans and second mortgage loans.

During the first quarter of 2010, the Company sold mortgage-backed securities and collateralized mortgage obligations with a carrying value of $13.8 million in order to downsize and deleverage its balance
sheet in order to increase the Banks regulatory capital ratios to comply with the Consent Order issued by the FDIC and OFR (see Note 14). The proceeds from the sale of securities were used to prepay approximately $16 million in FHLB advances
secured by these securities. The Company realized a loss from prepayment penalties of approximately $735,000.

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 was fixed at 6.4% for the first five years, and thereafter, the coupon rate floats quarterly at the three-month LIBOR rate plus 2.45% (2.73% at December 31, 2010). The
junior subordinated debenture, due in 2034, is redeemable in certain circumstances after October 2009. The terms of the debenture agreement allows the Company to defer payments of interest on the debenture by extending the interest payment period at
any time during the term of the debenture for up to twenty consecutive quarterly periods. During 2010, the Company exercised its right to defer payment of interest on the debenture. Interest payments deferred as of December 31, 2010 totaled
$179,000.



(continued)



F-27



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(8) Other Borrowings

Other borrowings consisted of securities sold under agreements to repurchase. The securities sold under the agreements
to repurchase were delivered to the broker-dealer who arranged the transactions. Information concerning the securities sold under agreements to repurchase is summarized as follows (dollars in thousands):



|                                                  |  |                         |        |   |      |   |        |  
|------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | -
|                                                  |  | Year Ended December 31, |       
|                                                  |  | 2010                    |        |   | 2009 |  
|                                                  |  |                        
|Balance at year end                               |  | $                       |       |   |      | $ | 41,800 |  
|Average balance during the year                   |  | $                       | 7,558  |   |      | $ | 41,800 |  
|Average interest rate during the year             |  |                         | 4.24   | % |      |   | 4.20   | %
|Maximum month-end balance during the year         |  | $                       | 41,800 |   |      | $ | 41,800 |  
|Securities held to maturity pledged as collateral |  | $                       |       |   |      | $ | 49,175 |  
|Cash pledged as collateral                        |  | $                       |       |   |      | $ | 7,847  |  

During the first quarter of 2010, the Company sold mortgage-backed securities and collateralized mortgage obligations
with a carrying value of $29.6 million in order to downsize and deleverage its balance sheet in order to increase the Banks regulatory capital ratios to comply with the Consent Order issued by the FDIC and OFR (see Note 14). The proceeds from
the sale of securities were used to prepay approximately $41.8 million in reverse repurchase agreements secured by these securities. The Company realized a loss from prepayment penalties of approximately $3.0 million.

(9) Financial Instruments

The estimated fair values of the Companys financial instruments were as follows (in thousands):



|                                        |  |                      |         |  |                      |   |         |                |  |   |           |  |  |   |         | 
|--------------------------------------- |  | -------------------- | ------- |  | -------------------- | - | ------- | -------------- |  | - | --------- |  |  | - | ------- | 
|                                        |  | At December 31, 2010 |         |  | At December 31, 2009 |  
|                                        |  | CarryingAmount       |         |  | FairValue            |   |         | CarryingAmount |  |   | FairValue | 
|Financial assets:                       |  |                      |         |  |                      |   |         |                |  |   |           |  |  |   |         | 
|Cash and cash equivalents               |  | $                    | 14,367  |  |                      | $ | 14,367  |                |  | $ | 36,784    |  |  | $ | 36,784  | 
|Securities held to maturity             |  |                      | 51,057  |  |                      |   | 48,839  |                |  |   | 81,141    |  |  |   | 76,984  | 
|Loans                                   |  |                      | 113,542 |  |                      |   | 113,513 |                |  |   | 134,126   |  |  |   | 134,365 | 
|Federal Home Loan Bank stock            |  |                      | 3,173   |  |                      |   | 3,173   |                |  |   | 3,551     |  |  |   | 3,551   | 
|Accrued interest receivable             |  |                      | 644     |  |                      |   | 644     |                |  |   | 1,088     |  |  |   | 1,088   | 
|                                        |  |                      |         | 
|Financial liabilities:                  |  |                      |         |  |                      |   |         |                |  |   |           |  |  |   |         | 
|Deposit liabilities                     |  |                      | 148,238 |  |                      |   | 148,929 |                |  |   | 151,682   |  |  |   | 152,381 | 
|Federal Home Loan Bank advances         |  |                      | 31,700  |  |                      |   | 33,425  |                |  |   | 57,700    |  |  |   | 59,206  | 
|Other borrowings                        |  |                      |        |  |                      |   |        |                |  |   | 41,800    |  |  |   | 43,537  | 
|Junior subordinated debenture           |  |                      | 5,155   |  |                      |   | 4,740   |                |  |   | 5,155     |  |  |   | 4,875   | 
|Off-balance sheet financial instruments |  |                      |        |  |                      |   |        |                |  |   |          |  |  |   |        | 



(continued)



F-28



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(9) 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 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 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.

As of December 31, 2010, the Company
has no commitments to extend credit.

(10) 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-29



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(11) Income Taxes

Income taxes (benefit) consisted of the following (in thousands):



|                    |  |                         |        |   |      |   |        |  
|------------------- |  | ----------------------- | ------ | - | ---- | - | ------ | -
|                    |  | Year Ended December 31, |       
|                    |  | 2010                    |        |   | 2009 |  
|Current:            |  |                         |        |   |      |   |        |  
|Federal             |  | $                       | (423   | ) |      | $ | (3,297 | )
|State               |  |                         |       |   |      |   |       |  
|                    |  |                         |        |   |      |   |        |  
|                    |  |                        
|Total current       |  |                         | (423   | ) |      |   | (3,297 | )
|                    |  |                         |        |   |      |   |        |  
|                    |  |                        
|Deferred:           |  |                         |        |   |      |   |        |  
|Federal             |  |                         | (2,191 | ) |      |   | (1,506 | )
|State               |  |                         | (446   | ) |      |   | (824   | )
|Valuation allowance |  |                         | 3,409  |   |      |   | 2,126  |  
|                    |  |                         |        |   |      |   |        |  
|                    |  |                        
|Total deferred      |  |                         | 772    |   |      |   | (204   | )
|                    |  |                         |        |   |      |   |        |  
|                    |  |                        
|Total               |  | $                       | 349    |   |      | $ | (3,501 | )
|                    |  |                         |        |   |      |   |        |  

The reasons for the differences between the statutory Federal income tax rate and the
effective tax rate are summarized as follows (dollars in thousands):



|                                         |  |                         |        |   |                |  |       |        |  |   |                |   |  |  |       |   
|---------------------------------------- |  | ----------------------- | ------ | - | -------------- |  | ----- | ------ |  | - | -------------- | - |  |  | ----- | --
|                                         |  | Year Ended December 31, |       
|                                         |  | 2010                    |        |   | 2009           | 
|                                         |  | Amount                  |        |   | % ofPretaxLoss |  |       | Amount |  |   | % ofPretaxLoss |  
|                                         |  |                         |        |  
|Income taxes (benefit) at statutory rate |  | $                       | (2,755 | ) |                |  | (34.0 | )%     |  | $ | (5,094         | ) |  |  | (34.0 | )%
|Increase (decrease) resulting from:      |  |                         |        |   |                |  |       |        |  |   |                |   |  |  |       |   
|State taxes, net of Federal tax benefit  |  |                         | (294   | ) |                |  | (3.6  | )      |  |   | (544           | ) |  |  | (3.6  | ) 
|Change in valuation allowance            |  |                         | 3,409  |   |                |  | 42.1  |        |  |   | 2,126          |   |  |  | 14.2  |   
|Other                                    |  |                         | (11    | ) |                |  | (.2   | )      |  |   | 11             |   |  |  |      |   
|                                         |  |                         |        |   |                |  |       |        |  |   |                |   |  |  |       |   
|                                         |  |                         |        |  
|                                         |  | $                       | 349    |   |                |  | 4.3   | %      |  | $ | (3,501         | ) |  |  | (23.4 | )%
|                                         |  |                         |        |   |                |  |       |        |  |   |                |   |  |  |       |   



(continued)



F-30



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(11) 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).



|                                 |  |                 |       |   |      |   |       |  
|-------------------------------- |  | --------------- | ----- | - | ---- | - | ----- | -
|                                 |  | At December 31, |      
|                                 |  | 2010            |       |   | 2009 |  
|Deferred tax assets:             |  |                 |       |   |      |   |       |  
|Allowance for loan losses        |  | $               | 434   |   |      | $ | 2,516 |  
|Net operating loss carryforwards |  |                 | 4,933 |   |      |   | 317   |  
|Premises and equipment           |  |                 | 92    |   |      |   | 58    |  
|Impaired securities              |  |                 | 67    |   |      |   | 67    |  
|Foreclosed property expenses     |  |                 | 14    |   |      |   |      |  
|Other                            |  |                 | 27    |   |      |   |      |  
|                                 |  |                 |       |   |      |   |       |  
|                                 |  |                
|Gross deferred tax assets        |  |                 | 5,567 |   |      |   | 2,958 |  
|Less: Valuation allowance        |  |                 | 5,535 |   |      |   | 2,126 |  
|                                 |  |                 |       |   |      |   |       |  
|                                 |  |                
|Net deferred tax assets          |  |                 | 32    |   |      |   | 832   |  
|                                 |  |                 |       |   |      |   |       |  
|                                 |  |                
|Deferred tax liabilities:        |  |                 |       |   |      |   |       |  
|Loan costs                       |  |                 | (10   | ) |      |   | (18   | )
|Prepaid expenses                 |  |                 | (22   | ) |      |   | (42   | )
|                                 |  |                 |       |   |      |   |       |  
|                                 |  |                
|Deferred tax liabilities         |  |                 | (32   | ) |      |   | (60   | )
|                                 |  |                
|                                 |  |                 |       |   |      |   |       |  
|Net deferred tax asset           |  | $               |      |   |      | $ | 772   |  
|                                 |  |                 |       |   |      |   |       |  

During the year ended December 31, 2009, the Company assessed its earnings history and
trend over the past year and its estimate of future earnings, and determined that it is more likely than not that the deferred tax assets will not be realized in the near term. Accordingly, a valuation allowance was recorded against the net deferred
tax asset for the amount not expected to be realized in the future.

At December 31, 2010, the Company
has net operating loss carryforwards of approximately $12.1 million for Federal and $23.0 million for Florida available to offset future taxable income. These carryforwards will begin to expire in 2029.

The Company files U.S. and Florida income tax returns. With few exceptions, the Company is no longer subject to U.S.
Federal or state and local income tax examinations by taxing authorities for years before 2007.



(continued)



F-31



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(12) 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 loans to related parties at December 31, 2010 and 2009 of approximately $244,000 and $4,164,000, respectively. At December 31, 2010 and 2009, these same related parties had approximately $975,000 and
$1,092,000, respectively, on deposit with the Company.

(13) Stock-Based Compensation

The Company established an Incentive Stock Option Plan (the Plan) for officers, directors and employees of
the Company and reserved 157,680 (amended) 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 and no stock options have been granted since 2005. The options must be exercised within ten years from the date of grant. At December 31, 2010, 66,794 options (amended) were available for grant. The plan terminated on
February 27, 2011.

A summary of the activity in the Companys stock option plan is as follows. All
option amounts reflect the one-for-four reverse stock split declared in October 2010 and the 5% stock dividend declared in May 2010 (dollars in thousands, except share amounts):



|                                                 |  |                  |         |   |                               |   |       |                                          |  |  |                         |  |  |   |   | 
|------------------------------------------------ |  | ---------------- | ------- | - | ----------------------------- | - | ----- | ---------------------------------------- |  |  | ----------------------- |  |  | - | - | 
|                                                 |  | Number ofOptions |         |   | Weighted-AverageExercisePrice |   |       | Weighted-AverageRemainingContractualTerm |  |  | AggregateIntrinsicValue | 
|                                                 |  |                  |         |  
|Outstanding at December 31, 2008                 |  |                  | 132,186 |   |                               | $ | 29.24 |                                          |  |  |                         |  |  |   |   | 
|Forfeited                                        |  |                  | (27,197 | ) |                               |   | 32.00 |                                          |  |  |                         |  |  |   |   | 
|                                                 |  |                  |         |   |                               |   |       |                                          |  |  |                         |  |  |   |   | 
|                                                 |  |                  |         |  
|Outstanding at December 31, 2009                 |  |                  | 104,989 |   |                               |   | 28.52 |                                          |  |  |                         |  |  |   |   | 
|Forfeited                                        |  |                  | (35,857 | ) |                               |   | 27.84 |                                          |  |  |                         |  |  |   |   | 
|                                                 |  |                  |         |   |                               |   |       |                                          |  |  |                         |  |  |   |   | 
|                                                 |  |                  |         |  
|Outstanding and exercisable at December 31, 2010 |  |                  | 69,132  |   |                               | $ | 30.05 |                                          |  |  | 3.1 years               |  |  | $ |  | 
|                                                 |  |                  |         |   |                               |   |       |                                          |  |  |                         |  |  |   |   | 



(continued)



F-32



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(14) Regulatory Matters

The Bank is 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 Banks financial statements.
Under capital adequacy guidelines and the regulatory framework for prompt corrective action, 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.

Quantitative measures established by regulation to ensure capital adequacy require 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). As of December 31, 2010, the
Bank did not meet the capital adequacy ratios as required in the Consent Order discussed below.

The
Banks actual capital amounts and percentages are also presented in the table (dollars in thousands).



|                                       |  |        |        |  |   |  |       |                             |  |   |        |                              |  |                                                                      |      |   |   |   |        |        |  |  |       |   |  |   |        |  |  |  |       |  
|-------------------------------------- |  | ------ | ------ |  | - |  | ----- | --------------------------- |  | - | ------ | ---------------------------- |  | -------------------------------------------------------------------- | ---- | - | - | - | ------ | ------ |  |  | ----- | - |  | - | ------ |  |  |  | ----- | -
|                                       |  |        |        |  |   |  |       |                             |  |   |        |                              |  | MinimumTo Be
WellCapitalized UnderPrompt
CorrectiveAction Provisions |      |   |   |   |        |        | 
|                                       |  |        |        |  |   |  |       |                             |  |   |        |                              |  |                                                                      |      |   |   |   |       
|                                       |  |        |        |  |   |  |       |                             |  |   |        |                              |  |                                                                      |      |   |   |   |       
|                                       |  |        |        |  |   |  |       | For
CapitalAdequacyPurposes |  |   |        | Requirements ofConsent
Order | 
|                                       |  | Actual |        |  |   | 
|                                       |  | Amount |        |  | % |  |       | Amount                      |  |   | %      |                              |  | Amount                                                               |      |   | % |   |        | Amount |  |  | %     |  
|As of December 31, 2010:               |  |        |        |  |   |  |       |                             |  |   |        |                              |  |                                                                      |      |   |   |   |        |        |  |  |       |   |  |   |        |  |  |  |       |  
|Total Capital to Risk-Weighted Assets  |  | $      | 9,639  |  |   |  | 6.70  | %                           |  | $ | 11,513 |                              |  |                                                                      | 8.00 | % |   | $ | 14,392 |        |  |  | 10.00 | % |  | $ | 17,270 |  |  |  | 12.00 | %
|Tier I Capital to Risk-Weighted Assets |  |        | 7,817  |  |   |  | 5.43  |                             |  |   | 5,757  |                              |  |                                                                      | 4.00 |   |   |   | 8,635  |        |  |  | 6.00  |   |  |   | N/A    |  |  |  | N/A   |  
|Tier I Capital to Total Assets         |  |        | 7,817  |  |   |  | 4.02  |                             |  |   | 7,786  |                              |  |                                                                      | 4.00 |   |   |   | 9,733  |        |  |  | 5.00  |   |  |   | 15,572 |  |  |  | 8.00  |  
|                                       |  |        |        |  |   |  |       |                            
|As of December 31, 2009:               |  |        |        |  |   |  |       |                             |  |   |        |                              |  |                                                                      |      |   |   |   |        |        |  |  |       |   |  |   |        |  |  |  |       |  
|Total Capital to Risk-Weighted Assets  |  | $      | 18,342 |  |   |  | 10.23 | %                           |  | $ | 14,349 |                              |  |                                                                      | 8.00 | % |   | $ | 17,937 |        |  |  | 10.00 | % |  |   | N/A    |  |  |  | N/A   |  
|Tier I Capital to Risk-Weighted Assets |  |        | 16,012 |  |   |  | 8.93  |                             |  |   | 7,175  |                              |  |                                                                      | 4.00 |   |   |   | 10,762 |        |  |  | 6.00  |   |  |   | N/A    |  |  |  | N/A   |  
|Tier I Capital to Total Assets         |  |        | 16,012 |  |   |  | 5.85  |                             |  |   | 10,952 |                              |  |                                                                      | 4.00 |   |   |   | 13,690 |        |  |  | 5.00  |   |  |   | N/A    |  |  |  | N/A   |  



(continued)



F-33



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(14) Regulatory Matters, Continued



Regulatory Matters - Company.The Company is subject to
the supervision and regulation of the Board of Governors of the Federal Reserve System (the Federal Reserve). On June 22, 2010, the Company entered into a written agreement with the Federal Reserve Bank of Atlanta (Reserve
Bank) with respect to certain aspects of the operation and management of the Company (the Written Agreement).

The Written Agreement contains the following principal requirements:



| |  |  | The board of directors of the Company must take appropriate steps to fully utilize the Companys financial and managerial resources to serve as a
source of strength to the Bank, including, but not limited to, taking steps to ensure that the Bank complies with the Consent Order entered into with the OFR and the FDIC and any other supervisory action taken by the Banks state or federal
regulator.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company may not declare or pay any dividends without prior Reserve Bank and Federal Reserve approval.
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | The Company may not, directly or indirectly, take dividends or any other form of payment representing a reduction in capital from the Bank without
prior Reserve Bank approval.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company and its nonbank subsidiary, OptimumBank Holdings Capital Trust I, may not make any distributions of interest, principal, or other sums on
subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Federal Reserve.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company and its nonbank subsidiary, OptimumBank Holdings Capital Trust I, may not, directly or indirectly, incur, increase, or guarantee any debt
or purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company must obtain prior written consent from the Reserve Bank before appointing any new director or senior executive officer, or changing the
responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, and must comply with the regulations applicable to indemnification and severance payments.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Company must provide quarterly progress reports to the Reserve Bank, along with parent company only financial statements.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



(continued)



F-34



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(14) Regulatory Matters, Continued



Regulatory Matters  Bank.Effective April 16,
2010, the Bank consented to the issuance of a Consent Order by the FDIC and the OFR, also effective as of April 16, 2010.

The Consent Order represents an agreement among the Bank, the FDIC and the OFR as to areas of the Banks operations that warrant improvement and presents a plan for making those improvements. The
Consent Order imposes no fines or penalties on the Bank. The Consent Order will remain in effect and enforceable until it is modified, terminated, suspended, or set aside by the FDIC and the OFR.

The Consent Order contains the following principal requirements:



| |  |  | The Board of Directors of the Bank is required to increase its participation in the affairs of the Bank and assume full responsibility for the approval
of sound policies and objectives for the supervision of all of the Banks activities.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank is required to have and retain qualified and appropriately experienced senior management, including a chief executive officer, a chief lending
officer and a chief financial officer, who are given the authority to implement the provisions of the Consent Order.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Any proposed changes in the Banks Board of Directors or senior executive officers are subject to the prior consent of the FDIC and the OFR.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank is required to maintain both a fully funded allowance for loan and lease losses satisfactory to the FDIC and the OFR and a minimum Tier 1
leverage capital ratio of 8% and a total risk-based capital ratio of 12% for as long as the Consent Order remains in effect.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank must undertake over a two-year period a scheduled reduction of the balance of loans classified substandard and
doubtful in its 2009 FDIC examination by at least 75%.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank is required to reduce the volume of its adversely classified private label mortgage backed securities under a plan acceptable to the FDIC and
OFR.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank must submit to the FDIC and the OFR for their review and comment a written business/strategic plan covering the overall operation of the Bank.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank must implement a plan to improve earnings, addressing goals and strategies for improving and sustaining earnings, major areas for improvement
in the Banks operating performance, realistic and comprehensive budgets and a budget review process.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



(continued)



F-35



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(14) Regulatory Matters, Continued



| |  |  | The Bank is required to revise, implement and incorporate recommendations of the FDIC and OFR with respect to the following policies or plans:
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Lending and Collection Policies
| | - |  | -------------------------------



| |  |  | Investment Policy
| | - |  | -----------------



| |  |  | Liquidity, Contingency Funding and Funds Management Plan
| | - |  | --------------------------------------------------------



| |  |  | Interest Rate Risk Management Policy
| | - |  | ------------------------------------



| |  |  | Internal Loan Review and Grading System and
| | - |  | -------------------------------------------



| |  |  | Internal Control Policy.
| | - |  | ------------------------



| |  |  | The Banks Board of Directors must review the adequacy of the allowance for loan and lease losses and establish a comprehensive policy
satisfactory to the FDIC and OFR for determining such adequacy at least quarterly thereafter.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank may not pay any dividends or bonuses without the prior approval of the FDIC.
| | - |  | -------------------------------------------------------------------------------------



| |  |  | The Bank may not accept, renew or rollover any brokered deposits except with the prior approval of the FDIC.
| | - |  | ------------------------------------------------------------------------------------------------------------



| |  |  | The Bank is required to notify the FDIC and OFR prior to undertaking asset growth of 10% or more per annum while the Consent Order remains in effect.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The Bank is required to file quarterly progress reports with the FDIC and the OFR.
| | - |  | ----------------------------------------------------------------------------------

The Bank has implemented comprehensive policies and plans to address all of the requirements of the Consent Order and
has incorporated recommendations from the FDIC and OFR into these policies and plans. Management believes that the Bank is currently in substantial compliance with all the requirements of the Consent Order except for the Banks failure to
attain the regulatory capital ratio requirements. The Company is conducting a private placement offering of its common stock intended to result in the Bank attaining such capital ratios. There can be no assurance, however, that the Company will
raise sufficient capital, if any, in the private placement offering for the Bank to achieve material compliance with these ratios.



(continued)



F-36



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(15) 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 dividends 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. At December 31, 2010, the Bank and Holding Company could not pay cash dividends (See Note 14).

(16) 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.

(17) 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, 2010 and 2009, expense attributable to the Plan amounted to $35,000 and $42,000, respectively.



(continued)



F-37



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(18) Fair Value Measurement

Impaired collateral-dependent loans are carried at fair value when the current collateral value is lower than the
carrying value of the loan. Those impaired collateral-dependent loans which are measured at fair value or a nonrecurring basis are as follows (in thousands):



|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|--------------------------- |  | -------------------- | ------ |  | ---------- | - | - | ------- |  | - | ------- |  |  | ----------- | ------ |  | ---------------- | - | ----- |  |  | - | ----- | 
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Losses           |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Recorded in      |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Operations       |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | For the          |  
|                            |  | At December 31, 2010 |        |  | Year Ended |  
|                            |  | FairValue            |        |  | Level 1    |   |   | Level 2 |  |   | Level 3 |  |  | TotalLosses |        |  | December 31,2010 |  
|Residential real estate-    |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|Closed-end first mortgages  |  | $                    | 4,136  |  |            | $ |  |         |  | $ |        |  |  | $           | 4,136  |  |                  | $ | 561   |  |  | $ | 561   | 
|Commercial real estate:     |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|Owner-occupied              |  |                      | 70     |  |            |   |  |         |  |   |        |  |  |             | 70     |  |                  |   | 20    |  |  |   | 20    | 
|Non-owner-occupied          |  |                      | 8,893  |  |            |   |  |         |  |   |        |  |  |             | 8,893  |  |                  |   | 2,583 |  |  |   | 1,857 | 
|Land and construction       |  |                      | 7,231  |  |            |   |  |         |  |   |        |  |  |             | 7,231  |  |                  |   | 1,815 |  |  |   | 1,363 | 
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|                            |  |                      |        |  |            |  
|                            |  | $                    | 20,330 |  |            | $ |  |         |  | $ |        |  |  | $           | 20,330 |  |                  | $ | 4,979 |  |  | $ | 3,801 | 
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|                            |  |                      |        |  |            |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Losses           |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Recorded in      |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | Operations       |  
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  | For the          |  
|                            |  | At December 31, 2009 |        |  | Year Ended |  
|                            |  | FairValue            |        |  | Level 1    |   |   | Level 2 |  |   | Level 3 |  |  | TotalLosses |        |  | December 31,2009 |  
|Residential real estate:    |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|Closed-end first mortgages  |  | $                    | 3,412  |  |            | $ |  |         |  | $ |        |  |  | $           | 3,412  |  |                  | $ | 1,227 |  |  | $ | 1,227 | 
|Closed-end second mortgages |  |                      | 200    |  |            |   |  |         |  |   |        |  |  |             | 200    |  |                  |   | 205   |  |  |   | 205   | 
|Multi-family real estate    |  |                      | 842    |  |            |   |  |         |  |   |        |  |  |             | 842    |  |                  |   | 562   |  |  |   | 562   | 
|Commercial real estate-     |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|Non-owner-occupied          |  |                      | 1,656  |  |            |   |  |         |  |   |        |  |  |             | 1,656  |  |                  |   | 1,844 |  |  |   | 1,844 | 
|Land and construction       |  |                      | 7,855  |  |            |   |  |         |  |   |        |  |  |             | 7,855  |  |                  |   | 4,490 |  |  |   | 4,426 | 
|Consumer-                   |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|Non-real estate secured     |  |                      | 1      |  |            |   |  |         |  |   |        |  |  |             | 1      |  |                  |   | 198   |  |  |   | 198   | 
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 
|                            |  |                      |        |  |            |  
|                            |  | $                    | 13,966 |  |            | $ |  |         |  | $ |        |  |  | $           | 13,966 |  |                  | $ | 8,526 |  |  | $ | 8,462 | 
|                            |  |                      |        |  |            |   |   |         |  |   |         |  |  |             |        |  |                  |   |       |  |  |   |       | 

Loans with a carrying value of $15,796,000 and $20,370,000 at December 31, 2010 and
2009, respectively, were measured for impairment using Level 3 inputs and had a fair value in excess of carrying value.



(continued)



F-38



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(18) Fair Value Measurement, Continued



Foreclosed real estate is recorded at fair value less estimated costs
to sell. Foreclosed real estate which is measured at fair value on a nonrecurring basis is as follows (in thousands):



|                     |  |             |       |  |                 |   |   |         |  |   |         |  |  |             |       |  |                |   |    |  |  |   |   | 
|-------------------- |  | ----------- | ----- |  | --------------- | - | - | ------- |  | - | ------- |  |  | ----------- | ----- |  | -------------- | - | -- |  |  | - | - | 
|                     |  | At Year End |       |  | Losses Recorded |  
|                     |  | FairValue   |       |  | Level 1         |   |   | Level 2 |  |   | Level 3 |  |  | TotalLosses |       |  | During theYear |  
|                     |  |             |       |  |                 |  
|At December 31, 2010 |  | $           | 3,215 |  |                 | $ |  |         |  | $ |        |  |  | $           | 3,215 |  |                | $ |   |  |  | $ |  | 
|                     |  |             |       |  |                 |   |   |         |  |   |         |  |  |             |       |  |                |   |    |  |  |   |   | 
|                     |  |             |       |  |                 |  
|At December 31, 2009 |  | $           | 5,487 |  |                 | $ |  |         |  | $ |        |  |  | $           | 5,487 |  |                | $ | 82 |  |  | $ | 8 | 
|                     |  |             |       |  |                 |   |   |         |  |   |         |  |  |             |       |  |                |   |    |  |  |   |   | 

(19) Stockholders Equity

The Companys board of directors authorized a one-for-four reverse stock split on October 18, 2010, which
became effective on November 5, 2010, with fractional shares rounded up to the next largest whole share. As part of the reverse stock split, the Company amended its Articles of Incorporation on November 5, 2010, to ratably decrease the
number of common shares authorized from 6,000,000 shares to 1,500,000 shares.



(continued)



F-39



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(20) Holding Company Financial Information

The Holding Companys unconsolidated financial information as of December 31, 2010 and 2009 and for the years
then ended follows (in thousands):

Condensed Balance Sheets



|                                           |  |                 |       |  |      |   |        | 
|------------------------------------------ |  | --------------- | ----- |  | ---- | - | ------ | 
|                                           |  | At December 31, |      
|                                           |  | 2010            |       |  | 2009 |  
|Assets                                     |  |                 |       |  |      |   |        | 
|Cash                                       |  | $               | 172   |  |      | $ | 286    | 
|Investment in subsidiary                   |  |                 | 7,817 |  |      |   | 16,012 | 
|Other assets                               |  |                 | 180   |  |      |   | 180    | 
|                                           |  |                 |       |  |      |   |        | 
|                                           |  |                
|Total assets                               |  | $               | 8,169 |  |      | $ | 16,478 | 
|                                           |  |                 |       |  |      |   |        | 
|                                           |  |                
|Liabilities and Stockholders Equity       |  |                 |       |  |      |   |        | 
|                                           |  |                
|Other liabilities                          |  | $               | 179   |  |      | $ | 35     | 
|Junior subordinated debenture              |  |                 | 5,155 |  |      |   | 5,155  | 
|Stockholders equity                       |  |                 | 2,835 |  |      |   | 11,288 | 
|                                           |  |                 |       |  |      |   |        | 
|                                           |  |                
|Total liabilities and stockholders equity |  | $               | 8,169 |  |      | $ | 16,478 | 
|                                           |  |                 |       |  |      |   |        | 

Condensed Statements of Operations



|                               |  |                         |        |   |      |   |         |  
|------------------------------ |  | ----------------------- | ------ | - | ---- | - | ------- | -
|                               |  | Year Ended December 31, |       
|                               |  | 2010                    |        |   | 2009 |  
|                               |  |                        
|Loss of subsidiary             |  | $                       | (8,195 | ) |      | $ | (11,189 | )
|Interest expense               |  |                         | (144   | ) |      |   | (275    | )
|Other expense                  |  |                         | (114   | ) |      |   | (147    | )
|                               |  |                         |        |   |      |   |         |  
|                               |  |                        
|Loss before income tax benefit |  |                         | (8,453 | ) |      |   | (11,611 | )
|                               |  |                        
|Income tax benefit             |  |                         |       |   |      |   | (130    | )
|                               |  |                         |        |   |      |   |         |  
|                               |  |                        
|Net loss                       |  | $                       | (8,453 | ) |      | $ | (11,481 | )
|                               |  |                         |        |   |      |   |         |  



(continued)



F-40



---

OPTIMUMBANK HOLDINGS, INC. AND SUBSIDIARY

Notes to Consolidated Financial Statements, Continued



(20) Holding Company Financial Information, Continued



Condensed Statements of Cash Flows



|                                                                                                                                       |  |                         |        |   |      |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ---- | - | ------- | -
|                                                                                                                                       |  | Year Ended December 31, |       
|                                                                                                                                       |  | 2010                    |        |   | 2009 |  
|Cash flows from operating activities:                                                                                                  |  |                         |        |   |      |   |         |  
|Net loss                                                                                                                               |  | $                       | (8,453 | ) |      | $ | (11,481 | )
|Adjustments to reconcile net loss to net cash used in operating activities:                                                            |  |                         |        |   |      |   |         |  
|Equity in undistributed loss of subsidiary                                                                                             |  |                         | 8,195  |   |      |   | 11,189  |  
|Decrease in other assets                                                                                                               |  |                         |       |   |      |   | 76      |  
|Increase (decrease) in accrued other liabilities                                                                                       |  |                         | 144    |   |      |   | (110    | )
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Net cash used in operating activities                                                                                                  |  |                         | (114   | ) |      |   | (326    | )
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Cash flow from investing activity-                                                                                                     |  |                         |        |   |      |   |         |  
|Dividend from subsidiary                                                                                                               |  |                         |       |   |      |   | 250     |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Net decrease in cash                                                                                                                   |  |                         | (114   | ) |      |   | (76     | )
|                                                                                                                                       |  |                        
|Cash at beginning of the year                                                                                                          |  |                         | 286    |   |      |   | 362     |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Cash at end of year                                                                                                                    |  | $                       | 172    |   |      | $ | 286     |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Noncash transactions:                                                                                                                  |  |                         |        |   |      |   |         |  
|Change in accumulated other comprehensive loss of subsidiary, net change in unrealized loss on security available for sale, net
of tax |  | $                       |       |   |      | $ | 4       |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Common stock dividend                                                                                                                  |  | $                       |       |   |      | $ | 554     |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  
|                                                                                                                                       |  |                        
|Reverse stock split                                                                                                                    |  | $                       | 25     |   |      | $ |        |  
|                                                                                                                                       |  |                         |        |   |      |   |         |  



(continued)



F-41