Broadway Financial Corporation Announces Results of Operations for First Quarter 2025

, /PRNewswire/ -- Broadway Financial Corporation ("Broadway", "we", or the "Company") (NASDAQ: BYFC), parent company of City First Bank, National Association (the "Bank", and collectively, with the Company, "City First Broadway"), reported consolidated net loss before preferred dividends of $451 thousand, or ($0.05) per diluted share, for the first quarter of 2025, compared to consolidated net loss of $164 thousand, or ($0.02) per diluted share, for the first quarter of 2024. Net loss attributable to common stockholders was $1.2 million during the first quarter of 2025 after deducting preferred dividends of $750 thousand, compared to net loss attributable to common stockholders of $164 thousand for the first quarter of 2024. Diluted loss per common share was ($0.14) for the first quarter of 2025, compared to ($0.02) of loss per diluted common share for the first quarter of 2024. Diluted loss per common share for the first quarter of 2025 reflects preferred dividends of $0.09 per diluted common share. Broadway Financial Corporation (PRNewsfoto/Broadway Financial Corporation) During the first quarter of 2025, net interest income increased by $521 thousand, or 6.9%, to $8.0 million, compared to the first quarter of 2024. The increase resulted from lower interest expense on borrowings, due to decreases in the average balance and average cost of borrowings, and an increase in interest and fees on loans receivable, primarily due to an increase in rates. These increases were partially offset by an increase in interest expense on deposits and decreases in interest income on interest-earning deposits and available-for-sale securities. During the first quarter of 2025, non-interest expense increased $444 thousand, or 5.7%, compared to the first quarter of 2024 due to increases of $1.0 million in compensation and benefits expense, which included $122 thousand of severance expense which negatively impacted diluted loss per share by $0.01, partially offset by a $710 thousand decrease in professional services expense. During the first quarter of 2025, the provision for credit losses increased $429 thousand, from $260 thousand for the first quarter of 2024 to $689 thousand for the first quarter of 2025, primarily due to one new non-accrual loan. The Company recorded an income tax benefit of $156 thousand for the first quarter of 2025 and an income tax benefit of $57 thousand for the first quarter of 2024. The increase in tax benefit reflected a decrease of $370 thousand in pre-tax income between the two periods. First Quarter 2025 Highlights: During the first quarter of 2025, net interest income increased by $521 thousand, or 6.9%, compared to the first quarter of 2024 The net interest margin increased by 43 basis points to 2.70% for the first quarter of 2025, compared to 2.27% for the first quarter of 2024. This increase was driven largely by growth in the yield on average loan balances and a reduction in cost of interest-bearing liabilities Total deposits increased by $31.1 million, or 4.2%, during the first quarter of 2025 compared to December 31, 2024 Capital ratios remain strong with a Community Bank Leverage Ratio of 15.36% at March 31, 2025 compared to 13.96% at December 31, 2024 Credit quality remains strong with non-accrual loans to total assets at 0.09% and non-performing loans to total assets at 0.07% Borrowings were $78.0 million at March 31, 2025 compared to $195.5 million at December 31, 2024, a reduction of $117.5 million, or 60.1% Chief Executive Officer, Brian Argrett commented, "During the first quarter of 2025, deposits grew by 4.2%, or $31.1 million, since the end of last year and 11.7%, or $81.0 million, since March of last year. In addition, we reduced borrowing costs which resulted in lower cost of funds. The net interest margin was 2.70%, which is an improvement of 43 basis points compared to March of last year." "Our results for the first quarter of 2025 were adversely affected by the provision for credit losses due to one borrower experiencing financial difficulty resulting in the loan changing to a non-accrual status. The increase in the provision is the result of the loss provision for the loan, although we are working with the borrower for a healthier resolution.""Furthermore, our first quarter financial results were negatively impacted by our investments in people over the past twelve months to support our operational capabilities to professionally manage our business, improve our control environment, improve our efficiency, and promote our continued growth.""We are optimistic in our ability to execute our strategic goals and mission objectives, grow and improve profitability while remaining focused on serving low-to-moderate income communities." "I wish to thank our employees, stockholders, and depositors for their continued support to our mission. Your efforts and financial support are fundamental to our ability to expand, serve, and support our communities, customers, and broader stakeholders."Net Interest IncomeNet interest income before provision for credit losses for the first quarter of 2025 totaled $8.0 million, representing an increase of $521 thousand, or 6.9%, from net interest income before provision for credit losses of $7.5 million for the first quarter of 2024. The increase resulted from a $2.3 million decrease in interest expense on borrowings, due to decreases in the average balance and average cost of borrowings. The Company reduced borrowings to improve the net interest margin and to support capacity for future loan growth. The decrease in interest expense was complemented by a $1.6 million increase in interest and fees on loans receivable, primarily due to an increase in rates. These increases were partially offset by a $1.4 million increase in interest expense on deposits, due to increases in rates and the average balance of deposits, a $1.1 million decrease in interest income on interest-earning deposits due to decreases in rates and the average balance of interest-earning deposits, and a $900 thousand decrease in interest income on available-for-sale securities due to decreases in rates and the average balance of available-for-sale securities.The net interest margin increased to 2.70% for the first quarter of 2025 from 2.27% for the first quarter of 2024, due to an increase in the average rate earned on interest-earnings assets, which increased to 4.82% for the first quarter of 2025 from 4.45% for the first quarter of 2024, and a decrease in the cost of funds, which decreased to 2.67% for the first quarter of 2025 from 3.02% for the first quarter of 2024.Provision for Credit LossesFor the three months ended March 31, 2025, the Company recorded a provision for credit losses of $689 thousand, compared to a provision for credit losses of $260 thousand for the three months ended March 31, 2024, primarily due to one new non-accrual loan. No loan charge-offs were recorded during the quarters ended March 31, 2025 or 2024. The allowance for credit losses ("ACL") increased to $8.8 million as of March 31, 2025, compared to $8.1 million as of December 31, 2024. The Bank had three non-accrual loans at March 31, 2025 with an unpaid principal balance of $860 thousand. Credit quality remains strong with non-accrual loans as a percentage of total loans at 0.09% and non-performing assets to total assets of 0.07% despite the addition of non-accrual loans. Non-interest ExpenseTotal non-interest expense was $8.3 million for the first quarter of 2025, compared to $7.8 million for the first quarter of 2024, representing an increase of $444 thousand, or 5.7%. The increase was primarily due to an increase of $1.0 million in compensation and benefits expense, which included $122 thousand in severance expense, partially offset by a $710 thousand decrease in professional services expense. The increase in compensation and benefits expense was primarily attributable to the addition of full-time employees during 2024 in various production and administrative positions as part of the Bank's efforts to expand its operational capabilities to grow its balance sheet. The decrease in professional services was primarily due to a third-party firm reviewing certain general ledger account reconciliations, as well as other professional services, during the first quarter of 2024. Income Taxes The Company recorded an income tax benefit of $156 thousand for the first quarter of 2025 and income tax benefit of $57 thousand for the first quarter of 2024. The increase in tax benefit reflected a decrease of $370 thousand in pre-tax income between the two periods. The effective tax rate was 25.57% for the first quarter of 2025, compared to 23.75% for the first quarter of 2024.Balance Sheet SummaryTotal assets decreased by $73.7 million at March 31, 2025, compared to December 31, 2024, reflecting decreases in cash and cash equivalents of $45.6 million, securities available-for-sale of $17.9 million, net loans of $7.0 million and FHLB stock of $5.0 million, partially offset by an increase in other assets of $2.1 million.Loans held for investment, net of the ACL, decreased by $7.0 million to $961.8 million at March 31, 2025, compared to $968.9 million at December 31, 2024. The decrease was primarily due to loan payoffs and repayments.Deposits increased by $31.1 million, or 4.2%, to $776.5 million at March 31, 2025, from $745.4 million at December 31, 2024. The increase in deposits was attributable to an increase of $53.4 million in certificates of deposit accounts, partially offset of decreases of $9.6 million in Insured Cash Sweep ("ICS") deposits (ICS deposits are the Bank's money market deposit accounts in excess of FDIC insured limits whereby the Bank makes reciprocal arrangements for insurance with other banks), $6.5 million in liquid deposits (demand, interest checking, and money market accounts), $3.8 million in Certificate of Deposit Registry Service ("CDARS") deposits (CDARS deposits are similar to ICS deposits, but involve certificates of deposit, instead of money market accounts), and $2.4 million in savings deposits. As of March 31, 2025, our uninsured deposits, including deposits from City First Bank and other affiliates, represented 34% of our total deposits, compared to 32% as of December 31, 2024. We leverage our long-standing partnership with IntraFi Deposit Solutions to offer deposit insurance for accounts exceeding the FDIC deposit insurance limit of $250,000.Total borrowings decreased by $103.4 million to $158.8 million at March 31, 2025, from $262.1 million at December 31, 2024, primarily due to a $117.5 million decrease in FHLB advances, partially offset by a $14.1 million increase in securities sold under agreements to repurchase.CapitalStockholders' equity was $286.0 million, or 23.3% of the Company's total assets, at March 31, 2025, compared to $285.2 million, or 21.9% of the Company's total assets, at December 31, 2024. Stockholders' equity increased primarily due to a decrease in accumulated other comprehensive loss, net of tax of $1.7 million, partially offset by a $1.2 million decrease in retained earnings. Book value per share was $14.73 at March 31, 2025, compared to $14.82 at December 31, 2024. Capital ratios remain strong with a Community Bank Leverage Ratio of 15.36% at March 31, 2025 compared to 13.96% at December 31,2024. About Broadway Financial CorporationBroadway Financial Corporation operates through its wholly-owned banking subsidiary, City First Bank, National Association, which is a leading mission-driven bank that serves low-to-moderate income communities within urban areas in Southern California and the Washington, D.C. market. City First Bank offers a variety of commercial real estate loan products, services, and depository accounts that support investments in affordable housing, small businesses, and nonprofit community facilities located within low-to-moderate income neighborhoods. City First Bank is a Community Development Financial Institution, Minority Depository Institution, Certified B Corp, and a member of the Global Alliance of Banking on Values. The Bank and the City First network of nonprofits, City First Enterprises, Homes By CFE, and City First Foundation, represent the City First branded family of community development financial institutions, which offer a robust lending and deposit platform.ContactsInvestor RelationsZack Ibrahim, Chief Financial Officer, (202) 243-7100[email protected] Cautionary Statement Regarding Forward-Looking InformationThis press release includes "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations and capital allocation and structure, are forward-looking statements. Forward‑looking statements typically include the words "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," "poised," "optimistic," "prospects," "ability," "looking," "forward," "invest," "grow," "improve," "deliver" and similar expressions, but the absence of such words or expressions does not mean a statement is not forward-looking. These forward‑looking statements are subject to risks and uncertainties, including those identified below, which could cause actual future results to differ materially from historical results or from those anticipated or implied by such statements. The following factors, among others, could cause future results to differ materially from historical results or from those indicated by forward‑looking statements included in this press release: (1) the level of demand for mortgage and commercial loans, which is affected by such external factors as general economic conditions, market interest rate levels, tax laws, and the demographics of our lending markets; (2) the direction and magnitude of changes in interest rates and the relationship between market interest rates and the yield on our interest‑earning assets and the cost of our interest‑bearing liabilities; (3) the rate and amount of loan losses incurred and projected to be incurred by us, increases in the amounts of our nonperforming assets, the level of our loss reserves and management's judgments regarding the collectability of loans; (4) changes in the regulation of lending and deposit operations or other regulatory actions, whether industry-wide or focused on our operations, including increases in capital requirements or directives to increase allowances for loan losses or make other changes in our business operations; (5) legislative or regulatory changes, including those that may be implemented by the current administration in Washington, D.C. and the Federal Reserve Board; (6) possible adverse rulings, judgments, settlements and other outcomes of litigation; (7) actions undertaken by both current and potential new competitors; (8) the possibility of adverse trends in property values or economic trends in the residential and commercial real estate markets in which we compete; (9) the effect of changes in general economic conditions; (10) the effect of geopolitical uncertainties; (11) the impact of health crises on our future financial condition and operations; (12) the impact of any volatility in the banking sector due to the failure of certain banks due to high levels of exposure to liquidity risk, interest rate risk, uninsured deposits and cryptocurrency risk; and (13) other risks and uncertainties. All such factors are difficult to predict and are beyond our control. Additional factors that could cause results to differ materially from those described above can be found in our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K or other filings made with the SEC and are available on our website at http://www.cityfirstbank.com and on the SEC's website at http://www.sec.gov. Forward-looking statements in this press release speak only as of the date they are made, and we undertake no obligation, and do not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except to the extent required by law. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.The following table sets forth selected financial data and ratios as of March 31, 2025 and December 31, 2024 and for the three months ended March 31, 2025 and 2024. BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Selected Financial Data and Ratios (Unaudited) (Dollars in thousands, except per share data) Selected Financial Condition Data and Ratios: March 31, 2025 December 31, 2024 Book value per share $ 14.73 $ 14.82 Equity to total assets 23.27 % 21.87 % Asset Quality Ratios: Non-accrual loans to total loans 0.09 % 0.03 % Non-performing assets to total assets 0.07 % 0.02 % Allowance for credit losses to total gross loans 0.90 % 0.83 % Allowance for credit losses to non-performing loans 1020.23 % 3069.32 % Non-Performing Assets: Non-accrual loans $ 860 $ 264 Loans delinquent 90 days or more and still accruing - - Real estate acquired through foreclosure - - Total non-performing assets $ 860 $ - Delinquent loans 31 to 89 days delinquent $ 4,073 $ 269 Delinquent loans greater than 90 days delinquent $ 264 $ - Selected Operating Data and Ratios: Three Months Ended March 31, 2025 Three Months Ended March 31, 2024 Net recoveries to average assets -%(1) -% (1) Return on average assets (0.39)%(1) (0.05)%(1) Return on average equity (1.70)%(1) (0.23)% (1) Net interest margin 2.70%(1) 2.27%(1) (1) Annualized The following table sets forth the consolidated statements of financial condition as of March 31, 2025 and December 31, 2024. BROADWAY FINANCIAL CORPORATION Consolidated Statements of Financial Condition (In thousands, except share and per share amounts) March 31, 2025 December 31, 2024 (Unaudited) Assets: Cash and due from banks $ 2,040 $ 2,255 Interest-bearing deposits in other banks 13,754 59,110 Cash and cash equivalents 15,794 61,365 Securities available-for-sale, at fair value (amortized cost of $199,318 and $219,658) 185,938 203,862 Loans receivable held for investment, net of allowance of $8,774 and $8,103 961,817 968,861 Accrued interest receivable 5,624 5,001 Federal Home Loan Bank (FHLB) stock 4,616 9,637 Federal Reserve Bank (FRB) stock 3,543 3,543 Office properties and equipment, net 8,812 8,899 Bank owned life insurance 3,332 3,321 Deferred tax assets, net 8,103 8,803 Core deposit intangible, net 1,696 1,775 Goodwill 25,858 25,858 Other assets 4,880 2,786 Total assets $ 1,230,013 $ 1,303,711 Liabilities and stockholders' equity Liabilities: Deposits $ 776,543 $ 745,399 Securities sold under agreements to repurchase 80,778 66,610 FHLB advances 78,000 195,532 Accrued expenses and other liabilities 8,488 10,794 Total liabilities 943,809 1,018,335 Stockholders' equity: Non-Cumulative Redeemable Perpetual Preferred stock, Series C; authorized 150,000 shares at March 31, 2025 and December 31, 2024; issued and outstanding 150,000 shares at March 31, 2025 and December 31, 2024; liquidation value $1,000 per share 150,000 150,000 Common stock, Class A, $0.01 par value, voting; authorized 75,000,000 shares at March 31, 2025 and December 31, 2024; issued 6,460,272 shares at March 31, 2025 and 6,349,455 shares at December 31, 2024; outstanding 6,133,044 shares at March 31, 2025 and 6,022,227 shares at December 31, 2024 64 63 Common stock, Class B, $0.01 par value, non-voting; authorized 15,000,000 shares at March 31, 2025 and December 31, 2024; issued and outstanding 1,425,574 shares at March 31, 2025 and December 31, 2024 14 14 Common stock, Class C, $0.01 par value, non-voting; authorized 25,000,000 shares at March 31, 2025 and December 31, 2024; issued and outstanding 1,672,562 at March 31, 2025 and December 31, 2024 17 17 Additional paid-in capital 143,169 142,902 Retained earnings 11,710 12,911 Unearned Employee Stock Ownership Plan (ESOP) shares (4,152) (4,201) Accumulated other comprehensive loss, net of tax (9,508) (11,223) Treasury stock-at cost, 327,228 shares at March 31, 2025 and at December 31, 2024 (5,326) (5,326) Total Broadway Financial Corporation and Subsidiary stockholders' equity 285,988 285,157 Non-controlling interest 216 219 Total liabilities and stockholders' equity $ 1,230,013 $ 1,303,711 The following table sets forth the consolidated statements of operations for the three months ended March 31, 2025 and 2024. BROADWAY FINANCIAL CORPORATION Consolidated Statements of Operations (In thousands, except share and per share amounts) Three Months Ended March 31, 2025 2024 (Unaudited) (Unaudited) Interest income: Interest and fees on loans receivable $ 12,690 $ 11,129 Interest on available-for-sale securities 1,208 2,075 Other interest income 476 1,589 Total interest income 14,374 14,793 Interest expense: Interest on deposits 4,199 2,799 Interest on borrowings 2,130 4,470 Total interest expense 6,329 7,269 Net interest income 8,045 7,524 Provision for credit losses 689 260 Net interest income after provision for credit losses 7,356 7,264 Non-interest income: Service charges 43 40 Grants 25 - Other 220 266 Total non-interest income 288 306 Non-interest expense: Compensation and benefits 5,284 4,269 Occupancy expense 540 503 Information services 706 707 Professional services 700 1,410 Advertising and promotional expense 46 28 Supervisory costs 193 177 Corporate insurance 67 61 Amortization of core deposit intangible 79 84 Other expense 639 571 Total non-interest expense 8,254 7,810 Income before income taxes (610) (240) Income tax expense (156) (57) Net loss $ (454) $ (183) Less: Net loss attributable to non-controlling interest (3) (19) Net loss attributable to Broadway Financial Corporation $ (451) $ (164) Less: Preferred stock dividends (750) - Net loss attributable to common stockholders $ (1,201) $ (164) Loss per common share-basic $ (0.14) $ (0.02) Loss per common share-diluted $ (0.14) $ (0.02) The following table sets forth the average balances, average yields and costs for the periods indicated. All average balances are daily average balances. The yields set forth below include the effect of deferred loan fees, and discounts and premiums that are amortized or accreted to interest income or expense. For the Three Months Ended March 31, 2025 March 31, 2024 (Dollars in thousands) (Unaudited) Average Balance Interest Average Yield Average Balance Interest Average Yield Assets Interest-earning assets: Interest-earning deposits $ 28,958 $ 312 4.37 % $ 99,103 $ 1,344 5.42 % Securities 196,463 1,208 2.49 % 305,615 2,075 2.72 % Loans receivable (1) 972,375 12,690 5.29 % 909,965 11,129 4.89 % FRB and FHLB stock (2) 11,188 164 5.94 % 13,733 245 7.14 % Total interest-earning assets 1,208,984 $ 14,374 4.82 % 1,328,416 $ 14,793 4.45 % Non-interest-earning assets 50,381 52,561 Total assets $ 1,259,365 $ 1,380,977 Liabilities and Stockholders' Equity Interest-bearing liabilities: Money market deposits $ 119,101 $ 257 0.88 % $ 125,704 $ 1,444 4.59 % Savings deposits 48,712 68 0.57 % 59,056 102 0.69 % Interest checking and other demand deposits 255,647 1,911 3.03 % 227,504 143 0.25 % Certificate accounts 322,544 1,963 2.47 % 163,116 1,110 2.72 % Total deposits 746,004 4,199 2.28 % 575,380 2,799 1.95 % FHLB advances 149,135 1,529 4.16 % 209,299 2,598 4.97 % Bank Term Funding Program borrowing - - - % 100,000 1,203 4.81 % Other borrowings 67,170 601 3.63 % 77,601 669 3.45 % Total borrowings 216,305 2,130 3.99 % 386,900 4,470 4.62 % Total interest-bearing liabilities 962,309 $ 6,329 2.67 % 962,280 $ 7,269 3.02 % Non-interest-bearing liabilities 10,411 137,035 Stockholders' equity 286,645 281,662 Total liabilities and stockholders' equity $ 1,259,365 $ 1,380,977 Net interest rate spread (3) $ 8,045 2.15 % $ 7,524 1.43 % Net interest rate margin (4) 2.70 % 2.27 % Ratio of interest-earning assets to interest-bearing liabilities 125.63 % 138.05 % (1) Amount includes non-accrual loans. (2) FHLB is Federal Home Loan Bank. (3) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. (4) Net interest rate margin represents net interest income as a percentage of average interest-earning assets. SOURCE Broadway Financial Corporation WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM? 440k+ Newsrooms & Influencers 9k+ Digital Media Outlets 270k+ Journalists Opted In

Broadway Financial Corporation Announces Results of Operations for First Quarter 2025

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