Community development finance leaders City
First Bank of DC and Broadway Federal Bank in Los Angeles expand
access to capital in underserved urban areas
CFBanc Corporation (“City First”) in Washington, DC and Broadway
Financial Corporation (“Broadway,” Nasdaq: BYFC) in Los Angeles, CA
announced today that they have entered into a transformational
Merger of Equals agreement to create the largest Black-led Minority
Depository Institution (MDI) in the nation with more than $1
billion in combined assets under management and approximately $850
million in total depository institution assets (as of June 30,
2020). Combining the two institutions will increase their
collective commercial lending capacity for investments in
multifamily affordable housing, small businesses, and nonprofit
development in financially underserved urban areas, while creating
a national platform for impact investors.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200826005490/en/
City First Bank of D.C., National Association (“City First
Bank,” a City First subsidiary) and Broadway Federal Bank, f.s.b.
(“Broadway Federal Bank,” a Broadway subsidiary) each hold a strong
financial position as Community Development Financial Institutions
(CDFIs), and have a longstanding history of advancing economic and
social equity through the provision of capital in low- to
moderate-income communities. The combined institution will maintain
its CDFI status, requiring it to deploy at least 60% of its lending
into low- to moderate-income communities. CDFIs help to close
funding gaps, create jobs, expand critical social services and spur
equitable economic development with a mission to strengthen the
overall well-being of vulnerable communities. Since the beginning
of 2015, City First Bank and Broadway Federal Bank have
collectively deployed over $1.1 billion combined in loans and
investments in their communities (as of June 30, 2020).
“Given the compounding factors of a global pandemic,
unprecedented unemployment and social unrest resulting from
centuries of inequities, the work of CDFIs has never been more
urgent and necessary,” said Brian E. Argrett, President and CEO of
City First Bank and the Vice Chair and CEO of the new combined
institution. “As part of this historic merger, we are demonstrating
that thriving urban neighborhoods are viable markets that require a
dedicated focus, long-term commitment and critical access to
capital.”
The combined nine-member board will be composed of five
directors from City First and four from Broadway. Broadway’s
president and CEO Wayne-Kent A. Bradshaw will lead the board of the
combined institution as its chair. City First board chair Marie C.
Johns will serve as the institution’s lead independent
director.
“The new combined institution will strengthen our position and
will help drive both sustainable economic growth and societal
returns,” said Mr. Bradshaw. “We envision building stronger
profitability and creating a multiplier effect of capital
availability for our customers and for the communities we
serve.”
The new institution will maintain bi-coastal headquarters and
will continue to serve and expand in the banks’ current geographic
areas, with a desire to scale to other high-potential urban
markets. As a national bank, the combined entity intends to
continue to operate under the supervision of the Office of the
Comptroller of the Currency (OCC) and to be listed on the Nasdaq
Capital Market. As a Community Development Financial Institution
(CDFI), a Minority Depository Institution (MDI), a Benefit
Corporation and a member of the Global Alliance of Banking on
Values, the new institution intends to continue to firmly anchor
its work, results and values in the rapidly expanding field of
social finance and accretive stakeholder benefits.
Under the terms of the merger agreement, which was unanimously
approved by the boards of directors of both City First and
Broadway, City First will merge with and into Broadway, with
Broadway as the surviving corporation. Broadway Federal Bank, the
wholly owned subsidiary of Broadway, will merge with and into City
First Bank, the wholly owned subsidiary of City First, with City
First Bank as the surviving bank. At the closing of the merger,
City First common shareholders will receive 13.626 shares of
Broadway common stock for each share of City First common stock
they own, resulting in Broadway stockholders owning 52.5% and City
First shareholders owning 47.5% of the combined institution.
The merger is expected to close in the first quarter of 2021,
subject to satisfaction of customary closing conditions, including
receipt of necessary regulatory approvals and approval by the
shareholders of each company.
Raymond James & Associates, Inc. is acting as financial
advisor, and has rendered a fairness opinion to the board of
directors of City First. Covington & Burling LLP is serving as
legal counsel to City First. Keefe, Bruyette & Woods, A Stifel
Company, is acting as financial advisor, and has rendered a
fairness opinion to the board of directors of Broadway. Arnold
& Porter Kaye Scholer LLP is serving as legal counsel to
Broadway.
About CFBanc Corporation
City First conducts its operations through its wholly owned
subsidiary, City First Bank. Founded over 25 years ago in direct
response to systemic disinvestment in our communities, City First
has been an innovator and a financial first responder for equitable
economic development in Washington, DC. Together with our
affiliates, City First has since invested over $1.3 billion as of
June 30, 2020 with a vision to advance economic equity and social
justice, impacting families and communities today and for
generations to come. City First is part of a dedicated network of
CDFIs and certified BCorps, and is a member of the Global Alliance
of Banking on Values, entities whose values are aligned with
sustainable solutions, healthier families and more prosperous
communities for our collective well-being. For more information,
please visit www.cityfirstbank.com | www.cfenterprises.org.
About Broadway Financial Corporation
Broadway conducts its operations through its wholly owned
subsidiary, Broadway Federal Bank, which is the leading
community-oriented savings bank in Southern California serving
low-to-moderate-income communities. Broadway Federal Bank offers a
variety of residential and commercial real estate loan products for
consumers, businesses and nonprofit organizations, other loan
products and a variety of deposit products, including checking,
savings and money market accounts, certificates of deposits and
retirement accounts. Broadway Federal Bank operates three
full-service branches, two in the city of Los Angeles, and one
located in the nearby city of Inglewood, California. For more
information, please visit www.broadwayfederalbank.com.
Shareholders, analysts and others seeking information about
Broadway are invited to write to: Broadway Financial Corporation,
Investor Relations, 5055 Wilshire Blvd., Suite 500, Los Angeles, CA
90036, or visit our website at www.broadwayfederalbank.com.
Additional Information and Where to Find it
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to buy or sell any securities or a
solicitation of any vote or approval. This communication relates to
a proposed business combination (the “proposed transaction”) between Broadway and City
First. In connection with the proposed transaction, Broadway
intends to file with the Securities and Exchange Commission (the
“SEC”) a registration statement on
Form S-4 (the “Registration
Statement”) that will include a joint proxy statement of
Broadway and City First and a prospectus of Broadway (the
“Joint Proxy/Prospectus”). Broadway
also plans to file other relevant documents with the SEC regarding
the proposed transaction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the U.S. Securities Act of 1933, as amended, and no offer to
sell or solicitation of an offer to buy shall be made in any
jurisdiction in which such offer, solicitation or sale would be
unlawful. Any definitive Joint Proxy/Prospectus (if and when
available) will be mailed or otherwise provided to stockholders of
Broadway and City First. INVESTORS AND SECURITY HOLDERS OF BROADWAY
AND CITY FIRST ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT
PROXY/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION.
Investors and security holders will be able to obtain free
copies of these documents (if and when available) and other
documents containing important information about Broadway and City
First, once such documents are filed with the SEC through the
website maintained by the SEC at http://www.sec.gov. Copies of the
documents filed with the SEC by Broadway will also be available
free of charge on Broadway’s website at
https://www.broadwayfederalbank.com/financial-highlights. Copies of
the Registration Statement and the Joint Proxy/Prospectus can also
be obtained, when it becomes available, free of charge by directing
a request to Broadway Financial Corporation, 5055 Wilshire
Boulevard Suite 500 Los Angeles, California 90036, Attention:
Investor Relations, Telephone: 323-556-3264, or by email to
investor.relations@broadwayfederalbank.com, or to CFBanc
Corporation, 1432 U Street, NW DC 20009, Attention: Audrey
Phillips, Corporate Secretary, Telephone: 202-243-7141.
Certain Information Concerning Participants
Broadway, City First and certain of their respective directors
and executive officers may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information about the directors and executive officers of Broadway
is set forth in Broadway’s proxy statement for its 2020 annual
meeting of stockholders, which was filed with the SEC on May 20,
2020. Information regarding all of the persons who may, under the
rules of the SEC, be deemed participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the Joint
Proxy/Prospectus and other relevant materials to be filed with the
SEC when they become available. These documents, when available,
can be obtained free of charge from the sources indicated above.
Investors should read the Joint Proxy/Prospectus carefully when it
becomes available before making any voting or investment
decisions.
Cautionary Statement Regarding Forward-Looking
Information
This communication includes “forward-looking statements” within
the meaning of the safe harbor provisions of the United States
Private Securities Litigation Reform Act of 1995. Words such as
“expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,”
“poised,” “believes,” “predicts,” “potential,” “continue,” and
similar expressions are intended to identify such forward-looking
statements; however the absence of these words does not mean the
statements are not forward-looking. Forward-looking statements in
this communication include matters that involve known and unknown
risks, uncertainties and other factors that may cause actual
results, levels of activity, performance or achievements to differ
materially from results expressed or implied by this communication.
Such risk factors include, among others: the uncertainty as to the
extent of the duration, scope and impacts of the COVID-19 pandemic;
political and economic uncertainty, including any decline in global
economic conditions or the stability of credit and financial
markets; the expected timing and likelihood of completion of the
proposed transaction, including the timing, receipt and terms and
conditions of any required governmental and regulatory approvals of
the proposed transaction that could reduce anticipated benefits or
cause the parties to abandon the proposed transaction, the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement, the
possibility that stockholders of Broadway or of City First may not
approve the merger agreement, the risk that the parties may not be
able to satisfy the conditions to the proposed transaction in a
timely manner or at all or failure to close the proposed
transaction for any other reason, risks related to disruption of
management time from ongoing business operations due to the
proposed transaction, the risk that any announcements relating to
the proposed transaction could have adverse effects on the market
price of Broadway Common Stock, the risk relating to the potential
dilutive effect of shares of Company Common Stock to be issued in
the proposed transaction, the risk of any unexpected costs or
expenses resulting from the proposed transaction, the risk of any
litigation relating to the proposed transaction, the risk of
possible adverse rulings, judgments, settlements and other outcomes
of pending litigation, the risk that the proposed transaction and
its announcement could have an adverse effect on the ability of
Broadway and City First to retain customers and retain and hire key
personnel and maintain relationships with their customers and on
their operating results and businesses generally, the risk the
pending proposed transaction could distract management of both
entities and that they will incur substantial costs, the risk that
problems may arise in successfully integrating the businesses of
the companies, which may result in the combined company not
operating as effectively and efficiently as expected, or that the
entities may not be able to successfully integrate the businesses,
the risk that the combined company may be unable to achieve
synergies or other anticipated benefits of the proposed transaction
or it may take longer than expected to achieve those synergies or
benefits and other important factors that could cause actual
results to differ materially from those projected. All such factors
are difficult to predict and are beyond Broadway’s control.
Additional factors that could cause results to differ materially
from those described above can be found in Broadway’s annual
reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K or other filings, which have been filed with
the SEC and are available on Broadway’s website at
https://www.broadwayfederalbank.com/financial-highlights and on the
SEC’s website at http://www.sec.gov.
Actual results may differ materially from those contained in the
forward-looking statements in this communication. Forward-looking
statements speak only as of the date they are made and Broadway
undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances
occurring after the date of this communication. You are cautioned
not to place undue reliance on these forward-looking statements,
which speak only as of the date of this communication.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200826005490/en/
Media Contacts: Kerry-Ann Hamilton Media@kahconsultinggroup.com
301.265.5100
Gloria Nauden Gnauden@cityfirstbank.com 202.528.9005
Brenda Battey BBattey@broadwayfederalbank.com 323.556.3264
Broadway Financial (NASDAQ:BYFC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Broadway Financial (NASDAQ:BYFC)
Historical Stock Chart
From Apr 2023 to Apr 2024
