Broadway Financial Corporation (the “Company”) (The Nasdaq Stock
Market LLC: BYFC), parent company of Broadway Federal Bank, f.s.b.
(the “Bank”), today reported a net loss of $244 thousand, or
($0.01) per diluted share, for the third quarter of 2020, compared
to a net loss of $279 thousand, or ($0.01) per diluted share, for
the third quarter of 2019.
During the third quarter of 2020, the Bank increased net
interest income after loan loss provision by $1 million because of
growth in the loan portfolio, a decrease in the cost of funds and a
decrease in loan loss provision. The growth in net interest income
was more than offset by an increase in non-interest expense of $588
thousand, a decrease in non-interest income of $138 thousand, and
an increase in income tax expense of $271 thousand. During the
quarter, professional services expense increased to $840 thousand,
of which $595 thousand was associated with the pending merger with
CFBanc Corporation. As certain merger-related expenses are
non-deductible, income tax expense was higher than expected by $167
thousand during the third quarter.
For the nine months ended September 30, 2020, the Company
reported a net loss of $61 thousand, or ($0.00) per diluted share,
compared to a net loss of $137 thousand, or ($0.01) per diluted
share, for the nine months ended September 30, 2019. The loss
during the nine months ended September 30, 2020 was primarily due
to merger-related expenses of $718 thousand, as well as $210
thousand of expenses incurred to respond to actions by a former
stockholder. During the nine months ended September 30, 2020, the
Company increased net interest income before loan loss provision
(recapture) by $1.6 million compared to the same period of 2019
because of growth in the loan portfolio and a decrease in the cost
of funds. These increases were partially offset by a loan loss
provision of $29 thousand recorded during the nine months ended
September 30, 2020 compared to a loan loss recapture of $301
thousand recorded during the same period of 2019. Also, there was
no grant income in the nine months ended September 30, 2020 but the
Bank received a grant of $233 thousand from the U.S. Department of
the Treasury’s Community Development Financial Institution (“CDFI”)
Fund during the nine months ended September 30, 2019. During the
nine months ended September 30, 2020, there was an income tax
credit adjustment of $273 thousand due to a tax settlement with the
California Franchise Tax Board, which more than offset the
additional tax expense associated with the non-deductible merger
costs.
Chief Executive Officer Wayne Bradshaw commented, “During the
third quarter, we announced the execution of a definitive agreement
to combine with CFBanc Corporation, parent of City First Bank of
D.C., in a merger of equals transaction that will create the
largest Black-led Minority Depository Institution in the United
States with pro forma assets of approximately $900 million. This
pending transaction will bring together two organizations with a
shared mission to serve low-to-moderate income communities, and
significantly accelerate Broadway’s plans to achieve profitable
economies of scale. In addition, the merger is expected to lower
Broadway’s cost of funds, expand the Bank’s product lines, and
reduce loan concentration levels that have persistently compelled
Broadway to sell loans over the past seven years, including $77.4
million of loans this year.
“The financial impact of the merger on Broadway’s results for
the third quarter was manifested in significantly higher fees for
legal and financial advisory services, which totaled $595 thousand
for the quarter, and higher income tax expense because of the
non-deductible nature of certain merger costs. These non-recurring
expenses offset the strong performance by the Bank, which increased
its net interest margin by 49 basis points and total net interest
income by $985 thousand, or 41%, compared to the comparable quarter
in 2019, while maintaining pristine asset quality. As of the end of
the quarter, Broadway had only two delinquent loans, totaling $84
thousand, and had not received any requests for loan
modifications.
“I wish to express my profound gratitude to all our employees
who have raised their performance to meet the extra challenges
created by the COVID-19 Pandemic and the expanded responsibilities
related to the merger. Despite these challenges, Broadway’s
employees have demonstrated remarkable efficiency and perseverance
in providing best-in-class service to our customers and
implementing the Bank’s plans to reduce costs and improve
profitability. We remain focused on serving the needs of
low-to-moderate income communities in Southern California, many of
which have suffered disproportionately during these tumultuous
times.”
COVID-19 Pandemic Impact
Since early March, the effects from the spread of the COVID-19
virus have permeated virtually every aspect of society and required
management to quickly plan and implement multiple changes to
Broadway’s operations to protect the health and welfare of the
Bank’s employees and customers, while minimizing disruptions to the
Bank’s ability to provide essential services. These changes were
based on guidance from various governmental entities, including the
Center for Disease Control and Prevention. Among the changes that
the Bank implemented were the following: more intensive cleaning
and maintenance of the branches, distribution of personal
protection equipment to employees, creation of safe distancing
measures within the branches and all work areas, guidance to all
employees regarding other safe practices, amended benefit policies
to ease the burden on employees with children at home, or those
experiencing symptoms of disease, development of plans for certain
employees or departments to work from home, and the creation of
contingency plans for potential further changes to operations. To
date, Broadway has not implemented layoffs or furloughs of any
employees.
In addition, Broadway has developed plans and policies for
providing financial relief to borrowers that may experience
difficulties in meeting the terms of their loans, performed updated
stress tests of the Bank’s loan portfolio using new assumptions
reflecting potential significant impacts of the COVID-19 Pandemic
and related governmental stay-at-home orders, created contingency
plans to respond if various aspects of the credit markets cease to
operate in a normal manner, and implemented new lending guidelines
that are designed to moderate the Bank’s loan concentration and
enhance liquidity. Management has been in regular communication
with the Bank’s regulator regarding these new plans and
policies.
To date, the Bank has had no delinquencies related to COVID-19
and has not received any requests for loan modifications.
Broadway decided not to participate in the Small Business
Administration’s (“SBA”) Paycheck Protection Program (“PPP”)
because management believes that it is more important and
appropriate to maintain the Bank’s focus on existing clients,
markets, and loan products. In addition, the Bank has historically
not offered SBA loans and has not had a significant client base or
portfolio of commercial and industrial loans, for which the PPP
would have represented a product line extension. Instead,
management has been focused on selective originations of
multi-family residential and commercial real estate loans, and
sales of the Bank’s portfolio of loans receivable held for sale,
which will moderate the Bank’s loan concentration and enhance
liquidity. Year to date during 2020, the Bank has sold $77.4
million of loans at a cumulative profit of $199 thousand.
Net Interest Income
Net interest income for the third quarter of 2020 totaled $3.4
million, compared to $2.4 million for the third quarter of 2019.
The increase primarily resulted from an increase in interest income
of $559 thousand due to higher interest income and fees on loans
receivable of $707 thousand, partially offset by lower interest
income on securities and other investments of $148 thousand. Also,
interest expense decreased by $426 thousand due to lower interest
expense on deposits of $474 thousand, partially offset by higher
interest expense on borrowings of $48 thousand. Average
interest-earning assets increased by $68.9 million during the third
quarter of 2020 compared to the third quarter of the prior year,
and the net interest margin increased by 49 basis points to 2.82%
for the third quarter of 2020 compared to 2.33% for the third
quarter of 2019.
Interest income and fees on loans receivable increased by $707
thousand to $4.4 million for the third quarter of 2020, from $3.7
million for the third quarter of 2019 due to an increase of $54.4
million in the average balance of loans receivable (including loans
held for sale), which increased interest income by $566 thousand
and an increase of 14 basis points in the average yield on loans,
which increased interest income by $141 thousand.
Interest income on securities decreased by $31 thousand for the
third quarter of 2020, compared to the third quarter of 2019. The
decrease in interest income on securities primarily resulted from a
decrease of $3.7 million in the average balance of securities,
which decreased interest income by $22 thousand and a decrease of
28 basis points in the average interest rate earned on securities,
which decreased interest income by $9 thousand.
Other interest income decreased by $117 thousand for the third
quarter of 2020, compared to the third quarter of 2019. The
decrease was primarily due to a decrease of 198 basis points in the
average rate earned on interest-bearing deposits in other banks,
which decreased interest income by $171 thousand, partially offset
by an increase of $17.5 million in the average balance of
interest-bearing deposits in other banks, which increased interest
income by $61 thousand. In addition, there was a decrease of $7
thousand in dividends earned on Federal Home Loan Bank (“FHLB”)
stock during the third quarter of 2020, compared to the third
quarter of 2019 due to a decrease of 200 basis points in the
average rate paid on the FHLB stock, offset by a higher average
balance of FHLB stock of $670 thousand.
Interest expense on deposits decreased by $474 thousand for the
third quarter of 2020, compared to the third quarter of 2019. The
$474 thousand decrease was attributable to lower rates paid on all
deposit types, including certificates of deposits, money market
accounts, and savings accounts, which lowered interest expense by
$357 thousand and a decrease of $38.5 million in the average
balance of certificates of deposit, which decreased interest
expense on certificates of deposit by $177 thousand, offset by an
increase in the average balance of non-maturity deposits of $67.6
million, which increased interest expense by $60 thousand.
Interest expense on borrowings increased by $48 thousand for the
third quarter of 2020, compared to the third quarter of 2019. The
higher interest expense on borrowings reflected a net increase of
$39.5 million in average borrowings, due to an increase of $40.5
million in the average balance of FHLB advances, partially offset
by a decrease of $1.0 million in the average balance of the
Company’s junior subordinated debentures. The higher average
borrowings increased interest expense by $196 thousand, which was
partially offset by a decrease of 70 basis points in the overall
cost of borrowings, which decreased interest expense by $148
thousand.
For the nine months ended September 30, 2020, net interest
income increased by $1.6 million to $9.3 million. The increase in
net interest income primarily resulted from an increase in interest
income on loans receivable of $1.5 million, partially offset by
lower interest income on securities and other investments of $299
thousand. Interest expense decreased by $399 thousand due to a
decrease in the cost of deposits of $576 thousand, which was
partially offset by an increase in borrowing costs, which increased
interest expense by $177 thousand.
Interest income and fees on loans receivable increased by over
$1.5 million during the nine months ended September 30, 2020 due to
an increase of $57.5 million in the average balance of loans
receivable (including loans held for sale), which increased
interest income by $1.7 million, partially offset by a decrease of
8 basis points in loan yield, which decreased interest income by
$227 thousand.
Interest income on securities decreased by $89 thousand for the
nine months ended September 30, 2020, compared to the same period
of 2019. The decrease in interest income on securities primarily
resulted from a decrease of $3.7 million in the average balance of
securities, which decreased interest income by $70 thousand, and a
decrease of 20 basis points in the average interest rate earned on
securities, which decreased interest income by $19 thousand.
Other interest income decreased by $210 thousand for the nine
months ended September 30, 2020 compared to the same period of
2019. The decrease was primarily due to a decrease of 183 basis
points in the average rate earned on interest-bearing deposits in
other banks, which decreased interest income by $374 thousand,
partially offset by an increase of $17.7 million in the average
balance of interest-earning deposits in other banks, which
increased interest income by $189 thousand. In addition, there was
a decrease of $25 thousand in dividends earned on FHLB stock during
the nine months ended September 30, 2020, compared to the same
period of 2019.
During the nine months ended September 30, 2020, interest
expense on deposits decreased by $576 thousand due to a decrease of
39 basis points in the average rates paid on all deposit types,
which caused interest expense on deposits to decrease by $547
thousand. In addition, the average balance of certificates of
deposit declined by $12.6 million, which caused an additional
decrease of $187 thousand in interest expense on deposits. These
decreases were partially offset by an increase of $46.2 million in
the average balance of non-maturity deposits, which caused interest
expense to increase by $158 thousand.
During the nine months ended September 30, 2020, interest
expense on borrowings increased by $177 thousand, compared to the
nine months ended September 30, 2019. The higher interest expense
on borrowings reflected a net increase of $37.5 million in average
borrowings, due to an increase of $38.4 million in the average
balance of FHLB advances, offset by a decrease of $957 thousand in
the average balance of the Company’s junior subordinated
debentures. The increase in average borrowings increased interest
expense by $544 thousand, which was partially offset by a decrease
of 47 basis points in the overall cost of borrowings, which
decreased interest expense by $367 thousand.
The net interest margin increased by 8 basis points to 2.57% for
the nine months ended September 30, 2020 from 2.49% for the same
period in 2019, primarily due to lower average rates paid on all
deposit types.
Loan Loss Provision/Recapture
As a small banking institution, Broadway is not required to
adopt the CECL accounting standard until 2023; consequently, the
Bank’s allowance for loan and lease losses (“ALLL”) is based on
evidence available at the date of preparation of its financial
statements, rather than projections of future economic conditions
over the life of the loans. In determining the adequacy of the ALLL
within the context of the current uncertainties posed by the
COVID-19 Pandemic, management has considered the historical and
current performance of the Bank’s portfolio, as well as various
measures of the quality and safety of the portfolio, such as debt
servicing and loan-to-value ratios. As of September 30, 2020, the
Bank had two delinquencies, which were single-family resident loans
that totaled $84 thousand. Management is continuing to monitor the
loan portfolio and regularly communicating with borrowers to
determine the continuing adequacy of the ALLL.
The Bank did not record any loan loss provision or recapture
during the third quarter of 2020 but recorded a loan loss provision
of $29 thousand during the nine months ended September 30, 2020 for
economic uncertainties related to the COVID-19 Pandemic. During the
nine months ended September 30, 2020, the Bank recorded a loan loss
recovery of $4 thousand. At September 30, 2020, the Bank maintained
its ALLL at $3.2 million, despite a net decrease of $36 million in
the gross loans held for investment portfolio during the nine
months ended September 30, 2020. No loan charge-offs were recorded
during the third quarter and the nine months of 2020.
The Bank recorded a loan loss provision of $47 thousand and loan
loss provision recaptures of $301 thousand during the third quarter
and nine months ended September 30, 2019. Cash recoveries of $190
thousand were recorded during the nine months ended September 30,
2019. No loan charge-offs were recorded during the third quarter or
the nine months ended September 30, 2019.
At September 30, 2020, the ALLL was $3.2 million, or 0.88% of
our gross loans held for investment compared to $3.2 million, or
0.79% at December 31, 2019. The ALLL was 392.1% of total
non-performing loans at September 30, 2020 compared to 750.5% at
December 31, 2019. The Bank’s total non-performing assets were $820
thousand at September 30, 2020, consisting of two church loans and
one single-family loan, compared to $424 thousand at December 31,
2019, consisting of one church loan and one single-family loan. The
Bank has not had any real estate owned from foreclosures (“REO”)
since the sale of a single REO property in April 2019.
Non-interest Income
Non-interest income for the third quarter of 2020 totaled $206
thousand compared to $344 thousand for the third quarter of 2019.
Non-interest income decreased by $138 thousand, primarily due to
lower gain on sale of loans of $128 thousand. Also, other
components of non-interest income had a net decrease of $10
thousand during the third quarter of 2020 compared to the third
quarter of 2019.
For the nine months ended September 30, 2020, non-interest
income totaled $645 thousand compared to $859 thousand for the same
period one year ago. The decrease of $214 thousand in non-interest
income was primarily due to a grant of $233 thousand from the CDFI
Fund received during the first quarter of 2019, partly offset by a
net increase in other components of non-interest income of $19
thousand during the nine months ended September 30, 2020 compared
to the same period of 2019.
Non-interest Expense
Non-interest expense for the third quarter of 2020 totaled $3.7
million, compared to $3.1 million for the third quarter of 2019.
The increase of $588 thousand in non-interest expense during the
third quarter of 2020 compared to the same quarter of 2019 was
primarily due to an increase of $505 thousand in professional
services expense, and to a lesser extent, increases of $33 thousand
in compensation and benefits expense, $25 thousand in office
services and supplies expense, $11 thousand in information services
expense, and $41 thousand in various other non-interest expense
items, primarily higher FDIC insurance expense. These increases
were partially offset by decreases of $10 thousand in amortization
of investment in affordable housing limited partnership and $17
thousand in loan related expenses.
The increase of $505 thousand in professional services expense
was due to increases of $439 thousand of legal fees and $156
thousand of financial advisory and consulting fees related to the
pending merger with CFBanc Corporation, parent of City First Bank,
and legal and consulting fees of $10 thousand incurred to respond
to activities conducted by a former stockholder against the
Company. The activities and related litigation were subsequently
withdrawn by the former stockholder early in the third quarter of
2020. These increases in professional services expense were
partially offset by a decrease of $128 thousand in legal fees
related to matters other than the merger or stockholder activities
and a decrease of $2 thousand in audit fees.
For the nine months ended September 30, 2020, non-interest
expense totaled $10.3 million, compared to $9.2 million for the
same period a year ago. The increase of $1.1 million in
non-interest expense was primarily due to increases of $766
thousand in professional services expense and $314 thousand in
compensation and benefits expense.
The increase of $766 thousand in professional services expense
was primarily due to an increase of $582 thousand in legal fees, of
which $470 thousand was related to the pending merger with CFBanc
Corporation, and $210 thousand related to legal expenses incurred
to respond to activities conducted by a former stockholder against
the Company, offset by a decrease of $98 thousand in legal fees
related to other matters. Also, financial advisory and consulting
services fees increased by $300 thousand during the nine months
ended September 30, 2020 compared to the same period a year ago due
primarily to $248 thousand of expenses related to the pending
merger. These increases were offset by a decrease of $116 thousand
in outsourced audit fees.
The increase of $314 thousand in compensation and benefits
expense was primarily due to increases in salary costs of $265
thousand, increases in compensated vacation expense of $44
thousand, and lower deferred loan origination costs of $68 thousand
because there were fewer multi-family loans originated for the
loans receivable held for investment portfolio during 2020 compared
to 2019. These increases were offset by lower employee stock
compensation costs of $32 thousand and lower temporary help expense
of $29 thousand.
Income Taxes
Income tax expense or benefit is computed by applying the
statutory federal income tax rate of 21% and the California income
tax rate of 10.84% to taxable income or loss. The Company recorded
income tax expense of $95 thousand and income tax benefits of $300
thousand for the three and nine months ended September 30, 2020,
respectively, compared to income tax benefits of $176 thousand and
$262 thousand for the three and nine months ended September 30,
2019, respectively. The increase in income tax expense during the
third quarter of 2020 was primarily due to non-deductible merger
related expenses. The income tax benefit recorded during the nine
months ended September 30, 2020 was primarily due to a tax credit
adjustment of $273 thousand upon the resolution of an outstanding
audit issue with the California Franchise Tax Board for tax years
2009 to 2013, partially offset by the additional tax expense
associated with the non-deductible merger related expenses. In
addition, the Company recorded low-income housing tax credits of
$29 thousand and $87 thousand during the third quarter and nine
months ended September 30, 2020, compared to $50 thousand and $149
thousand during the third quarter and nine months ended September
30, 2019. The Company had no valuation allowance on its deferred
tax assets, which totaled $5.3 million at September 30, 2020 and
$5.2 million at December 31, 2019.
Balance Sheet Summary
Total assets increased by $58.8 million to $499.2 million at
September 30, 2020 from $440.4 million at December 31, 2019. The
increase in total assets was comprised of an increase of $54.2
million in cash and cash equivalents, an increase of $40.7 million
in loans receivable held for sale and an increase of $670 thousand
in FHLB stock. These increases were offset by a decrease of $36
million in loans held for investment and a net decrease of $634
thousand in securities available-for-sale.
Loans receivable held for sale totaled $40.7 million at
September 30, 2020. There were no loans held for sale as of
December 31, 2019. During the nine months ended September 30, 2020,
the Bank originated $118.6 million of multi-family loans for sale
and sold $77.4 million of loans held for sale for a gain of $199
thousand. Repayments of loans receivable held for sale totaled $529
thousand during the nine months ended September 30, 2020.
Loans receivable held for investment, net of the allowance for
loan losses, totaled $361.8 million at September 30, 2020, compared
to $397.8 million at December 31, 2019. During the nine months
ended September 30, 2020, the Bank originated $6.2 million in
commercial real estate loans, $2.6 million in multi-family loans
and $728 thousand in construction loans for the loans
held-for-investment portfolio. Net repayments of loans receivable
held for investment during the nine months ended September 30, 2020
totaled $45.5 million.
Deposits increased to $325.3 million at September 30, 2020 from
$297.7 million at December 31, 2019, which consisted primarily of
an increase of $70.1 million in liquid deposits (NOW, demand, money
market and passbook accounts), offset by a net decrease of $24.5
million in CDARS, $9.9 million in deposits gathered from a deposit
listing service and $8.1 million in certificates of deposit. One
customer transferred $21.5 million in deposits from two-way CDARS
to money market accounts during the nine months ended September 30,
2020.
FHLB advances increased to $115.5 million at September 30, 2020
from $84.0 million at December 31, 2019 as the Bank took on
additional advances to fund new loans. The weighted average rate on
FHLB advances decreased to 1.85% at September 30, 2020 compared to
2.32% at December 31, 2019.
Stockholders' equity was $49.4 million, or 9.89% of the
Company’s total assets, at September 30, 2020, compared to $48.8
million, or 11.09% of the Company’s total assets at December 31,
2019. The Company’s book value was $1.76 per share as of September
30, 2020, compared to $1.75 per share as of December 31, 2019.
At September 30, 2020, the Bank’s Total Capital ratio was 18.10%
and its Leverage ratio (Tier 1 Capital to adjusted total assets)
was 9.84%, compared to a Total Capital ratio of 18.29% and a
Leverage ratio of 11.56% at December 31, 2019.
About Broadway Financial Corporation
Broadway Financial Corporation conducts its operations through
its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which
is the leading community-oriented savings bank in Southern
California serving low-to-moderate income communities. We offer a
variety of residential and commercial real estate loan products for
consumers, businesses, and non-profit organizations, other loan
products, and a variety of deposit products, including checking,
savings and money market accounts, certificates of deposit and
retirement accounts. The Bank operates three full-service branches,
two in the city of Los Angeles, and one located in the nearby city
of Inglewood, California.
Shareholders, analysts and others seeking information about the
Company 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.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based upon our
management’s current expectations and involve risks and
uncertainties. Actual results or performance may differ materially
from those suggested, expressed, or implied by the forward-looking
statements due to a wide range of factors including, but not
limited to, the general business environment, the COVID-19
Pandemic, the real estate market, competitive conditions in the
business and geographic areas in which the Company conducts its
operations, regulatory actions or changes, and other risks detailed
in the Company’s reports filed with the Securities and Exchange
Commission, including the Company’s Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q. In addition, there are a number of
risks and uncertainties related to the pending merger of equals
with CFBanc Corporation that could adversely impact the Company,
including the occurrence of an event, change or other circumstance
that could give rise to the right of one or both parties to
terminate the definitive merger agreement, delays in completing the
merger, the failure to obtain necessary regulatory or stockholder
approvals, the possibility that the merger may be more expensive to
complete than anticipated, effects from the diversion of
management’s attention from ongoing business operations, potential
adverse reactions from the Company’s employee and customers to the
announcement of the merger, and difficulties in integrating the
operations of the two organizations after completion of the Merger.
The Company undertakes no obligation to revise any forward-looking
statement to reflect any future events or circumstances, except to
the extent required by law.
Additional Information and Where to Find it
This report 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 between Broadway Financial
Corporation (“Broadway”) and CFBanc Corporation (“CityFirst”). 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 that
will include a joint proxy statement of Broadway and CityFirst and
a prospectus of Broadway. 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. Any definitive joint proxy
statement of CityFirst and Broadway and prospectus of Broadway (if
and when available) will be mailed to stockholders of Broadway and
CityFirst. INVESTORS AND SECURITY HOLDERS OF BROADWAY AND CITYFIRST
ARE URGED TO READ THE REGISTRATION STATEMENT, JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT MAY BE FILED WITH THE
SEC 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 CityFirst, 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.
Certain Information Concerning Participants
Broadway, CityFirst, 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 about the directors and executive officers of
CityFirst will be set forth in the joint proxy
statement/prospectus. These documents, when available, can be
obtained free of charge from the sources indicated above. Other
information regarding the participants in the proxy solicitations
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the joint
proxy statement/prospectus and other relevant materials to be filed
with the SEC when such materials become available. Investors should
read the joint proxy statement/prospectus carefully when it becomes
available before making any voting or investment decisions. You may
obtain free copies of these documents from Broadway using the
sources indicated above.
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Selected
Financial Data and Ratios (Unaudited) (Dollars in thousands,
except per share data) September 30, 2020
December 31, 2019 Selected
Financial Condition Data and Ratios: Cash and cash
equivalents
$
69,716
$
15,566
Securities available-for-sale, at fair value
10,372
11,006
Loans receivable held for sale
40,653
-
Loans receivable held for investment
365,008
401,029
Allowance for loan losses
(3,215
)
(3,182
)
Loans receivable held for investment, net of allowance
361,793
397,847
Total assets
499,217
440,369
Deposits
325,336
297,724
FHLB advances
115,500
84,000
Junior subordinated debentures
3,570
4,335
Total stockholders' equity
49,366
48,848
Book value per share
$
1.76
$
1.75
Equity to total assets
9.89
%
11.09
%
Asset Quality Ratios:
Non-accrual loans to total
loans
0.20
%
0.11
%
Non-performing assets to total assets
0.16
%
0.10
%
Allowance for loan losses to total gross loans
0.88
%
0.79
%
Allowance for loan losses to non-performing loans
392.07
%
750.47
%
Non-Performing Assets:
Non-accrual loans
$
820
$
424
Loans delinquent 90 days or more and still accruing
-
-
Real estate acquired through foreclosure
-
-
Total non-performing assets
$
820
$
424
Delinquent loans (including less than 30 days delinquent)
$
84
$
18
Three Months Ended September 30, Nine
Months Ended September 30, Selected
Operating Data and Ratios:
2020
2019
2020
2019
Interest income
$
4,574
$
4,015
$
13,713
$
12,473
Interest expense
1,197
1,623
4,407
4,806
Net interest income
3,377
2,392
9,306
7,667
Loan loss provision (recapture)
-
47
29
(301
)
Net interest income after loan loss provision (recapture)
3,377
2,345
9,277
7,968
Non-interest income
206
344
645
859
Non-interest expense
(3,732
)
(3,144
)
(10,283
)
(9,226
)
(Loss) income before income taxes
(149
)
(455
)
(361
)
(399
)
Income tax benefit
95
(176
)
(300
)
(262
)
Net income (loss)
$
(244
)
$
(279
)
$
(61
)
$
(137
)
Earnings per common share-diluted
$
(0.01
)
$
(0.01
)
$
-
$
(0.01
)
Loan originations (1)
$
12,645
$
22,507
$
128,185
$
59,772
Net recoveries to average loans
(0.00
)%
(2)
(0.00
)%
(2)
(0.00
)%
(2)
(0.07
)%
(2)
Return on average assets
-0.20
%
(2)
-0.26
%
(2)
-0.02
%
(2)
-0.04
%
(2)
Return on average equity
-1.96
%
(2)
-2.28
%
(2)
-0.17
%
(2)
-0.37
%
(2)
Net interest margin
2.82
%
(2)
2.33
%
(2)
2.57
%
(2)
2.49
%
(2)
(1
)
Does not include net deferred origination costs.
(2
)
Annualized
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201110006238/en/
Brenda J. Battey, Chief
Financial Officer (323)
556-3264 investor.relations@broadwayfederalbank.com
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