Broadway Financial Corporation (“Broadway”) (NASDAQ: BYFC) and
CFBanc Corporation (“City First”) jointly announced today that they
have received the regulatory approvals required to complete their
proposed merger of equals transaction from the Office of the
Comptroller of the Currency on December 24, 2020 and from the
Federal Reserve Bank of San Francisco acting on behalf of the Board
of Governors of the Federal Reserve System on December 28, 2020.
Pursuant to the merger, City First will merge with and into
Broadway, with Broadway as the surviving corporation, and,
subsequently, Broadway Federal Bank, f.s.b. (“BFB”), Broadway’s
bank subsidiary, will merge with and into City First Bank of D.C.,
N.A. (“City First Bank”), City First’s bank subsidiary, with City
First Bank as the surviving bank.
In addition, City First Enterprises, Inc., a nonprofit
corporation that is the largest stockholder of City First, received
regulatory approval from the Federal Reserve Bank of San Francisco
to acquire approximately 18.85% of Broadway pursuant to the merger
and thereby indirectly acquire control of BFB.
The merger will create the largest African American-led Minority
Depository Institution (“MDI”) in the nation with more than $1
billion in combined assets under management and over $900 million
in total depository institution assets as of September 30, 2020.
Combining the two institutions will increase their collective
commercial lending capacity for investments in multi-family
affordable housing, small businesses, and nonprofit development in
financially underserved urban areas, while creating a national
platform for impact investors.
“I am excited that we are announcing regulatory approval for our
historic merger. This represents a critical milestone in our
process for creating a dynamic banking institution with sufficient
scale to begin addressing the systemic inequities in access to
capital and financial opportunities available within
low-to-moderate income communities. The need for such an
institution has been highlighted by the confluence of domestic
social unrest, the global pandemic, and resulting pervasive
unemployment that has occurred in 2020,” said Brian E. Argrett,
President and CEO of City First Bank and the Vice Chair and CEO of
the new combined institution. “These events have invigorated our
resolve to pursue our bank’s mission. Our management teams are
continuing to work diligently to plan for a successful integration
of the two organizations, and to obtain shareholder approval of the
merger.”
“We greatly appreciate the prompt review of the merger by all of
the regulators involved with oversight of Broadway, City First, and
our respective bank subsidiaries, and their assessments and
determinations to approve the merger. These approvals are pivotal
achievements in helping us create a combined institution with over
$90 million in equity capital and the capabilities to drive both
sustainable economic growth and societal returns for the
low-to-moderate income communities that we serve,” said Mr.
Wayne-Kent A. Bradshaw, CEO of Broadway and the Chair of the new
combined institution.
The merger is expected to be completed in the first half of
2021, subject to the satisfaction of customary closing conditions,
including approval by the stockholders of each company. As
previously announced, 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 approximately 52.5% and City First
shareholders owning approximately 47.5% of the combined
institution, before dilution from a proposed private placement of
Broadway’s common stock with certain institutional investors.
Completion of Broadway’s private placement at its maximum proposed
amount would result in the issuance of up to 12,720,000 shares of
common stock at a price of $1.78 per share.
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, D.C. Together with its
affiliates, City First has since invested over $1.3 billion as of
September 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.
About Broadway Financial Corporation
Broadway 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. 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.
Stockholders, 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 (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 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, 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’s common stock, the risk relating to
the potential dilutive effect of the shares of Broadway’s Common
Stock to be issued in the proposed transaction and the previously
disclosed private placement of new shares of Broadway’s common
stock, 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 require Broadway and City First to 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 the control of
Broadway and City First. 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/20210104005854/en/
Media Contacts: Kerry-Ann Hamilton Media@kahconsultinggroup.com
202.230.6219 Brenda Battey BBattey@broadwayfederalbank.com
323-556-3264 Gloria Nauden Gnauden@cityfirstbank.com
202.528.9005
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