v3.25.4

Restatement of Previously Issued Consolidated Financial Statements | 3 Months Ended
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Mar. 31, 2025
Restatement of Previously Issued Consolidated Financial Statements [Abstract] |
Restatement of Previously Issued Consolidated Financial Statements | NOTE 13 – Restatement of Previously Issued Consolidated Financial Statements The consolidated financial statements for the quarter ended March 31, 2025 have been restated to reflect the correction of misstatements. We have also restated all amounts impacted within the Notes to the consolidated financial statements. The restatement is related to several loan participation agreements originated by City First Bank and sold to other financial institutions. Upon further review of the agreements, it was determined that the transfers did not meet the requirements in ASC 860 to be treated as sales for accounting purposes, and therefore should have been recorded as secured borrowing arrangements. The related adjustment to the consolidated statements of financial condition for treating such transferred interests as secured borrowing arrangements as of March 31, 2025, is to increase “Loans Receivable Held for Investment” by $20.4 million to reflect the fact that the transfers did not meet the requirements for sale accounting treatment, and to record a “Secured Borrowing” for the same amounts as a liability. The related adjustments to the consolidated statements of operations and comprehensive income for treating such transferred interests as secured borrowing arrangements for the quarters ended March 31, 2025 and 2024, is to increase both interest and fees on loans receivable and interest on borrowings by $427 thousand and $415 thousand, respectively. Net income for the quarters ended March 31, 2025 and 2024, is also impacted by the related revisions to the ACL and income taxes, as well as an adjustment to the ACL for a collateral dependent loan. The related consolidated statements of cash flows adjustments for treating such transferred interests as secured borrowing arrangements for the quarters ended March 31, 2025 and 2024, is to adjust “Net change in loans receivable held for investment” and “Proceeds of secured borrowings and “Repayments of secured borrowings” for these amounts. BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Consolidated Statements of Financial Condition (In thousands, except share and per share amounts)
|  | March 31, 2025 (Unaudited) |
|  | As Previously Reported |  |  | Adjustments |  |  | As Restated |
Assets: |  |  |  |  |  |  |  |  |
Cash and due from banks |  | $ | 2,040 |  |  | $ |  |  |  | $ | 2,040 |
Interest-bearing deposits in other banks |  |  | 13,754 |  |  |  |  |  |  |  | 13,754 |
Cash and cash equivalents |  |  | 15,794 |  |  |  |  |  |  |  | 15,794 |
Securities available-for-sale, at fair value |  |  | 185,938 |  |  |  |  |  |  |  | 185,938 |
Loans receivable held for investment, net of allowance |  |  | 971,231 |  |  |  | 20,356 |  |  |  | 991,587 |
Accrued interest receivable |  |  | 5,624 |  |  |  |  |  |  |  | 5,624 |
Federal Home Loan Bank (“FHLB”) stock |  |  | 4,616 |  |  |  |  |  |  |  | 4,616 |
Federal Reserve Bank (“FRB”) stock |  |  | 3,543 |  |  |  |  |  |  |  | 3,543 |
Office properties and equipment, net |  |  | 8,812 |  |  |  |  |  |  |  | 8,812 |
Bank owned life insurance |  |  | 3,332 |  |  |  |  |  |  |  | 3,332 |
Deferred tax assets, net |  |  | 8,103 |  |  |  | 1,189 |  |  |  | 9,292 |
Core deposit intangible, net |  |  | 1,696 |  |  |  |  |  |  |  | 1,696 |
Goodwill |  |  | 25,858 |  |  |  |  |  |  |  | 25,858 |
Other assets |  |  | 3,472 |  |  |  | (788 | ) |  |  | 2,684 |
Total assets |  | $ | 1,238,019 |  |  | $ | 20,757 |  |  | $ | 1,258,776 |
Liabilities and equity |  |  |  |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Deposits |  | $ | 776,543 |  |  | $ |  |  |  | $ | 776,543 |
Securities sold under agreements to repurchase |  |  | 80,778 |  |  |  |  |  |  |  | 80,778 |
FHLB borrowings |  |  | 78,000 |  |  |  |  |  |  |  | 78,000 |
Secured borrowings |  |  | 9,415 |  |  |  | 21,841 |  |  |  | 31,256 |
Accrued expenses and other liabilities |  |  | 8,486 |  |  |  | (69 | ) |  |  | 8,417 |
Total liabilities |  |  | 953,222 |  |  |  | 21,772 |  |  |  | 974,994 |
Non-Cumulative Redeemable Perpetual Preferred stock, Series C |  |  | 150,000 |  |  |  |  |  |  |  | 150,000 |
Common stock, Class A |  |  | 64 |  |  |  |  |  |  |  | 64 |
Common stock, Class B |  |  | 14 |  |  |  |  |  |  |  | 14 |
Common stock, Class C |  |  | 17 |  |  |  |  |  |  |  | 17 |
Additional paid-in capital |  |  | 143,169 |  |  |  |  |  |  |  | 143,169 |
Retained earnings |  |  | 10,303 |  |  |  | (1,015 | ) |  |  | 9,288 |
Unearned Employee Stock Ownership Plan (“ESOP”) shares |  |  | (4,152 | ) |  |  |  |  |  |  | (4,152 | )
Accumulated other comprehensive loss, net of tax |  |  | (9,508 | ) |  |  |  |  |  |  | (9,508 | )
Treasury stock-at cost |  |  | (5,326 | ) |  |  |  |  |  |  | (5,326 | )
Total Broadway Financial Corporation and Subsidiary equity |  |  | 284,581 |  |  |  | (1,015 | ) |  |  | 283,566 |
Non-controlling interest |  |  | 216 |  |  |  |  |  |  |  | 216 |
Total liabilities and equity |  | $ | 1,238,019 |  |  | $ | 20,757 |  |  | $ | 1,258,776 |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except per share amounts)
|  | Three Months Ended March 31, 2025 (Unaudited) |
|  | As Previously Reported |  |  | Adjustments |  |  | As Restated |
Interest income: |  |  |  |  |  |  |  |  |
Interest and fees on loans receivable |  | $ | 12,690 |  |  | $ | 427 |  |  | $ | 13,117 |
Interest on available-for-sale securities |  |  | 1,208 |  |  |  |  |  |  |  | 1,208 |
Other interest income |  |  | 476 |  |  |  |  |  |  |  | 476 |
Total interest income |  |  | 14,374 |  |  |  | 427 |  |  |  | 14,801 |
Interest expense: |  |  |  |  |  |  |  |  |  |  |  |
Interest on deposits |  |  | 4,199 |  |  |  |  |  |  |  | 4,199 |
Interest on borrowings |  |  | 2,130 |  |  |  | 427 |  |  |  | 2,557 |
Total interest expense |  |  | 6,329 |  |  |  | 427 |  |  |  | 6,756 |
Net interest income |  |  | 8,045 |  |  |  | – |  |  |  | 8,045 |
Provision for credit losses |  |  | 689 |  |  |  | 1,225 |  |  |  | 1,914 |
Net interest income after provision for credit losses |  |  | 7,356 |  |  |  | (1,225 | ) |  |  | 6,131 |
Non-interest income: |  |  |  |  |  |  |  |  |  |  |  |
Service charges |  |  | 43 |  |  |  |  |  |  |  | 43 |
Grants |  |  | 25 |  |  |  |  |  |  |  | 25 |
Other |  |  | 220 |  |  |  |  |  |  |  | 220 |
Total non-interest income |  |  | 288 |  |  |  |  |  |  |  | 288 |
Non-interest expense: |  |  |  |  |  |  |  |  |  |  |  |
Compensation and benefits |  |  | 5,284 |  |  |  |  |  |  |  | 5,284 |
Occupancy expense |  |  | 540 |  |  |  |  |  |  |  | 540 |
Information services |  |  | 706 |  |  |  |  |  |  |  | 706 |
Professional services |  |  | 700 |  |  |  |  |  |  |  | 700 |
Advertising and promotional expense |  |  | 46 |  |  |  |  |  |  |  | 46 |
Supervisory costs |  |  | 193 |  |  |  |  |  |  |  | 193 |
Corporate insurance |  |  | 67 |  |  |  |  |  |  |  | 67 |
Amortization of core deposit intangible |  |  | 79 |  |  |  |  |  |  |  | 79 |
Operational loss |  |  | 1,943 |  |  |  |  |  |  |  | 1,943 |
Other |  |  | 639 |  |  |  |  |  |  |  | 639 |
Total non-interest expense |  |  | 10,197 |  |  |  |  |  |  |  | 10,197 |
Loss before income taxes |  |  | (2,553 | ) |  |  | (1,225 | ) |  |  | (3,778 | )
Income tax benefit |  |  | (692 | ) |  |  | (394 | ) |  |  | (1,086 | )
Net loss |  | $ | (1,861 | ) |  | $ | (831 | ) |  | $ | (2,692 | )
Less: Net loss attributable to non-controlling interest |  |  | (3 | ) |  |  |  |  |  |  | (3 | )
Net loss attributable to Broadway Financial Corporation |  | $ | (1,858 | ) |  | $ | (831 | ) |  | $ | (2,689 | )
Less: Preferred stock dividends |  |  | 750 |  |  |  |  |  |  |  | 750 |
Net loss attributable to common stockholders |  | $ | (2,608 | ) |  | $ | (831 | ) |  | $ | (3,439 | )
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |  |  |  |  |  |
Unrealized gains (losses) on securities available-for-sale arising during the period |  | $ | 2,416 |  |  | $ |  |  |  | $ | 2,416 |
Income tax expense (benefit) |  |  | 701 |  |  |  |  |  |  |  | 701 |
Other comprehensive income (loss), net of tax |  |  | 1,715 |  |  |  |  |  |  |  | 1,715 |
Comprehensive loss |  | $ | (893 | ) |  | $ | (831 | ) |  | $ | (1,724 | )
Loss per common share-basic |  | $ | (0.30 | ) |  | $ | (0.11 | ) |  | $ | (0.39 | )
Loss per common share-diluted |  | $ | (0.30 | ) |  | $ | (0.11 | ) |  | $ | (0.39 | )
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Consolidated Statements of Cash Flows (In thousands)
|  | Three Months Ended March 31, 2025 (Unaudited) |  |  | Three Months Ended March 31, 2024 (Unaudited) |
|  | As Previously Reported |  |  | Adjustments |  |  | As Restated |  |  | As Previously Reported |  |  | Adjustments |  |  | As Restated |
Cash flows from operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net loss |  | $ | (1,861 | ) |  | $ | (831 | ) |  | $ | (2,692 | ) |  | $ | (183 | ) |  | $ | 10 |  |  | $ | (173 | )
Adjustments to reconcile net loss to net cash used in operating activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Provision for credit losses |  |  | 689 |  |  |  | 1,225 |  |  |  | 1,914 |  |  |  | 260 |  |  |  | (13 | ) |  |  | 247 |
Depreciation |  |  | 102 |  |  |  |  |  |  |  | 102 |  |  |  | 164 |  |  |  |  |  |  |  | 164 |
Net change of deferred loan origination costs |  |  | 114 |  |  |  |  |  |  |  | 114 |  |  |  | 137 |  |  |  |  |  |  |  | 137 |
Net accretion of premiums and discounts on available-for-sale securities |  |  | (57 | ) |  |  |  |  |  |  | (57 | ) |  |  | (253 | ) |  |  |  |  |  |  | (253 | )
Accretion of purchase accounting marks on loans |  |  | (103 | ) |  |  |  |  |  |  | (103 | ) |  |  | (32 | ) |  |  |  |  |  |  | (32 | )
Amortization of core deposit intangible |  |  | 79 |  |  |  |  |  |  |  | 79 |  |  |  | 84 |  |  |  |  |  |  |  | 84 |
Director compensation expense |  |  | 168 |  |  |  |  |  |  |  | 168 |  |  |  | – |  |  |  |  |  |  |  | – |
Accretion of premium on FHLB advances |  |  | – |  |  |  |  |  |  |  | 0 |  |  |  | (4 | ) |  |  |  |  |  |  | (4 | )
Stock-based compensation expense |  |  | 99 |  |  |  |  |  |  |  | 99 |  |  |  | 77 |  |  |  |  |  |  |  | 77 |
ESOP compensation expense |  |  | 50 |  |  |  |  |  |  |  | 50 |  |  |  | 47 |  |  |  |  |  |  |  | 47 |
Earnings on bank owned life insurance |  |  | (11 | ) |  |  |  |  |  |  | (11 | ) |  |  | (11 | ) |  |  |  |  |  |  | (11 | )
Change in assets and liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in deferred taxes |  |  | – |  |  |  | (1,113 | ) |  |  | (1,113 | ) |  |  | (57 | ) |  |  | 3 |  |  |  | (54 | )
Net change in accrued interest receivable |  |  | (623 | ) |  |  |  |  |  |  | (623 | ) |  |  | (700 | ) |  |  |  |  |  |  | (700 | )
Net change in other assets |  |  | (686 | ) |  |  | 788 |  |  |  | 102 |  |  |  | (9,857 | ) |  |  |  |  |  |  | (9,857 | )
Net change in accrued expenses and other liabilities |  |  | (2,308 | ) |  |  | (69 | ) |  |  | (2,377 | ) |  |  | (1,336 | ) |  |  |  |  |  |  | (1,336 | )
Net cash used in operating activities |  |  | (4,348 | ) |  |  | – |  |  |  | (4,348 | ) |  |  | (11,664 | ) |  |  | – |  |  |  | (11,664 | )
Cash flows from investing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in loans receivable held for investment |  |  | (3,070 | ) |  |  | 9,515 |  |  |  | 6,445 |  |  |  | (46,405 | ) |  |  | 299 |  |  |  | (46,106 | )
Principal payments on available-for-sale securities |  |  | 20,396 |  |  |  |  |  |  |  | 20,396 |  |  |  | 23,157 |  |  |  |  |  |  |  | 23,157 |
Purchase of FHLB stock |  |  | (2,684 | ) |  |  |  |  |  |  | (2,684 | ) |  |  | (136 | ) |  |  |  |  |  |  | (136 | )
Proceeds from redemption of FHLB stock |  |  | 7,705 |  |  |  |  |  |  |  | 7,705 |  |  |  | – |  |  |  |  |  |  |  | – |
Purchase of office properties and equipment |  |  | (15 | ) |  |  |  |  |  |  | (15 | ) |  |  | (55 | ) |  |  |  |  |  |  | (55 | )
Net cash provided by (used in) investing activities |  |  | 22,332 |  |  |  | 9,515 |  |  |  | 31,847 |  |  |  | (23,439 | ) |  |  | 299 |  |  |  | (23,140 | )
Cash flows from financing activities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net change in deposits |  |  | 31,144 |  |  |  |  |  |  |  | 31,144 |  |  |  | 12,859 |  |  |  |  |  |  |  | 12,859 |
Net change in securities sold under agreements to repurchase |  |  | 14,168 |  |  |  |  |  |  |  | 14,168 |  |  |  | (1,794 | ) |  |  |  |  |  |  | (1,794 | )
Repayment of notes payable |  |  | – |  |  |  |  |  |  |  | – |  |  |  | (14,000 | ) |  |  |  |  |  |  | (14,000 | )
Cash dividends paid - preferred |  |  | (750 | ) |  |  |  |  |  |  | (750 | ) |  |  | – |  |  |  |  |  |  |  | – |
Proceeds from secured borrowings |  |  | 9,415 |  |  |  | (9,415 | ) |  |  | – |  |  |  | – |  |  |  | 1,816 |  |  |  | 1,816 |
Repayments of secured borrowings |  |  | – |  |  |  | (100 | ) |  |  | (100 | ) |  |  | – |  |  |  | (2,115 | ) |  |  | (2,115 | )
Proceeds from FHLB advances |  |  | 176,500 |  |  |  |  |  |  |  | 176,500 |  |  |  | – |  |  |  |  |  |  |  | – |
Repayments of FHLB advances |  |  | (294,032 | ) |  |  |  |  |  |  | (294,032 | ) |  |  | (35 | ) |  |  |  |  |  |  | (35 | )
Net cash used in financing activities |  |  | (63,555 | ) |  |  | (9,515 | ) |  |  | (73,070 | ) |  |  | (2,970 | ) |  |  | (299 | ) |  |  | (3,269 | )
Net change in cash and cash equivalents |  |  | (45,571 | ) |  |  |  |  |  |  | (45,571 | ) |  |  | (38,073 | ) |  |  |  |  |  |  | (38,073 | )
Cash and cash equivalents at beginning of the period |  |  | 61,365 |  |  |  |  |  |  |  | 61,365 |  |  |  | 105,195 |  |  |  |  |  |  |  | 105,195 |
Cash and cash equivalents at end of the period |  | $ | 15,794 |  |  | $ | – |  |  | $ | 15,794 |  |  | $ | 67,122 |  |  | $ | – |  |  | $ | 67,122 |
Supplemental disclosures of cash flow information: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash paid for interest |  | $ | 5,975 |  |  | $ | 427 |  |  | $ | 6,402 |  |  | $ | 5,913 |  |  | $ |  |  |  | $ | 5,913 |
Cash paid for income taxes |  |  | – |  |  |  |  |  |  |  | – |  |  |  | 48 |  |  |  |  |  |  |  | 48 |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY Consolidated Statements of Changes in Equity (Unaudited)
|  | Three Months Ended March 31, 2025 and 2024 |
|  | Preferred Stock Non- Voting |  |  | Common Stock Voting |  |  | Common Stock Non- Voting |  |  | Additional Paid-in Capital |  |  | Accumulated Other Comprehensive Loss |  |  | Retained Earnings (As Restated) |  |  | Unearned ESOP Shares |  |  | Treasury Stock |  |  | Non- Controlling Interest |  |  | Total Equity (As Restated) |
|  | (In thousands) |
Balance at December 31, 2024 (As Restated) |  | $ | 150,000 |  |  | $ | 63 |  |  | $ | 31 |  |  | $ | 142,902 |  |  | $ | (11,223 | ) |  | $ | 12,727 |  |  | $ | (4,201 | ) |  | $ | (5,326 | ) |  | $ | 219 |  |  | $ | 285,192 |
Net loss (As Restated) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (2,689 | ) |  |  | – |  |  |  | – |  |  |  | (3 | ) |  |  | (2,692 | )
Release of unearned ESOP shares |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1 |  |  |  | – |  |  |  | – |  |  |  | 49 |  |  |  | – |  |  |  | – |  |  |  | 50 |
Stock-based compensation expense |  |  | – |  |  |  | 1 |  |  |  | – |  |  |  | 98 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 99 |
Director stock compensation expense |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 168 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 168 |
Dividends declared and paid - preferred |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (750 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (750 | )
Other comprehensive income, net of tax |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,715 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 1,715 |
Balance at March 31, 2025 |  | $ | 150,000 |  |  | $ | 64 |  |  | $ | 31 |  |  | $ | 143,169 |  |  | $ | (9,508 | ) |  | $ | 9,288 |  |  | $ | (4,152 | ) |  | $ | (5,326 | ) |  | $ | 216 |  |  | $ | 283,782 |
Balance at December 31, 2023 (As Restated) |  | $ | 150,000 |  |  | $ | 62 |  |  | $ | 31 |  |  | $ | 142,601 |  |  | $ | (13,525 | ) |  | $ | 12,365 |  |  | $ | (4,492 | ) |  | $ | (5,326 | ) |  | $ | 194 |  |  | $ | 281,910 |
Net loss (As Restated) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (154 | ) |  |  | – |  |  |  | – |  |  |  | (19 | ) |  |  | (173 | )
Release of unearned ESOP shares |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (25 | ) |  |  | – |  |  |  | – |  |  |  | 72 |  |  |  | – |  |  |  | – |  |  |  | 47 |
Stock-based compensation expense |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 77 |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | 77 |
Other comprehensive loss, net of tax |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (571 | ) |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (571 | )
Balance at March 31, 2024 |  | $ | 150,000 |  |  | $ | 62 |  |  | $ | 31 |  |  | $ | 142,653 |  |  | $ | (14,096 | ) |  | $ | 12,211 |  |  | $ | (4,420 | ) |  | $ | (5,326 | ) |  | $ | 175 |  |  | $ | 281,290 |

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