QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
|
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class:
|
Trading Symbol(s)
|
Name of each exchange on which registered:
|
||
(including attached preferred stock purchase rights)
|
|
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
|
☒
|
Smaller reporting company
|
|
Emerging growth company
|
|
TABLE OF CONTENTS
|
|||
Page
|
|||
PART I.
|
FINANCIAL STATEMENTS
|
(to be updated) |
|
Item 1.
|
Consolidated Financial Statements (Unaudited)
|
||
1
|
|||
2
|
|||
3
|
|||
4
|
|||
Notes to Consolidated Financial Statements | 6 | ||
Item 2.
|
30
|
||
Item 3.
|
42
|
||
Item 4.
|
42
|
||
PART II.
|
OTHER INFORMATION
|
||
Item 1.
|
44 | ||
Item 1A.
|
44 | ||
Item 2.
|
44 | ||
Item 3.
|
44
|
||
Item 4.
|
44
|
||
Item 5.
|
44
|
||
Item 6.
|
44
|
||
45
|
September 30, 2021
|
December 31, 2020
|
|||||||
(Unaudited)
|
||||||||
Assets:
|
||||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest-bearing deposits in other banks
|
|
|
||||||
Cash and cash equivalents
|
|
|
||||||
Securities available-for-sale, at fair value
|
|
|
||||||
Loans receivable held for investment, net of allowance of $
|
|
|
||||||
Accrued interest receivable
|
|
|
||||||
Federal Home Loan Bank (“FHLB”) stock
|
|
|
||||||
Federal Reserve Bank (FRB) stock
|
||||||||
Office properties and equipment, net
|
|
|
||||||
Bank owned life insurance
|
|
|
||||||
Deferred tax assets, net
|
|
|
||||||
Core deposit intangible, net
|
||||||||
Goodwill
|
||||||||
Other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and stockholders’ equity
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$
|
|
$
|
|
||||
Securities sold under agreements to repurchase |
||||||||
FHLB advances
|
|
|
||||||
Junior subordinated debentures
|
|
|
||||||
Notes payable
|
||||||||
Accrued expenses and other liabilities
|
|
|
||||||
Total liabilities
|
|
|
|
|||||
Cumulative Redeemable Perpetual Preferred stock, Series A, authorized
|
|
|
||||||
Common stock, Class A, $
|
|
|
||||||
Common stock, Class B, $
|
||||||||
Common stock, Class C, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Unearned Employee Stock Ownership Plan (ESOP) shares
|
(
|
)
|
(
|
)
|
||||
Accumulated other comprehensive income, net of tax
|
|
|
||||||
Treasury stock-at cost,
|
(
|
)
|
(
|
)
|
||||
Total Broadway Financial Corporation and Subsidiary stockholders’ equity
|
|
|
||||||
Non-controlling interest
|
||||||||
Total liabilities and stockholders’ equity
|
$
|
|
$
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands, except per share)
|
||||||||||||||||
Interest income:
|
||||||||||||||||
Interest and fees on loans receivable
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Interest on available for sale securities
|
|
|
|
|
||||||||||||
Other interest income
|
|
|
|
|
||||||||||||
Total interest income
|
|
|
|
|
||||||||||||
Interest expense:
|
||||||||||||||||
Interest on deposits
|
|
|
|
|
||||||||||||
Interest on borrowings
|
|
|
|
|
||||||||||||
Total interest expense
|
|
|
|
|
||||||||||||
Net interest income
|
|
|
|
|
||||||||||||
Loan loss provision
|
|
|
|
|
||||||||||||
Net interest income after loan loss provision
|
|
|
|
|
||||||||||||
Non-interest income:
|
||||||||||||||||
Service charges
|
|
|
|
|
||||||||||||
Gain on sale of loans
|
|
|
|
|
||||||||||||
CDFI Grant
|
|
|
|
|
||||||||||||
Other
|
|
|
|
|
||||||||||||
Total non-interest income
|
|
|
|
|
||||||||||||
Non-interest expense:
|
||||||||||||||||
Compensation and benefits
|
|
|
|
|
||||||||||||
Occupancy expense
|
|
|
|
|
||||||||||||
Information services
|
|
|
|
|
||||||||||||
Professional services
|
|
|
|
|
||||||||||||
Supervisory costs
|
||||||||||||||||
Office services and supplies
|
|
|
|
|
||||||||||||
Corporate insurance
|
|
|
|
|
||||||||||||
Amortization of core deposit intangible
|
|
|
||||||||||||||
Other
|
|
|
|
|
||||||||||||
Total non-interest expense
|
|
|
|
|
||||||||||||
Income (loss) before income taxes
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Income tax expense (benefit)
|
|
|
(
|
)
|
(
|
)
|
||||||||||
Net income (loss)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
|||||
Less: Net income attributable to non-controlling interest |
||||||||||||||||
Net Income (loss) Attributable to Broadway Financial Corporation |
$ | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||||
Other comprehensive (loss) income, net of tax:
|
||||||||||||||||
Unrealized (loss) gain on securities available-for-sale arising during the period
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||
Income tax (benefit) expense
|
(
|
)
|
(
|
)
|
|
|
||||||||||
Other comprehensive (loss) income, net of tax
|
(
|
)
|
(
|
)
|
|
|
||||||||||
Comprehensive (loss) income
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
|||||
Earnings (loss) per common share-basic | $ |
$
|
(
|
)
|
$ | ( |
) | $ | ||||||||
Earnings (loss) per common share-diluted | $ | $ | ( |
) | $ | ( |
) | $ |
Nine Months Ended September 30,
|
||||||||
2021
|
2020
|
|||||||
(In thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Loan loss provision
|
|
|
||||||
Depreciation
|
|
|
||||||
Net amortization of deferred loan origination costs
|
|
|
||||||
Net amortization of premiums on available for sale securities
|
|
|
||||||
Amortization of investment in affordable housing limited partnership
|
||||||||
Amortization of core deposit intangible
|
||||||||
Director compensation expense-common stock
|
|
|
||||||
Accretion of premium on FHLB advances
|
( |
) | ||||||
Stock-based compensation expense
|
|
|
||||||
Write down of deferred tax asset
|
||||||||
ESOP compensation expense
|
|
|
||||||
Earnings on bank owned life insurance
|
(
|
)
|
(
|
)
|
||||
Originations of loans receivable held for sale
|
|
(
|
)
|
|||||
Proceeds from sales of loans receivable held for sale
|
|
|
||||||
Repayments on loans receivable held for sale
|
||||||||
Gain on sale of loans receivable held for sale
|
|
(
|
)
|
|||||
Change in assets and liabilities:
|
||||||||
Net change in deferred taxes
|
(
|
)
|
(
|
)
|
||||
Net change in accrued interest receivable
|
|
(
|
)
|
|||||
Net change in other assets
|
|
|
||||||
Net change in advance payments by borrowers for taxes and insurance
|
|
|
||||||
Net change in accrued expenses and other liabilities
|
|
(
|
)
|
|||||
Net cash provided by (used in) operating activities
|
|
(
|
)
|
|||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Cash acquired in merger |
||||||||
Net change in loans receivable held for investment
|
(
|
)
|
|
|||||
Principal payments on available-for-sale securities
|
|
|
||||||
Purchase of available-for-sale securities |
( |
) | ( |
) | ||||
Purchase of FHLB stock
|
(
|
)
|
(
|
)
|
||||
Proceeds from redemption of FHLB stock |
||||||||
Purchase of office properties and equipment
|
(
|
)
|
(
|
)
|
||||
Proceeds from disposals of office property and equipment | ||||||||
Net cash provided by investing activities
|
|
|
||||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
|
|
||||||
Net increase in securities sold under agreements to repurchase |
( |
) | ||||||
Proceeds from sale of stock (net of costs) | ||||||||
Distributions to non-controlling interest | ( |
) | ||||||
Dividends paid on preferred stock
|
( |
) | ||||||
Proceeds from FHLB advances
|
|
|
||||||
Repayments of FHLB advances
|
(
|
)
|
(
|
)
|
||||
Stock cancelled for income tax withholding |
( |
) | ||||||
Repayments of junior subordinated debentures
|
(
|
)
|
(
|
)
|
||||
Net cash provided by financing activities
|
|
|
||||||
Net change in cash and cash equivalents
|
|
|
||||||
Cash and cash equivalents at beginning of the period
|
|
|
||||||
Cash and cash equivalents at end of the period
|
$
|
|
$
|
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
|
$
|
|
||||
Cash paid for income taxes
|
|
|
||||||
Assets acquired (liabilities assumed) in acquisition: |
||||||||
Securities available for sale, at fair value |
$ | $ | ||||||
Loans receivable |
||||||||
Accrued interest receivable |
||||||||
FHLB and FRB stock |
||||||||
Office property and equipment |
||||||||
Goodwill |
||||||||
Core deposit intangible | ||||||||
Other assets | ||||||||
Deposits | ( |
) | ||||||
FHLB advances | ( |
) | ||||||
Securities sold under agreements to repurchase | ( |
) | ||||||
Other borrowings | ( |
) | ||||||
Deferred taxes | ( |
) | ||||||
Accrued expenses and other liabilities | ( |
) | ||||||
Preferred stock | ( |
) | ||||||
Common stock | ( |
) |
Three-Month Period Ended September 30, 2021 and 2020
|
||||||||||||||||||||||||||||||||||||||||
Preferred Stock Non-Voting
|
Common
Stock Voting |
Common
Stock Non-Voting |
Additional
Paid‑in Capital |
Accumulated Other Comprehensive Income
|
Retained Earnings (Substantially Restricted)
|
Unearned
ESOP Shares |
Treasury
Stock |
Non-controlling Interest
|
Total
Stockholders’ Equity |
|||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
Net income for the three months ended September 30, 2021
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||||
Release of unearned ESOP shares
|
||||||||||||||||||||||||||||||||||||||||
Dividends paid on preferred stock
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common stock cancelled for payment of tax withholdings
|
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
Restricted stock compensation expense
|
||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax
|
( |
) | ( |
) | ||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
Balance at June 30, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
Net loss for the three months ended September 30, 2020
|
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||||||||||||
Release of unearned ESOP shares
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Restricted stock Compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock option compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||||
Balance at September 30, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
$
|
|
Nine-Month Period Ended September 30, 2021 and 2020
|
||||||||||||||||||||||||||||||||||||||||
Preferred Stock Non-Voting
|
Common
Stock Voting |
Common
Stock Non-Voting |
Additional
Paid‑in Capital |
Accumulated Other Comprehensive Income
|
Retained Earnings (Substantially Restricted)
|
Unearned
ESOP Shares |
Treasury
Stock |
Non-controlling interest
|
Total
Stockholders’ Equity |
|||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||||||
Balance
at December 31, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
Net (loss) income for the nine months ended September 30, 2021
|
|
|
|
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||||||||||||||
Preferred shares issued in business combination
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Dividends paid on preferred stock
|
- | - | ( |
) | ( |
) | ||||||||||||||||||||||||||||||||||
Common shares issued in business combination
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Shares transferred from voting to non-voting after business combination
|
|
(
|
)
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||
Common shares issued in private placement
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Release of unearned ESOP shares
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Restricted stock compensation expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Stock awarded to directors
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Stock option compensation expense
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Common stock cancelled for payment of tax withholdings
|
|
(
|
)
|
|
(
|
)
|
|
|
|
|
|
(
|
)
|
|||||||||||||||||||||||||||
Payment to non-controlling interest
|
|
|
|
|
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||||||||
Other comprehensive income, net of tax
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Balance
at September 30, 2021
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
$
|
|
||||||||||||||||||
Balance
at December 31, 2019
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
$
|
|
||||||||||||||||||
Net loss for the nine months ended September 30, 2020
|
|
|
|
|
|
(
|
)
|
|
|
(
|
)
|
|||||||||||||||||||||||||||||
Release of unearned ESOP shares
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Restricted stock compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock awarded to directors
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Stock option compensation expense
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Balance
at September 30, 2020
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$ |
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
CFBanc
Book
Value
|
Fair Value
Adjustments
|
Fair Value
|
||||||||||
Assets acquired
|
(In
thousands) |
|||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
||||||
Securities available-for-sale
|
|
(
|
)
|
|
||||||||
Loans receivable held for investment:
|
||||||||||||
Gross loans receivable held for investment
|
|
(
|
)
|
|
||||||||
Deferred fees and costs
|
(
|
)
|
|
|
||||||||
Allowance for loan losses
|
(
|
)
|
|
|
||||||||
|
|
|
||||||||||
Accrued interest receivable
|
|
|
|
|||||||||
FHLB and FRB stock
|
|
|
|
|||||||||
Office properties and equipment
|
|
|
|
|||||||||
Deferred tax assets, net
|
|
(
|
)
|
(
|
)
|
|||||||
Core deposit intangible
|
|
|
|
|||||||||
Other assets
|
|
|
|
|||||||||
Total assets
|
$
|
|
$
|
|
$
|
|
||||||
Liabilities assumed
|
||||||||||||
Deposits
|
$ |
|
$ |
|
$ |
|
||||||
Securities sold under agreements to repurchase |
||||||||||||
FHLB advances
|
|
|
|
|||||||||
Notes payable
|
|
|
|
|||||||||
Accrued expenses and other liabilities
|
|
|
|
|||||||||
Total liabilities
|
$ |
|
$ |
|
$ |
|
||||||
Excess of assets acquired over liabilities assumed
|
$
|
|
$
|
|
$
|
|
||||||
Consideration paid
|
$
|
|
||||||||||
Goodwill recognized
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Acquired Loans
|
||||
(In thousands)
|
||||
Contractual amounts due
|
$
|
|
||
Cash flows not expected to be collected
|
(
|
)
|
||
Expected cash flows
|
|
|||
Interest component of expected cash flows
|
(
|
)
|
||
Fair value of acquired loans
|
$
|
|
Contractual amounts due
|
$
|
|
||
Non-accretable difference (cash flows not expected to be collected)
|
(
|
)
|
||
Expected cash flows
|
|
|||
Accretable yield
|
(
|
)
|
||
Fair value of acquired loans
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
2021
|
September 30,
2020
|
September 30, 2021
|
September 30,
2020
|
|||||||||||||
(Dollars in thousands except per share amounts)
|
||||||||||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Net income (loss)
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||
Basic earnings per share
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
||||||
Diluted earnings per share
|
$
|
|
$
|
(
|
)
|
$
|
(
|
)
|
$
|
|
Common Shares Outstanding
|
||||||||||||||||
Voting
Class A
|
Nonvoting
Class B |
Nonvoting
Class C |
Total
Shares
|
|||||||||||||
Shares outstanding March 31, 2021:
|
|
|
|
|
||||||||||||
Shares issued in merger
|
|
|
|
|
||||||||||||
Shares exchanged post-merger
|
(
|
)
|
|
|
|
|||||||||||
Shares cancelled
|
(
|
)
|
|
|
(
|
)
|
||||||||||
Shares issued in private placements
|
|
|
|
|
||||||||||||
Shares outstanding April 6, 2021:
|
|
|
|
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
For the three months ended
September 30,
|
For the nine months ended
September 30,
|
|||||||||||||||
2021
|
2020
|
2021 | 2020 | |||||||||||||
(Dollars in thousands, except per share )
|
||||||||||||||||
Net income (loss) attributable to Broadway Financial Corporation
|
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | |||||
Less net income attributable to participating securities
|
|
(
|
( |
|||||||||||||
Income (loss) available to common stockholders
|
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ | ( |
) | |||||
Weighted average common shares outstanding for basic earnings (loss) per common share
|
|
|
||||||||||||||
Add: dilutive effects of unvested restricted stock awards
|
|
|
||||||||||||||
Weighted average common shares outstanding for diluted earnings (loss) per common share
|
|
|
||||||||||||||
Earnings (loss) per common share - basic
|
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ | |||||||
Earnings (loss) per common share - diluted
|
$
|
|
$
|
(
|
)
|
$ | ( |
) | $ |
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
September 30, 2021:
|
||||||||||||||||
Federal agency mortgage-backed securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Federal agency CMO
|
( |
) | ||||||||||||||
Federal agency debt
|
|
|
(
|
)
|
|
|||||||||||
Municipal bonds
|
|
|
(
|
)
|
|
|||||||||||
U. S. Treasuries
|
|
|
(
|
)
|
|
|||||||||||
SBA pools
|
|
|
(
|
)
|
|
|||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
December 31, 2020:
|
||||||||||||||||
Federal agency mortgage-backed securities
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Federal agency debt
|
|
|
|
|
||||||||||||
Municipal bonds
|
|
|
|
|
||||||||||||
Total available-for-sale securities
|
$
|
|
$
|
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Due in one year or less
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Due after one year through five years
|
|
|
(
|
)
|
|
|||||||||||
Due after five years through ten years
|
|
|
(
|
)
|
|
|||||||||||
Due after ten years (1)
|
|
|
(
|
)
|
|
|||||||||||
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
(1)
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
September 30,
2021
|
December 31, 2020
|
|||||||
(In thousands)
|
||||||||
Real estate:
|
||||||||
Single family
|
$
|
|
$
|
|
||||
Multi-family
|
|
|
||||||
Commercial real estate
|
|
|
||||||
Church
|
|
|
||||||
Construction
|
|
|
||||||
Commercial – other
|
|
|
||||||
SBA loans (1) |
||||||||
Consumer
|
|
|
||||||
Gross loans receivable before deferred loan costs and premiums
|
|
|
||||||
Unamortized net deferred loan costs and premiums
|
|
|
||||||
Gross loans receivable
|
|
|
||||||
Allowance for loan losses | ( |
) | ( |
) | ||||
Loans receivable, net
|
$
|
|
$
|
|
|
September 30, 2021
|
|||
|
(In thousands)
|
|||
Real estate:
|
||||
Single family
|
$
|
|
||
Commercial real estate
|
|
|||
Commercial - other
|
|
|||
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
|
Three Months Ended
September 30, 2021
|
Nine Months Ended
September 30, 2021
|
||||||
|
(In thousands)
|
|||||||
Balance at the beginning of the period
|
$
|
|
$
|
|
||||
Additions
|
|
|
||||||
Accretion
|
(
|
)
|
(
|
)
|
||||
Balance at the end of the period
|
$
|
|
$
|
|
Three Months Ended September 30, 2021
|
||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single
family
|
Multi-
family
|
Commercial
real estate
|
Church
|
Construction
|
Commercial - other
|
SBA
Loans
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Provision for (recapture of) loan losses
|
(
|
)
|
|
|
(
|
)
|
|
|
|
|
||||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Loans charged off
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
Three Months Ended September 30,
2020
|
||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single
family |
Multi-
family
|
Commercial real estate
|
Church
|
Construction
|
Commercial - other
|
SBA
Loans
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Provision for (recapture of) loan losses
|
|
|
|
(
|
)
|
|
(
|
)
|
|
|
||||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Loans charged off
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
Nine Months Ended September 30, 2021
|
||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single family
|
Multi-family
|
Commercial real estate
|
Church
|
Construction
|
Commercial - other
|
SBA
Loans
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Provision for (recapture of) loan losses
|
(
|
)
|
|
|
(
|
)
|
|
|
|
|
|
|||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loans charged off
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Nine Months Ended September 30, 2020
|
||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single family
|
Multi-family
|
Commercial real estate
|
Church
|
Construction
|
Commercial - other
|
SBA
Loans
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Beginning balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||||
Provision for (recapture of) loan losses
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
|
|
|
||||||||||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Loans charged off
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Ending balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
2021
|
||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single
family
|
Multi-
family
|
Commercial
real estate
|
Church
|
Construction
|
Commercial - other
|
SBA Loans |
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total ending allowance balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Loans collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total ending loans balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
December 31, 2020 | ||||||||||||||||||||||||||||||||||||
Real Estate
|
||||||||||||||||||||||||||||||||||||
Single
family
|
Multi-
family |
Commercial
real estate
|
Church
|
Construction
|
Commercial - other
|
SBA
Loans
|
Consumer
|
Total
|
||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||||||||
Allowance for loan losses:
|
||||||||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
$ |
$
|
|
$
|
|
||||||||||||||||||||
Collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total ending allowance balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Loans:
|
||||||||||||||||||||||||||||||||||||
Loans individually evaluated for impairment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
|||||||||||||||||||
Loans collectively evaluated for impairment
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||
Total ending loans balance
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$ |
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
September 30,
2021
|
December 31, 2020
|
|||||||||||||||||||||||
Unpaid
Principal
Balance |
Recorded
Investment
|
Allowance
for Loan
Losses
Allocated
|
Unpaid
Principal Balance |
Recorded
Investment
|
Allowance
for Loan
Losses
Allocated
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
With no related allowance recorded:
|
||||||||||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
-
|
$
|
|
$
|
|
$
|
-
|
||||||||||||
Multi-family
|
|
|
-
|
|
|
-
|
||||||||||||||||||
Church
|
|
|
-
|
|
|
-
|
||||||||||||||||||
With an allowance recorded:
|
||||||||||||||||||||||||
Single family
|
|
|
|
|
|
|
||||||||||||||||||
Church
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - other
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Three Months Ended September 30, 2021
|
Three Months Ended September 30, 2020
|
|||||||||||||||
Average
Recorded
Investment
|
Cash Basis
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Cash Basis
Interest
Income
Recognized
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Multi-family
|
|
|
|
|
||||||||||||
Church
|
|
|
|
|
||||||||||||
Commercial - other
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Nine
Months Ended September 30, 2021
|
Nine
Months Ended September 30, 2020
|
|||||||||||||||
Average
Recorded Investment
|
Cash Basis
Interest
Income
Recognized
|
Average
Recorded
Investment
|
Cash Basis
Interest
Income
Recognized |
|||||||||||||
(In thousands)
|
||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Multi-family
|
|
|
|
|
||||||||||||
Church
|
|
|
|
|
||||||||||||
Commercial - other
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
September 30,
2021
|
||||||||||||||||||||||||
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Greater
than
90 Days
Past Due
|
Total
Past Due
|
Current
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Loans receivable held for investment:
|
||||||||||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Multi-family
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Church
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - other
|
|
|
|
|
|
|
||||||||||||||||||
SBA loans | ||||||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2020
|
||||||||||||||||||||||||
30-59
Days
Past Due
|
60-89
Days
Past Due
|
Greater
than
90 Days
Past Due
|
Total
Past Due
|
Current
|
Total
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Loans receivable held for investment:
|
||||||||||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Multi-family
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Church
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - other
|
|
|
|
|
|
|
||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
September 30,
2021
|
December 31, 2020
|
|||||||
(In thousands)
|
||||||||
Loans receivable held for investment:
|
||||||||
Single-family residence
|
$
|
|
$
|
|
||||
Church
|
|
|
||||||
Total non-accrual loans
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
◾ |
Watch. Loans classified as watch exhibit
weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing and are not more than 59 days past due. A watch rating is used when a material
deficiency exists, but correction is anticipated within an acceptable time frame.
|
◾ |
Special Mention. Loans classified as
special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the
institution’s credit position at some future date.
|
◾ |
Substandard. Loans classified as
substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize
the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
◾ |
Doubtful. Loans classified as doubtful
have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and
values, highly questionable and improbable.
|
◾ |
Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.
|
September 30,
2021
|
||||||||||||||||||||||||
Pass
|
Watch
|
Special Mention
|
Substandard
|
Doubtful
|
Loss
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Multi-family
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Church
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - other
|
|
|
|
|
|
|
||||||||||||||||||
SBA loans
|
||||||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
December 31,
2020
|
|||||||||||||||||||||||
|
Pass
|
Watch
|
Special Mention
|
Substandard
|
Doubtful
|
Loss
|
||||||||||||||||||
|
(In thousands)
|
|||||||||||||||||||||||
Single family
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||
Multi-family
|
|
|
|
|
|
|
||||||||||||||||||
Commercial real estate
|
|
|
|
|
|
|
||||||||||||||||||
Church
|
|
|
|
|
|
|
||||||||||||||||||
Construction
|
|
|
|
|
|
|
||||||||||||||||||
Commercial - other
|
|
|
|
|
|
|
||||||||||||||||||
Consumer
|
|
|
|
|
|
|
||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Goodwill |
Core Deposit
Intangible
|
|||||||
(In thousands) |
||||||||
Balance at the beginning of the period
|
$
|
|
$
|
|
||||
Additions
|
|
|||||||
Amortization
|
(
|
)
|
||||||
Impairment
|
|
|||||||
Balance at the end of the period
|
$ |
$
|
|
(In thousands)
|
||||
Core deposit intangible acquired
|
$
|
|
||
Less: accumulated amortization
|
(
|
)
|
||
|
$
|
|
(In thousands)
|
||||
2021
|
$
|
|
||
2022
|
|
|||
2023
|
|
|||
2024
|
|
|||
2025
|
|
|||
Thereafter
|
|
|||
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Fair Value Measurement
|
||||||||||||||||
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant Unobservable
Inputs
(Level 3)
|
Total
|
|||||||||||||
(In thousands)
|
||||||||||||||||
At September 30, 2021:
|
||||||||||||||||
Securities available-for-sale – federal agency mortgage-backed
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities available-for-sale – federal agency CMO
|
||||||||||||||||
Securities available-for-sale – federal agency debt
|
|
|
|
|
||||||||||||
Municipal bonds
|
|
|
|
|
||||||||||||
U. S. Treasuries
|
||||||||||||||||
SBA pools
|
||||||||||||||||
At December 31, 2020:
|
||||||||||||||||
Securities available-for-sale – federal agency mortgage-backed
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Securities available-for-sale – federal agency debt
|
|
|
|
|
||||||||||||
Municipal bonds
|
|
|
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Fair Value Measurements at September 30, 2021
|
||||||||||||||||||||
Carrying
Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||
Securities available-for-sale |
||||||||||||||||||||
Loans receivable held for investment
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivables |
||||||||||||||||||||
Bank owned life insurance |
||||||||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Securities sold under agreements to repurchase
|
||||||||||||||||||||
Federal Home Loan Bank advances
|
|
|
|
|
|
|||||||||||||||
Note payable |
||||||||||||||||||||
Accrued interest payable |
Fair Value Measurements at December 31, 2020
|
||||||||||||||||||||
Carrying
Value
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Securities available-for-sale
|
|
|
|
|
|
|||||||||||||||
Loans receivable held for investment
|
|
|
|
|
|
|||||||||||||||
Accrued interest receivables
|
|
|
|
|
|
|||||||||||||||
Bank owned life insurance
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Federal Home Loan Bank advances
|
|
|
|
|
|
|||||||||||||||
Junior subordinated debentures
|
|
|
|
|
|
|||||||||||||||
Accrued interest payable |
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Nine Months Ended
September 30, 2021
|
Nine Months Ended
September 30, 2020
|
|||||||||||||||
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
|||||||||||||
Outstanding at beginning of period
|
|
$
|
|
|
$
|
|
||||||||||
Granted during period
|
|
|
|
|
||||||||||||
Exercised during period
|
|
|
|
|
||||||||||||
Forfeited or expired during period
|
|
|
(
|
)
|
|
|||||||||||
Outstanding at end of period
|
|
$
|
|
|
$
|
|
||||||||||
Exercisable at end of period
|
|
$
|
|
|
$
|
|
Outstanding
|
Exercisable
|
||||||||||||||||||||||||
Grant Date
|
Number
Outstanding
|
Weighted
Average
Remaining
Contractual
Life
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
Number
Outstanding
|
Weighted
Average
Exercise
Price
|
Aggregate
Intrinsic
Value
|
||||||||||||||||||
February 24, 2016
|
|
|
$
|
|
|
$
|
|
||||||||||||||||||
|
|
$
|
|
$
|
|
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
September 30, 2021
|
December 31, 2020
|
|||||||
(Dollars in thousands)
|
||||||||
Allocated to participants
|
|
|
||||||
Committed to be released
|
|
|
||||||
Suspense shares
|
|
|
||||||
Total ESOP shares
|
|
|
||||||
Fair value of unearned shares
|
$
|
|
$
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
Actual
|
Minimum Capital
Requirements
|
Minimum Required to
Be Well Capitalized
Under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||||||
September 30,
2021:
|
||||||||||||||||||||||||
Community Bank Leverage Ratio (1)
|
$
|
|
|
% |
$
|
$
|
|
|
% | |||||||||||||||
December 31,
2020:
|
||||||||||||||||||||||||
Tier 1 (Leverage)
|
$
|
|
|
%
|
$
|
|
|
% |
$
|
|
|
% | ||||||||||||
Common Equity Tier 1
|
$
|
|
|
% |
$
|
|
|
% |
$
|
|
|
% | ||||||||||||
Tier 1
|
$
|
|
|
% |
$
|
|
|
% |
$
|
|
|
% | ||||||||||||
Total Capital
|
$
|
|
|
% |
$
|
|
|
% |
$
|
|
|
% |
(1)
|
|
Table of Contents |
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY
Notes to Unaudited Consolidated Financial Statements
|
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
For the three months ended
|
|||||||||||||||||||||||
|
September 30, 2021
|
September 30, 2020
|
||||||||||||||||||||||
(Dollars in Thousands)
|
Average Balance
|
Interest
|
Average
Yield/
Cost
|
Average Balance
|
Interest
|
Average
Yield/
Cost
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Interest-earning deposits
|
$
|
214,366
|
$
|
101
|
0.19
|
%
|
$
|
42,406
|
$
|
32
|
0.30
|
%
|
||||||||||||
Securities
|
157,142
|
457
|
1.16
|
%
|
10,242
|
59
|
2.30
|
%
|
||||||||||||||||
Loans receivable (1)
|
612,755
|
6,296
|
4.12
|
%
|
423,305
|
4,438
|
4.19
|
%
|
||||||||||||||||
FRB and FHLB stock
|
3,401
|
55
|
6.47
|
%
|
3,586
|
45
|
5.02
|
%
|
||||||||||||||||
Total interest-earning assets
|
987,664
|
$
|
6,909
|
2.80
|
%
|
479,539
|
$
|
4,574
|
3.82
|
%
|
||||||||||||||
Non-interest-earning assets
|
61,615
|
10,663
|
||||||||||||||||||||||
Total assets
|
$
|
1,049,279
|
$
|
490,202
|
||||||||||||||||||||
Liabilities and Stockholders’ Equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Money market deposits
|
$
|
199,577
|
$
|
159
|
0.16
|
%
|
$
|
50,238
|
$
|
60
|
0.48
|
%
|
||||||||||||
Passbook deposits
|
74,223
|
61
|
0.11
|
%
|
58,377
|
55
|
0.38
|
%
|
||||||||||||||||
NOW and other demand deposits
|
210,014
|
37
|
0.02
|
%
|
60,835
|
5
|
0.03
|
%
|
||||||||||||||||
Certificate accounts
|
197,746
|
189
|
0.07
|
%
|
146,469
|
511
|
1.40
|
%
|
||||||||||||||||
Total deposits
|
681,560
|
446
|
0.26
|
%
|
315,919
|
631
|
0.80
|
%
|
||||||||||||||||
FHLB advances
|
91,000
|
440
|
1.98
|
%
|
115,500
|
538
|
1.86
|
%
|
||||||||||||||||
Junior subordinated debentures
|
2,923
|
17
|
2.67
|
%
|
3,783
|
28
|
2.96
|
%
|
||||||||||||||||
Other borrowings
|
65,657
|
15
|
0.09
|
%
|
-
|
-
|
-
|
|||||||||||||||||
Total borrowings
|
159,580
|
472
|
1.18
|
%
|
119,283
|
566
|
1.90
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
841,140
|
$
|
918
|
0.44
|
%
|
435,202
|
$
|
1,197
|
1.10
|
%
|
||||||||||||||
Non-interest-bearing liabilities
|
64,271
|
5,281
|
||||||||||||||||||||||
Stockholders’ Equity
|
143,868
|
49,719
|
||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
1,049,279
|
$
|
490,202
|
||||||||||||||||||||
Net interest rate spread (2)
|
$
|
5,991
|
2.36
|
%
|
$
|
3,377
|
2.72
|
%
|
||||||||||||||||
Net interest rate margin (3)
|
2.43
|
%
|
2.82
|
%
|
||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities
|
117.4
|
%
|
110.19
|
%
|
(1)
|
Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs and loan premiums.
|
(2)
|
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
|
(3)
|
Net interest rate margin represents net interest income as a percentage of average interest-earning assets.
|
|
For the nine months ended
|
|||||||||||||||||||||||
|
September 30, 2021
|
September 30, 2020
|
||||||||||||||||||||||
(Dollars in Thousands)
|
Average Balance
|
Interest
|
Average
Yield/
Cost
|
Average Balance
|
Interest
|
Average
Yield/
Cost
|
||||||||||||||||||
Assets
|
||||||||||||||||||||||||
Interest-earning assets:
|
||||||||||||||||||||||||
Interest-earning deposits
|
$
|
198,922
|
$
|
207
|
0.14
|
%
|
$
|
36,989
|
$
|
165
|
0.59
|
%
|
||||||||||||
Securities
|
120,952
|
953
|
1.05
|
%
|
10,539
|
194
|
2.45
|
%
|
||||||||||||||||
Loans receivable (1)
|
539,811
|
16,240
|
4.01
|
%
|
431,330
|
13,226
|
4.09
|
%
|
||||||||||||||||
FHLB stock
|
3,718
|
170
|
6.10
|
%
|
3,410
|
128
|
5.00
|
%
|
||||||||||||||||
Total interest-earning assets
|
863,403
|
$
|
17,570
|
2.71
|
%
|
482,268
|
$
|
13,713
|
3.79
|
%
|
||||||||||||||
Non-interest-earning assets
|
34,696
|
10,530
|
||||||||||||||||||||||
Total assets
|
$
|
898,099
|
$
|
492,798
|
||||||||||||||||||||
Liabilities and Stockholders’ Equity
|
||||||||||||||||||||||||
Interest-bearing liabilities:
|
||||||||||||||||||||||||
Money market deposits
|
$
|
162,230
|
$
|
463
|
0.38
|
%
|
$
|
44,853
|
$
|
277
|
0.82
|
%
|
||||||||||||
Passbook deposits
|
69,728
|
175
|
0.33
|
%
|
53,451
|
224
|
0.56
|
%
|
||||||||||||||||
NOW and other demand deposits
|
165,646
|
84
|
0.07
|
%
|
52,655
|
12
|
0.03
|
%
|
||||||||||||||||
Certificate accounts
|
183,569
|
584
|
0.42
|
%
|
168,812
|
2,140
|
1.69
|
%
|
||||||||||||||||
Total deposits
|
581,173
|
1,306
|
0.30
|
%
|
319,771
|
2,653
|
1.11
|
%
|
||||||||||||||||
FHLB advances
|
104,366
|
1,516
|
1.94
|
%
|
114,234
|
1,646
|
1.92
|
%
|
||||||||||||||||
Junior subordinated debentures
|
3,113
|
60
|
2.57
|
%
|
4,036
|
108
|
3.57
|
%
|
||||||||||||||||
Other borrowings
|
47,863
|
31
|
0.09
|
%
|
-
|
-
|
-
|
|||||||||||||||||
Total borrowings
|
155,342
|
1 607
|
1.38
|
%
|
118,270
|
1,754
|
1.98
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
736,515
|
$
|
2,913
|
0.53
|
%
|
438,041
|
$
|
4,407
|
1.34
|
%
|
||||||||||||||
Non-interest-bearing liabilities
|
49,696
|
5,476
|
||||||||||||||||||||||
Stockholders’ Equity
|
111,889
|
49,281
|
||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
898,099
|
$
|
492,798
|
||||||||||||||||||||
Net interest rate spread (2)
|
$
|
14,657
|
2.19
|
%
|
$
|
9,306
|
2.45
|
%
|
||||||||||||||||
Net interest rate margin (3)
|
2.26
|
%
|
2.57
|
%
|
||||||||||||||||||||
Ratio of interest-earning assets to interest-bearing liabilities
|
117.2
|
%
|
110.10
|
%
|
(1)
|
Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs and loan premiums.
|
(2)
|
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
|
(3)
|
Net interest rate margin represents net interest income as a percentage of average interest-earning assets.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
Item 1. |
LEGAL PROCEEDINGS
|
Item 1A. |
RISK FACTORS
|
Item 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
Item 3. |
DEFAULTS UPON SENIOR SECURITIES
|
Item 4. |
MINE SAFETY DISCLOSURES
|
Item 5. |
OTHER INFORMATION
|
Item 6. |
EXHIBITS
|
Exhibit
Number*
|
|
Amended and Restated Certificate of Incorporation of Broadway Financial Corporation effective as of April 1, 2021 (Exhibit 3.1 to Form 8-K filed by Registrant on April 5, 2021)
|
|
Bylaws of Registrant (Exhibit 3.2 to Form 8-K filed by Registrant on August 24, 2020)
|
|
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
101.INS
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definitions Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
* |
Exhibits followed by a parenthetical reference are incorporated by reference herein from the document filed by the Registrant with the SEC described therein. Except as otherwise indicated, the SEC File No.
for each incorporated document is 000-27464.
|
** |
Management contract or compensatory plan or arrangement
|
Broadway Financial Corporation
|
||
Date: November 15, 2021
|
By:
|
/s/ Brian Argrett
|
Brian Argrett
|
||
Chief Executive Officer
|
||
Date: November 15, 2021
|
By:
|
/s/ Brenda J. Battey
|
Brenda J. Battey
|
||
Chief Financial Officer
|