001-39043
|
95-4547287
|
|
(State or other jurisdiction of incorporation or organization)
|
(Commission File Number)
|
(I.R.S. Employer Identification Number)
|
5055 Wilshire Boulevard Suite 500, Los Angeles, California
|
90036
|
|
(Address of principal executive offices)
|
(Zip Code)
|
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Class A Common Stock, par value $0.01 per share (including attached preferred stock purchase rights)
|
BYFC
|
The Nasdaq Stock Market LLC
|
Item 8.01 |
Other Events.
|
Item 9.01 |
Financial Statements and Exhibits.
|
(a)
|
Financial statements of businesses acquired.
|
(b)
|
Pro forma financial information.
|
(c)
|
Exhibits
|
Exhibit
No.
|
Description of Exhibit
|
|
Consent of BDO USA, LLP.
|
||
CFBanc Audited Information.
|
||
Broadway-CFBanc Pro Forma Financial Information.
|
Date: June 15, 2021
|
|
BROADWAY FINANCIAL CORPORATION
|
By:
|
/s/ Brenda J. Battey
|
|
Name: Brenda J. Battey
|
||
Title: Chief Financial Officer
|
/s/ BDO USA, LLP
|
|
BDO USA, LLP
|
|
Philadelphia, Pennsylvania
|
|
June 15, 2021
|
|
CFBanc Corportion and Subsidiaries
|
|
Consolidated Financial Statements |
|
December 31, 2020 and 2019 |
CFBanc Corporation and Subsidiaries |
Contents |
Independent Auditor’s Report
|
3 - 4
|
|
Consolidated Financial Statements
|
5 |
|
Consolidated Balance Sheets
|
5 |
|
Consolidated Statements of Income
|
6 |
|
Consolidated Statements of Comprehensive Income
|
7 |
|
Consolidated Statements of Changes in Stockholders’ Equity
|
8 |
|
Consolidated Statements of Cash Flows
|
9 |
|
Notes to Consolidated Financial Statements
|
10 - 52
|
|
Tel: 215-564-1900
Fax: 215-564-3940
www.bdo.com
|
Ten Penn Center
1801 Market Street, Suite 1700
Philadelphia, PA 19103
|
• |
Exercise professional judgment and maintain professional skepticism throughout the audit.
|
• |
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
|
• |
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control. Accordingly, no such opinion is expressed.
|
• |
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
|
• |
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for a reasonable period of time.
|
Consolidated Financial Statements |
|
CFBanc Corporation and Subsidiaries
|
Consolidated Balance Sheets (Dollars in thousands, except per share data) |
December 31,
|
2020
|
2019
|
||||||
Assets
|
||||||||
Cash and due from ban
|
$
|
853
|
$
|
2,293
|
||||
Interest bearing deposits in other financial institutions
|
28,322
|
67,561
|
||||||
Federal funds sold
|
53,896
|
48,454
|
||||||
Total cash and cash equivalents
|
83,071
|
118,308
|
||||||
Certificates of deposit in other financial institutions
|
2,722
|
4,954
|
||||||
Securities available-for-sale, at fair value
|
125,462
|
94,362
|
||||||
Federal Reserve Bank stock, at cost
|
693
|
693
|
||||||
Federal Home Loan Bank stock, at cost
|
479
|
479
|
||||||
Loans, less allowance for credit losses 2020 $2,093; 2019 $2,108 (includes $14 million loan of the consolidated VIE)
|
215,735
|
138,495
|
||||||
Accrued interest receivable on investment securities and loans
|
1,577
|
1,152
|
||||||
Bank premises and equipment, at cost, less accumulated depreciation
|
5,168
|
5,247
|
||||||
Deferred tax asset, net
|
187
|
142
|
||||||
Income tax receivable
|
60
|
-
|
||||||
Other assets
|
1,307
|
1,009
|
||||||
Total Assets
|
$
|
436,461
|
$
|
364,841
|
||||
Liabilities and Stockholders' Equity
|
||||||||
Liabilities
|
||||||||
Deposits:
|
||||||||
Non-interest bearing demand
|
$
|
44,542
|
$
|
41,472
|
||||
NOW
|
116,703
|
85,635
|
||||||
Money market
|
67,905
|
37,843
|
||||||
Savings
|
3,817
|
3,353
|
||||||
Time, $100,000 or more
|
10,118
|
19,852
|
||||||
Other time
|
87,257
|
87,084
|
||||||
|
||||||||
Total deposits
|
330,342
|
275,239
|
||||||
Securities sold under agreements to repurchase
|
47,429
|
32,333
|
||||||
FHLB advances
|
3,092
|
3,232
|
||||||
Notes payable of the consolidated VIE
|
14,000
|
14,000
|
||||||
Accrued interest payable
|
106
|
326
|
||||||
Income tax payable
|
-
|
116
|
||||||
Other liabilities
|
2,676
|
2,165
|
||||||
Total Liabilities
|
397,645
|
327,411
|
||||||
Stockholders' Equity
|
||||||||
Common stock
|
949
|
949
|
||||||
Preferred stock, Series B: par value $0.50, authorized 10,000 shares, issued and outstanding, 3,000 shares in 2019 and 2018, respectively, 4% dividend, liquidation value $1,000 per share
|
3,000
|
3,000
|
||||||
Surplus
|
18,246
|
18,246
|
||||||
Retained earnings
|
15,679
|
15,109
|
||||||
Accumulated other comprehensive income, net of tax
|
1,105
|
376
|
||||||
Less: Treasury stock
|
(330
|
)
|
(330
|
)
|
||||
Total CFBanc Corporation and Subsidiaries stockholders' equity
|
38,649
|
37,350
|
||||||
|
||||||||
Noncontrolling interest
|
167
|
80
|
||||||
Total Stockholders' Equity (including noncontrolling interest)
|
38,816
|
37,430
|
||||||
Total Liabilities and Stockholders' Equity
|
$
|
436,461
|
$
|
364,841
|
CFBanc Corporation and Subsidiaries |
|
Consolidated Statements of Income (Dollars in thousands) |
Years Ended December 31,
|
2020
|
2019
|
||||||
Interest Income
|
||||||||
Loans, including fees
|
$
|
8,595
|
$
|
7,021
|
||||
Taxable investment securities
|
1,911
|
1,916
|
||||||
Federal funds sold
|
315
|
1,210
|
||||||
Deposits in other financial institutions
|
319
|
1,941
|
||||||
Total Interest Income
|
11,140
|
12,088
|
||||||
Interest Expense
|
||||||||
Deposits
|
1,052
|
1,223
|
||||||
Securities sold under agreements to repurchase
|
96
|
82
|
||||||
FHLB advances
|
83
|
87
|
||||||
Notes payable
|
525
|
525
|
||||||
Total Interest Expense
|
1,756
|
1,917
|
||||||
Net interest income
|
9,384
|
10,171
|
||||||
Provision for (Benefit from) Credit Losses
|
114
|
(46
|
)
|
|||||
Net Interest Income After Provision for (Benefit From) Credit Losses
|
9,270
|
10,217
|
||||||
Noninterest Income
|
||||||||
Service charges on deposit accounts
|
52
|
71
|
||||||
BEA grant income
|
152
|
233
|
||||||
Gains on sales of available-for-sale investment securities
|
873
|
-
|
||||||
Other noninterest income
|
771
|
1,529
|
||||||
Total Noninterest Income
|
1,848
|
1,833
|
||||||
Other Expenses
|
||||||||
Salaries and employee benefits
|
5,964
|
6,271
|
||||||
Professional fees
|
973
|
1,100
|
||||||
Occupancy and equipment
|
465
|
484
|
||||||
Data processing expense and network administration
|
1,044
|
643
|
||||||
Gain on sale of other real estate owned
|
-
|
(325
|
)
|
|||||
Indemnification fees
|
-
|
147
|
||||||
Other expenses
|
1,783
|
1,374
|
||||||
|
||||||||
Total Other Expenses
|
10,229
|
9,694
|
||||||
Income before income taxes
|
889
|
2,356
|
||||||
Provision for Income Taxes
|
112
|
654
|
||||||
Net Income
|
777
|
1,702
|
||||||
Less: Net income attributable to noncontrolling interest
|
(87
|
)
|
(243
|
)
|
||||
Net Income Attributable to CFBanc Corporation and Subsidiaries
|
$
|
690
|
$
|
1,459
|
CFBanc Corporation and Subsidiaries |
|
Consolidated Statements of Comprehensive Income (Dollars in thousands) |
Years Ended December 31,
|
2020
|
2019
|
||||||
Net Income
|
$
|
777
|
$
|
1,702
|
||||
Other Comprehensive Income, Net of Tax
|
||||||||
Unrealized holding gains on available-for-sale securities, net of income tax expense of $506 and $624, respectively
|
1,362
|
1,575
|
||||||
Less: Reclassification adjustment for realized gain on available-for-sale securities, net of income tax expense of $240 and $0, respectively
|
(633
|
)
|
-
|
|||||
Total Other Comprehensive Income, Net of Tax
|
729
|
1,575
|
||||||
Comprehensive income
|
1,506
|
3,277
|
||||||
Comprehensive Income Attributable to Noncontrolling Interest
|
(87
|
)
|
(243
|
)
|
||||
Comprehensive Income Attributable to CFBanc Corporation and Subsidiaries
|
$
|
1,419
|
$
|
3,034
|
CFBanc Corporation and Subsidiaries |
|
Consolidated Statements of Changes in Stockholders’ Equity (Dollars in thousands) |
Common
Stock
|
Preferred
Stock
|
Surplus
|
Retained
Earnings
|
Accumulated
Other
Comprehensive
Loss
|
Treasury
Stock
|
Total CFBanc
Corporation
and
Subsidiaries
Stockholders’ Equity
|
Non-
controlling
Interest
|
Total
Stockholders’
Equity
(including
Non- controlling
Interest)
|
||||||||||||||||||||||||||||
Balance, January 1, 2019
|
$
|
949
|
$
|
3,000
|
$
|
18,246
|
$
|
13,770
|
$
|
(1,199
|
)
|
$
|
(330
|
)
|
$
|
34,436
|
$
|
147
|
$
|
34,583
|
||||||||||||||||
Net income
|
-
|
-
|
-
|
1,459
|
-
|
-
|
1,459
|
243
|
1,702
|
|||||||||||||||||||||||||||
Distributions to noncontrolling interest
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(310
|
)
|
(310
|
)
|
|||||||||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
-
|
-
|
-
|
1,575
|
-
|
1,575
|
-
|
1,575
|
|||||||||||||||||||||||||||
Preferred stock dividends paid
|
-
|
-
|
-
|
(120
|
)
|
-
|
-
|
(120
|
)
|
-
|
(120
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019
|
$
|
949
|
$
|
3,000
|
$
|
18,246
|
$
|
15,109
|
$
|
376
|
$
|
(330
|
)
|
$
|
37,350
|
$
|
80
|
$
|
37,430
|
|||||||||||||||||
Net income
|
-
|
-
|
-
|
690
|
-
|
-
|
690
|
87
|
777
|
|||||||||||||||||||||||||||
Other comprehensive income, net of tax
|
-
|
-
|
-
|
-
|
729
|
-
|
729
|
-
|
729
|
|||||||||||||||||||||||||||
Preferred stock dividends paid
|
-
|
-
|
-
|
(120
|
)
|
-
|
-
|
(120
|
)
|
-
|
(120
|
)
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020
|
$
|
949
|
$
|
3,000
|
$
|
18,246
|
$
|
15,679
|
$
|
1,105
|
$
|
(330
|
)
|
$
|
38,649
|
$
|
167
|
$
|
38,816
|
CFBanc Corporation and Subsidiaries |
|
Consolidated Statements of Cash Flows (Dollars in thousands) |
Years Ended December 31,
|
2020
|
2019
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
777
|
1,702
|
|||||
Adjustments to reconcile change in net income to net cash provided by operating activities:
|
||||||||
Amortization and accretion
|
227
|
167
|
||||||
Depreciation
|
183
|
205
|
||||||
Deferred taxes, net
|
(333
|
)
|
10
|
|||||
Provision for (benefit from) credit losses
|
114
|
(46
|
)
|
|||||
Provision for (benefit from) unfunded off-balance sheet commitments
|
102
|
(71
|
)
|
|||||
Gain on sale of available-for-sale securities
|
(873
|
)
|
-
|
|||||
Gain on sale of other real estate owned
|
-
|
(325
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Increase in accrued interest receivable
|
(425
|
)
|
(33
|
)
|
||||
(Increase) decrease in income taxes receivable
|
(60
|
)
|
91
|
|||||
(Decrease) increase in other assets
|
(298
|
)
|
524
|
|||||
(Decrease) increase in accrued interest payable
|
(220
|
)
|
61
|
|||||
(Decrease) increase in income taxes payable
|
(116
|
)
|
116
|
|||||
Increase in other liabilities
|
409
|
26
|
||||||
Net Cash (Used in) Provided by Operating Activities
|
(513
|
)
|
2,427
|
|||||
Cash Flows from Investing Activities
|
||||||||
Purchases of available-for-sale securities
|
(100,263
|
)
|
(29,334
|
)
|
||||
Purchases of certificate of deposits in other institutions
|
(248
|
)
|
(496
|
)
|
||||
Purchases of FHLB stock
|
-
|
(52
|
)
|
|||||
Proceeds from sales of available-for-sale securities
|
25,472
|
-
|
||||||
Proceeds from repayments of available-for-sale securities
|
21,030
|
12,084
|
||||||
Proceeds from calls and maturities of available-for-sale securities
|
23,795
|
12,995
|
||||||
Proceeds from maturities of certificates of deposit in other institutions
|
2,480
|
3,947
|
||||||
Increase in loans, net
|
(76,825
|
)
|
(9,405
|
)
|
||||
Proceeds from sale of other real estate owned
|
-
|
2610
|
||||||
Purchases of premises and equipment
|
(104
|
)
|
(46
|
)
|
||||
Net Cash Used in Investing Activities
|
(104,663
|
)
|
(7,697
|
)
|
||||
Cash Flows from Financing Activities
|
||||||||
Increase in noninterest-bearing deposits, NOW accounts, money market accounts, and savings accounts, net
|
64,664
|
5,339
|
||||||
(Decrease) increase in time deposits, net
|
(9,561
|
)
|
3,779
|
|||||
Increase in securities sold under agreements to repurchase, net
|
15,096
|
4,760
|
||||||
Decrease in FHLB advances
|
(140
|
)
|
(140
|
)
|
||||
Preferred stock dividends paid
|
(120
|
)
|
(120
|
)
|
||||
Distributions to noncontrolling interest
|
-
|
(310
|
)
|
|||||
Net Cash Provided by (Used in) Financing Activities
|
69,939
|
(4,928
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(35,237
|
)
|
(10,198
|
)
|
||||
Cash and Cash Equivalents, Beginning of Year
|
118,308
|
128,506
|
||||||
Cash and Cash Equivalents, End of Year
|
$
|
83,071
|
$
|
118,308
|
||||
Supplementary Cash Flow Information
|
||||||||
Interest paid
|
$
|
1,976
|
$
|
1,856
|
||||
Income taxes paid
|
$
|
455
|
$
|
455
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31, 2020
|
Amortized Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Fair
Value
|
||||||||||||
U.S. Government agencies
|
$
|
25,388
|
$
|
125
|
$
|
(54
|
)
|
$
|
25,459
|
|||||||
Mortgage-backed securities
|
79,372
|
1,468
|
(69
|
)
|
80,771
|
|||||||||||
Collateralized mortgage obligations
|
2,026
|
16
|
-
|
2,042
|
||||||||||||
Municipal taxable
|
1,224
|
6
|
-
|
1,230
|
||||||||||||
SBA loan pools
|
15,926
|
113
|
(79
|
)
|
15,960
|
|||||||||||
$
|
123,936
|
$
|
1,728
|
$
|
(202
|
)
|
$
|
125,462
|
December 31, 2019
|
Amortized Cost
|
Gross
Unrealized
Gains |
Gross
Unrealized Losses |
Fair
Value
|
||||||||||||
U.S. Government agencies
|
$
|
22,585
|
$
|
156
|
$
|
(38
|
)
|
$
|
22,703
|
|||||||
Mortgage-backed securities
|
63,390
|
547
|
(97
|
)
|
63,840
|
|||||||||||
SBA loan pools
|
7,856
|
23
|
(60
|
)
|
7,819
|
|||||||||||
$
|
93,831
|
$
|
726
|
$
|
(195
|
)
|
$
|
94,362
|
December 31, 2020
|
Less than 12 Months
|
12 Months or Longer
|
Total
|
|||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
losses
|
|||||||||||||||||||
U.S. Government agencies
|
$
|
10,522
|
$
|
(54
|
)
|
$
|
-
|
$
|
-
|
$
|
10,522
|
$
|
(54
|
)
|
||||||||||
Mortgage-backed securities
|
26,021
|
(58
|
)
|
1,402
|
(11
|
)
|
27,423
|
(69
|
)
|
|||||||||||||||
SBA loan pools
|
7,998
|
(68
|
)
|
1,808
|
(11
|
)
|
9,806
|
(79
|
)
|
|||||||||||||||
$
|
44,541
|
$
|
(180
|
)
|
$
|
3,210
|
$
|
(22
|
)
|
$
|
47,751
|
$
|
(202
|
)
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Less than 12 Months
|
12 Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
Losses
|
Fair Value
|
Unrealized
losses
|
|||||||||||||||||||
U.S. Government agencies
|
$
|
3,056
|
$
|
(17
|
)
|
$
|
13,010
|
$
|
(21
|
)
|
$
|
16,066
|
$
|
(38
|
)
|
|||||||||
Mortgage-backed securities
|
12,915
|
(46
|
)
|
6,171
|
(51
|
)
|
19,086
|
(97
|
)
|
|||||||||||||||
SBA loan pools
|
2,607
|
(38
|
)
|
3,609
|
(22
|
)
|
6,216
|
(60
|
)
|
|||||||||||||||
$
|
18,578
|
$
|
(101
|
)
|
$
|
22,790
|
$
|
(94
|
)
|
$
|
41,368
|
$
|
(195
|
)
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31, 2020
|
Available-for-Sale
|
|||||||
Amortized
Cost
|
Fair
Value
|
|||||||
Amounts maturing:
|
||||||||
Less than one year
|
$
|
7,749
|
$
|
7,764
|
||||
After one year through five years
|
3,996
|
4,105
|
||||||
After five years through ten years
|
11,800
|
11,751
|
||||||
Greater than ten years
|
3,067
|
3,069
|
||||||
Mortgage-backed, due in monthly installments
|
79,372
|
80,771
|
||||||
Collateralized mortgage obligations, due in monthly installments
|
2,026
|
2,042
|
||||||
SBA loan pool, due in monthly installments
|
15,926
|
15,960
|
||||||
$
|
123,936
|
$
|
125,462
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
2019
|
|||||||
Loans secured by real estate:
|
||||||||
Construction, land development and other land loans
|
$
|
25,283
|
$
|
10,965
|
||||
Loans secured by 1-4 family residential properties
|
12,118
|
8,786
|
||||||
Secured by multi-family (5 or more) residential properties
|
43,927
|
27,848
|
||||||
Secured by nonfarm nonresidential properties
|
62,196
|
50,038
|
||||||
Commercial and industrial loans
|
74,646
|
43,185
|
||||||
218,170
|
140,822
|
|||||||
Less: Unearned income on loans
|
342
|
219
|
||||||
217,828
|
140,603
|
|||||||
Less: Allowance for credit losses
|
2,093
|
2,108
|
||||||
$
|
215,735
|
$
|
138,495
|
2020
|
2019
|
|||||||
Commercial lines of credit
|
$
|
8,597
|
$
|
2,547
|
||||
Construction and real estate loans and lines
|
7,407
|
7,109
|
||||||
Unused letters of credit
|
335
|
315
|
||||||
$
|
16,339
|
$
|
9,971
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
• |
Construction, land development and other land loans;
|
• |
Loans secured by 1-4 family residential properties;
|
• |
Loans secured by multi-family (5 or more) residential properties;
|
• |
Loans secured by nonfarm nonresidential properties.
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
• |
Changes in the levels and trends in delinquencies, non-accruals, classified assets and troubled debt restructurings
|
• |
Changes in the nature and volume of the portfolio
|
• |
Effects of any changes in lending policies and procedures, including underwriting standards and collections, charge-off and recovery practices
|
• |
Changes in the experience, ability, and depth of management and staff
|
• |
Changes in national and local economic conditions and developments, including the condition of various market segments
|
• |
Changes in the concentration of credits within each pool
|
• |
Changes in the quality of the Bank’s loan review system and the degree of oversight by the Board
|
• |
Changes in external factors such as competition and the legal environment including Regulation B
|
• |
Changes in the underlying collateral for collateral dependent loans
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31, 2020
|
Construction
and
Development
|
1-4 Family
Residential
|
Multi-Family
Residential
|
Nonfarm
Non-
residential
|
Commercial
and
Industrial
|
Unallocated
|
Total
|
|||||||||||||||||||||
Balance, beginning of year
|
$
|
139
|
$
|
49
|
$
|
627
|
$
|
812
|
$
|
290
|
$
|
191
|
$
|
2,108
|
||||||||||||||
Provision (benefit) of credit losses
|
294
|
65
|
(55
|
)
|
(137
|
)
|
138
|
(191
|
)
|
114
|
||||||||||||||||||
Recoveries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Loans charged off
|
(129
|
)
|
-
|
-
|
-
|
-
|
-
|
(129
|
)
|
|||||||||||||||||||
Balance, end of year
|
$
|
304
|
$
|
114
|
$
|
572
|
$
|
675
|
$
|
428
|
$
|
-
|
$
|
2,093
|
||||||||||||||
Individually evaluated for impairment:
|
||||||||||||||||||||||||||||
Balance in allowance
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Related loan balance
|
-
|
887
|
116
|
1,207
|
634
|
-
|
2,844
|
|||||||||||||||||||||
Collectively evaluated for impairment:
|
||||||||||||||||||||||||||||
Balance in allowance
|
$
|
304
|
$
|
114
|
$
|
572
|
$
|
675
|
$
|
428
|
$
|
-
|
$
|
2,093
|
||||||||||||||
Related loan balance
|
25,283
|
11,231
|
43,811
|
60,989
|
74,012
|
-
|
215,326
|
December 31, 2019
|
Construction
and
Development
|
1-4 Family
Residential
|
Multi-Family
Residential
|
Nonfarm
Non-
residential
|
Commercial
and
Industrial
|
Unallocated
|
Total
|
|||||||||||||||||||||
Balance, beginning of year
|
$
|
194
|
$
|
92
|
$
|
758
|
$
|
647
|
$
|
294
|
$
|
198
|
$
|
2,183
|
||||||||||||||
Provision (benefit) of credit losses
|
(26
|
)
|
(43
|
)
|
(131
|
)
|
165
|
(4
|
)
|
(7
|
)
|
(46
|
)
|
|||||||||||||||
Recoveries
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||||
Loans charged off
|
(29
|
)
|
-
|
-
|
-
|
-
|
-
|
(29
|
)
|
|||||||||||||||||||
Balance, end of year
|
$
|
139
|
$
|
49
|
$
|
627
|
$
|
812
|
$
|
290
|
$
|
191
|
$
|
2,108
|
||||||||||||||
Individually evaluated for impairment:
|
||||||||||||||||||||||||||||
Balance in allowance
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||||||
Related loan balance
|
619
|
887
|
116
|
228
|
252
|
-
|
2,102
|
|||||||||||||||||||||
Collectively evaluated for impairment:
|
||||||||||||||||||||||||||||
Balance in allowance
|
$
|
139
|
$
|
49
|
$
|
627
|
$
|
812
|
$
|
290
|
$
|
191
|
$
|
2,108
|
||||||||||||||
Related loan balance
|
10,346
|
7,899
|
27,732
|
49,810
|
42,933
|
-
|
138,720
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
10 |
Excellent – minimal risk (normally supported by pledged deposits, United States government securities, etc.)
|
20 |
Above Average - low risk (all of the risks associated with this credit based on each of the Bank’s creditworthiness criteria are minimal)
|
30 |
Average – moderately low to average risk (most of the risks associated with this credit based on each of the Bank’s creditworthiness criteria are minimal to average)
|
40 |
Acceptable – moderate risk (the weighted overall risk associated with this credit based on each of the Bank’s creditworthiness criteria is acceptable but deemed more than average credit risk)
|
50 |
Monitor (Watch) – more than average credit risk that requires special monitoring (the weighted overall risk associated with this credit based on each of the Bank’s creditworthiness criteria is acceptable however, trends in the borrower’s
affairs or the nature of the transaction may warrant closer attention)
|
60 |
Special Mention – moderately high risk (possesses potential weaknesses which may result in deterioration if left uncorrected)
|
70 |
Substandard – the Bank is inadequately protected and there exists the distinct possibility of loss if the deficiencies are not corrected
|
80 |
Doubtful – weaknesses make collection or liquidation in full, based on currently existing facts, improbable
|
90 |
Loss – considered uncollectible or of little value
|
2020
|
Construction
and
Development
|
1-4 Family
Residential
|
Multi-Family
Residential
|
Nonfarm
Non-
residential
|
Commercial
and
Industrial
|
Total
|
||||||||||||||||||
Pass
|
$
|
25,244
|
$
|
10,270
|
$
|
35,610
|
$
|
44,250
|
$
|
74,012
|
$
|
189,386
|
||||||||||||
Special mention
|
39
|
281
|
1,260
|
11,862
|
-
|
13,442
|
||||||||||||||||||
Substandard
|
-
|
1,567
|
7,057
|
6,084
|
569
|
15,277
|
||||||||||||||||||
Doubtful
|
-
|
-
|
-
|
-
|
65
|
65
|
||||||||||||||||||
Loss
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
$
|
25,283
|
$
|
12,118
|
$
|
43,927
|
$
|
62,196
|
$
|
74,646
|
$
|
218,170
|
|||||||||||||
Non-accrual
|
$
|
-
|
$
|
887
|
$
|
116
|
$
|
1,207
|
$
|
634
|
$
|
2,844
|
||||||||||||
Troubled debt restructure
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Number of TDR accounts
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-performing TDRs
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Number of TDR accounts
|
-
|
-
|
-
|
-
|
-
|
-
|
2019
|
Construction
and Development
|
1-4 Family
Residential
|
Multi-Family
Residential
|
Nonfarm
Non-
residential
|
Commercial
and Industrial |
Total
|
||||||||||||||||||
Pass
|
$
|
9,896
|
$
|
7,899
|
$
|
19,191
|
$
|
31,229
|
$
|
39,504
|
$
|
107,719
|
||||||||||||
Special mention
|
450
|
-
|
3,687
|
9,356
|
3,274
|
16,767
|
||||||||||||||||||
Substandard
|
619
|
887
|
4,970
|
9,453
|
407
|
16,336
|
||||||||||||||||||
Doubtful
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
Loss
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||||||
$
|
10,965
|
$
|
8,786
|
$
|
27,848
|
$
|
50,038
|
$
|
43,185
|
$
|
140,822
|
|||||||||||||
Non-accrual
|
$
|
619
|
$
|
887
|
$
|
116
|
$
|
228
|
$
|
252
|
$
|
2,102
|
||||||||||||
Troubled debt restructure
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Number of TDR accounts
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Non-performing TDRs
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Number of TDR accounts
|
-
|
-
|
-
|
-
|
-
|
-
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
Current
|
30-89 Days
Past Due |
90 Days or
More and
Still Accruing
|
Non-accrual
|
Total
|
|||||||||||||||
Construction and development
|
$
|
25,244
|
$
|
39
|
$
|
-
|
$
|
-
|
$
|
25,283
|
||||||||||
1-4 family residential
|
11,231
|
-
|
-
|
887
|
12,118
|
|||||||||||||||
Multi-family residential
|
43,276
|
535
|
-
|
116
|
43,927
|
|||||||||||||||
Nonfarm nonresidential
|
60,989
|
-
|
-
|
1,207
|
62,196
|
|||||||||||||||
Commercial and industrial
|
74,012
|
-
|
-
|
634
|
74,646
|
|||||||||||||||
$
|
214,752
|
$
|
574
|
$
|
-
|
$
|
2,844
|
$
|
218,170
|
2019
|
Current
|
30-89 Days
Past Due
|
90 Days or
More and Still
Accruing
|
Non-accrual
|
Total
|
|||||||||||||||
Construction and development
|
$
|
10,265
|
$
|
81
|
$
|
-
|
$
|
619
|
$
|
10,965
|
||||||||||
1-4 family residential
|
7,899
|
-
|
-
|
887
|
8,786
|
|||||||||||||||
Multi-family residential
|
27,375
|
357
|
-
|
116
|
27,848
|
|||||||||||||||
Nonfarm nonresidential
|
48,584
|
1,226
|
-
|
228
|
50,038
|
|||||||||||||||
Commercial and industrial
|
42,418
|
515
|
-
|
252
|
43,185
|
|||||||||||||||
$
|
136,541
|
$
|
2,179
|
$
|
-
|
$
|
2,102
|
$
|
140,822
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Interest
Income
Recognized
|
Specific
Reserve
|
Average
Recorded
Investment
|
|||||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||
Construction and development
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
1-4 family residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Multi-family residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Nonfarm nonresidential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial and industrial
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total impaired loans with specific reserves
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Impaired loans with no specific reserve:
|
||||||||||||||||||||
Construction and development
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
1-4 family residential
|
887
|
887
|
-
|
-
|
887
|
|||||||||||||||
Multi-family residential
|
116
|
116
|
-
|
-
|
116
|
|||||||||||||||
Nonfarm nonresidential
|
1,207
|
1,950
|
23
|
-
|
1,972
|
|||||||||||||||
Commercial and industrial
|
634
|
637
|
14
|
-
|
616
|
|||||||||||||||
Total impaired loans with no specific reserves
|
$
|
2,844
|
$
|
3,590
|
$
|
37
|
$
|
-
|
$
|
3,591
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2019
|
Recorded
Investment
|
Unpaid
Principal
Balance
|
Interest
Income
Recognized
|
Specific
Reserve
|
Average
Recorded
Investment
|
|||||||||||||||
Impaired loans with specific reserves:
|
||||||||||||||||||||
Construction and development
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
1-4 family residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Multi-family residential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Nonfarm nonresidential
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Commercial and industrial
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Total impaired loans with specific reserves
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Impaired loans with no specific reserve:
|
||||||||||||||||||||
Construction and development
|
$
|
619
|
$
|
649
|
$
|
-
|
$
|
-
|
$
|
649
|
||||||||||
1-4 family residential
|
887
|
887
|
-
|
-
|
887
|
|||||||||||||||
Multi-family residential
|
116
|
116
|
-
|
-
|
116
|
|||||||||||||||
Nonfarm nonresidential
|
228
|
1,205
|
-
|
-
|
257
|
|||||||||||||||
Commercial and industrial
|
252
|
252
|
-
|
-
|
240
|
|||||||||||||||
Total impaired loans with no specific reserves
|
$
|
2,102
|
$
|
3,109
|
$
|
-
|
$
|
-
|
$
|
2,149
|
2020
|
2019
|
|||||||
Loans
|
$
|
1,209
|
$
|
777
|
||||
Certificates of deposit
|
11
|
14
|
||||||
Securities
|
357
|
361
|
||||||
$
|
1,577
|
$
|
1,152
|
2020
|
2019
|
|||||||
Cost:
|
||||||||
Land
|
$
|
2,603
|
$
|
2,603
|
||||
Buildings
|
4,039
|
3,978
|
||||||
Furniture and equipment
|
850
|
806
|
||||||
7,492
|
7,387
|
|||||||
Less: accumulated depreciation
|
(2,324
|
)
|
(2,140
|
)
|
||||
$
|
5,168
|
$
|
5,247
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
2019
|
|||||||
Current:
|
||||||||
Federal
|
$
|
395
|
$
|
452
|
||||
D.C.
|
50
|
192
|
||||||
Total current
|
445
|
644
|
||||||
Deferred income taxes:
|
||||||||
Federal
|
(225
|
)
|
(9
|
)
|
||||
D.C.
|
(108
|
)
|
19
|
|||||
Total deferred
|
(333
|
)
|
10
|
|||||
Income tax expense
|
$
|
112
|
$
|
654
|
2020
|
2019
|
|||||||
Tax expense at Federal statutory rate
|
$
|
169
|
$
|
493
|
||||
Tax effect of:
|
||||||||
Other
|
3
|
27
|
||||||
D.C. income taxes, net
|
(60
|
)
|
134
|
|||||
Income tax expense
|
$
|
112
|
$
|
654
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
2019
|
|||||||
Deferred tax asset:
|
||||||||
Allowance for credit losses
|
$
|
304
|
$
|
280
|
||||
Allowance for unfunded off-balance sheet commitments
|
56
|
29
|
||||||
Deferred loan fees, net
|
94
|
62
|
||||||
Non-accrual interest
|
49
|
17
|
||||||
Accrued compensation
|
176
|
59
|
||||||
Unearned grant revenue
|
60
|
47
|
||||||
Other
|
24
|
-
|
||||||
763
|
494
|
|||||||
Deferred tax liabilities:
|
||||||||
Accumulated securities discount accretion
|
15
|
29
|
||||||
Accumulated depreciation
|
118
|
168
|
||||||
Net unrealized gains on securities available-for-sale
|
443
|
155
|
||||||
576
|
352
|
|||||||
Net deferred tax asset
|
$
|
187
|
$
|
142
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2021
|
$
|
94,197
|
||
2022
|
2,803
|
|||
2023
|
319
|
|||
2024
|
50
|
|||
2025
|
6
|
|||
$
|
97,375
|
2020
|
2019
|
|||||||
Now
|
$
|
238
|
$
|
111
|
||||
Money market
|
228
|
174
|
||||||
Savings
|
5
|
6
|
||||||
Time, $100,000 or more
|
99
|
115
|
||||||
Other time
|
482
|
817
|
||||||
$
|
1,052
|
$
|
1,223
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Gross Amounts Not Offset in the Balance Sheets
|
||||||||||||||||||||||||
December 31, 2020
|
Gross
Amounts of
Recognized
Liabilities
|
Gross
Amounts
Offset in the
Balance
Sheets
|
Net
Amounts of
Liabilities
Presented
in the
Balance
Sheets
|
Financial
Instruments
|
Cash
Collateral
Pledged
|
Net Amount
|
||||||||||||||||||
Repurchase agreements:
|
||||||||||||||||||||||||
Commercial customers (a)
|
$
|
47,429
|
$
|
-
|
$
|
47,429
|
$
|
47,429
|
$
|
-
|
$
|
-
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Gross Amounts Not Offset in the Balance Sheets
|
||||||||||||||||||||||||
December 31, 2019
|
Gross
Amounts of
Recognized
Liabilities
|
Gross
Amounts
Offset in the Balance
Sheets
|
Net
Amounts of
Liabilities
Presented
in the
Balance
Sheets
|
Financial
Instruments
|
Cash
Collateral
Pledged
|
Net Amount
|
||||||||||||||||||
Repurchase agreements:
|
||||||||||||||||||||||||
Commercial customers (a)
|
$
|
32,333
|
$
|
-
|
$
|
32,333
|
$
|
32,333
|
$
|
-
|
$
|
-
|
(a) |
As of December 31, 2019, and 2018, the fair value of securities pledged in connection with repurchase agreements was $47.2 million and $32.9 million, respectively.
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
2019
|
|||||||
Class A voting stock – par value $0.50 per share, authorized 3,000,000 shares: issued 2020 1,060,438; 2019 1,060,338; outstanding 2020 1,027,438; 2019 1,027,338
|
$
|
530
|
$
|
530
|
||||
Class B non-voting common stock – par value $0.50 per share, authorized 3,000,000 shares: issued 2020 836,975; 2019 836,975; outstanding 2020 836,975; 2019 836,975
|
419
|
419
|
||||||
$
|
949
|
$
|
949
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31, 2020
|
Actual
|
For Capital Adequacy
Purposes
|
Minimum Capital
Adequacy with Capital
Buffer
|
To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
39,688
|
17.70
|
%
|
$
|
17,937
|
8.00
|
%
|
$
|
23,543
|
10.50
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
36,291
|
16.20
|
%
|
17,923
|
8.00
|
%
|
23,524
|
10.50
|
%
|
$
|
22,403
|
10.00
|
%
|
|||||||||||||||||||
Tier 1 capital common equity (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
37,595
|
16.77
|
%
|
$
|
10,090
|
4.50
|
%
|
$
|
15,695
|
7.00
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
34,198
|
15.26
|
%
|
10,082
|
4.50
|
%
|
15,682
|
7.00
|
%
|
$
|
14,562
|
10.00
|
%
|
|||||||||||||||||||
Tier 1 capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
37,595
|
16.77
|
%
|
$
|
13,453
|
6.00
|
%
|
$
|
19,059
|
8.50
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
34,198
|
15.26
|
%
|
13,442
|
6.00
|
%
|
19,043
|
8.50
|
%
|
$
|
17,923
|
8.00
|
%
|
|||||||||||||||||||
Company
|
$
|
37,595
|
8.89
|
%
|
$
|
16,917
|
4.00
|
%
|
$
|
16,917
|
4.00
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
34,198
|
8.09
|
%
|
16,917
|
4.00
|
%
|
16,917
|
4.00
|
%
|
$
|
21,146
|
5.00
|
%
|
December 31, 2019
|
Actual
|
For Capital Adequacy
Purposes
|
Minimum Capital
Adequacy with Capital
Buffer
|
To Be Well Capitalized
Under Prompt
Corrective Action
Provisions
|
||||||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||||||
Total capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
39,262
|
21.56
|
%
|
$
|
14,568
|
8.00
|
%
|
$
|
19,121
|
10.500
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
35,889
|
19.63
|
%
|
14,626
|
8.00
|
%
|
19,197
|
10.500
|
%
|
$
|
18,283
|
10.00
|
%
|
|||||||||||||||||||
Tier 1 capital common equity (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
37,052
|
20.34
|
%
|
$
|
8,197
|
4.50
|
%
|
$
|
12,751
|
7.000
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
33,679
|
18.42
|
%
|
8,228
|
4.50
|
%
|
12,799
|
7.000
|
%
|
$
|
11,885
|
6.50
|
%
|
|||||||||||||||||||
Tier 1 capital (to risk-weighted assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
37,052
|
20.34
|
%
|
$
|
10,930
|
6.00
|
%
|
$
|
15,484
|
8.500
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
33,679
|
18.42
|
%
|
10,970
|
6.00
|
%
|
15,541
|
8.500
|
%
|
$
|
14,627
|
8.00
|
%
|
|||||||||||||||||||
Tier 1 capital (to adjusted total assets):
|
||||||||||||||||||||||||||||||||
Company
|
$
|
37,052
|
10.14
|
%
|
$
|
14,616
|
4.00
|
%
|
$
|
14,616
|
4.000
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
33,679
|
9.22
|
%
|
14,611
|
4.00
|
%
|
14,611
|
4.000
|
%
|
$
|
18,264
|
5.00
|
%
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
2019
|
|||||||
Insurance
|
$
|
108
|
$
|
91
|
||||
Marketing
|
11
|
140
|
||||||
Bank security
|
81
|
113
|
||||||
FED correspondence and CDARS/ICS fees
|
202
|
187
|
||||||
Director fees
|
208
|
141
|
||||||
FDIC/OCC assessment
|
164
|
129
|
||||||
Miscellaneous tax expense
|
155
|
115
|
||||||
Donations and contributions
|
58
|
80
|
||||||
Provision for credit losses on unfunded commitments
|
102
|
(71
|
)
|
|||||
Other
|
694
|
449
|
||||||
$
|
1,783
|
$
|
1,374
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31,
|
2020
|
2019
|
||||||||||||||
Carrying
Amount
|
Fair Value
|
Carrying
Amount
|
Fair Value
|
|||||||||||||
Financial Assets:
|
||||||||||||||||
Cash and due from banks
|
$
|
853
|
$
|
853
|
$
|
2,293
|
$
|
2,293
|
||||||||
Interest bearing deposits in other financial institutions
|
28,322
|
28,322
|
67,561
|
67,561
|
||||||||||||
Federal funds sold
|
53,896
|
53,896
|
48,454
|
48,454
|
||||||||||||
Certificates of deposit in other financial institutions
|
2,722
|
2,773
|
4,954
|
4,971
|
||||||||||||
Investment securities available-for-sale
|
125,462
|
125,462
|
94,362
|
94,362
|
||||||||||||
Federal Reserve Bank stock
|
693
|
693
|
693
|
693
|
||||||||||||
Federal Home Loan Bank stock
|
479
|
479
|
479
|
479
|
||||||||||||
Loans, less allowance for credit losses
|
215,735
|
218,108
|
138,495
|
138,290
|
||||||||||||
Financial Liabilities:
|
||||||||||||||||
Non-interest-bearing demand deposits
|
44,542
|
44,542
|
41,472
|
41,472
|
||||||||||||
NOW & Savings deposits
|
120,520
|
120,520
|
88,988
|
88,988
|
||||||||||||
Money market
|
67,905
|
67,905
|
37,843
|
37,843
|
||||||||||||
Time deposits
|
97,375
|
97,439
|
106,936
|
106,686
|
||||||||||||
FHLB advances
|
3,092
|
3,243
|
3,232
|
3,305
|
||||||||||||
Notes payable
|
14,000
|
14,000
|
14,000
|
14,000
|
||||||||||||
Securities sold under agreements to repurchase
|
47,429
|
47,429
|
32,333
|
32,333
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
U.S. Government agencies
|
$
|
-
|
$
|
25,459
|
$
|
-
|
$
|
25,459
|
||||||||
Mortgage-backed securities
|
-
|
80,771
|
-
|
80,771
|
||||||||||||
Collateralized mortgage obligations
|
-
|
2,042
|
-
|
2,042
|
||||||||||||
Municipal taxable
|
-
|
1,230
|
-
|
1,230
|
||||||||||||
SBA loan pools
|
-
|
15,960
|
-
|
15,960
|
||||||||||||
Total
|
$
|
-
|
$
|
125,462
|
$
|
-
|
$
|
125,462
|
December 31, 2019
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
||||||||||||
U.S. Government agencies
|
$
|
-
|
$
|
22,703
|
$
|
-
|
$
|
22,703
|
||||||||
Mortgage-backed securities
|
-
|
63,840
|
-
|
63,840
|
||||||||||||
SBA loan pools
|
-
|
7,819
|
-
|
7,819
|
||||||||||||
Total
|
$
|
-
|
$
|
94,362
|
$
|
-
|
$
|
94,362
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
|||||||||||||
Impaired loans
|
$
|
-
|
$
|
-
|
$
|
2,844
|
$
|
2,844
|
December 31, 2019
|
Level 1
|
Level 2
|
Level 3
|
Fair Value
|
||||||||||||
Impaired loans
|
$
|
-
|
$
|
-
|
$
|
2,102
|
$
|
2,102
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
2020
|
||||
Non-Interest Income
|
||||
In-scope of Topic 606
|
||||
Service Charges and Activity Fees on Deposits
|
$
|
52
|
||
BEA Grant Income
|
152
|
|||
NMTC Origination and Maintenance Fees
|
667
|
|||
Other Non-Interest Income
|
104
|
|||
Non-Interest Income (in-scope of Topic 606)
|
975
|
|||
Non-Interest Income (out-of-scope of Topic 606)
|
873
|
|||
Total Non-Interest Income
|
$
|
1,848
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31,
|
2020
|
2019
|
||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
3,166
|
$
|
4,157
|
||||
Investment in subsidiary, at equity
|
35,420
|
34,055
|
||||||
Other
|
230
|
58
|
||||||
Total Assets
|
$
|
38,816
|
$
|
38,270
|
||||
Liabilities and Stockholders’ Equity
|
||||||||
Liabilities
|
||||||||
Accrued expenses and other liabilities
|
$
|
-
|
$
|
840
|
||||
Stockholders’ Equity
|
||||||||
Common stock
|
949
|
949
|
||||||
Preferred stock
|
3,000
|
3,000
|
||||||
Surplus
|
18,246
|
18,246
|
||||||
Retained earnings
|
15,679
|
15,109
|
||||||
Accumulated other comprehensive loss, net of tax
|
1,105
|
376
|
||||||
Less: Treasury stock
|
(330
|
)
|
(330
|
)
|
||||
Total CFBanc Corporation and Subsidiaries stockholders’ equity
|
38,649
|
37,350
|
||||||
|
||||||||
Noncontrolling interest
|
167
|
80
|
||||||
Total Stockholders’ Equity (including noncontrolling interest)
|
38,816
|
37,430
|
||||||
Total Liabilities and Stockholders’ Equity
|
$
|
38,816
|
$
|
38,270
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Years ended December 31,
|
2020
|
2019
|
||||||
Income
|
||||||||
Equity in net income of subsidiary
|
$
|
756
|
$
|
1,695
|
||||
Other
|
21
|
7
|
||||||
Total Income
|
777
|
1,702
|
||||||
Expenses
|
||||||||
Other
|
-
|
-
|
||||||
Total Expenses
|
-
|
-
|
||||||
Net Income
|
777
|
1,702
|
||||||
Less: Net income attributable to noncontrolling interest
|
(87
|
)
|
(243
|
)
|
||||
Net Income Attributable to CFBanc Corporation and Subsidiaries
|
$
|
690
|
$
|
1,459
|
Years ended December 31,
|
2020
|
2019
|
||||||
Cash Flows from Operating Activities
|
||||||||
Net income
|
$
|
777
|
$
|
1,702
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Equity in net income in subsidiary
|
(756
|
)
|
(1,695
|
)
|
||||
Changes in assets and liabilities:
|
||||||||
Increase in other assets
|
(172
|
)
|
(10
|
)
|
||||
Decrease in other liabilities
|
(840
|
)
|
(198
|
)
|
||||
Net Cash Used in Operating Activities
|
(991
|
)
|
(201
|
)
|
||||
Cash Flows from Investing Activities
|
||||||||
Dividends received from subsidiary
|
120
|
120
|
||||||
Net Cash Provided by Investing Activities
|
120
|
120
|
||||||
Cash Flows from Financing Activities
|
||||||||
Preferred stock dividends paid
|
(120
|
)
|
(120
|
)
|
||||
Net Cash Used in Financing Activities
|
(120
|
)
|
(120
|
)
|
||||
Net decrease in cash and cash equivalents
|
(991
|
)
|
(201
|
)
|
||||
Cash and Cash Equivalents, Beginning of Year
|
4,157
|
4,358
|
||||||
Cash and Cash Equivalents, End of Year
|
$
|
3,166
|
$
|
4,157
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31,
|
2020
|
2019
|
||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
7,678
|
$
|
7,850
|
||||
Loans
|
14,000
|
14,000
|
||||||
Accounts receivable
|
47
|
47
|
||||||
Investment in subsidiaries
|
24
|
39
|
||||||
Prepaid expenses and other assets
|
286
|
26
|
||||||
Total Assets
|
$
|
22,035
|
$
|
21,962
|
||||
Liabilities and Members’ Capital
|
||||||||
Liabilities
|
||||||||
Notes payable
|
$
|
14,000
|
$
|
14,000
|
||||
Accrued expenses and other liabilities
|
185
|
147
|
||||||
Total Liabilities
|
14,185
|
14,147
|
||||||
Members’ Capital
|
||||||||
Retained earnings
|
7,683
|
7,735
|
||||||
|
||||||||
Total CFNMA members’ capital
|
7,683
|
7,735
|
||||||
|
||||||||
Noncontrolling interest
|
167
|
80
|
||||||
Total Members’ Capital (including noncontrolling interest)
|
7,850
|
7,815
|
||||||
Total Liabilities and Members’ Capital
|
$
|
22,035
|
$
|
21,962
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
Years ended December 31,
|
2020
|
2019
|
||||||
Income
|
||||||||
Net interest income on loan
|
$
|
35
|
$
|
35
|
||||
Equity in net loss of subsidiaries
|
-
|
-
|
||||||
Origination and other fee income on NMTC transactions
|
667
|
1,435
|
||||||
Total Income
|
702
|
1,470
|
||||||
Expenses
|
||||||||
Salaries
|
312
|
340
|
||||||
Professional fees
|
321
|
324
|
||||||
Indemnity fees
|
-
|
147
|
||||||
Operating expense
|
55
|
85
|
||||||
Total Expenses
|
688
|
896
|
||||||
Income before income taxes
|
14
|
574
|
||||||
(Benefit from) Provision for Income Taxes
|
(21
|
)
|
93
|
|||||
Net Income
|
35
|
481
|
||||||
Less: Net income attributable to noncontrolling interest
|
(87
|
)
|
(243
|
)
|
||||
Net (Loss) Income Attributable to CFNMA
|
$
|
(52
|
)
|
$
|
238
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31,
|
2020
|
2019
|
||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
1,391
|
$
|
1,391
|
||||
Total Assets
|
$
|
1,391
|
$
|
1,391
|
||||
Liabilities and Members’ Capital
|
||||||||
Members’ Capital
|
||||||||
Retained earnings
|
$
|
1,391
|
$
|
1,391
|
||||
Total Members’ Capital
|
1,391
|
1,391
|
||||||
Total Liabilities and Members’ Capital
|
$
|
1,391
|
$
|
1,391
|
Years ended December 31,
|
2020
|
2019
|
||||||
Income
|
||||||||
Interest income on loan
|
$
|
-
|
$
|
-
|
||||
Other fee income
|
-
|
-
|
||||||
Net Income
|
$
|
-
|
$
|
-
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
December 31,
|
2020
|
2019
|
||||||
Assets
|
||||||||
Cash and due from banks
|
$
|
6
|
$
|
6
|
||||
Loans
|
14,000
|
14,000
|
||||||
Accrued interest receivable
|
47
|
47
|
||||||
Accounts receivable
|
3
|
3
|
||||||
|
||||||||
Total Assets
|
$
|
14,056
|
$
|
14,056
|
||||
Liabilities and Members’ Capital
|
||||||||
Liabilities
|
||||||||
Notes payable
|
$
|
14,000
|
$
|
14,000
|
||||
Interest payable
|
47
|
47
|
||||||
Other liabilities
|
3
|
3
|
||||||
Total Liabilities
|
14,050
|
14,050
|
||||||
Members’ Capital
|
||||||||
Surplus
|
6
|
6
|
||||||
Total Members’ Capital
|
6
|
6
|
||||||
Total Liabilities and Members’ Capital
|
$
|
14,056
|
$
|
14,056
|
Years ended December 31,
|
2020
|
2019
|
||||||
Income
|
||||||||
Net interest income on loan
|
$
|
35
|
$
|
35
|
||||
Total Income
|
35
|
35
|
||||||
Expenses
|
||||||||
Other
|
35
|
35
|
||||||
Total Expenses
|
35
|
35
|
||||||
Net Income
|
$
|
-
|
$
|
-
|
CFBanc Corporation and Subsidiaries
|
|
Notes to Consolidated Financial Statements |
• |
certain reclassifications to conform the historical financial statement presentation of CFBanc to that of Broadway;
|
• |
application of the acquisition method of accounting under the provisions of the Financial Accounting Standards Board Accounting Standards Codification 805 “Business Combinations” (“ASC 805”) to reflect the
value of merger consideration of 13.626 shares of Broadway common stock in exchange for each outstanding share of CFBanc common stock and one share of Broadway’s Series A preferred stock for each share of CFBanc preferred stock;
|
• |
transaction costs incurred in connection with the merger; and
|
• |
the separate sales of Broadway common stock to certain institutional and accredited investors were completed shortly after the effective date of the merger.
|
(Dollars in Thousands)
|
As of December 31, 2020
|
||||||||||||||||||||||||
Unaudited
|
Broadway
Financial
Corporation
|
CFBanc
Corporation
|
Transaction
Accounting
Adjustments
|
Notes
|
Pro
Forma
Combined
for
Merger
|
Financing
(l)
|
Pro
Forma
Combined
for
Merger
and
Financing
|
||||||||||||||||||
Assets:
|
|||||||||||||||||||||||||
Cash and due from banks
|
$
|
71,110
|
$
|
853
|
$
|
(1,041 | ) |
(a)
|
$
|
70,922 |
$
|
30,851
|
$
|
101,773 | |||||||||||
Interest-bearing deposits in other banks
|
24,999
|
31,044
|
—
|
56,043
|
—
|
56,043
|
|||||||||||||||||||
Federal funds sold
|
—
|
53,896
|
—
|
53,896
|
—
|
53,896
|
|||||||||||||||||||
Cash and cash equivalents
|
96,109
|
85,793
|
(1,041
|
)
|
180,861
|
30,851
|
211,712
|
||||||||||||||||||
Securities available-for-sale, at fair value
|
10,698
|
125,462
|
—
|
136,160
|
—
|
136,160
|
|||||||||||||||||||
Loans receivable, net of ALLL
|
360,129
|
215,735
|
(4,563
|
)
|
(b)
|
571,301
|
—
|
571,301
|
|||||||||||||||||
Accrued interest receivable
|
1,202
|
1,577
|
—
|
2,779
|
—
|
2,779
|
|||||||||||||||||||
Federal Reserve Bank stock, at cost
|
—
|
693
|
—
|
693
|
—
|
693
|
|||||||||||||||||||
Federal Home Loan Bank (FHLB) stock, at cost
|
3,431
|
479
|
—
|
3,910
|
—
|
3,910
|
|||||||||||||||||||
Office properties and equipment, net
|
2,540
|
5,168
|
—
|
7,708
|
—
|
7,708
|
|||||||||||||||||||
Bank owned life insurance
|
3,147
|
—
|
—
|
3,147
|
—
|
3,147
|
|||||||||||||||||||
Deferred tax assets, net
|
5,633
|
187
|
1,122
|
(c)
|
6,942
|
(698
|
)
|
6,244
|
|||||||||||||||||
Core deposit intangibles
|
—
|
—
|
958
|
(d)
|
958
|
—
|
958
|
||||||||||||||||||
Goodwill
|
—
|
—
|
30,355
|
(e)
|
30,355
|
—
|
30,355
|
||||||||||||||||||
Other assets
|
489
|
1,367
|
—
|
1,856
|
—
|
1,856
|
|||||||||||||||||||
Total assets
|
$
|
483,378
|
$
|
436,461
|
$
|
26,831
|
$
|
946,670
|
$
|
30,153
|
$
|
976,823
|
|||||||||||||
|
|||||||||||||||||||||||||
Liabilities and stockholders’ equity
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Liabilities:
|
|||||||||||||||||||||||||
Deposits
|
$
|
315,630
|
$
|
330,342
|
—
|
$
|
645,972
|
$
|
—
|
$
|
645,972
|
||||||||||||||
Securities sold under agreements to repurchase
|
—
|
47,429
|
—
|
47,429
|
—
|
47,429
|
|||||||||||||||||||
FHLB advances
|
110,500
|
3,092
|
264
|
(f)
|
113,856
|
—
|
113,856
|
||||||||||||||||||
Notes payable - Merrill Lynch NMTC Corp., due 2040
|
—
|
14,000
|
—
|
14,000
|
—
|
14,000
|
|||||||||||||||||||
Junior subordinated floating rate debentures, due 2024
|
3,315
|
—
|
—
|
3,315
|
—
|
3,315
|
|||||||||||||||||||
Advance payments by borrowers for taxes and insurance
|
787
|
—
|
—
|
787
|
—
|
787
|
|||||||||||||||||||
Other liabilities
|
4,261
|
2,782
|
2,944
|
(g)
|
9,987
|
—
|
9,987
|
||||||||||||||||||
Total liabilities
|
434,493
|
397,645
|
3,208
|
835,346
|
—
|
835,346
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Stockholders’ equity:
|
|||||||||||||||||||||||||
Preferred Stock
|
—
|
3,000
|
—
|
(h)
|
3,000
|
—
|
3,000
|
||||||||||||||||||
Common Stock:
|
|||||||||||||||||||||||||
Voting, Class A
|
219
|
530
|
(390
|
)
|
(i)
|
359
|
105
|
464
|
|||||||||||||||||
Nonvoting, Class B
|
—
|
419
|
(305
|
)
|
(i)
|
114
|
—
|
114
|
|||||||||||||||||
Nonvoting, Class C
|
87
|
—
|
—
|
87
|
80
|
167
|
|||||||||||||||||||
Additional Paid-in Capital
|
46,851
|
18,246
|
44,757
|
(j)
|
109,854
|
30,666
|
140,520
|
||||||||||||||||||
Retained Earnings
|
7,783
|
15,679
|
(19,664
|
)
|
(k)
|
3,798
|
(698
|
)
|
3,100
|
||||||||||||||||
Other, including Treasury Stock, net
|
(6,055
|
)
|
775
|
(775
|
)
|
(j)
|
(6,055
|
)
|
—
|
(6,055
|
)
|
||||||||||||||
Total stockholders’ equity before noncontrolling interest
|
48,885
|
38,649
|
23,623
|
111,157
|
30,153
|
141,310
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Noncontrolling interest
|
—
|
167
|
—
|
167
|
—
|
167
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Total stockholders’ equity including noncontrolling interest
|
48,885
|
38,816
|
23,623
|
111,324
|
30,153
|
141,477
|
|||||||||||||||||||
|
|||||||||||||||||||||||||
Total liabilities and stockholders’ equity
|
$
|
483,378
|
$
|
436,461
|
$
|
26,831 |
$
|
946,670
|
$
|
30,153
|
$
|
976,823
|
|
Year Ended December 31, 2020
|
|||||||||||||||
|
Broadway
Financial
Corporation
|
CFBanc
Corporation
|
Transaction
Accounting
Adjustments
|
Notes
|
Pro
Forma
Combined
|
|||||||||||
|
(In thousands, except share and per share data)
|
|||||||||||||||
Interest income:
|
||||||||||||||||
Interest and fees on loans receivable
|
$
|
17,016
|
$
|
8,595
|
$
|
2,289
|
(a)
|
$
|
27,900
|
|||||||
Interest on investment securities
|
253
|
1,911
|
—
|
2,164
|
||||||||||||
Other interest income
|
375
|
634
|
—
|
1,009
|
||||||||||||
Total interest income
|
17,644
|
11,140
|
2,289
|
31,073
|
||||||||||||
|
||||||||||||||||
Interest expense:
|
||||||||||||||||
Interest on deposits
|
3,163
|
1,052
|
—
|
4,215
|
||||||||||||
Interest on borrowings
|
2,312
|
704
|
60
|
(b)
|
3,076
|
|||||||||||
Total interest expense
|
5,475
|
1,756
|
60
|
7,291
|
||||||||||||
Net interest income before loan loss provision
|
12,169
|
9,384
|
2,229
|
23,782
|
||||||||||||
Loan loss provision
|
(29
|
)
|
(114
|
)
|
—
|
(143
|
)
|
|||||||||
Net interest income after loan loss recapture
|
12,140
|
9,270
|
2,229
|
23,639
|
||||||||||||
|
||||||||||||||||
Non-interest income:
|
||||||||||||||||
Service charges
|
420
|
52
|
—
|
472
|
||||||||||||
Net gain on sale of loans
|
276
|
—
|
—
|
276
|
||||||||||||
Net gain on sale of securities
|
—
|
873
|
—
|
873
|
||||||||||||
CDFI grant
|
203
|
152
|
—
|
355
|
||||||||||||
Other, including NMTC activities
|
126
|
771
|
—
|
897
|
||||||||||||
Total non-interest income
|
1,025
|
1,848
|
—
|
2,873
|
||||||||||||
|
||||||||||||||||
Non-interest expense:
|
||||||||||||||||
Compensation and benefits
|
8,362
|
6,172
|
—
|
14,534
|
||||||||||||
Occupancy expense
|
1,288
|
465
|
—
|
1,753
|
||||||||||||
Professional services
|
2,299
|
973
|
3,272
|
|||||||||||||
Information services
|
937
|
1,122
|
—
|
2,059
|
||||||||||||
Other
|
1,328
|
1,497
|
156
|
(c)
|
2,981
|
|||||||||||
Total non-interest expense
|
14,214
|
10,229
|
156
|
24,599
|
||||||||||||
(Loss) income before income taxes
|
(1,049
|
)
|
889
|
2,073
|
1,913
|
|||||||||||
Income tax (benefit) expense
|
(407
|
)
|
112
|
601
|
(d)
|
306
|
||||||||||
Net (loss) income
|
$
|
(642
|
)
|
$
|
777
|
$
|
1,472
|
$ |
1,607
|
|||||||
Less net income attributable to non-controlling interest
|
—
|
(87
|
)
|
—
|
(87
|
)
|
||||||||||
Net (loss) income attributable to common stockholders
|
$
|
(642
|
)
|
$
|
690
|
$
|
1,472
|
$ |
1,520
|
|||||||
|
||||||||||||||||
(Loss) earnings per common share - basic
|
$
|
(0.02
|
)
|
$
|
0.37
|
(e)
|
$ |
0.03
|
||||||||
(Loss) earnings per common share - diluted
|
$
|
(0.02
|
)
|
$
|
0.37
|
(e)
|
$ |
0.03
|
||||||||
|
||||||||||||||||
Basic weighted average common shares outstanding
|
27,163,427
|
1,864,410
|
(e)
|
52,567,881
|
||||||||||||
Diluted weighted average common shares outstanding
|
27,163,427
|
1,864,410
|
(e)
|
52,963,804
|
|
Year Ended December 31, 2019
|
|||||||||||||||
|
Broadway
Financial
Corporation
|
CFBanc
Corporation
|
Transaction
Accounting
Adjustments
|
Notes
|
Pro Forma
Combined
|
|||||||||||
|
(In thousands, except share and per share data)
|
|||||||||||||||
Interest income:
|
||||||||||||||||
Interest and fees on loans receivable
|
$
|
15,845
|
$
|
7,021
|
$
|
3,037
|
(a)
|
$
|
25,903
|
|||||||
Interest on investment securities
|
359
|
1,916
|
—
|
2,275
|
||||||||||||
Other interest income
|
643
|
3,151
|
—
|
3,794
|
||||||||||||
Total interest income
|
16,847
|
12,088
|
3,037
|
31,972
|
||||||||||||
|
||||||||||||||||
Interest expense:
|
||||||||||||||||
Interest on deposits
|
4,276
|
1,223
|
—
|
5,499
|
||||||||||||
Interest on borrowings
|
2,110
|
694
|
63
|
(b)
|
2,867
|
|||||||||||
Total interest expense
|
6,386
|
1,917
|
63
|
8,366
|
||||||||||||
Net interest income before loan loss recapture
|
10,461
|
10,171
|
2,974
|
23,606
|
||||||||||||
Loan loss recapture
|
7
|
46
|
—
|
53
|
||||||||||||
Net interest income after loan loss recapture
|
10,468
|
10,217
|
2,974
|
23,659
|
||||||||||||
|
||||||||||||||||
Non-interest income:
|
||||||||||||||||
Service charges
|
491
|
71
|
—
|
562
|
||||||||||||
Net gain on sale of loans
|
204
|
—
|
—
|
204
|
||||||||||||
CDFI grant
|
233
|
233
|
—
|
466
|
||||||||||||
Other, including NMTC activities
|
124
|
1,529
|
—
|
1,653
|
||||||||||||
Total non-interest income
|
1,052
|
1,833
|
—
|
2,885
|
||||||||||||
|
||||||||||||||||
Non-interest expense:
|
||||||||||||||||
Compensation and benefits
|
7,357
|
6,271
|
—
|
13,628
|
||||||||||||
Occupancy expense
|
1,265
|
484
|
—
|
1,749
|
||||||||||||
Professional services
|
1,144
|
1,100
|
—
|
2,244
|
||||||||||||
Information services
|
888
|
643
|
—
|
1,531
|
||||||||||||
Other
|
1,417
|
1,196
|
174
|
(c)
|
2,787
|
|||||||||||
Total non-interest expense
|
12,071
|
9,694
|
174
|
21,939
|
||||||||||||
(Loss) income before income taxes
|
(551
|
)
|
2,356
|
2,800
|
4,605
|
|||||||||||
Income tax (benefit) expense
|
(345
|
)
|
654
|
812
|
(d)
|
1,121
|
||||||||||
Net (loss) income
|
$
|
(206
|
)
|
$
|
1,702
|
$
|
1,988
|
$
|
3,484
|
|||||||
Less net income attributable to noncontrolling interest
|
—
|
(243
|
)
|
—
|
(243
|
)
|
||||||||||
Net income (loss) attributable to common stockholders
|
$
|
(206
|
)
|
$
|
1,459
|
$
|
1,988
|
$
|
3,241
|
|||||||
|
||||||||||||||||
(Loss) earnings per common share - basic
|
$
|
(0.01
|
)
|
$
|
0.78
|
(e)
|
$
|
0.06
|
||||||||
(Loss) earnings per common share - diluted
|
$
|
(0.01
|
)
|
$
|
0.78
|
(e)
|
$
|
0.06
|
||||||||
|
||||||||||||||||
Basic weighted average common shares outstanding
|
26,833,693
|
1,864,313
|
(e)
|
52,236,822
|
||||||||||||
Diluted weighted average common shares outstanding
|
26,833,693
|
1,864,313
|
(e)
|
52,632,745
|
Calculation of merger consideration
|
Note
|
Amount
|
||||
Share consideration:
|
|
|||||
Shares of CFBanc common stock
|
(i)
|
1,864,413
|
||||
Exchange ratio
|
|
13.626
|
||||
Shares of Broadway common stock issued
|
|
25,404,491
|
||||
Broadway’s closing share price as of March 31, 2021
|
|
$
|
2.49 | |||
Fair value of consideration for CFBanc common stock
|
|
$
|
63,257 | |||
Consideration for preferred stock issued for CFBanc preferred stock
|
|
$
|
3,000
|
|||
Fair value of total merger consideration
|
|
$
|
66,257
|
(i)
|
Under the terms of the merger agreement, holders of CFBanc common stock received a fixed number of shares of Broadway common stock based on an exchange ratio of 13.626 shares of Broadway
common stock for each share of CFBanc common stock they held. For purposes of the unaudited pro forma condensed combined balance sheet, the merger consideration is based on the total number of shares of CFBanc common stock issued and
outstanding as of March 31, 2021 and the closing price per share of Broadway common stock as of March 31, 2021.
|
December 31, 2020
(Dollars in thousands)
|
Amount
|
|||
Fair value of total merger consideration
|
$
|
66,257 | ||
Assets
|
||||
Cash and cash equivalents
|
85,793
|
|||
Investment securities
|
125,462
|
|||
Loans receivable
|
211,172
|
|||
Core deposit intangible
|
958
|
|||
Other assets
|
10,593
|
|||
Total assets
|
433,978
|
|||
Liabilities and Equity
|
||||
Deposits
|
(330,342
|
)
|
||
FHLB advances
|
(3,356
|
)
|
||
Short-term borrowings
|
(47,429
|
)
|
||
Long-term debt
|
(14,000
|
)
|
||
Accounts payable and other liabilities
|
(2,782
|
)
|
||
Total liabilities
|
(397,909
|
)
|
||
Noncontrolling interest
|
(167
|
)
|
||
Less: Net assets
|
35,902
|
|||
Goodwill
|
$
|
30,355
|
(a)
|
Represents payment of estimated transaction expenses related to the merger, net of accruals, income tax and amounts previously paid.
|
|
(b)
|
Represents net fair value adjustments of $7.3 million to reflect a preliminary estimate of the market value of CFBanc’s loans, offset in part by purchase accounting reversals of CFBanc’s
allowance for loan losses of $2.6 million and deferred loan fees of $200 thousand. Also includes loans receivable held for sale.
|
|
(c)
|
Represents a purchase accounting adjustment to reflect the impact on deferred tax assets resulting from fair value adjustments to CFBanc’s loans, core deposit intangible asset and FHLB
Advances.
|
|
(d)
|
Reflects the fair value of CFBanc’s core deposits in excess of book value, which is estimated to be .50% of core deposits. This asset will be amortized on an accelerated basis over an
estimated life of ten years.
|
|
(e)
|
Represents the recognition of goodwill resulting from the merger equal to the excess of the consideration paid to CFBanc’s stockholders over the preliminary net fair value of the assets
acquired and liabilities assumed. See Note 2 – Preliminary Purchase Price Allocation.
|
(f)
|
Represents a fair value adjustment for CFBanc’s FHLB advances that are at rates above current FHLB advance rates.
|
|
(g)
|
Represents net incremental accrued obligations resulting from the merger to be paid post-merger.
|
|
(h)
|
The preferred stockholder of CFBanc will received preferred stock of BYFC with substantially identical terms.
|
|
(i)
|
Reflects the par value of the common stock of BYFC that will be issued in the merger as purchase price consideration, offset in part by purchase accounting adjustments to eliminate the par
value of CFBanc’s common stock accounts.
|
|
(j)
|
Reflects the balance of the value of the purchase price consideration paid to CFBanc’s stockholders, offset in part by purchase accounting adjustments to eliminate CFBanc’s additional
paid-in capital and other equity accounts.
|
|
(k)
|
Reflects purchase accounting adjustments to eliminate CFBanc’s retained earnings account, as well as record $5.6 million in estimated additional transaction costs, less the related tax
effect assuming a tax rate of 29%.
|
|
(l)
|
Reflects the sale of approximately 18,474,000 shares of common stock through private placements to certain institutional and accredited investors at a price of $1.78 per share. Also,
assumes total issuance costs of $2.0 million. Also, reflects the write-down of Broadway’s deferred tax assets because the number of shares issued in the placements will trigger limitations on the future use of certain deferred tax assets
imposed under federal and state income tax regulations.
|
December 31, 2020
(Dollars in thousands)
|
Note
|
Amount
|
||||
Fair value of common stock consideration issued
|
(i)
|
$
|
63,257
|
|||
Fair value of preferred stock consideration issued
|
(ii)
|
3,000
|
||||
Estimated transaction costs not yet paid
|
(iii)
|
(3,985
|
)
|
|||
Pro forma adjustment to Broadway stockholders’ equity
|
|
62,272
|
||||
Removal of CFBanc’s historical stockholders’ equity
|
|
(38,649
|
)
|
|||
Pro forma net adjustment to total stockholders’ equity
|
|
$
|
23,623
|
(i)
|
As mentioned in Note 2, the value of total common stock consideration issued pursuant to the merger agreement is $63.3 million based on a stock price of $2.49 per share of Broadway common
stock at March 31, 2021.
|
(ii)
|
Reflects the fair value of Broadway preferred stock issued pursuant to the merger agreement for the preferred stock of CFBanc.
|
(iii)
|
Reflects expenses to be paid, net of taxes, for estimated transaction costs not yet paid by both Broadway and CFBanc as a result of the merger.
|
(a)
|
Represents an adjustment to interest income of $2.2 million for the year ended December 31, 2020 2020 and $3.0 million for the year ended December 31, 2019 to record estimated accretion of
discounts on acquired loans that will be marked down to fair value upon completion of the merger. The accretion assumes that the estimated average life of the discounted loans is four years and that the loan discounts are amortized using a
constant yield.
|
|
(b)
|
Represents an adjustment to interest expense on borrowings of $60 thousand for the year ended December 31, 2020 d 2020 and $63 thousand for the year ended December 31 2019 to record
estimated amortization of premiums on certain acquired FHLB advances with interest costs above market. The amortization assumes that the estimated life of the advances is 55 months.
|
|
Represents an adjustment to other expenses of $157 thousand for the year ended December 31, 2020 and $174 thousand for the year ended December 31, 2019 to record amortization of the
acquired core deposit intangibles. The adjustment is based upon an accelerated amortization schedule over an estimated life of ten years.
|
||
(d)
|
Marginal income taxes related to the pro forma pre-tax adjustments are estimated at Broadway’s marginal income tax rate of 29%.
|
|
(e)
|
Pro forma earnings per share were calculated by eliminating CFBanc’s basic and diluted common shares outstanding and adding the issuance of basic common shares by Broadway as merger
consideration as follows:
|
Year Ended
December 31, 2020
|
Year Ended December 31, 2019
|
|||||||||||||||
|
Basic Shares
Outstanding
|
Diluted Shares
Outstanding
|
Basic Shares
Outstanding
|
Diluted Shares
Outstanding
|
||||||||||||
|
(In thousands, except per share data)
|
|||||||||||||||
Weighted average common shares outstanding:
|
||||||||||||||||
Broadway weighted average outstanding
|
27,163
|
27,163
|
26,834
|
26,834
|
||||||||||||
CFBanc weighted average outstanding
|
1,864
|
1,864
|
1,864
|
1,864
|
||||||||||||
Combined weighted average shares outstanding
|
29,027
|
29,027
|
28,698
|
28,698
|
||||||||||||
Eliminate CFBanc’s weighted average outstanding
|
(1,864
|
)
|
(1,864
|
)
|
(1,864
|
)
|
(1,864
|
)
|
||||||||
Record issuance of new Broadway common shares in the merger at the exchange ratio of 13.626
|
25,404
|
25,404
|
25,404
|
25,404
|
||||||||||||
Broadway dilutive securities
|
N/A
|
396
|
N/A
|
396
|
||||||||||||
CFBanc dilutive securities
|
N/A
|
—
|
N/A
|
—
|
||||||||||||
Net pro forma adjustments
|
23,540
|
23,936
|
23,540
|
23,936
|
||||||||||||
Pro forma combined weighted average common shares outstanding
|
52,567
|
52,963
|
52,238
|
52,634
|
||||||||||||
Pro forma net income attributable to common shares
|
$
|
1,520
|
$
|
1,520
|
$
|
3,241
|
$
|
3,241
|
||||||||
Pro forma earnings per share
|
$
|
0.03
|
$
|
0.03
|
$
|
0.06
|
$
|
0.06
|