☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
95‑4547287
|
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
|
|
||
5055 Wilshire Boulevard, Suite 500
Los Angeles, California
|
90036
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Title of each class:
|
Trading Symbol
|
Name of each exchange on which registered:
|
Common Stock, par value $0.01 per share
(including attached preferred stock purchase rights)
|
BYFC
|
The Nasdaq Stock Market LLC
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
|
Non‑accelerated filer ☒
|
Smaller reporting company ☒
|
|
Emerging growth company ☐
|
PART III
|
|||
Item 10.
|
Directors, Executive Officers and Corporate Governance |
1
|
|
Item 11.
|
Executive Compensation |
6
|
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
9
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence |
10
|
|
Item 14.
|
Principal Accountant Fees and Services |
12
|
|
PART IV
|
|||
Item 15.
|
Exhibits and Financial Statement Schedules |
13
|
|
14 |
Name
|
Age at
March 31, 2021
|
Director
Since*
|
Current Term
Expires
|
Positions Currently Held with
the Company and the Bank
|
|||||
DIRECTORS:
|
|||||||||
Marie C. Johns
|
69
|
2002
|
2021
|
Lead Independent Director
|
|||||
David McGrady
|
65
|
1997
|
2021
|
Director
|
|||||
Wayne-Kent A. Bradshaw
|
74
|
2012
|
2021
|
Chairman of the Board
|
|||||
Robert C. Davidson, Jr.
|
74
|
2003
|
2022
|
Director
|
|||||
Dutch C. Ross III
|
73
|
2003
|
2022
|
Director
|
|||||
Jack T. Thompson
|
48
|
2019
|
2022
|
Director
|
|||||
Brian E. Argrett
|
57
|
2011
|
2023
|
Director, Vice Chair, President and
Chief Executive Officer
|
|||||
Mary Ann Donovan
|
56
|
2020
|
2023
|
Director
|
|||||
William Longbrake
|
77
|
2011
|
2023
|
Director
|
Name
|
Age(1)
|
Principal Occupation during the Past Five Years
|
Brenda Battey
|
63
|
Executive Vice President and Chief Financial Officer of the Company since June 2013 and the Bank(2) since April 2013. Senior Vice President and Senior Controller of Bank of
Manhattan from September 2011 to June 2012. Senior Vice President and Controller of Community Bank from February 2010 to September 2010. Senior Vice President and Controller of First Federal Bank of California from 1997 to 2009.
|
Norman Bellefeuille
|
68
|
Executive Vice President and Chief Lending Officer, Wholesale Lending, of the Company and Bank since April 2021. Previously Executive Vice President of the Company, and Executive Vice
President and Chief Loan Officer of the Bank,(2) since July 2012. Lending Division Manager of Luther Burbank Savings from 2005 to July 2012.
|
Ruth McCloud
|
72
|
Executive Vice President and Chief Operating Officer of the Company and Bank since April 2021. Previously Executive Vice President of the Company, and Executive Vice President and Chief
Retail Banking Officer of the Bank,(2) since July 2014. Senior Vice President / Divisional Sales Manager of OneWest Bank from January of 2010 to June 2014. Senior Vice President / Sales Manager of First
Federal Bank of California from January 2004 to December 2009.
|
Shannan A. Herbert
|
41
|
Executive Vice President and Chief Credit Officer of the Company since April 2021 and of the Bank since December 2018. Senior Vice President and Director of Loan Review at United Bank from
January 2015 to December 2018. Vice President, Credit Officer and Credit Analyst Manager at United Bank from June 2010 to January 2015.
|
Sonja Wells
|
66
|
Executive Vice President and Chief Lending Officer, Commercial Banking, of the Company and the Bank since April 2021. Previously Executive Vice President and Chief Lending Officer of the
Bank since January of 2021. Senior Vice President and Interim Chief Lending Officer of the Bank from May 2020 to January 2021 and prior to that Senior Vice President and Relationship Manager of the Bank from July 2015. Senior Relationship
Manager with M &T Bank in Baltimore Maryland from June 2002 to July 2015. Small Business Relationship Sales Manager from May 1999 to 2002 at First Union National Bank (Wachovia/Wells Fargo) in Baltimore Maryland.
|
Tom Nida
|
71
|
Executive Vice President and Market Executive of the Company since April 2021, and of the Bank since January 2019. Senior Vice President and DC Regional Executive at John Marshall Bank from
October 2017 to January 2019. Executive Vice President and Managing Director of Community Development and Non-Profit Banking as well as an Executive Vice President and DC Market President at United Bank from April 2004 to September 2016.
Vice President & Chair-DC Advisory Board of EagleBank from September 2003 to March 2004. Senior Vice President in Commercial Lending and served as the Bank’s first commercial lender at City First Bank from November 1999 to September 2003.
|
ITEM 11. |
EXECUTIVE COMPENSATION
|
Name and Principal Position
|
Year
|
Salary(1)
|
Stock
Awards(2)
|
Non-Equity
Incentive Plan
Compensation(3)
|
All Other
Compensation(4)
|
Total
($)
|
|||||||||||||||
Wayne-Kent A. Bradshaw Chief Executive Officer
|
2020
|
$
|
448,050
|
$
|
54,375
|
$
|
286,510
|
$
|
73,265
|
$
|
862,200
|
||||||||||
2019
|
$
|
435,000
|
$
|
239,100
|
-
|
$
|
70,963
|
$
|
745,063
|
||||||||||||
2018
|
$
|
435,000
|
$
|
240,072
|
-
|
$
|
71,515
|
$
|
746,587
|
||||||||||||
Brenda J. Battey Chief Financial Officer
|
2020
|
$
|
242,383
|
23,532
|
$
|
84,834
|
$
|
35,107
|
$
|
385,856
|
|||||||||||
2019
|
$
|
235,323
|
47,065
|
-
|
$
|
34,032
|
$
|
316,420
|
|||||||||||||
2018
|
$
|
235,323
|
-
|
-
|
$
|
32,271
|
$
|
267,594
|
|||||||||||||
Norman Bellefeuille Chief Loan Officer
|
2020
|
$
|
255,485
|
24,805
|
$
|
89,420
|
$
|
46,061
|
$
|
415,771
|
|||||||||||
2019
|
$
|
248,044
|
49,609
|
-
|
$
|
46,701
|
$
|
344,354
|
|||||||||||||
2018
|
$
|
248,044
|
-
|
-
|
$
|
46,669
|
$
|
294,713
|
|||||||||||||
Ruth McCloud
Chief Retail Banking Officer
|
2020
|
$
|
206,525
|
20,051
|
$
|
72,284
|
$
|
29,195
|
$
|
328,055
|
|||||||||||
2019
|
$
|
200,510
|
40,102
|
-
|
$
|
29,387
|
$
|
269,999
|
|||||||||||||
2018
|
$
|
200,510
|
-
|
-
|
$
|
27,788
|
$
|
228,298
|
(1) |
Includes amounts deferred and contributed to the 401(k) Plan by the NEO.
|
(2) |
Grant date fair value of RSU awards covering 97,195 shares of common stock in 2018 in lieu of cash bonus due to restrictions applicable to companies that participated in the United States Department of the Treasury’s Capital Assistance
Program, and awards of 194,390 shares, 38,264 shares, 40,332 shares, and 32,603 shares of restricted stock awarded to Mr. Bradshaw, Ms. Battey, Mr. Bellefeuille, and Mrs. McCloud, respectively, pursuant to the LTIP in 2019 and awards of
37,371 shares, 16,173 shares, 17,048 shares and 13,781 shares of restricted stock awarded to Mr. Bradshaw, Ms. Battey, Mr. Bellefeuille, and Mrs. McCloud, respectively, pursuant to the LTIP in 2020. The restricted stock awards granted in 2019
and 2020 vest two years after the grant date.
|
(3) |
The amounts shown represent the cash incentive compensation awards earned by the NEO under Broadway Federal Bank’s Incentive Plan for Management (“Incentive Plan”), based on the objective criteria established by the Broadway board of
directors pursuant to the Incentive Plan at the beginning of each year and discretionary amounts as determined by the Broadway board of directors’ compensation and benefits committee (“compensation committee”). The compensation committee
evaluates the performance results at the beginning of the following year and approves the amounts of bonuses to be paid.
|
(4) |
Includes amounts paid by Broadway to the 401(k) account of the NEO and allocations under Broadway’s Employee Stock Ownership Plan. Also includes perquisites and other benefits consisting of automobile and telephone allowances, health
benefits and life insurance premiums. The amount shown for Broadway’s CEO includes country club dues.
|
Option Awards |
Restricted Stock Awards |
|||||||||||||||||||||||
Name
|
Number of Securities Underlying Unexercised Options
(Exercisable)
|
Number of
Securities
Underlying
Unexercised
Options
(Unexercisable)(1)
|
Option
Exercise
Price Price(2)
|
Option
Expiration
Date(3)
|
Number of
Shares
That Have
Not
Vested(4)
|
Market
Value of
Shares That
Have Not
Vested(5)
|
||||||||||||||||||
Wayne K. Bradshaw
|
-
|
-
|
-
|
-
|
231,761
|
$
|
428,758
|
|||||||||||||||||
Brenda J. Battey
|
120,000
|
30,000
|
$
|
1.62
|
02/24/26
|
54,437
|
$
|
100,708
|
||||||||||||||||
Norman Bellefeuille
|
160,000
|
40,000
|
$
|
1.62
|
02/24/26
|
57,380
|
$
|
106,153
|
||||||||||||||||
Ruth McCloud
|
80,000
|
20,000
|
$
|
1.62
|
02/24/26
|
46,384
|
$
|
85,810
|
(1) |
Options vest in equal annual installments on each anniversary date over a period of five years commencing on the date of grant.
|
(2) |
Based upon the fair market value of a share of Company common stock on the date of grant.
|
(3) |
Terms of outstanding stock options are for a period of ten years from the date the option is granted.
|
(4) |
There were no vested restricted stock awards as of December 31, 2020.
|
(5) |
Based upon a market value of $1.85 per share for the Company’s common stock as of December 31, 2020.
|
Name
|
Fees Earned
or Paid in
Cash(1)
|
Stock Awards(2)
|
All Other
Compensation(3)
|
Total
|
||||||||||||
Robert C. Davidson
|
$
|
35,000
|
$
|
7,500
|
$
|
578
|
$
|
43,078
|
||||||||
Daniel Medina
|
$
|
29,000
|
$
|
7,500
|
-
|
$
|
36,500
|
|||||||||
Virgil Roberts
|
$
|
37,000
|
$
|
7,500
|
-
|
$
|
44,500
|
|||||||||
Dutch C. Ross III
|
$
|
29,000
|
$
|
7,500
|
-
|
$
|
36,500
|
|||||||||
Erin Selleck
|
$
|
29,000
|
$
|
7,500
|
-
|
$
|
36,500
|
|||||||||
Jack Thompson
|
$
|
23,000
|
$
|
7,500
|
-
|
$
|
30,500
|
(1) |
Includes payments of annual retainer fees, fees paid to chairmen and members of Board committees, and meeting attendance fees.
|
(2) |
The amounts shown reflect the aggregate fair value of stock awards on the grant date, as determined in accordance with FASB ASC Topic 718.
|
(3) |
Includes premiums paid for dental and vision insurance.
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
Beneficial Owner
|
Number of
Shares of
Voting
Common
Stock, Class A
Beneficially
Owned
|
Percent
of Voting
Common
Stock
|
Number of
Shares of
Non-Voting
Common
Stock, Class B
Beneficially
Owned(1)
|
Number of
Shares of
Non-Voting
Common
Stock, Class C
Beneficially
Owned (2)
|
Percent of
Total
Common
Stock
Outstanding(3)
|
|||||||||||||||
CJA Private Equity Financial Restructuring Master Fund I L.P.(4)
|
1,845,141
|
4.23
|
%
|
-
|
6,453,995
|
11.57
|
%
|
|||||||||||||
City First Enterprises(5)
|
6,622,236
|
15.18
|
%
|
-
|
-
|
9.23
|
%
|
|||||||||||||
JP Morgan Chase Community Development Corporation(6)
|
-
|
-
|
-
|
5,737,479
|
8.00
|
%
|
||||||||||||||
National Community Investment Fund(7)
|
1,492,893
|
3.42
|
%
|
2,398,176
|
1,564,540
|
7.61
|
%
|
|||||||||||||
CDFI Fund(8)
|
-
|
-
|
5,450,400
|
-
|
7.60
|
%
|
||||||||||||||
Directors and Named Executive Officers(9)
|
||||||||||||||||||||
Wayne-Kent A. Bradshaw(10)
|
269,902
|
*
|
-
|
-
|
*
|
|||||||||||||||
Brian E. Argrett
|
1,362
|
*
|
-
|
*
|
||||||||||||||||
Robert C. Davidson, Jr.(11)
|
88,590
|
*
|
-
|
-
|
*
|
|||||||||||||||
Mary Ann Donovan
|
1,362
|
*
|
-
|
-
|
*
|
|||||||||||||||
Marie C. Johns
|
1,362
|
*
|
-
|
-
|
*
|
|||||||||||||||
William A. Longbrake
|
1,362
|
*
|
-
|
-
|
*
|
|||||||||||||||
David J. McGrady
|
1,362
|
*
|
-
|
-
|
*
|
|||||||||||||||
Dutch C. Ross III
|
32,072
|
*
|
-
|
-
|
*
|
|||||||||||||||
Jack T. Thompson
|
14,635
|
*
|
-
|
-
|
*
|
|||||||||||||||
Brenda J. Battey(12)
|
212,175
|
*
|
-
|
-
|
*
|
|||||||||||||||
Norman Bellefeuille(13)
|
316,470
|
*
|
-
|
-
|
*
|
|||||||||||||||
Ruth McCloud(14)
|
154,742
|
*
|
-
|
-
|
*
|
|||||||||||||||
All current directors and executive officers as a group (12 persons)
|
1,095,396
|
2.48
|
%
|
-
|
-
|
1.52
|
%
|
(1) |
The Class B non-voting common stock may not be converted to common stock.
|
(2) |
The Class C non-voting common stock automatically converts to Class A voting common stock upon certain prescribed forms of sales to third parties that are not affiliated with the holders thereof.
|
(3) |
Percentages are based on the total of Class A voting, Class B non-voting and Class C non-voting common stock held by the respective stockholders shown in the table.
|
(4) |
Christopher J. Acito, managing member of Christopher J. Acito (“CJA’’) & Associates LLC, has sole investment and voting power with respect to these shares. CJA & Associates LLC is the managing member of CJA Private Equity
Financial Restructuring GP I Ltd., which is the general partner of CJA Private Equity Financial Restructuring Master Fund I LP. The address for CJA & Associates LLC is 654 Madison Avenue, Suite 601, New York, NY 10065. CJA &
Associates LLC is an affiliate of Gapstow Capital Partners located at 654 Madison Avenue, Suite 601, New York, NY 10065.
|
(5) |
The address for City First Enterprises is 1 Thomas Circle, NW, Suite 700, Washington, D.C. 20005.
|
(6) |
The address for JP Morgan Chase Community Development Corporation c/o JP Morgan Chase Bank, NA is 237 Park Avenue, 7th Floor, New York, NY 10017.
|
(7) |
The address for National Community Investment Fund is 135 South LaSalle Street, Suite 3025, Chicago, IL 60603.
|
(8) |
The address for the CDFI Fund is 601 Thirteenth Street NW, Suite 200 South, Washington, DC 20005.
|
(9) |
The address for each of the directors and named executive officers is 5055 Wilshire Boulevard, Suite 500, Los Angeles, CA 90036.
|
(10) |
Includes 41,630 allocated shares under the Broadway Employee Stock Ownership Plan (“ESOP”).
|
(11) |
Includes 70,000 shares that are held by the Robert and Alice Davidson Trust, dated August 11, 1982. Robert Davidson and Alice Davidson share investment and voting power with respect to the shares held by the Robert and Alice Davidson
Trust in their capacities as trustees of the trust.
|
(12) |
Includes 29,037 allocated shares under the ESOP and 150,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021.
|
(13) |
Includes 29,013 allocated shares under the ESOP and 200,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021, and 52,500 shares held jointly with his spouse with whom voting
and investment power are shared.
|
(14) |
Includes 26,516 allocated shares under the ESOP and 100,000 shares subject to options granted under the LTIP, which options are all currently exercisable as of March 31, 2021.
|
ITEM 13. |
ITEM 14. |
2020
|
2019
|
|||||||
(In thousands)
|
||||||||
Audit fees(1)
|
$
|
214
|
$
|
197
|
||||
Audit-related fees(2)
|
16
|
12
|
||||||
Total fees
|
$
|
230
|
$
|
209
|
(1) |
Aggregate fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements included in the Company’s Annual Report on Form 10-K and for the reviews of the Company’s consolidated
financial statements included in the Company’s Quarterly Reports on Form 10-Q.
|
(2) |
Consultation fees billed for professional services rendered for: a) 2020, primarily, on proposed business combination; b) the 2019 reviews of the Company’s deferred tax assets valuation.
|
ITEM 15. |
(b) |
List of Exhibits
|
Exhibit
Number
|
||
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002
|
||
Certification of Chief Financial Officer 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
|
BROADWAY FINANCIAL CORPORATION
|
||
By:
|
/s/ Brenda J. Battey | |
Brenda J. Battey
Chief Financial Officer
|
||
Date:
|
April 30, 2021
|
1. |
I have reviewed this annual report on Form 10-K of Broadway Financial Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 30, 2021
|
|
/s/ Brian E. Argrett
|
||
Brian E. Argrett
|
||
Chief Executive Officer
|
||
Broadway Financial Corporation
|
1. |
I have reviewed this annual report on Form 10-K of Broadway Financial Corporation;
|
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this
report based on such evaluation; and
|
d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors
(or persons performing the equivalent functions):
|
a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report
financial information; and
|
b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
April 30, 2021
|
|
/s/ Brenda J. Battey
|
||
Brenda J. Battey
|
||
Chief Financial Officer
|
||
Broadway Financial Corporation
|
Date: April 30, 2021
|
By:
|
/s/ Brian E. Argrett
|
|
Brian E. Argrett
|
|||
Chief Executive Officer
|
|||
Broadway Financial Corporation
|
Date: April 30, 2021
|
By:
|
/s/ Brenda J. Battey
|
|
Brenda J. Battey
|
|||
Chief Financial Officer
|
|||
Broadway Financial Corporation
|