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 9.01 |
Financial Statements and Exhibits.
|
(d) |
Exhibits
|
Press Release dated August 16, 2021, announcing results for the quarter ended June 30, 2021.
|
Date: August 16, 2021
|
BROADWAY FINANCIAL CORPORATION
|
||
By:
|
/s/ Brenda J. Battey
|
||
Name: Brenda J. Battey
|
|||
Title: Chief Financial Officer
|
• |
Total assets exceeded $1 billion at the end of the second quarter, representing an increase of over 115% since December 31, 2020.
|
• |
Total loans receivable, net of allowances, were over $600 million, representing an increase of $255 million, or 70.7%, since December 31, 2020. The Company acquired approximately $226 million of loans in the Merger.
|
• |
Gross loan originations during the quarter were $89.1 million, including $46.9 million of loans secured by multi-family residential properties and $26.4 million of Paycheck Protection Program (“PPP”) loans.
|
• |
Overall liquidity improved during the second quarter as cash and equivalents, plus securities available for sale, increased by $271 million, and the ratio of total loans receivable, net of allowances, to total deposits declined to
87.2% from 116.1% at the beginning of the quarter.
|
• |
Deposits totaled $705 million as of June 30, 2021, reflecting growth of $39 million, or 5.9%, since the Merger date.
|
• |
Total equity increased by $98.4 million to $143.5 million since the Merger date, reflecting the value of the shares issued in the Merger and private placements, plus net income earned in the second quarter.
|
CFBanc Book
Value
|
Fair Value
Adjustments
|
Fair Value
|
||||||||||
Assets acquired
|
||||||||||||
Cash and cash equivalents
|
$
|
84,745
|
$
|
-
|
$
|
84,745
|
||||||
Securities available-for-sale
|
150,052
|
(77
|
)
|
149,975
|
||||||||
Loans:
|
||||||||||||
Gross loans receivable held for investment
|
227,669
|
(1,784
|
)
|
225,885
|
||||||||
Deferred fees and costs
|
(315
|
)
|
315
|
-
|
||||||||
Allowance for loan losses
|
(2,178
|
)
|
2,178
|
-
|
||||||||
225,176
|
709
|
225,885
|
||||||||||
Accrued interest receivable
|
1,637
|
-
|
1,637
|
|||||||||
FHLB and FRB stock
|
1,061
|
-
|
1,061
|
|||||||||
Office properties and equipment
|
5,152
|
1,801
|
6,953
|
|||||||||
Deferred tax assets, net
|
890
|
(1,608
|
)
|
(718
|
)
|
|||||||
Goodwill
|
-
|
25,996
|
25,996
|
|||||||||
Core deposit intangible
|
-
|
3,329
|
3,329
|
|||||||||
Other assets
|
2,290
|
-
|
2,290
|
|||||||||
Total assets
|
$
|
471,003
|
$
|
30,150
|
$
|
501,153
|
||||||
Liabilities assumed
|
||||||||||||
Deposits
|
353,671
|
51
|
353,722
|
|||||||||
FHLB advances
|
3,057
|
109
|
3,166
|
|||||||||
Other borrowings
|
73,945
|
-
|
73,945
|
|||||||||
Accrued expenses and other liabilities
|
4,063
|
-
|
4,063
|
|||||||||
Total liabilities
|
434,736
|
160
|
434,896
|
|||||||||
-
|
||||||||||||
Excess of assets acquired over liabilities assumed
|
$
|
36,267
|
$
|
29,990
|
$
|
66,257
|
||||||
Total liabilities and equity
|
$
|
471,003
|
$
|
30,150
|
$
|
501,153
|
Number of Common Shares Outstanding
|
||||||||||||||||
Class A Voting Common Stock
|
Class B
Non-Voting Common Stock |
Class C
Non-Voting Common Stock |
Total Common Stock
|
|||||||||||||
Shares Outstanding at March 31, 2021
|
19,142,498
|
-
|
8,756,396
|
27,898,894
|
||||||||||||
Issued in Merger
|
13,999,870
|
11,404,621
|
-
|
25,404,491
|
||||||||||||
RSUs canceled upon vesting in Merger
|
(52,105
|
)
|
-
|
-
|
(52,105
|
)
|
||||||||||
Total Post Merger
|
33,090,263
|
11,404,621
|
8,756,396
|
53,251,280
|
||||||||||||
Exchanged post Merger
|
(681,300
|
)
|
-
|
681,300
|
-
|
|||||||||||
Issued in Private Placements
|
11,221,921
|
-
|
7,252,079
|
18,474,000
|
||||||||||||
Total Outstanding at June 30, 2021
|
43,630,884
|
11,404,621
|
16,689,775
|
71,725,280
|
As of June 30, 2021:
|
Common Equity Capital
|
Shares Outstanding
|
Per Share Amount
|
|||||||||
(In thousands)
|
||||||||||||
Book Value per Share
|
$
|
140,463
|
71,725,280
|
$
|
1.96
|
|||||||
Less:
|
||||||||||||
Goodwill
|
(25,996
|
)
|
||||||||||
Net Unamortized Core Deposit Intangible
|
(3,198
|
)
|
||||||||||
Tangible Book Value per Share
|
$
|
111,269
|
71,725,280
|
$
|
1.55
|
June 30, 2021
|
December 31, 2020
|
|||||||
Selected Financial Condition Data and Ratios:
|
||||||||
Cash and cash equivalents
|
$
|
210,383
|
$
|
96,109
|
||||
Securities available-for-sale, at fair value
|
158,832
|
10,698
|
||||||
Loans receivable held for investment
|
618,014
|
363,344
|
||||||
Allowance for loan losses
|
(3,296
|
)
|
(3,215
|
)
|
||||
Loans receivable held for investment, net of allowance
|
614,718
|
360,129
|
||||||
Total assets
|
1,040,998
|
483,378
|
||||||
Deposits
|
705,041
|
315,630
|
||||||
FHLB advances
|
96,022
|
110,500
|
||||||
Junior subordinated debentures
|
2,805
|
3,315
|
||||||
Securities sold under agreements to repurchase
|
70,660
|
-
|
||||||
Notes payable
|
14,000
|
-
|
||||||
Stockholders' equity of Broadway Financial Corporation
|
143,463
|
48,885
|
||||||
Tangible book value per share
|
$
|
1.55
|
$
|
1.74
|
||||
Equity to total assets
|
13.78
|
%
|
10.11
|
%
|
||||
Asset Quality Ratios:
|
||||||||
Non-accrual loans to total loans
|
0.12
|
%
|
0.22
|
%
|
||||
Non-performing assets to total assets
|
0.07
|
%
|
0.16
|
%
|
||||
Allowance for loan losses to total gross loans
|
0.53
|
%
|
0.88
|
%
|
||||
Allowance for loan losses to non-performing loans
|
448.44
|
%
|
408.51
|
%
|
||||
Non-Performing Assets:
|
||||||||
Non-accrual loans
|
$
|
735
|
$
|
787
|
||||
Loans delinquent 90 days or more and still accruing
|
-
|
-
|
||||||
Real estate acquired through foreclosure
|
-
|
-
|
||||||
Total non-performing assets
|
$
|
735
|
$
|
787
|
||||
Delinquent loans (greater than 30 days)
|
$
|
1,885
|
$
|
-
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||||||
Selected Operating Data and Ratios:
|
2021
|
2020
|
2021
|
2020
|
||||||||||||||||
Interest income
|
$
|
6,884
|
$
|
4,568
|
$
|
10,661
|
$
|
9,139
|
||||||||||||
Interest expense
|
1,063
|
1,537
|
1,995
|
3,210
|
||||||||||||||||
Net interest income
|
5,821
|
3,031
|
8,666
|
5,929
|
||||||||||||||||
Loan loss provision
|
81
|
-
|
81
|
29
|
||||||||||||||||
Net interest income after loan loss provision
|
5,740
|
3,031
|
8,585
|
5,900
|
||||||||||||||||
Non-interest income
|
2,192
|
242
|
2,315
|
439
|
||||||||||||||||
Non-interest expense
|
(5,374
|
)
|
(3,402
|
)
|
(14,001
|
)
|
(6,551
|
)
|
||||||||||||
Income (loss) before income taxes
|
2,558
|
(129
|
)
|
(3,101
|
)
|
(212
|
)
|
|||||||||||||
Income tax expense (benefit)
|
1,824
|
(345
|
)
|
(348
|
)
|
(395
|
)
|
|||||||||||||
Net income (loss)
|
734
|
216
|
(2,753
|
)
|
183
|
|||||||||||||||
Less: Net income attributable to non-controlling interest
|
(33
|
)
|
-
|
(33
|
)
|
-
|
||||||||||||||
Net Income Attributable to Broadway Financial Corporation
|
$
|
701
|
$
|
216
|
$
|
(2,786
|
)
|
$
|
183
|
|||||||||||
Earnings per common share-diluted
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.06
|
)
|
$
|
0.01
|
|||||||||||
Loan originations (1)
|
$
|
89,114
|
$
|
49,601
|
$
|
113,075
|
$
|
115,540
|
||||||||||||
Net recoveries to average loans
|
(0.00
|
)%
|
(2)
|
(0.00
|
)%
|
(2)
|
(0.00
|
)%
|
(2)
|
(0.00
|
)%
|
(2)
|
||||||||
Return on average assets
|
0.27
|
%
|
(2)
|
0.17
|
%
|
(2)
|
-0.73
|
%
|
(2)
|
0.07
|
%
|
(2)
|
||||||||
Return on average equity
|
1.97
|
%
|
(2)
|
1.76
|
%
|
(2)
|
-5.83
|
%
|
(2)
|
0.75
|
%
|
(2) | ||||||||
Net interest margin
|
2.33
|
%
|
(2)
|
2.43
|
%
|
(2)
|
2.35
|
%
|
(2)
|
2.45
|
%
|
(2) |
(1) |
Does not include net deferred origination costs.
|
(2) |
Annualized
|
June 30, 2021
|
December 31, 2020
|
|||||||
(Unaudited)
|
||||||||
Assets:
|
||||||||
Cash and due from banks
|
$
|
41,730
|
$
|
71,110
|
||||
Interest-bearing deposits in other banks
|
168,653
|
24,999
|
||||||
Cash and cash equivalents
|
210,383
|
96,109
|
||||||
Securities available-for-sale, at fair value
|
158,832
|
10,698
|
||||||
Loans receivable held for investment, net of allowance of $3,296 and $3,215
|
614,718
|
360,129
|
||||||
Accrued interest receivable
|
2,572
|
1,202
|
||||||
Federal Home Loan Bank (FHLB) stock
|
2,896
|
3,431
|
||||||
Federal Reserve Bank (FRB) stock
|
693
|
-
|
||||||
Office properties and equipment, net
|
9,159
|
2,540
|
||||||
Bank owned life insurance
|
3,168
|
3,147
|
||||||
Deferred tax assets, net
|
5,513
|
5,633
|
||||||
Core deposit intangible
|
3,198
|
-
|
||||||
Goodwill
|
25,996
|
-
|
||||||
Other assets
|
3,870
|
489
|
||||||
Total assets
|
$
|
1,040,998
|
$
|
483,378
|
||||
Liabilities and stockholders’ equity
|
||||||||
Liabilities:
|
||||||||
Deposits
|
$
|
705,041
|
$
|
315,630
|
||||
Securities sold under agreements to repurchase
|
70,660
|
-
|
||||||
FHLB advances
|
96,022
|
110,500
|
||||||
Junior subordinated debentures
|
2,805
|
3,315
|
||||||
Notes payable of the VIE
|
14,000
|
-
|
||||||
Accrued expenses and other liabilities
|
8,975
|
5,048
|
||||||
Total liabilities
|
897,503
|
$
|
434,493
|
|||||
Stockholders' Equity:
|
||||||||
Cumulative Redeemable Perpetual Preferred stock, Series A, $.01 par value,
authorized 3,000 shares at June 30, 2021 and none at December 31, 2020; issued
and outstanding 3,000 shares at June 30, 2021 and none at December 31, 2020
|
3,000
|
-
|
||||||
Common stock, Class A, $.01 par value, voting, authorized 75,000,000 shares at
June 30, 2021 and 50,000,000 shares at December 31, 2020; issued 46,248,710
shares at June 30, 2021 and 21,899,584 shares at December 31, 2020; outstanding
43,630,884 shares at June 30, 2021 and 19,281,758 shares at December 31, 2020
|
462
|
219
|
||||||
Common stock, Class B, $.01 par value, non-voting, authorized 15,000,000 shares at
June 30, 2021 and none at December 31, 2020; issued and outstanding
11,404,621 shares at June 30, 2021 and none at December 31, 2020
|
114
|
-
|
||||||
Common stock, Class C, $.01 par value, non-voting, authorized 25,000,000 shares at
June 30, 2021 and December 31, 2020; issued and outstanding 16,689,775 at June
30, 2021 and 8,756,396 shares at December 31, 2020
|
167
|
87
|
||||||
Additional paid-in capital
|
140,125
|
46,851
|
||||||
Retained earnings
|
4,997
|
7,783
|
||||||
Unearned Employee Stock Ownership Plan (ESOP) shares
|
(861
|
)
|
(893
|
)
|
||||
Accumulated other comprehensive gain (loss), net of tax
|
785
|
164
|
||||||
Treasury stock-at cost, 2,617,826 shares at June 30, 2021 and at December 31, 2020
|
(5,326
|
)
|
(5,326
|
)
|
||||
Total Broadway Financial Corporation and Subsidiary stockholders’ equity
|
143,463
|
48,885
|
||||||
Non-controlling interest
|
32
|
-
|
||||||
Total liabilities and stockholders’ equity
|
$
|
1,040,998
|
$
|
483,378
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2021
|
2020
|
2021
|
2020
|
|||||||||||||
(In thousands, except per share)
|
||||||||||||||||
Interest income:
|
||||||||||||||||
Interest and fees on loans receivable
|
$
|
6,300
|
$
|
4,429
|
$
|
9,944
|
$
|
8,788
|
||||||||
Interest on mortgage-backed and other securities
|
440
|
65
|
496
|
135
|
||||||||||||
Other interest income
|
144
|
74
|
221
|
216
|
||||||||||||
Total interest income
|
6,884
|
4,568
|
10,661
|
9,139
|
||||||||||||
Interest expense:
|
||||||||||||||||
Interest on deposits
|
477
|
967
|
860
|
2,022
|
||||||||||||
Interest on borrowings
|
586
|
570
|
1,135
|
1,188
|
||||||||||||
Total interest expense
|
1,063
|
1,537
|
1,995
|
3,210
|
||||||||||||
Net interest income
|
5,821
|
3,031
|
8,666
|
5,929
|
||||||||||||
Loan loss provision
|
81
|
-
|
81
|
29
|
||||||||||||
Net interest income after loan loss provision (recapture)
|
5,740
|
3,031
|
8,585
|
5,900
|
||||||||||||
Non-interest income:
|
||||||||||||||||
Service charges
|
36
|
94
|
129
|
238
|
||||||||||||
Gain on sale of loans
|
-
|
116
|
-
|
123
|
||||||||||||
CDFI Grant
|
1,826
|
-
|
1,826
|
-
|
||||||||||||
Other
|
330
|
32
|
360
|
78
|
||||||||||||
Total non-interest income
|
2,192
|
242
|
2,315
|
439
|
||||||||||||
Non-interest expense:
|
||||||||||||||||
Compensation and benefits
|
2,819
|
1,983
|
8,209
|
4,038
|
||||||||||||
Occupancy expense
|
627
|
320
|
935
|
635
|
||||||||||||
Information services
|
566
|
221
|
807
|
458
|
||||||||||||
Professional services
|
513
|
571
|
2,452
|
835
|
||||||||||||
Supervisory costs
|
177
|
95
|
247
|
112
|
||||||||||||
Office services and supplies
|
59
|
87
|
154
|
163
|
||||||||||||
76
|
(17
|
)
|
106
|
(10
|
)
|
|||||||||||
Corporate insurance
|
8
|
32
|
254
|
64
|
||||||||||||
Amortization of core deposit intangible
|
131
|
-
|
131
|
-
|
||||||||||||
Other
|
398
|
110
|
706
|
256
|
||||||||||||
Total non-interest expense
|
5,374
|
3,402
|
14,001
|
6,551
|
||||||||||||
Income (loss) before income taxes
|
2,558
|
(129
|
)
|
(3,101
|
)
|
(212
|
)
|
|||||||||
Income tax expense (benefit )
|
1,824
|
(345
|
)
|
(348
|
)
|
(395
|
)
|
|||||||||
Net income (loss)
|
$
|
734
|
$
|
216
|
$
|
(2,753
|
)
|
$
|
183
|
|||||||
Less: Net income attributable to non-controlling interest
|
(33
|
)
|
-
|
(33
|
)
|
-
|
||||||||||
Net Income Attributable to Broadway Financial Corporation
|
$
|
701
|
$
|
216
|
$
|
(2,786
|
)
|
$
|
183
|
|||||||
Other comprehensive income, net of tax:
|
||||||||||||||||
Unrealized gains on securities available-for-sale arising during the period
|
$
|
1,022
|
$
|
155
|
$
|
864
|
$
|
330
|
||||||||
Income tax expense
|
290
|
46
|
243
|
98
|
||||||||||||
Other comprehensive income, net of tax
|
732
|
109
|
621
|
232
|
||||||||||||
Comprehensive income (loss)
|
$
|
1,466
|
$
|
325
|
$
|
(2,132
|
)
|
$
|
415
|
|||||||
Earnings (loss) per common share-basic
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.06
|
)
|
$
|
0.01
|
|||||||
Earnings (loss) per common share-diluted
|
$
|
0.01
|
$
|
0.01
|
$
|
(0.06
|
)
|
$
|
0.01
|
Six Months Ended June 30,
|
||||||||
2021
|
2020
|
|||||||
(In thousands)
|
||||||||
Cash flows from operating activities:
|
||||||||
Net (loss) income
|
$
|
(2,753
|
)
|
$
|
183
|
|||
Adjustments to reconcile net income to net cash used in operating activities:
|
||||||||
Loan loss provision
|
81
|
29
|
||||||
Depreciation
|
345
|
115
|
||||||
Net amortization of deferred loan origination costs
|
964
|
136
|
||||||
Net amortization of premiums on mortgage-backed securities
|
231
|
19
|
||||||
Amortization of investment in affordable housing limited partnership
|
26
|
53
|
||||||
Amortization of core deposit intangible
|
131
|
-
|
||||||
Director compensation expense-common stock
|
45
|
45
|
||||||
Amortization of premium on FHLB stock
|
(7
|
)
|
-
|
|||||
Stock-based compensation expense
|
169
|
179
|
||||||
Valuation allowance on deferred tax asset
|
370
|
-
|
||||||
ESOP compensation expense
|
47
|
32
|
||||||
Earnings on bank owned life insurance
|
(21
|
)
|
(23
|
)
|
||||
Originations of loans receivable held for sale
|
-
|
(110,908
|
)
|
|||||
Proceeds from sales of loans receivable held for sale
|
-
|
60,997
|
||||||
Repayments on loans receivable held for sale
|
-
|
315
|
||||||
Gain on sale of loans receivable held for sale
|
-
|
(123
|
)
|
|||||
Change in assets and liabilities:
|
||||||||
(1,210
|
)
|
(271
|
)
|
|||||
Net change in accrued interest receivable
|
267
|
(68
|
)
|
|||||
Net change in other assets
|
(1,118
|
)
|
(349
|
)
|
||||
Net change in advance payments by borrowers for taxes and insurance
|
310
|
43
|
||||||
Net change in accrued expenses and other liabilities
|
(447
|
)
|
442
|
|||||
Net cash used in operating activities
|
(2,570
|
)
|
(49,154
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Cash acquired in merger
|
84,745
|
-
|
||||||
Net change in loans receivable held for investment
|
(29,749
|
)
|
23,265
|
|||||
Principal payments on available-for-sale securities
|
6,547
|
1,125
|
||||||
Purchase of available-for-sale securities
|
(4,073
|
)
|
-
|
|||||
Purchase of FHLB stock
|
(152
|
)
|
(670
|
)
|
||||
Proceeds from redemption of FHLB stock
|
1,055
|
-
|
||||||
Purchase of office properties and equipment
|
(56
|
)
|
-
|
|||||
Disposals of office property and equipment
|
45
|
(328
|
)
|
|||||
Net cash provided by investing activities
|
58,362
|
23,392
|
||||||
Cash flows from financing activities:
|
||||||||
Net change in deposits
|
35,690
|
18,054
|
||||||
Net increase in securities sold under agreements to repurchase
|
10,613
|
-
|
||||||
Proceeds from sale of stock (net of costs)
|
30,837
|
-
|
||||||
Distributions to non-controlling interest
|
(165
|
)
|
||||||
Proceeds from FHLB advances
|
5,000
|
66,000
|
||||||
Repayments of FHLB advances
|
(22,535
|
)
|
(33,500
|
)
|
||||
Stock cancelled for income tax withholding
|
(448
|
)
|
-
|
|||||
Repayments of junior subordinated debentures
|
(510
|
)
|
(510
|
)
|
||||
Net cash provided by financing activities
|
58,482
|
50,044
|
||||||
Net change in cash and cash equivalents
|
114,274
|
24,282
|
||||||
Cash and cash equivalents at beginning of the period
|
96,109
|
15,566
|
||||||
Cash and cash equivalents at end of the period
|
$
|
210,383
|
$
|
39,848
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
1,803
|
$
|
3,290
|
||||
Cash paid for income taxes
|
429
|
3
|
||||||
Assets acquired (liabilities assumed) in acquisition:
|
||||||||
Securities available for sale, at fair value
|
$
|
149,975
|
$
|
-
|
||||
Loans receivable
|
225,885
|
-
|
||||||
Accrued interest receivable
|
1,637
|
-
|
||||||
FHLB and FRB stock
|
1,061
|
-
|
||||||
Office property and equipment
|
6,953
|
-
|
||||||
Goodwill
|
25,966
|
-
|
||||||
Core deposit intangible
|
3,329
|
-
|
||||||
Other assets
|
2,290
|
-
|
||||||
Deposits
|
(353,721
|
)
|
-
|
|||||
FHLB advances
|
(3,166
|
)
|
-
|
|||||
Securities sold under agreements to repurchase
|
(59,945
|
)
|
-
|
|||||
Other borrowings
|
(14,000
|
)
|
-
|
|||||
Deferred taxes
|
(717
|
)
|
-
|
|||||
Accrued expenses and other liabilities
|
(4,064
|
)
|
-
|
|||||
Preferred stock
|
(3,000
|
)
|
-
|
|||||
Common stock
|
(63,257
|
)
|
-
|