Broadway Financial Reports $24.6 Million Net Loss in Q3 2025, Driven by Goodwill Impairment

Broadway Financial Corporation reported a consolidated net loss attributable to common stockholders of $24.6 million for the third quarter of 2025, a significant decline from a net loss of $234,000 in the same period of the previous year. This loss was primarily driven by a $25.9 million goodwill impairment charge. The company’s total assets increased slightly to $1.34 billion as of September 30, 2025, compared to $1.33 billion at the end of 2024, reflecting a rise in securities available-for-sale and loans receivable, offset by a decrease in cash and cash equivalents.

In terms of revenue, Broadway Financial's net interest income before provision for credit losses rose to $8.6 million for the third quarter of 2025, up from $8.3 million in the same quarter of 2024. This increase was attributed to a decrease in interest expense on borrowings, despite a rise in interest expense on deposits. The net interest margin improved to 2.72% from 2.43% year-over-year, driven by a higher average rate on interest-earning assets. For the first nine months of 2025, net interest income was $24.4 million, a 2.7% increase from $23.8 million in the prior year.

The company’s total liabilities increased by $24 million to $1.07 billion, primarily due to a $103.8 million increase in deposits, which rose to $849.2 million. This growth in deposits was largely driven by an increase in certificates of deposit and liquid deposits. However, total borrowings decreased significantly by $89.2 million, primarily due to a reduction in Federal Home Loan Bank (FHLB) advances. The allowance for credit losses (ACL) increased to $10.3 million, reflecting a rise in specific reserves on individually evaluated loans.

Broadway Financial's operational developments included a focus on purchasing government-guaranteed loans to complement organic growth. The company also reported a significant operational loss recovery of $1.6 million related to a fraudulent wire transfer incident. Looking ahead, management is actively working on improving internal controls and addressing identified weaknesses in financial reporting processes, particularly concerning loan participation agreements. The company remains committed to maintaining its capital adequacy, with a Community Bank Leverage Ratio of 14.56% as of September 30, 2025, well above the regulatory minimum.