Broadway Financial Corporation Reports $1.9 Million Net Loss in Q1 2025

Broadway Financial Corporation reported a net loss of $1.9 million for the first quarter of 2025, a significant increase from a net loss of $164,000 in the same period of 2024. The loss attributable to common stockholders was $2.6 million after accounting for preferred dividends of $750,000. The company's total interest income decreased slightly to $14.4 million from $14.8 million year-over-year, primarily due to a decline in interest income from available-for-sale securities and other interest income. However, net interest income rose to $8.0 million, up 6.9% from $7.5 million, driven by lower interest expenses on borrowings and an increase in interest and fees on loans receivable.

In terms of operational metrics, Broadway Financial's total assets decreased by $65.7 million to $1.26 billion as of March 31, 2025. This decline was attributed to a $45.6 million drop in cash and cash equivalents and a $17.9 million decrease in available-for-sale securities, partially offset by a $2.4 million increase in net loans. The company reported a total loan portfolio of $980.3 million, with an allowance for credit losses (ACL) of $8.8 million, reflecting an increase from $8.1 million at the end of 2024. The provision for credit losses also rose to $689,000, up from $260,000 in the prior year, primarily due to one new non-accrual loan.

Broadway Financial's deposit base increased by $31.1 million, or 4.2%, to $776.5 million, driven by a rise in certificates of deposit. However, total borrowings decreased significantly by $93.9 million to $168.2 million, largely due to a reduction in Federal Home Loan Bank (FHLB) advances. The company’s Community Bank Leverage Ratio stood at 15.24%, well above the minimum required threshold, indicating a strong capital position.

Strategically, the company has been focusing on enhancing its operational capabilities, which included an increase in compensation and benefits expenses by $1.0 million, partly due to severance costs. Additionally, Broadway Financial experienced a $1.9 million loss from wire fraud, which may result in a gain if recovered. The company is currently working on addressing a material weakness in its internal controls over financial reporting, which was identified during the quarter.

Looking ahead, Broadway Financial aims to improve its financial performance by managing its loan portfolio effectively and enhancing its operational efficiency. The company remains committed to maintaining its capital adequacy and liquidity while navigating the challenges posed by market conditions and operational risks.