Broadway Financial (BYFC) - 2025 Q3 - Quarterly Report

Financial Performance - Net loss attributable to common stockholders was $24,633 thousand for the three months ended September 30, 2025, compared to a loss of $234 thousand in the same period of 2024 [12]. - For the nine months ended September 30, 2025, the company reported a net loss of $25,840,000 compared to a net income of $623,000 for the same period in 2024, indicating a significant decline in profitability [14]. - The Company reported a net loss of $23.9 million for the three months ended September 30, 2025, compared to a net income of $0.5 million for the same period in 2024, resulting in a basic and diluted loss per share of $2.86 [30]. - For the nine months ended September 30, 2025, the net loss available to common stockholders was $28.1 million, compared to a net loss of $0.2 million for the same period in 2024 [30]. Assets and Liabilities - Total assets increased to $1,335,565 thousand as of September 30, 2025, compared to $1,334,883 thousand at December 31, 2024, reflecting a slight growth [10]. - Total liabilities increased to $1,073,679 thousand from $1,049,691 thousand, representing an increase of about 2.3% [10]. - Cash and cash equivalents decreased to $19,731 thousand as of September 30, 2025, from $61,365 thousand at December 31, 2024, reflecting a significant decline [10]. - The balance of total equity as of September 30, 2025, was $261,886,000, down from $286,395,000 as of September 30, 2024, indicating a decrease in shareholder equity [19]. Income and Expenses - Net interest income after provision for credit losses was $7,938 thousand for the three months ended September 30, 2025, slightly up from $7,922 thousand in the same period of 2024 [12]. - Total non-interest expense surged to $31,518 thousand for the three months ended September 30, 2025, compared to $7,594 thousand in the same period of 2024, largely due to a goodwill impairment of $25,858 thousand [12]. - The company reported cash paid for interest of $19,928,000 in 2025, slightly down from $20,577,000 in 2024, reflecting stable interest expenses [14]. Credit Losses and Provisions - The company reported a provision for credit losses of $679 thousand for the three months ended September 30, 2025, compared to $408 thousand in the same period of 2024, indicating an increase in credit loss provisions [12]. - The provision for credit losses increased to $2,139,000 in 2025 from $1,169,000 in 2024, reflecting a rise in expected credit losses [14]. - The total provision for credit losses for the nine months ended September 30, 2025, was $1.975 million, contributing to the ending balance of $10.339 million [50]. Loans and Investments - Loans receivable held for investment rose to $1,013,144 thousand, up from $999,956 thousand, indicating a growth of approximately 1.2% [10]. - The net change in loans receivable held for investment was a decrease of $15,510,000 in 2025, compared to a much larger decrease of $88,133,000 in 2024, indicating a potential stabilization in loan demand [14]. - The total loans held for investment as of September 30, 2025, amounted to $1,023.63 million, with a significant portion classified as pass loans [66]. Securities and Fair Value - As of September 30, 2025, the total available-for-sale securities amounted to $244.0 million, with unrealized losses of $10.8 million [40]. - The total fair value of financial assets as of September 30, 2025 was $1,277,000 thousand, with cash and cash equivalents at $19,731 thousand and securities available-for-sale at $244,005 thousand [92]. - The company’s total unrealized loss position for investment securities was $10.845 million, with $31.759 million in unrealized losses for securities held less than 12 months [44]. Internal Controls and Compliance - Management identified material weaknesses in internal control over financial reporting, concluding that disclosure controls were ineffective as of September 30, 2025 [112]. - The Company is dedicating significant resources, including employee training, to improve internal control over financial reporting in response to identified weaknesses [184]. - The Company did not maintain effective controls to identify unusual or infrequent equity-related contracts that could impact financial reporting [187]. Dividends and Shareholder Equity - The company declared and paid preferred dividends of $2,250,000 in 2025, compared to $817,000 in 2024, reflecting an increase in dividend payouts [19]. - The Company issued 150,000 shares of Series C Preferred Stock for a total capital investment of $150 million from the U.S. Treasury under the Emergency Capital Investment Program (ECIP) [31]. Risk Management - The company maintains a robust risk grading system, with loans classified as watch, special mention, substandard, and doubtful indicating varying levels of credit risk [65]. - The company categorized loans into risk categories based on borrowers' ability to service their debt, using various financial indicators [63].