#United States #Los Angeles #Broadway Financial #BYFC #City First Bank

Broadway Financial Corporation's Q2 2025 Report

On July 31, 2025, Broadway Financial Corporation, the parent company of City First Bank, announced its results for the second quarter of 2025, revealing a mixed performance amidst ongoing market challenges. The corporation reported a consolidated net income before preferred dividends of $603,000, which translates to $0.07 per diluted share. This is a notable increase from the prior year's Q2, when the company recorded a net income of $269,000, or $0.03 per diluted share. However, after accounting for preferred dividends, the net loss attributable to common stockholders reached $147,000, highlighting significant financial hurdles the company is facing.

The first half of 2025 also presented its challenges for Broadway, with the total net loss before preferred dividends amounting to $1.3 million or ($0.15) per diluted share, a stark contrast to the $105,000 net income recorded during the same period in 2024. The report showed that Broadway recorded a diluted loss per common share of ($0.32), a significant drop from the previous year’s results.

Second Quarter Highlights

During the second quarter, Broadway Financial improved its net interest margin to 2.63%, a rise from 2.41% the previous year. This positive turnaround was largely fueled by an increase in the yield on average loans and a decrease in the cost of interest-bearing liabilities. The total deposits grew by $53.5 million, or 7.2%, since December 31, 2024. These increases signal an effective strategy towards maintaining liquidity during turbulent times.

CEO Brian Argrett expressed optimism regarding the second-quarter performance, citing a 2.9% increase in deposits since the first quarter of 2025 and a significant 64.6% reduction in borrowings. He noted that the company's efforts had led to lower funding costs, thereby enhancing financial stability.

Broadway faced operational challenges, including a $2.7 million reduction in non-interest expenses related to a previous operational loss from a fraudulent wire transfer. This incident highlighted the ongoing risks that financial institutions navigate daily.

Detailed Financial Insights

The income statement illustrated a cohesive strategy, with net interest income for Q2 at $7.8 million, a slight decrease from $7.9 million in Q2 2024. This decrease was attributed to a drop in interest income, primarily from interest-bearing deposits. The firm effectively responded to these challenges, securing a $1.1 million decrease in interest expenses thanks to reduced borrowing levels. Furthermore, Broadway’s allowance for credit losses rose to $8.6 million, reflecting a proactive stance towards credit risk management.

Non-interest expense was reported at $7.5 million for Q2, a 3.3% increase from last year, driven mainly by higher professional services costs. However, overall operational efficiency remained a core focus for the management team, which is crucial as they navigate this challenging economic climate.

Looking Towards the Future

Broadway Financial remains committed to enhancing the efficiency of its operations and driving long-term growth that supports low-to-moderate income communities. The company’s mission to serve these areas underlines its role as a Community Development Financial Institution and a Minority Depository Institution, aiming to create sustainable financial opportunities.

As Broadway Financial moves forward into the latter half of 2025, its leadership emphasizes strengthening its balance sheet and improving overall profitability. Sustained growth in deposits alongside a robust lending strategy could potentially pave the way for recovery and enhanced financial performance amidst ongoing market fluctuations.

In conclusion, while Broadway Financial's Q2 results indicate challenges ahead, its operational strategies and community-focused mission position it well as it continues to adapt to the evolving economic landscape. 

Contacts for Further Information

For further inquiries, investors and stakeholders can contact CEO Brian Argrett via Broadway Financial Corporation’s investor relations team or through the contact page on their website.