Broadway Financial Reports Q1 2025 Net Loss Due to Wire Fraud, Sees 6.9% Interest Income Growth

Broadway Financial Corporation reported a $1.9 million net loss in Q1 2025 due to a wire fraud incident. Despite the loss, net interest income increased 6.9% to $8.0 million, and deposits rose 4.2% to $776.5 million. The Community Bank Leverage Ratio improved to 15.24%. Non-interest expenses rose 30.6% to $10.2 million. Management remains optimistic about strategic goals and serving low-to-moderate income communities.

Broadway Financial Corporation (NASDAQ: BYFC) has announced its revised Q1 2025 financial results, highlighting a net loss of $1.9 million, or ($0.21) per diluted share, compared to a net loss of $164,000 in Q1 2024. The primary factor behind this deterioration was a $1.9 million loss from wire fraud, which management notes could potentially be recovered in the future [1].

Despite the significant financial setback, the bank reported several positive developments. Net interest income increased by $521,000 (6.9%) to $8.0 million, driven by lower borrowing costs and higher loan yields. The net interest margin improved significantly to 2.70% from 2.27% a year earlier. Total deposits grew by $31.1 million (4.2%) during the quarter, reaching $776.5 million [1].

The provision for credit losses increased to $689,000 from $260,000 a year earlier, primarily due to one new non-accrual loan. However, credit quality metrics remain strong with non-accrual loans at just 0.09% of total loans. The company maintains a solid capital position with a Community Bank Leverage Ratio of 15.24%, up from 13.96% at year-end 2024 [1].

Non-interest expenses rose 30.6% to $10.2 million, including higher compensation costs as the bank expanded its operational capabilities. The company also reported an income tax benefit of $692,000 for the first quarter of 2025, reflecting a decrease in pre-tax income between the two periods [2].

Chief Executive Officer Brian Argrett commented on the results, stating that deposits grew by 4.2%, or $31.1 million, since the end of last year and 11.7%, or $81.0 million, since March of last year. The net interest margin was 2.70%, which is an improvement of 43 basis points compared to March of last year. The CEO also noted that the results were adversely affected by a loss of $1.9 million incurred from wire fraud, which will result in a corresponding gain if recovered [2].

Management remains optimistic about executing strategic goals and continuing to focus on serving low-to-moderate income communities. The company executed an ECIP Securities Purchase Option Agreement with the U.S. Treasury, which may allow them to repurchase preferred stock at a favorable price in the future [1].

References:
[1] https://www.stocktitan.net/news/BYFC/broadway-financial-corporation-announces-revised-results-of-yqvi27daqgcg.html
[2] https://www.morningstar.com/news/pr-newswire/20250729dc39836/broadway-financial-corporation-announces-revised-results-of-operations-for-first-quarter-2025