Breaking Down Broadway Financial Corporation (BYFC) Financial Health: Key Insights for Investors

You're looking at Broadway Financial Corporation (BYFC) and seeing a mixed signal: strong capital ratios but a recent net loss, so what's the real story? Honestly, the headline numbers from the second quarter of 2025 show a bank working hard to de-risk and improve its core profitability, which is a defintely bullish signal for the long term. They grew deposits by a solid 7.2% in the first half of the year, bringing the total to $798.9 million as of June 30, 2025, which is a key measure of stability in this rate environment. Plus, management cut borrowings by a massive $126.3 million, down to just $69.2 million, which directly lowers their cost of funds; this is the quick math behind the improved net interest margin (NIM) of 2.63% for Q2 2025. Still, you can't ignore the Q1 2025 net loss of $1.2 million attributable to common stockholders, but the operational efficiency gains suggest a pivot is underway. The question is, can they sustain this NIM improvement while navigating a slight decrease in their loan portfolio, which fell to $957.3 million?

Revenue Analysis

You're looking at Broadway Financial Corporation (BYFC) and its revenue, and the direct takeaway is that while the core business-Net Interest Income-is showing healthy growth in a tough rate environment, the overall top-line revenue growth is still under pressure. The company's primary revenue source, like any bank, is its Net Interest Income (NII), which is the profit from lending money versus the cost of borrowing it (deposits and other funding).

For the full fiscal year 2025, Broadway Financial Corporation has an updated revenue outlook projecting between $51 million and $52 million. This is an upward revision, which is defintely a positive sign of management confidence. However, you need to look closer at the engine driving that number.

Core Revenue Streams: Net Interest Income Dominance

Broadway Financial Corporation's revenue is split into two main streams: Net Interest Income and Non-Interest Income. NII is the crucial metric here, representing the bulk of their earnings. Their strategy has been to reduce high-cost borrowings to improve their Net Interest Margin (NIM), which is the spread between what they earn and what they pay out.

Here's the quick math on the core business: For the first six months of 2025, Net Interest Income before the provision for credit losses totaled $15.8 million. That's an increase of $358 thousand, or 2.3%, compared to the first six months of 2024. This modest growth in NII is a direct result of a better NIM, which hit 2.67% for the first half of 2025, up from 2.34% in the first half of 2024.

The Non-Interest Income segment, which includes fees and other banking services, has historically been volatile. For instance, the prior fiscal year saw a significant drop in non-interest income, largely due to a decrease in grant income. This is a community-focused bank, so grant income can be a swing factor. If you want a deeper dive into the bank's purpose, check out their Mission Statement, Vision, & Core Values of Broadway Financial Corporation (BYFC).

• Primary revenue is Net Interest Income (NII).
• NII growth for H1 2025 was 2.3% year-over-year.
• Non-Interest Income is subject to grant and fee volatility.

Segment Contribution and Growth Trends

The NII is generated primarily from the bank's lending portfolio. Their three main lending segments are Commercial Real Estate Loans, Residential Mortgages, and Small Business Loans. This focus aligns with their mission to serve underserved urban communities. You want to see growth in these loan segments, but you also want to see credit quality hold up.

The overall revenue picture for the trailing twelve months (TTM) ending June 30, 2025, was $33.41 million, which was a slight year-over-year decline of -1.36%. This tells you that while the core lending spread (NII) is improving, the total revenue is still catching up, likely due to the non-interest income headwinds and a strategic reduction in total assets to improve efficiency.

To be fair, the quarterly performance is showing some momentum. Revenue for the second quarter of 2025 was $8.38 million, reflecting an 8.82% growth over the previous quarter. This is how a banking turnaround starts-by fixing the margin first, then driving new loan growth into that better margin.

Significant Revenue Changes: The Cost of Doing Business

What this revenue analysis hides is the impact of non-operating costs. In the first quarter of 2025, the company incurred a $1.9 million loss from wire fraud. While this is technically a non-interest expense, it directly impacts the bottom line and highlights a risk that can erode revenue gains. Management expects a corresponding gain if the funds are recovered, but for now, it's a significant drag on the net income, turning a small net income before preferred dividends in Q2 2025 ($603 thousand) into a net loss attributable to common stockholders of $147 thousand.

Your action item is to watch the next few quarters for sustained NII improvement and evidence of a recovery of that fraud loss. Finance: Monitor the next earnings release for the full-year NII and any update on the fraud recovery by the end of the year.

Profitability Metrics

You're looking at Broadway Financial Corporation (BYFC) to see if the recent operational momentum translates into sustainable profits. The short answer is that while core lending efficiency is improving, overall profitability still lags significantly behind the industry, largely due to non-interest expenses and a negative net income figure. This means the bank is generating good revenue from its core business but is losing money after all costs are factored in.

For a bank, the most critical profitability metric is the Net Interest Margin (NIM), which is the banking equivalent of a gross profit margin. It tells you how well the bank is earning on its loans and investments versus what it pays out on deposits and borrowings. Broadway Financial Corporation's NIM for the second quarter of 2025 stood at 2.63%.

Here's the quick math on how that compares to the industry for the first half of 2025:

• Broadway Financial Corporation's NIM (Q2 2025): 2.63%
• U.S. Community Bank Average NIM (Q2 2025): 3.62%

That 99-basis-point gap is significant. It shows that Broadway Financial Corporation is still paying a higher relative cost for its funding or earning a lower relative yield on its assets than its peers, a trend that management has been working to correct by reducing borrowings.

Operating and Net Profit Margins

When we look at the Trailing Twelve Months (TTM) data ending in late 2025, the picture shifts from a margin challenge to a clear profitability issue after all expenses. The TTM Revenue was $33.41 million, which serves as the base for our margins.

The Operating Profit Margin (Operating Income divided by Revenue) was only about 3.62% ($1.21 million / $33.41 million). This margin reflects the bank's operational efficiency-the cost of running the business, like salaries and technology, is eating up nearly all the core revenue. The Net Profit Margin (Net Income divided by Revenue) is even more concerning, sitting at a negative -7.51% (a loss of $2.51 million on $33.41 million in revenue). You defintely want to see a positive number here.

This negative net margin is the key risk right now. The company is not profitable after accounting for all expenses, taxes, and preferred dividends. While the bank reported a consolidated net income before preferred dividends of $603 thousand in Q2 2025, the net loss attributable to common stockholders for the same quarter was $147 thousand.

Comparison to Industry Averages

The stark difference in profitability is best illustrated by looking at the Return on Assets (ROA) and Return on Equity (ROE), which measure how effectively a bank uses its assets and shareholder capital to generate profit.

The TTM ROA of 0.05% is a fraction of the community bank average of 1.18%, and the ROE of 0.21% is miles away from the peer average of nearly 10%. This shows a significant operational efficiency challenge, meaning the bank needs to either drastically cut its non-interest expenses or substantially increase its Net Interest Income to catch up.

The operational efficiency analysis shows some good signs, though. The reduction in non-interest expense by 26.23% in Q2 2025 compared to the prior quarter, even if mainly due to a one-time operational loss in Q1, shows management is focused on cost control. Still, the overall numbers indicate that cost management needs to be a relentless, long-term focus to bridge the gap with peers. For a deeper dive into the bank's strategy, check out this full analysis: Breaking Down Broadway Financial Corporation (BYFC) Financial Health: Key Insights for Investors

Debt vs. Equity Structure

You need a clear picture of how Broadway Financial Corporation (BYFC) funds its operations, and the latest 2025 data shows a deliberate shift toward a less debt-reliant structure. The company is actively shedding high-cost borrowings to strengthen its balance sheet and free up capacity for future lending, a smart move in the current rate environment.

As of June 30, 2025, Broadway Financial Corporation reported total borrowings-which is the closest equivalent to its total debt, including both short-term and long-term obligations-of $133.0 million. This figure is a significant drop from the $262.1 million reported at the end of 2024, showing a clear focus on debt reduction. For a financial institution, this debt is primarily composed of interest-bearing liabilities like Federal Home Loan Bank (FHLB) advances and secured borrowings.

• Total Borrowings (Debt) at June 30, 2025: $133.0 million.
• Stockholders' Equity at June 30, 2025: $285.5 million.

Here's the quick math on the leverage: The Debt-to-Equity (D/E) ratio for Broadway Financial Corporation stands at approximately 0.47 (or 47%) based on the most recent figures. This is defintely a healthy ratio, especially when you compare it to the average for the broader Financials sector, which typically sits around 66.7% (or 0.67). That means for every dollar of shareholder equity, the company is using less than fifty cents of debt to finance its assets, indicating a lower financial risk profile than many peers.

The company's recent activity confirms this deleveraging trend. The substantial reduction in total borrowings by $129.1 million in the first half of 2025 was largely achieved by paying down $135.3 million in FHLB advances. This is a strategic refinancing action, not just a passive balance sheet change. They are using this debt reduction to improve the net interest margin (the profit difference between interest earned and interest paid) and build capacity for new loan growth, showing a clear preference for deposit funding over wholesale borrowings.

The balance between debt and equity funding is currently tilted toward equity, which is a sign of strength. The Community Bank Leverage Ratio (CBLR)-a key regulatory measure of capital adequacy-was a strong 15.69% at June 30, 2025, well above the regulatory minimum. This high ratio confirms that equity is the primary funding source, giving Broadway Financial Corporation a significant cushion against economic downturns or credit losses. If you want to dig deeper into who is holding this equity, you should check out Exploring Broadway Financial Corporation (BYFC) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You want to know if Broadway Financial Corporation (BYFC) has the cash to cover its near-term obligations, and the short answer is that while its primary liquidity sources are shrinking, the company is actively reducing its reliance on costly short-term funding, a positive sign. For a bank, traditional liquidity ratios (Current and Quick Ratios) are less relevant; we focus on the ratio of highly liquid assets-like cash and available-for-sale securities-to short-term liabilities, primarily deposits and borrowings.

For the first half of the 2025 fiscal year, the balance sheet shows a clear strategy: cash and securities are being used to pay down debt. Here's the quick math on the change in key liquid components from the start of the year (December 31, 2024) to the end of Q2 2025 (June 30, 2025):

• Cash and Cash Equivalents decreased by $31.9 million.
• Securities Available-for-Sale decreased by $25.9 million.
• Total Borrowings were cut by a significant $126.3 million, a 64.6% reduction.

Working Capital and Funding Trends

In a bank's context, working capital trends are better viewed as changes in the funding mix. Broadway Financial Corporation (BYFC) is moving away from higher-cost borrowings, like Federal Home Loan Bank (FHLB) advances, and successfully growing its deposit base, which is a more stable form of funding. Total deposits grew by $53.5 million, or 7.2%, in the first six months of 2025 to reach $798.9 million by June 30, 2025. This shift is defintely a strength, lowering the overall cost of funds and improving the net interest margin.

The reduction in total borrowings to $69.2 million by the end of Q2 2025 from $195.5 million at year-end 2024 is the most telling sign of a deliberate move to de-risk the funding structure. This is a strong, clear action.

Cash Flow Statement Overview

Analyzing the cash flow statement components gives us the full picture of where the cash is coming from and where it's going. The trends show a company prioritizing debt reduction and managing its liquid assets carefully.

The negative operating cash flow in Q1 2025 is a challenge, but the large implied financing cash outflow-paying down debt-shows why the cash on the balance sheet is shrinking. The company is choosing to use its liquidity to clean up its liabilities, a trade-off that strengthens long-term solvency (the ability to meet long-term debts) at the expense of its immediate liquid asset buffer.

Near-Term Liquidity Concerns and Strengths

The primary near-term risk is the financial uncertainty around the third quarter. Broadway Financial Corporation (BYFC) announced a delay in filing its Q3 2025 report (Form 10-Q) due to an accounting review, and they expect a projected net loss of $24.1 million for the quarter, largely due to a non-cash $25.9 million goodwill impairment charge. While the impairment is non-cash, the loss itself can impact investor and depositor confidence.

The biggest strength remains the strong capital position, with a Community Bank Leverage Ratio of 15.69% at June 30, 2025, which is well above regulatory minimums. This capital acts as a significant buffer against unexpected losses. For a deeper look at who is backing the company, check out Exploring Broadway Financial Corporation (BYFC) Investor Profile: Who's Buying and Why?

Next Step: Monitor the filing of the delayed Q3 2025 10-Q for final cash flow figures and management commentary on the goodwill impairment. Investment Committee: Set a calendar alert for the Q3 10-Q filing date.

Valuation Analysis

You're looking at Broadway Financial Corporation (BYFC) and asking the core question: Is it a bargain or a value trap? The direct takeaway is that, based on its Price-to-Book (P/B) ratio, the stock looks significantly undervalued, but its negative Price-to-Earnings (P/E) ratio signals a critical profitability concern you must address before investing.

As of November 2025, the picture is mixed, which is common for smaller regional banks navigating a complex interest rate environment. The market is pricing in risk, and we see that clearly in the valuation multiples (ratios). Here's the quick math on the key metrics.

• Price-to-Book (P/B): At a P/B of just 0.43, the stock is trading at less than half its tangible book value. For a bank, a P/B below 1.0 often suggests the market believes the company's assets are impaired or that its future profitability will not justify its current equity.
• Price-to-Earnings (P/E): The trailing twelve-month P/E ratio stands at a negative -22.47 as of November 2025. This isn't a valuation metric you can use to compare to peers; it simply tells you the company is currently unprofitable, reporting a loss over the last year. That's a huge red flag that overrides a low P/B.
• Enterprise Value-to-EBITDA (EV/EBITDA): This metric is often less meaningful for financial institutions like Broadway Financial Corporation (BYFC) than for industrial companies. The reported figures are inconsistent or zero, so we'll skip it. For a bank, focus on P/B and net interest margin (NIM) trends instead.

The stock price trend confirms the market's skepticism. Over the last 12 months leading up to November 2025, Broadway Financial Corporation's stock price has declined by -12.92%, closing recently at $6.25. The 52-week trading range of $5.76 to $9.35 shows a clear downtrend from its highs, reflecting the pressure from its lack of profitability and the broader banking sector's stress. The stock is cheap, but it's cheap for a reason.

One clean one-liner: The price is low, but the earnings are lower.

Regarding income investors, Broadway Financial Corporation (BYFC) does not currently pay a dividend, resulting in a 0.00% dividend yield. This means the investment thesis must be entirely focused on a turnaround in earnings and a subsequent re-rating of the P/B multiple, not on passive income.

Analyst coverage is thin, with no recent, public consensus rating (Buy, Hold, or Sell) available, which adds an element of uncertainty. You are defintely on your own for this deep dive, which means your own due diligence is even more critical.

Here is a summary of the key valuation metrics as of November 2025:

What this estimate hides is the quality of the bank's loan book, especially the nonperforming assets which were reported at $4.4 million at June 30, 2025, up significantly from $264 thousand at December 31, 2024. That jump in nonperforming assets is a major reason for the low P/B and the negative P/E. Your next step should be to read the full report at Breaking Down Broadway Financial Corporation (BYFC) Financial Health: Key Insights for Investors to understand the drivers of that loss.

Risk Factors

You need a clear-eyed view of what could derail Broadway Financial Corporation (BYFC)'s momentum, and honestly, the biggest near-term risk isn't the market-it's the paperwork. The most immediate concern is a significant operational and regulatory hurdle stemming from delayed financial reporting.

The company received a non-compliance notice from Nasdaq on August 21, 2025, for failing to timely file its Form 10-Q for the second quarter of 2025. This delay is all about accounting complexity, specifically needing more time to evaluate participation agreements for compliance with Accounting Standards Codification Topic 860 (ASC 860). This isn't a small thing; it puts the stock's listing status on the Nasdaq Capital Market at risk, even if there's no immediate impact.

• Regulatory Compliance: Delayed Q2 and Q3 2025 Form 10-Q filings.
• Financial Reporting: Risk of further delay in material financial reporting.
• Goodwill Impairment: Expected significant non-cash charge.

To be fair, Broadway Financial Corporation has a plan. They've secured an extension from Nasdaq until February 16, 2026, to file the delayed Q2 2025 10-Q and regain compliance. The company is working to resolve this, but a material delay in financial reporting remains a key risk factor that could defintely affect investor confidence.

Beyond the regulatory issue, the company is facing a significant financial hit. For the quarter ending September 30, 2025, the company has disclosed a preliminary expected net loss of $24.1 million. Here's the quick math: this loss is largely driven by a massive, non-cash $25.9 million goodwill impairment charge. This charge reflects a re-evaluation of the carrying value of goodwill on the balance sheet and signals a strategic risk regarding the value derived from past acquisitions or mergers.

Still, the core credit quality of the loan book remains strong, which is a big positive in a banking environment. As of June 30, 2025, non-accrual loans to total loans were only 0.42%, and non-performing loans to total assets were just 0.36%. That's a tight ship on the lending side. Plus, management has been proactive on the balance sheet, reducing borrowings by $126.3 million-a 64.6% reduction-to $69.2 million at June 30, 2025, to improve the net interest margin (NIM) and create capacity for future loan growth.

The table below summarizes the key risks and the company's direct mitigation actions:

For a deeper dive into the company's overall financial health, check out the full post: Breaking Down Broadway Financial Corporation (BYFC) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking for a clear path forward on Broadway Financial Corporation (BYFC), and the near-term growth story is rooted in its unique mission and improving operational efficiency. The direct takeaway is that their status as a Community Development Financial Institution (CDFI) and their focus on reducing funding costs are the primary levers for future profitability, which is defintely a good sign.

The core growth driver for Broadway Financial Corporation isn't a new product line, but a deepening of its existing, specialized market focus. The company's wholly-owned subsidiary, City First Bank, National Association, is a leading mission-driven bank that targets low-to-moderate income communities in Southern California and the Washington, D.C. market. This focus provides a competitive moat, allowing them to finance commercial real estate, affordable housing, and small businesses where larger institutions often won't tread.

• Deepen market penetration in urban areas.
• Expand commercial real estate loan products.
• Increase financial inclusion services.

Strategic Initiatives and Margin Improvement

Management is clearly mapping out a strategy to improve the bottom line by controlling costs and optimizing the balance sheet. The most recent data from the second quarter of 2025 shows this plan taking hold: the net interest margin-the difference between interest earned on assets and interest paid on liabilities-increased to 2.63%. This is a material jump from the 2.41% reported in the second quarter of 2024, driven by a lower cost of funds.

Here's the quick math on balance sheet optimization: Broadway Financial Corporation reduced its total borrowings by a massive $126.3 million, or 64.6%, to just $69.2 million as of June 30, 2025. This reduction frees up capital and substantially lowers interest expense, which directly translates into a higher net interest margin. Plus, total deposits increased by $53.5 million, or 7.2%, in the first six months of 2025, providing a more stable and less expensive funding base for future loan growth.

Near-Term Earnings and Competitive Edge

While full-year 2025 earnings estimates are still coalescing, the second quarter of 2025 showed a consolidated net income of $603 thousand, or $0.07 per diluted share, before preferred dividends. This demonstrates positive momentum, especially when coupled with their strong capital position. The Community Bank Leverage Ratio (CBLR) stood at a robust 15.69% at June 30, 2025, well above regulatory minimums, giving them significant capacity for future lending.

What this estimate hides is the potential for non-interest income growth, which has been volatile in the past, but the core lending business is solid. The company's competitive advantage is its dual status as a CDFI and a Minority Depository Institution (MDI), which aligns it with federal and state programs and grants aimed at community development, offering a distinct advantage over traditional regional banks. This mission-driven focus is a true differentiator in the banking space.

For a deeper dive into the valuation metrics that support these growth prospects, you should read the full analysis at Breaking Down Broadway Financial Corporation (BYFC) Financial Health: Key Insights for Investors.

Next step: Finance needs to model a 12-month projection using a conservative 2.70% net interest margin to see the full impact of the Q2 2025 cost reductions.