Broadway Financial's biggest risks in the FY2024 10-K
- Broadway Financial Corp is dominated by geographic concentration in Washington D.C. and Southern California real estate risks.
- The bank faces intense financial competition and relies heavily on its CDFI status for grants.
- Public benefit corporation obligations create unique fiduciary and litigation risks not typical of traditional banks.
The risks most specific to Broadway Financial
- Risks Relating to Our Business
Our future success will depend on our ability to compete effectively in the highly competitive financial services industry in the greater Washington, D.C. and Los Angeles metropolitan areas
We face strong financial competition in the Washington, D.C. and Southern California metropolitan areas from commercial banks, credit unions, and other institutions.
- Risks Relating to Our Business
A downturn in the real estate market could seriously impair our loan portfolio and operating results
Most of our loan portfolio consists of real estate loans in Southern California and Washington, D.C., making us vulnerable to local property value declines.
- Risks Relating to Our Business
Changes in interest rates affect profitability
Our profitability depends heavily on the interest rate spread between the interest we earn on loans and securities and what we pay on deposits and borrowings.
- Risks Relating to Our Business
Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which would negatively impact the market price and liquidity of our common stock and our ability to access the capital markets
Failure to maintain the $1.00 minimum closing bid price or timely reporting requirements could cause Nasdaq to delist our common stock.
- Risks Relating to Our Business
We have not paid cash dividends on our common stock since 2010 and we may not pay any cash dividends on our common stock for the foreseeable future
We have not paid cash dividends on our common stock since June 2010 and may not pay any in the foreseeable future.
- Risks Relating to Our Business
If we were to lose our status as a CDFI, our ability to obtain grants and awards as a CDFI similar to those received in the past may be lost
If we lose our certification as a Community Development Financial Institution (CDFI), we could lose access to valuable grants and awards.
- Risks Relating to Our Business
The markets in which we operate are susceptible to natural disasters, including earthquakes, fires, drought, flooding, extreme heat, and other severe weather or catastrophic events, any of which could result in a disruption of our operations and increases in loan losses
Natural disasters such as earthquakes, fires, and floods in our operating markets could disrupt operations and increase loan losses.
- Risks Relating to the Company Being a Public Benefit Corporation
As a Delaware public benefit corporation, our focus on specific public benefit purposes and producing a positive effect for society can negatively impact our financial performance
As a Delaware public benefit corporation, our duty to balance stockholder financial interests with specific public benefit purposes can negatively impact our financial performance.
- Risks Relating to the Company Being a Public Benefit Corporation
As a Delaware public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on its financial condition and results of operations
Stockholders owning at least two percent or $2 million in market value of shares can file derivative litigation against us regarding our duty to balance stakeholder and public benefit interests.
All 22 risk factors
Headings as the filing states them, in filing order.
Risks Relating to Our Business
- 01The macroeconomic environment could pose significant challenges for the Company and could adversely affect our financial condition and results of operations
- 02Our future success will depend on our ability to compete effectively in the highly competitive financial services industry in the greater Washington, D.C. and Los Angeles metropolitan areas
- 03A downturn in the real estate market could seriously impair our loan portfolio and operating results
- 04Our allowance for credit losses may not be adequate to cover actual loan losses
- 05Changes in interest rates affect profitability
- 06Changes in governmental regulation may impair operations or restrict growth
- 07Negative public opinion regarding us or the failure to maintain our reputation in the communities we serve could adversely affect our business and prevent us from growing our business
- 08We may not be successful in retaining key employees
- 09Ineffective internal control over financial reporting could affect our ability to record, process, and report financial information accurately, impair our ability to prepare financial statements, negatively affect investor confidence, and cause reputational harm
- 10Our failure to meet the continued listing requirements of Nasdaq could result in a delisting of our common stock, which would negatively impact the market price and liquidity of our common stock and our ability to access the capital markets
- 11The market price of our common stock is volatile. Stockholders may not be able to resell shares of our common stock at times or at prices they find attractive
- 12We have not paid cash dividends on our common stock since 2010 and we may not pay any cash dividends on our common stock for the foreseeable future
- 13Stock sales by us or other dilution of our equity may adversely affect the market price of our common stock
- 14Anti-takeover provisions of our certificate of incorporation and bylaws, federal and state law and our stockholder rights plan may limit the ability of another party to acquire the Company, which could depress our stock price
- 15Our common stock is not insured and stockholders could lose the value of their entire investment
- 16If we were to lose our status as a CDFI, our ability to obtain grants and awards as a CDFI similar to those received in the past may be lost
- 17Systems failures, interruptions and cybersecurity breaches in our information technology and telecommunications systems and of third-party service providers could have a material adverse effect on us
- 18The financial services industry is undergoing rapid technological change, and we may not have the resources to effectively implement new technology or may experience operational challenges when implementing new technology
- 19The markets in which we operate are susceptible to natural disasters, including earthquakes, fires, drought, flooding, extreme heat, and other severe weather or catastrophic events, any of which could result in a disruption of our operations and increases in loan losses
Risks Relating to the Company Being a Public Benefit Corporation
- 20We cannot provide any assurance that we will achieve our public benefit purposes
- 21As a Delaware public benefit corporation, our focus on specific public benefit purposes and producing a positive effect for society can negatively impact our financial performance
- 22As a Delaware public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on its financial condition and results of operations
Other Broadway Financial 10-Ks
- FY2025 10-K risk factors21 risks1 new2 dropped2 reworded
Broadway Financial Corp restructured its CDFI risk disclosures while grappling with Nasdaq delisting determinations and financial statement restatements.
Filed Mar 31, 2026
About this page
The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.