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What changed in BROADWAY FINANCIAL CORP DE's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of BROADWAY FINANCIAL CORP DE's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+245 added−264 removedSource: 10-K (2026-03-31) vs 10-K (2025-03-31)

Top changes in BROADWAY FINANCIAL CORP DE's 2025 10-K

245 paragraphs added · 264 removed · 197 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

91 edited+17 added−24 removed153 unchanged
Biggest changeThe following table details our allocation of the ACL/ALLL to the various categories of loans held for investment and the percentage of loans in each category to total loans at the dates indicated: December 31, 2024 2023 2022 2021 2020 Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans (Dollars in thousands) Single-family $ 196 2.42 % $ 260 2.79 % $ 109 3.89 % $ 145 6.96 % $ 296 13.32 % Multi‑family 4,568 64.94 % 4,413 63.33 % 3,273 65.08 % 2,657 60.36 % 2,433 75.24 % Commercial real estate 1,129 16.01 % 1,094 13.47 % 449 14.85 % 236 14.29 % 222 6.71 % Church 54 0.97 % 72 1.43 % 65 2.04 % 103 3.45 % 237 4.60 % Construction 1,475 8.30 % 932 10.14 % 313 5.27 % 212 4.92 % 22 0.11 % Commercial 670 7.24 % 529 7.16 % 175 8.87 % 23 10.02 % 4 0.02 % SBA loans 11 0.12 % 48 1.68 % – – % – – % – – % Consumer – – % – – % 4 – % 15 – % 1 – % Total allowance for credit losses $ 8,103 100.00 % $ 7,348 100.00 % $ 4,388 100.00 % $ 3,391 100.00 % $ 3,215 100.00 % 11 Table of Contents The following table shows the activity in our ACL/ALLL related to our loans held for investment for the years indicated: 2024 2023 2022 2021 2020 (Dollars in thousands) Allowance balance at beginning of year $ 7,348 $ 4,388 $ 3,391 $ 3,215 $ 3,182 Charge‑offs: Single-family – – – – – Multi-family – – – – – Commercial real estate – – – – – Church – – – – – Construction – – – – – Commercial – – – – – SBA Loans – – – – – Consumer – – – – – Total charge‑offs – – – – – Recoveries: Single-family – – – – 4 Multi-family - 109 – – – Commercial real estate – 107 – – – Church – – – – – Construction – – – – – Commercial – – – – – SBA Loans – – – – – Consumer – – – – – Total recoveries – 216 – – 4 Impact of CECL adoption – 1,809 – – – Credit/loan loss provision (2) 755 935 997 176 29 Allowance balance at end of year $ 8,103 $ 7,348 $ 4,388 $ 3,391 $ 3,215 Net charge‑offs (recoveries) to average loans, excluding loans receivable held for sale – % – % – % – % (0.00 %) ACL/ALLL as a percentage of gross loans, excluding loans receivable held for sale (1) 0.83 % 0.83 % 0.57 % 0.52 % 0.88 % ACL/ALLL as a percentage of total non‑accrual loans 3,069.32 % - % 3,047.22 % 495.76 % 408.51 % ACL/ALLL as a percentage of total non‑performing assets 3,069.32 % - % 3,047.22 % 495.76 % 408.51 % (1) The ACL/ALLL as of December 31, 2024 and 2023 does not include any ACL/ALLL for the remaining balance of loans acquired in the City First Merger, which totaled $5.3 million and $126.8 million, respectively.
Biggest changeThe following table details our allocation of the ACL to the various categories of loans held for investment and the percentage of loans in each category to total loans at the dates indicated: December 31, 2025 2024 2023 2022 2021 Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans Amount Percent of loans in each category to total loans (Dollars in thousands) Single-family $ 132 2.03 % $ 200 2.39 % $ 264 2.74 % $ 109 3.89 % $ 145 6.96 % Multi‑family 4,782 58.41 % 4,617 63.50 % 4,464 61.81 % 3,273 65.08 % 2,657 60.36 % Commercial real estate 1,193 16.01 % 1,188 16.23 % 1,164 13.91 % 449 14.85 % 236 14.29 % Church 36 0.89 % 54 0.94 % 72 1.39 % 65 2.04 % 103 3.45 % Construction 2,039 7.19 % 1,564 9.10 % 1,009 10.79 % 313 5.27 % 212 4.92 % Commercial 900 13.79 % 730 7.73 % 592 7.73 % 175 8.40 % 23 7.13 % SBA loans 342 1.68 % 11 0.11 % 48 1.63 % – 0.47 % – 2.89 % Consumer – – % – – % - – % 4 – % 15 – % Total allowance for credit losses $ 9,424 100.00 % $ 8,364 100.00 % $ 7,613 100.00 % $ 4,388 100.00 % $ 3,391 100.00 % 10 Table of Contents The following table shows the activity in our ACL related to our loans held for investment for the years indicated: 2025 2024 2023 (Dollars in thousands) Allowance balance at beginning of year $ 8,364 $ 7,613 $ 4,388 Charge‑offs: Single-family – – – Multi-family 1,143 – – Commercial real estate – – – Church – – – Construction – – – Commercial – – – SBA Loans 36 – – Consumer – – – Total charge‑offs 1,179 – – Recoveries: Single-family – – – Multi-family – – 109 Commercial real estate – – 107 Church – – – Construction – – – Commercial – – – SBA Loans – – – Consumer – – – Total recoveries – – 216 Impact of CECL adoption – – 1,809 Provision for credit losses (2) 2,239 751 1,200 Allowance balance at end of year $ 9,424 $ 8,364 $ 7,613 Net charge‑offs (recoveries) to average loans – % – % – % ACL as a percentage of gross loans (1) 0.92 % 0.83 % 0.83 % ACL as a percentage of total non‑accrual loans 84.38 % 3,168.18 % - % ACL as a percentage of total non‑performing assets 84.38 % 3,168.18 % - % (1) The ACL as of December 31, 2025 and 2024 does not include any ACL for the remaining balance of loans acquired in the City First Merger, which totaled $5.0 million and $5.3 million, respectively.
The FRB may also determine, based on the relevant facts and circumstances, that a company has otherwise acquired control of a bank holding company. 23 Table of Contents Restrictions on Dividends and Other Capital Distributions In general, the prompt corrective action regulations prohibit a national bank from declaring any dividends, making any other capital distribution, or paying a management fee to a controlling person, such as its parent holding company, if, following the distribution or payment, the institution would be within any of the three undercapitalized categories set out in the regulations.
The FRB may also determine, based on the relevant facts and circumstances, that a company has otherwise acquired control of a bank holding company. 19 Table of Contents Restrictions on Dividends and Other Capital Distributions In general, the prompt corrective action regulations prohibit a national bank from declaring any dividends, making any other capital distribution, or paying a management fee to a controlling person, such as its parent holding company, if, following the distribution or payment, the institution would be within any of the three undercapitalized categories set out in the regulations.
These failures dramatically increased the resolution costs incurred by the FDIC and substantially reduced the available amount of the DIF. 20 Table of Contents Consistent with the requirements of the Dodd‑Frank Act, the FDIC adopted its most recent DIF restoration plan in September 2020; that plan is designed to enable the FDIC to achieve the statutorily required reserve ratio of 1.35% by September 30, 2028.
These failures dramatically increased the resolution costs incurred by the FDIC and substantially reduced the available amount of the DIF. 17 Table of Contents Consistent with the requirements of the Dodd‑Frank Act, the FDIC adopted its most recent DIF restoration plan in September 2020; that plan is designed to enable the FDIC to achieve the statutorily required reserve ratio of 1.35% by September 30, 2028.
Real Estate: Construction – Subject to adverse conditions in the local economy, which may lead to reduced demand for new commercial, multi‑family, or single-family buildings or reduced lease or sale opportunities once the building is complete. Commercial and SBA Loans – Subject to industry and economic conditions including decreases in product demand.
Real Estate: Construction – Subject to adverse conditions in the local economy, which may lead to reduced demand for new commercial, multi‑family, or single-family buildings or reduced lease or sale opportunities once the building is complete. Commercial – Subject to industry and economic conditions including decreases in product demand.
We had no commitments to lend additional funds to borrowers whose loans were on non‑accrual status at December 31, 2024. We discontinue accruing interest on loans when the loans become 90 days delinquent as to their payment due date (three missed payments).
We had no commitments to lend additional funds to borrowers whose loans were on non‑accrual status at December 31, 2025. We discontinue accruing interest on loans when the loans become 90 days delinquent as to their payment due date (three missed payments).
While we believe that the ACL has been established and maintained at adequate levels, future adjustments may be necessary if economic or other conditions differ materially from the conditions on which we based our estimates at December 31, 2024.
While we believe that the ACL has been established and maintained at adequate levels, future adjustments may be necessary if economic or other conditions differ materially from the conditions on which we based our estimates at December 31, 2025.
The FDIC has applied the credits each quarter that the reserve ratio was at least 1.38% to offset the regular deposit insurance assessments of institutions with credits. The Bank did not receive any assessment credits during 2024 or 2023.
The FDIC has applied the credits each quarter that the reserve ratio was at least 1.38% to offset the regular deposit insurance assessments of institutions with credits. The Bank did not receive any assessment credits during 2025 or 2024.
In addition, because of interest rate caps and floors, market rates may exceed or go below the respective maximum or minimum rates payable on our ARM Loans. The mortgage loans that we originate generally include due‑on‑sale clauses, which provide us with the contractual right to declare the loan immediately due and payable if the borrower transfers ownership of the property.
In addition, because of interest rate caps and floors, market rates may exceed or go below the respective maximum or minimum rates payable on our ARM Loans. 4 Table of Contents The mortgage loans that we originate generally include due‑on‑sale clauses, which provide us with the contractual right to declare the loan immediately due and payable if the borrower transfers ownership of the property.
Collateral values, particularly real estate values, are also impacted by a variety of factors, including general economic conditions, demographics, property maintenance and collection or foreclosure delays. Delinquencies We perform a weekly review of all delinquent loans and a monthly loan delinquency report is made to the Internal Asset Review Committee of the Board.
Collateral values, particularly real estate values, are also impacted by a variety of factors, including general economic conditions, demographics, property maintenance and collection or foreclosure delays. 6 Table of Contents Delinquencies We perform a weekly review of all delinquent loans and a monthly loan delinquency report is made to the Internal Asset Review Committee of the Board.
Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Classification of Assets Federal regulations and our internal policies require that we utilize an asset classification system as a means of monitoring and reporting problem and potential problem assets.
Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. 7 Table of Contents Classification of Assets Federal regulations and our internal policies require that we utilize an asset classification system as a means of monitoring and reporting problem and potential problem assets.
Most of these financial institutions are significantly larger than we are and have greater financial resources, and many have a regional, statewide, or national presence. Human Capital Management Human Capital At City First Bank, N.A., we are a unified, commercial Community Development Financial Institution (CDFI) with a mission-driven approach that advances economic, social, and environmental solutions.
Most of these financial institutions are significantly larger than we are and have greater financial resources, and many have a regional, statewide, or national presence. Human Capital Management Human Capital City First Bank is a unified, commercial Community Development Financial Institution (CDFI) with a mission-driven approach that advances economic, social, and environmental solutions.
The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter. 9 Table of Contents The Company’s ACL model also includes adjustments for qualitative factors, where appropriate.
The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter. The Company’s ACL model also includes adjustments for qualitative factors, where appropriate.
However, market interest rates, including rates offered by competing financial institutions, the availability of other investment alternatives, and general economic conditions significantly affect our ability to attract and retain deposits. We participate in a deposit program called the Certificate of Deposit Account Registry Service (“CDARS”).
However, market interest rates, including rates offered by competing financial institutions, the availability of other investment alternatives, and general economic conditions significantly affect our ability to attract and retain deposits. 12 Table of Contents We participate in a deposit program called the Certificate of Deposit Account Registry Service (“CDARS”).
(2) The Company also recorded a recovery of provision for off-balance sheet loan commitments of $91 thousand and $2 thousand for the years ended December 31, 2024 and 2023, respectively.
(2) The Company also recorded a recovery of provision for off-balance sheet loan commitments of $53 thousand, $91 thousand and $2 thousand for the years ended December 31, 2025, 2024 and 2023, respectively.
The Bank is also a member of the Federal Home Loan Bank of Atlanta (the “FHLB”). See “Regulation” for further descriptions of the regulatory systems to which the Company and the Bank are subject. 1 Table of Contents Available Information Our internet website address is www.cityfirstbank.com.
The Bank is also a member of the Federal Home Loan Bank of Atlanta (the “FHLB”). See “Regulation” for further descriptions of the regulatory systems to which the Company and the Bank are subject. Available Information Our internet website address is www.cityfirstbank.com.
In addition to deposits, we obtain funds from the amortization and prepayment of loans and investment securities, sales of loans and investment securities, advances from the FHLB, and cash flows generated by operations. 13 Table of Contents Deposits We offer a variety of deposit accounts featuring a range of interest rates and terms.
In addition to deposits, we obtain funds from the amortization and prepayment of loans and investment securities, sales of loans and investment securities, advances from the FHLB, and cash flows generated by operations. Deposits We offer a variety of deposit accounts featuring a range of interest rates and terms.
The Dodd‑Frank Act requires bank holding companies to serve as a source of financial strength for any subsidiary of the holding company that is a depository institution by providing financial assistance in the event of the financial distress of the depository institution. The Dodd‑Frank Act also established the CFPB.
The Dodd‑Frank Act requires bank holding companies to serve as a source of financial strength for any subsidiary of the holding company that is a depository institution by providing financial assistance in the event of the financial distress of the depository institution. 16 Table of Contents The Dodd‑Frank Act also established the CFPB.
The interest rate on this borrowing was fixed at 4.84% and the borrowing matured on December 29, 2024. Investment securities with a book value of $107.3 million and a fair value of $98.3 million were pledged as collateral for this borrowing as of December 31, 2023.
The interest rate on this borrowing was fixed at 4.84%. Investment securities with a book value of $107.3 million and a fair value of $98.3 million were pledged as collateral for this borrowing as of December 31, 2023.
The Dodd‑Frank Act is intended to address perceived weaknesses in the U.S. financial regulatory system and prevent future economic and financial crises. 19 Table of Contents The Dodd‑Frank Act established increased compliance obligations across a number of areas in the banking business.
The Dodd‑Frank Act is intended to address perceived weaknesses in the U.S. financial regulatory system and prevent future economic and financial crises. The Dodd‑Frank Act established increased compliance obligations across a number of areas in the banking business.
In the case of loans secured by accounts receivable, the recovery of our investment is dependent upon the borrower’s ability to collect amounts due from customers. 6 Table of Contents SBA Guaranteed Loans City First is an approved SBA lender.
In the case of loans secured by accounts receivable, the recovery of our investment is dependent upon the borrower’s ability to collect amounts due from customers. SBA Guaranteed Loans City First is an approved SBA lender.
In connection with the conversion, the bank’s name was changed to Broadway Federal Bank, f.s.b. (“Broadway Federal”). The conversion was completed, and Broadway Federal became a wholly‑owned subsidiary of the Company, in January 1996. On April 1, 2021, the Company completed its merger (the “Merger”) with CFBanc Corporation (“CFBanc”), with the Company continuing as the surviving entity.
In connection with the conversion, the bank’s name was changed to Broadway Federal Bank, f.s.b. (“Broadway Federal”). In 1996, the conversion was completed and Broadway Federal became a wholly‑owned subsidiary of the Company. In 2021, the Company completed its merger (the “Merger”) with CFBanc Corporation (“CFBanc”), with the Company continuing as the surviving entity.
As of December 31, 2024, our single largest multi‑family credit had an outstanding balance of $11.4 million, was current, and was collateralized by a 53-unit apartment complex in Downey, California. At December 31, 2024, the average balance of a loan in our multi‑family portfolio was $1.3 million.
As of December 31, 2025, our single largest multi‑family credit had an outstanding balance of $11.2 million, was current, and was collateralized by a 53-unit apartment complex in Downey, California. At December 31, 2025, the average balance of a loan in our multi‑family portfolio was $1.3 million.
Effective January 1, 2023, the Company accounts for the ACL on loans in accordance with Accounting Standards Codification Topic 326 (“ASC 326”), which requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition.
The Company accounts for the ACL on loans in accordance with Accounting Standards Codification Topic 326 (“ASC 326”), which requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition.
We originate these loans in order to maintain a high percentage of loans that have provisions for periodic repricing, thereby reducing our exposure to interest rate risk. At December 31, 2024, more than 84% of our loans had adjustable-rate features.
We originate these loans in order to maintain a high percentage of loans that have provisions for periodic repricing, thereby reducing our exposure to interest rate risk. At December 31, 2025, more than 82% of our loans had adjustable-rate features.
The financial statements of CFC 45 are consolidated with those of the Bank and the Company. 16 Table of Contents Market Area and Competition The Bank is a Community Development Financial Institution (“CDFI”) and a certified B Corp, offering a variety of financial services to meet the needs of the communities it serves.
The financial statements of CFC 45 are consolidated with those of the Bank and the Company. Market Area and Competition City First is a Community Development Financial Institution (“CDFI”) and a certified B Corp, offering a variety of financial services to meet the needs of the communities it serves.
Loan originations are derived from various sources including our loan personnel, local mortgage brokers, and referrals from customers. More than 85% of multi-family loan originations during 2024, 2023 and 2022 were sourced from wholesale loan brokers.
Loan originations are derived from various sources including our loan personnel, local mortgage brokers, and referrals from customers. More than 94% of multi-family loan originations during 2025, 2024 and 2023 were sourced from wholesale loan brokers.
The SEC also maintains an internet site at www.sec.gov that contains reports, proxy and information statements, and other information filed electronically by us with the SEC.
The SEC also maintains an internet site that contains reports, proxy and information statements, and other information filed electronically by us with the SEC.
The following table summarizes information concerning our FHLB advances at or for the periods indicated: At or For the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) FHLB Advances: Average balance outstanding during the year $ 199,893 $ 177,261 $ 61,593 Maximum amount outstanding at any month‑end during the year $ 209,298 $ 210,242 $ 128,823 Balance outstanding at end of year $ 195,532 $ 209,319 $ 128,344 Weighted average interest rate at end of year 4.03 % 4.91 % 3.74 % Average cost of advances during the year 4.79 % 4.70 % 1.74 % Weighted average maturity (in months) - 2 7 On December 27, 2023, the Bank borrowed $100.0 million from the Federal Reserve under the Bank Term Funding Program (“BTFP”), which was paid off in December 2024.
The following table summarizes information concerning our FHLB advances at or for the periods indicated: At or For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) FHLB Advances: Average balance outstanding during the year $ 93,431 $ 199,893 $ 177,261 Maximum amount outstanding at any month‑end during the year $ 150,750 $ 209,298 $ 210,242 Balance outstanding at end of year $ 72,000 $ 195,532 $ 209,319 Weighted average interest rate at end of year 3.79 % 4.03 % 4.91 % Average cost of advances during the year 4.28 % 4.79 % 4.70 % Weighted average maturity (in months) - - 2 On December 27, 2023, the Bank borrowed $100.0 million from the Federal Reserve under the Bank Term Funding Program (“BTFP”), which was paid off in December 2024.
Department of the Treasury’s Community Development Financial Institutions Fund. In connection with the New Market Tax Credit activities of the Bank, CFC 45 is a partnership whose members include CFNMA and City First New Markets Fund II, LLC.
In connection with the New Market Tax Credit activities of the Bank, CFC 45 is a partnership whose members include CFNMA and City First New Markets Fund II, LLC.
The Company’s assessment of available-for-sale investment securities as of December 31, 2024, indicated that an ACL was not required. The Company analyzed available-for-sale investment securities that were in an unrealized loss position and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions.
The Company analyzed available-for-sale investment securities that were in an unrealized loss position and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no ACL was recorded for available-for-sale securities as of December 31, 2025.
Loans to One Borrower The Bank is in compliance with the statutory and regulatory limits applicable to loans to any one borrower. As of December 31, 2024, the lending limit for City First is $30.9 million.
Loans to One Borrower The Bank is in compliance with the statutory and regulatory limits applicable to loans to any one borrower. As of December 31, 2025, the lending limit for City First is $28.2 million.
Certain multi-family loans have adjustable-rate features based on SOFR but are fixed for the first five years. Depending on interest rate trends, some multi-family loans may pay-off during the first five years, while others continue into the adjustable-rate phase. The interest rates on loans that continue into the adjustable-rate phase are adjusted semi-annually subject to interest rate caps.
Depending on interest rate trends, some multi-family loans may pay-off during the first five years, while others continue into the adjustable-rate phase. The interest rates on loans that continue into the adjustable-rate phase are adjusted semi-annually subject to interest rate caps.
The following table shows our loan delinquencies by type and amount at the dates indicated: December 31, 2024 December 31, 2023 December 31, 2022 Loans delinquent Loans delinquent Loans delinquent 60-89 Days 90 days or more 60-89 Days 90 days or more 60-89 Days 90 days or more Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount (Dollars in thousands) Single-family 1 $ 6 – $ – – $ – – $ – – $ – – $ – Multi- family – – – – 1 401 – – – – – – SBA loans 1 264 – – – – – – – – – – Total 2 $ 270 – $ – 1 $ 401 – $ – – $ – – $ – % of Gross Loans 0.03 % – % 0.05 % – % – % – % Non‑Performing Assets Non‑performing assets (“NPAs”) include non‑accrual loans and real estate owned through foreclosure or deed in lieu of foreclosure (“REO”).
The following table shows our loan delinquencies by type and amount at the dates indicated: December 31, 2025 December 31, 2024 December 31, 2023 Loans delinquent Loans delinquent Loans delinquent 60-89 Days 90 days or more 60-89 Days 90 days or more 60-89 Days 90 days or more Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount (Dollars in thousands) Single-family – $ – 1 $ 424 1 $ 6 – $ – – $ – – $ – Multi- family – – 1 2,094 – – – – 1 401 – – Commercial - other 1 367 1 261 – – – – – – – – SBA loans – – 2 222 1 264 – – – – – – Total 1 $ 367 5 $ 3,001 2 $ 270 – $ – 1 $ 401 – $ – % of Gross Loans – % 0.29 % 0.03 % – % 0.04 % – % Non‑Performing Assets Non‑performing assets (“NPAs”) include non‑accrual loans and real estate owned through foreclosure or deed in lieu of foreclosure (“REO”).
These deposits totaled $145.8 million and $114.8 million at December 31, 2024 and 2023, respectively and are not considered to be brokered deposits. As of December 31, 2024 and 2023, approximately $268.8 million and $286.4 million, respectively, of our total deposits were not insured by FDIC insurance.
These deposits totaled $150.8 million and $145.8 million at December 31, 2025 and 2024, respectively and are not considered to be brokered deposits. As of December 31, 2025 and 2024, approximately $413.5 million and $268.8 million, respectively, of our total deposits were not insured by FDIC insurance.
At December 31, 2024, our securities portfolio, consisting primarily of federal agency debt, mortgage‑backed securities, bonds issued by the United States Treasury and the SBA, and municipal bonds, totaled $203.9 million, or 15.6% of total assets. 12 Table of Contents We classify investments as held‑to‑maturity or available‑for‑sale at the date of purchase based on our assessment of our internal liquidity requirements.
At December 31, 2025, our securities portfolio, consisting primarily of federal agency debt, mortgage‑backed securities, bonds issued by the United States Treasury and the SBA, and municipal bonds, totaled $256.8 million, or 19.1% of total assets. We classify investments as held‑to‑maturity or available‑for‑sale at the date of purchase based on our assessment of our internal liquidity requirements.
Commercial Lending Our commercial lending portfolio consists of loans and lending activities to businesses in our market area that are secured by business assets including inventory, receivables, machinery, and equipment. As of December 31, 2024 and 2023, non-real estate commercial loans totaled $70.6 million and $63.5 million, respectively.
Commercial Lending Our commercial lending portfolio consists of loans and lending activities to businesses in our market area that are secured by business assets including inventory, receivables, machinery, and equipment. As of December 31, 2025 and 2024, non-real estate commercial loans totaled $140.0 million and $77.8 million, respectively.
The FDIC Board has set the designated reserve ratio for each of the years 2024 and 2023 at 2%.
The FDIC Board has set the designated reserve ratio for each of the years ended December 31, 2025 and 2024 at 2%.
For the Years Ended December 31, 2024 2023 2022 Average Balance Percent of Total Weighted Average Cost of Funds Average Balance Percent of Total Weighted Average Cost of Funds Average Balance Percent of Total Weighted Average Cost of Funds (Dollars in thousands) Money market deposits $ 284,263 48.22 % 2.44 % $ 262,827 45.53 % 1.62 % $ 192,835 28.30 % 0.67 % Savings deposits 55,715 9.45 % 0.67 % 59,928 10.38 % 0.25 % 66,033 9.69 % 0.09 % Interest checking and other demand deposits 74,302 12.60 % 0.74 % 100,248 17.37 % 0.36 % 240,380 35.28 % 0.08 % Certificates of deposit 175,275 29.73 % 3.04 % 154,275 26.72 % 1.77 % 182,050 26.73 % 0.30 % Total $ 589,555 100.00 % 2.24 % $ 577,278 100.00 % 1.30 % $ 681,298 100.00 % 0.31 % 15 Table of Contents Borrowings We utilize short‑term and long‑term advances from the FHLB as an alternative to retail deposits as a funding source for asset growth.
For the Years Ended December 31, 2025 2024 2023 Average Balance Percent of Total Weighted Average Cost of Funds Average Balance Percent of Total Weighted Average Cost of Funds Average Balance Percent of Total Weighted Average Cost of Funds (Dollars in thousands) Money market deposits $ 146,793 20.43 % 1.00 % $ 284,263 48.22 % 2.44 % $ 262,827 45.53 % 1.62 % Savings deposits 45,235 6.30 % 0.48 % 55,715 9.45 % 0.67 % 59,928 10.38 % 0.25 % Interest checking and other demand deposits 258,159 35.93 % 3.04 % 74,302 12.60 % 0.74 % 100,248 17.37 % 0.36 % Certificates of deposit 268,265 37.34 % 3.88 % 175,275 29.73 % 3.04 % 154,275 26.72 % 1.77 % Total $ 718,452 100.00 % 2.77 % $ 589,555 100.00 % 2.24 % $ 577,278 100.00 % 1.30 % 13 Table of Contents Borrowings We utilize short‑term and long‑term advances from the FHLB as an alternative to retail deposits as a funding source for asset growth.
As of December 31, 2024, our single largest church loan had an outstanding balance of $2.2 million, was current, and was collateralized by a church building and parcel of land in Baltimore, Maryland.
As of December 31, 2025, our single largest church loan had an outstanding balance of $2.1 million, was current, and was collateralized by a church building and parcel of land in Baltimore, Maryland. At December 31, 2025, the average balance of a loan in our church loan portfolio was $644 thousand.
Among other things, we are generally prohibited, either directly or indirectly, from acquiring more than 5% of the voting shares of any depository or depository holding company that is not a subsidiary of the Company. 22 Table of Contents The Change in Bank Control Act prohibits a person, acting directly or indirectly or in concert with one or more persons, from acquiring control of a bank holding company unless the FRB has been given 60 days prior written notice of such proposed acquisition and within that time period the FRB has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which a disapproval may be issued.
The Change in Bank Control Act prohibits a person, acting directly or indirectly or in concert with one or more persons, from acquiring control of a bank holding company unless the FRB has been given 60 days prior written notice of such proposed acquisition and within that time period the FRB has not issued a notice disapproving the proposed acquisition or extending for up to another 30 days the period during which a disapproval may be issued.
These qualitative factors incorporate the concept of reasonable and supportable forecasts, as required by ASC 326. The Company has a credit portfolio review process designed to detect problem loans.
These qualitative factors incorporate the concept of reasonable and supportable forecasts. 8 Table of Contents The Company has a credit portfolio review process designed to detect problem loans.
Construction Lending Construction loans totaled $80.9 million and $89.9 million at December 31, 2024 and 2023, respectively, and represented 8.30% and 10.14% of our gross loan portfolio at December 31, 2024 and 2023, respectively. We provide loans for the construction of quality, affordable single-family, multi‑family and commercial real estate projects and for land development.
Construction Lending Construction loans totaled $73.0 million and $91.6 million at December 31, 2025 and 2024, respectively, and represented 7.19% and 9.10% of our gross loan portfolio at December 31, 2025 and 2024, respectively. We provide loans for the construction of quality, affordable single-family, multi‑family and commercial real estate projects and for land development.
The determination to purchase specific loans or pools of loans is subject to our underwriting policies, which consider, among other factors, the financial condition of the borrowers, the location of the underlying collateral properties and the appraised value of the collateral properties. We did not purchase any loans during the years ended December 31, 2024, 2023 or 2022.
The determination to purchase specific loans or pools of loans is subject to our underwriting policies, which consider, among other factors, the financial condition of the borrowers, the location of the underlying collateral properties and the appraised value of the collateral properties. During the year ended December 31, 2025, we purchased $78.0 million of loans.
At December 31, 2024, our securities portfolio did not contain securities of any issuer with an aggregate book value in excess of 10% of our equity capital, excluding those issued by the United States Government or its agencies. ​ At December 31, ​ 2024 2023 2022 ​ Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value ​ (In thousands) Federal agency mortgage-backed securities $ 62,853 $ 53,029 $ 76,091 $ 66,778 $ 84,955 $ 74,169 Federal agency collateralized mortgage obligations (“CMO”) 21,299 20,058 24,720 23,339 27,776 26,100 Federal agency debt 42,100 40,034 50,893 47,836 55,687 51,425 Municipal bonds 4,800 4,388 4,833 4,373 4,866 4,197 U.S.
At December 31, 2025, our securities portfolio did not contain securities of any issuer with an aggregate book value in excess of 10% of our equity capital, excluding those issued by the United States Government or its agencies. 11 Table of Contents ​ At December 31, ​ 2025 2024 2023 ​ Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value ​ (In thousands) Federal agency mortgage-backed securities $ 120,372 $ 114,430 $ 62,853 $ 53,029 $ 76,091 $ 66,778 Federal agency collateralized mortgage obligations (“CMO”) 69,742 69,457 21,299 20,058 24,720 23,339 Federal agency debt 29,259 28,413 42,100 40,034 50,893 47,836 Municipal bonds 4,766 4,522 4,800 4,388 4,833 4,373 U.S.
The following table provides information regarding our non‑performing assets at the dates indicated: December 31, 2024 2023 2022 2021 2020 (Dollars in thousands) Non‑accrual loans: Single-family $ – $ – $ – $ – $ 1 Church – – 144 684 786 SBA loans 264 – – – – Total non‑accrual loans 264 – 144 684 787 Loans delinquent 90 days or more and still accruing – – – – – Real estate owned acquired through foreclosure – – – – – Total non‑performing assets $ 264 $ – $ 144 $ 684 $ 787 Non‑accrual loans as a percentage of gross loans, including loans receivable held for sale 0.03 % – % 0.02 % 0.10 % 0.22 % Non‑performing assets as a percentage of total assets 0.02 % – % 0.01 % 0.06 % 0.16 % 8 Table of Contents There were no accrual loans that were contractually past due by 90 days or more at December 31, 2024 or 2023.
The following table provides information regarding our non‑performing assets at the dates indicated: December 31, 2025 2024 2023 2022 2021 (Dollars in thousands) Non‑accrual loans: Single-family $ 424 $ – $ – $ – $ – Multi-family 2,094 – – – – Church – – – 144 684 Commercial-other 261 – – – – SBA loans 222 264 – – – Construction 8,168 – – – – Total non‑accrual loans 11,169 264 – 144 684 Loans delinquent 90 days or more and still accruing – – – – – Real estate owned acquired through foreclosure – – – – – Total non‑performing assets $ 11,169 $ 264 $ – $ 144 $ 684 Non‑accrual loans as a percentage of gross loans 1.09 % 0.03 % - % 0.02 % 0.10 % Non‑performing assets as a percentage of total assets 0.83 % 0.02 % - % 0.01 % 0.06 % There were no accrual loans that were contractually past due by 90 days or more at December 31, 2025 or 2024.
We currently offer loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three or five‑year fixed rate period. Borrowers are required to make monthly payments under the terms of such loans.
The interest rates for our single-family ARM Loans are indexed to COFI, SOFR, 12‑MTA and 1‑Yr. CMT. We currently offer loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three or five‑year fixed rate period. Borrowers are required to make monthly payments under the terms of such loans.
As such, no ACL was recorded for available-for-sale securities as of December 31, 2024. The following table sets forth the amortized cost and fair value of available-for-sale securities by type as of the dates indicated.
The following table sets forth the amortized cost and fair value of available-for-sale securities by type as of the dates indicated.
Department of Housing and Urban Development (“HUD”) if the OCC determines violations of the fair lending laws may have occurred. 18 Table of Contents Changes in applicable laws or the regulations of the OCC, the FDIC, the FRB, the CFPB, or other regulatory authorities, or changes in interpretations of such regulations or in agency policies or priorities, could have a material adverse impact on the Bank and our Company, our operations, and the value of our debt and equity securities.
Changes in applicable laws or the regulations of the OCC, the FDIC, the FRB, the CFPB, or other regulatory authorities, or changes in interpretations of such regulations or in agency policies or priorities, could have a material adverse impact on the Bank and our Company, our operations, and the value of our debt and equity securities.
Our offerings include: • Competitive Compensation & Incentives aligned with market benchmarks and performance outcomes. • Comprehensive Health & Wellness Benefits , including medical, dental, and vision coverage, as well as mental health and wellness initiatives. • Retirement & Financial Security programs, including a 401(k) with employer matching contributions. • Paid Time Off & Work-Life Balance initiatives, including generous PTO, parental leave, and flexible work arrangements. • Employee Assistance Programs (EAPs) and wellness initiatives to support physical, mental, and financial well-being.
Our offerings include: • Competitive Compensation & Incentives aligned with market benchmarks and performance outcomes. • Comprehensive Health & Wellness Benefits , including medical, dental, and vision coverage, as well as mental health and wellness initiatives. • Retirement & Financial Security programs, including a 401(k) with employer matching contributions. • Paid Time Off & Work-Life Balance initiatives, including generous PTO, parental leave, and flexible work arrangements. • Employee Assistance Programs (EAPs) and wellness initiatives to support physical, mental, and financial well-being. 15 Table of Contents Our Total Rewards philosophy ensures that our employees feel valued, supported, and motivated to contribute to the organization’s success while maintaining a strong sense of personal and financial well-being.
The fair value of securities pledged totaled $83.3 million as of December 31, 2024 and included $46.5 million of U.S. Treasuries, $27.1 million of federal agency debt, $5.5 million of federal agency mortgage-backed securities, and $4.2 million of SBA pools. As of December 31, 2023, securities sold under agreements to repurchase totaled $73.5 million at an average rate of 2.60%.
Treasuries, and $1.5 million of SBA pools. As of December 31, 2024, securities sold under agreements to repurchase totaled $66.6 million at an average rate of 3.62%. The fair value of securities pledged totaled $83.3 million as of December 31, 2024 and included $46.5 million of U.S.
Loans secured by multi‑family and commercial properties are granted based on the income producing potential of the property and the financial strength of the borrower.
Borrowers are required to make monthly payments under the terms of such loans. Loans secured by multi‑family and commercial properties are granted based on the income producing potential of the property and the financial strength of the borrower.
Actual and required capital amounts and ratios as of the dates indicated are presented below: Actual Minimum Required to be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2024: Community Bank Leverage Ratio $ 189,009 13.96 % $ 121,897 9.00 % December 31, 2023: Community Bank Leverage Ratio $ 185,773 14.97 % $ 111,696 9.00 % At December 31, 2024, the Company and the Bank met all the capital adequacy requirements to which they were subject.
Actual and required capital amounts and ratios as of the dates indicated are presented below: Actual Minimum Required to be Well Capitalized Under Prompt Corrective Action Provisions Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2025: Community Bank Leverage Ratio $ 191,336 14.09 % $ 122,184 9.00 % December 31, 2024: Community Bank Leverage Ratio $ 188,827 13.61 % $ 124,879 9.00 % At December 31, 2025, the Company and the Bank met all the capital adequacy requirements to which they were subject.
Our church loans totaled $9.5 million and $12.7 million at December 31, 2024 and 2023, respectively, which represented 0.97% and 1.43% of our gross loan portfolio at December 31, 2024 and 2023, respectively.
Our church loans totaled $9.0 million and $9.5 million at December 31, 2025 and 2024, respectively, which represented 0.89% and 0.94% of our gross loan portfolio at December 31, 2025 and 2024, respectively.
City First has historically classified all newly originated construction loans as Watch loans until a history of loan performance can be established or until the construction project is complete, which is the main driver for the increase in total criticized loans of $20.3 million during 2024.
City First has historically classified all newly originated construction loans as Watch loans until a history of loan performance can be established or until the construction project is complete.
Our founders in Los Angeles and Washington, D.C. were local leaders who saw a need in the community for a bank that addressed the lack of access to capital for under invested communities.
Our founders in Los Angeles and Washington, D.C. were local leaders who saw a need in the community for a bank that addressed the lack of access to capital for under invested communities. Our ownership, responsibility, and commitment to these Shared Values and legacy is reflected in the composition of our workforce, executive leadership team, and Board.
In certain cases, the OCC has the authority to refer matters relating to federal fair lending laws to the U.S. Department of Justice (“DOJ”) or the U.S.
In certain cases, the OCC has the authority to refer matters relating to federal fair lending laws to the U.S. Department of Justice (“DOJ”) or the U.S. Department of Housing and Urban Development (“HUD”) if the OCC determines violations of the fair lending laws may have occurred.
Beginning January 1, 2023, the Company accounts for credit losses on all loans in accordance with ASC 326, which eliminates the concept of an impaired loan within the context of determining credit losses, and requires all loans to be evaluated for credit losses collectively based on similar risk characteristics.
The Company may increase or decrease the ACL for collateral dependent loans based on changes in the estimated fair value of the collateral. 9 Table of Contents The Company accounts for credit losses on all loans in accordance with ASC 326, which eliminates the concept of an impaired loan within the context of determining credit losses, and requires all loans to be evaluated for credit losses collectively based on similar risk characteristics.
Beginning on January 1, 2023, the Company evaluates loans collectively for purposes of determining the ACL in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio.
Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio.
At December 31, 2024, the average balance of a loan in our church loan portfolio was $631 thousand. 5 Table of Contents Single-Family Mortgage Lending While we have historically been primarily a multi‑family and commercial real estate lender, we also have purchased or originated loans secured by single-family residential properties, including investor‑owned properties, with maturities of up to 30 years.
Single-Family Mortgage Lending While we have historically been primarily a multi‑family and commercial real estate lender, we also have purchased or originated loans secured by single-family residential properties, including investor‑owned properties, with maturities of up to 30 years. Single-family loans totaled $20.6 million and $24.0 million at December 31, 2025 and 2024, respectively.
At December 31, 2024, our net loan portfolio totaled $968.9 million, or 74.3% of total assets. We emphasize the origination of adjustable‑rate loans, most of which are hybrid loans (loans having an initial fixed rate period which are initially five years, followed by an adjustable-rate period), for our portfolio of loans held for investment.
We emphasize the origination of adjustable‑rate loans, most of which are hybrid loans (loans having an initial fixed rate period which are initially five years, followed by an adjustable-rate period), for our portfolio of loans held for investment.
During 2024 and 2023, we did not originate or sell any loans that were classified as held for sale. 7 Table of Contents Asset Quality General The underlying credit quality of our loan portfolio is dependent primarily on each borrower’s ability to continue to make required loan payments and, in the event a borrower is unable to continue to do so, the value of the collateral securing the loan, if any.
Asset Quality General The underlying credit quality of our loan portfolio is dependent primarily on each borrower’s ability to continue to make required loan payments and, in the event a borrower is unable to continue to do so, the value of the collateral securing the loan, if any.
These multi‑family loans amounted to $633.3 million and $561.4 million at December 31, 2024 and 2023, respectively. Multi‑family loans represented 64.94% of our gross loan portfolio at December 31, 2024 compared to 63.33% of our gross loan portfolio at December 31, 2023. Most of our multi‑family loans amortize over 30 years.
These multi‑family loans amounted to $593.2 million and $639.2 million at December 31, 2025 and 2024, respectively. Multi‑family loans represented 58.41% of our gross loan portfolio at December 31, 2025 compared to 63.50% of our gross loan portfolio at December 31, 2024. Most of our multi‑family loans amortize over 30 years.
We specialize in the origination of construction loans for affordable housing developments where rents are subsidized by housing authority agencies. During 2024, we originated $7.6 million of construction loans, compared to $40.0 million of construction loan originations during 2023.
We specialize in the origination of construction loans for affordable housing developments where rents are subsidized by housing authority agencies. During 2025, we originated $6.8 million of construction loans, compared to $8.9 million of construction loan originations during 2024. As of December 31, 2025, our single largest construction loan had an outstanding balance of $15.7 million.
At December 31, 2024, the average balance of a loan in our non-real estate commercial loan portfolio was $3.4 million. The risks related to commercial loans differ from loans secured by real estate and relate to the ability of borrowers to successfully operate their businesses and the difference between expected and actual cash flows of the borrowers.
The risks related to commercial loans differ from loans secured by real estate and relate to the ability of borrowers to successfully operate their businesses and the difference between expected and actual cash flows of the borrowers.
Our earnings are significantly affected by general economic and competitive conditions, particularly monetary trends, and conditions, including changes in market interest rates and the differences in market interest rates for the interest-bearing deposits and borrowings that are our principal funding sources and the interest yielding assets in which we invest, as well as government policies and actions of regulatory authorities.
Our earnings are significantly affected by general economic and competitive conditions, particularly monetary trends, and conditions, including changes in market interest rates and the differences in market interest rates for the interest-bearing deposits and borrowings that are our principal funding sources and the interest yielding assets in which we invest, as well as government policies and actions of regulatory authorities. 1 Table of Contents Lending Activities General Our loan portfolio is comprised primarily of commercial mortgage loans which are secured by multi‑family residential properties, single-family residential properties and commercial real estate, including charter schools, community facilities, and churches.
The Human Resources team leads the execution of our talent strategy, workforce planning, employee engagement, and organizational development initiatives. As of December 31, 2024, we employed 106 full-time employees across our corporate offices, branch locations, and operational facilities.
Governance & Workforce Overview Our Board provides strategic oversight of our human capital management to promote alignment with the organization’s long-term objectives. The Human Resources team leads the execution of our talent strategy, workforce planning, employee engagement, and organizational development initiatives. As of December 31, 2025, we employed 98 full-time employees across our corporate offices, branch locations, and operational facilities.
Our commercial real estate loans amounted to $156.2 million and $119.4 million at December 31, 2024 and 2023, respectively. Commercial real estate loans represented 16.01% and 13.47% of our gross loan portfolios at December 31, 2024 and 2023, respectively.
Our commercial real estate loans amounted to $162.6 million and $163.3 million at December 31, 2025 and 2024, respectively. Commercial real estate loans represented 16.01% and 16.23% of our gross loan portfolios at December 31, 2025 and 2024, respectively.
Treasuries 77,857 77,190 167,055 163,880 165,997 160,589 SBA pools 10,749 9,163 12,386 10,744 14,048 12,269 Total $ 219,658 $ 203,862 $ 335,978 $ 316,950 $ 353,329 $ 328,749 The table below presents the carrying amount, weighted average yields and contractual maturities of our securities as of December 31, 2024.
Treasuries 4,993 4,987 77,857 77,190 167,055 163,880 SBA pools 9,387 8,275 10,749 9,163 12,386 10,744 Asset-backed securities 9,352 9,269 - - - - Corporate bonds 17,500 17,482 - - - - Total $ 265,371 $ 256,835 $ 219,658 $ 203,862 $ 335,978 $ 316,950 The table below presents the carrying amount, weighted average yields and contractual maturities of our securities as of December 31, 2025.
Consumer – Subject to adverse employment conditions in the local economy, which may lead to higher default rates.
Consumer – Subject to adverse employment conditions in the local economy, which may lead to higher default rates. SBA – Subject to Federal legislation that can affect the funding and availability of the program.
Single-family loans totaled $23.6 million and $24.7 million at December 31, 2024 and 2023, respectively. Of the single-family residential mortgage loans outstanding at December 31, 2024, more than 26% had adjustable-rate features. We did not purchase any single-family loans during 2024 or 2023.
Of the single-family residential mortgage loans outstanding at December 31, 2025, more than 47% had adjustable-rate features. We did not purchase any single-family loans during 2025 or 2024. Of the $20.6 million of single-family loans at December 31, 2025, $16.0 million are secured by investor‑owned properties.
The following table presents the maturity of time deposits as of the dates indicated: Three Months or Less Three to Six Months Six Months to One Year Over One Year Total (In thousands) December 31, 2024 Time deposits of $250,000 or less $ 46,350 $ 37,239 $ 92,028 $ 4,060 $ 179,677 Time deposits of more than $250,000 3,149 5,712 16,864 7,437 33,162 Total $ 49,499 $ 42,951 $ 108,892 $ 11,497 $ 212,839 Not covered by deposit insurance $ 1,399 $ 3,212 $ 12,363 $ 6,437 $ 23,411 December 31, 2023 Time deposits of $250,000 or less $ 36,931 $ 26,248 $ 63,118 $ 18,202 $ 144,499 Time deposits of more than $250,000 4,609 3,904 6,895 8,128 23,536 Total $ 41,540 $ 30,152 $ 70,013 $ 26,330 $ 168,035 Not covered by deposit insurance $ 3,109 $ 2,154 $ 4,395 $ 6,628 $ 16,286 The following table details the maturity periods of our certificates of deposit in amounts of $100 thousand or more at December 31, 2024.
The following table presents the maturity of time deposits as of the dates indicated: Three Months or Less Three to Six Months Six Months to One Year Over One Year Total (In thousands) December 31, 2025 Time deposits of $250,000 or less $ 65,681 $ 42,989 $ 83,129 $ 2,849 $ 194,648 Time deposits of more than $250,000 79,939 4,491 18,413 2,243 105,086 Total $ 145,620 $ 47,480 $ 101,542 $ 5,092 $ 299,734 Not covered by deposit insurance $ 74,439 $ 2,491 $ 14,913 $ 1,743 $ 93,586 December 31, 2024 Time deposits of $250,000 or less $ 46,350 $ 37,239 $ 92,028 $ 4,060 $ 179,677 Time deposits of more than $250,000 3,149 5,712 16,864 7,437 33,162 Total $ 49,499 $ 42,951 $ 108,892 $ 11,497 $ 212,839 Not covered by deposit insurance $ 1,399 $ 3,212 $ 12,363 $ 6,437 $ 23,411 The following table details the maturity periods of our certificates of deposit in amounts of $100 thousand or more at December 31, 2025.
See “Regulation” for more information on the government regulations to which we are subject. 2 Table of Contents The following table details the composition of our portfolio of loans held for investment by type, dollar amount and percentage of loan portfolio at the dates indicated: December 31, 2024 2023 2022 2021 2020 Amount Percent of total Amount Percent of total Amount Percent of total Amount Percent of total Amount Percent of total (Dollars in thousands) Single-family $ 23,566 2.42 % $ 24,702 2.79 % $ 30,038 3.89 % $ 45,372 6.96 % $ 48,217 13.32 % Multi‑family 633,306 64.94 % 561,447 63.33 % 502,141 65.08 % 393,704 60.36 % 272,387 75.24 % Commercial real estate 156,155 16.01 % 119,436 13.47 % 114,574 14.85 % 93,193 14.29 % 24,289 6.71 % Church 9,470 0.97 % 12,717 1.43 % 15,780 2.04 % 22,503 3.45 % 16,658 4.60 % Construction 80,948 8.30 % 89,887 10.14 % 40,703 5.27 % 32,072 4.92 % 429 0.11 % Commercial - other 70,596 7.24 % 63,450 7.16 % 64,841 8.40 % 46,539 7.13 % 57 0.02 % SBA Loans 1,142 0.12 % 14,954 1.68 % 0.47 0.47 % 18,837 2.89 % – – % Consumer 13 – % 13 – % 11 – % - - % 7 – % Gross loans 975,196 100.00 % 886,606 100.00 % 771,689 100.00 % 652,220 100.00 % 362,044 100.00 % Plus: Premiums on loans purchased - 32 35 58 88 Deferred loan costs, net 2,116 1,940 1,723 1,471 1,218 Less: Credit and interest marks on purchased loans, net 348 772 1,010 1,842 – Unamortized discounts - 1 3 3 6 Allowance for credit/loan losses 8,103 7,348 4,388 3,391 3,215 Total loans held for investment $ 968,861 $ 880,457 $ 768,046 $ 648,513 $ 360,129 3 Table of Contents The following table presents loan categories by maturity for the period indicated.
The following table details the composition of our portfolio of loans held for investment by type, dollar amount and percentage of loan portfolio at the dates indicated: December 31, 2025 2024 2023 2022 2021 Amount Percent of total Amount Percent of total Amount Percent of total Amount Percent of total Amount Percent of total (Dollars in thousands) Single-family $ 20,607 2.03 % $ 24,036 2.39 % $ 25,184 2.74 % $ 30,038 3.89 % $ 45,372 6.96 % Multi‑family 593,187 58.41 % 639,156 63.50 % 567,481 61.81 % 502,141 65.08 % 393,704 60.36 % Commercial real estate 162,618 16.01 % 163,348 16.23 % 127,684 13.91 % 114,574 14.85 % 93,193 14.29 % Church 9,015 0.89 % 9,470 0.94 % 12,717 1.39 % 15,780 2.04 % 22,503 3.45 % Construction 72,979 7.19 % 91,600 9.10 % 99,060 10.79 % 40,703 5.27 % 32,072 4.92 % Commercial - other 140,019 13.79 % 77,787 7.73 % 70,950 7.73 % 64,841 8.40 % 46,539 7.13 % SBA Loans 17,067 1.68 % 1,142 0.11 % 14,954 1.63 % 3,601 0.47 % 18,837 2.89 % Consumer 38 – % 13 – % 13 – % 11 - % - – % Gross loans 1,015,530 100.00 % 1,006,552 100.00 % 918,043 100.00 % 771,689 100.00 % 652,220 100.00 % Plus: Premiums on loans purchased 8,671 - 32 35 58 Deferred loan costs, net 1,858 2,116 1,940 1,723 1,471 Less: Credit and interest marks on purchased loans, net 95 348 772 1,010 1,842 Unamortized discounts - - 1 3 3 Allowance for credit/loan losses 9,424 8,364 7,613 4,388 3,391 Total loans held for investment $ 1,016,540 $ 999,956 $ 911,629 $ 768,046 $ 648,513 The following table presents loan categories by maturity for the period indicated.
Our retail banking network includes full-service banking offices, automated teller machines and internet banking capabilities that are available using our website at www.ciytfirstbank.com. We have three banking offices as of December 31, 2024: two in California (in Los Angeles and in the nearby City of Inglewood) and one in Washington, D.C.
The retail banking network includes full-service banking offices, automated teller machines and internet banking capabilities that are available using our website at www.ciytfirstbank.com.
December 31, 2024 Amount Weighted Average Rate (Dollars in thousands) Certificates maturing: Less than three months $ 44,010 3.34 % Three to six months 39,003 3.60 % Six to twelve months 99,471 3.85 % Over twelve months 9,301 1.26 % Total $ 191,785 3.56 % 14 Table of Contents The following table presents the distribution of our average deposits for the years indicated and the weighted average interest rates during the year for each category of deposits presented.
December 31, 2025 Amount Weighted Average Rate (Dollars in thousands) Certificates maturing: Less than three months $ 139,911 3.84 % Three to six months 42,219 3.65 % Six to twelve months 92,057 3.36 % Over twelve months 3,616 2.87 % Total $ 277,803 3.64 % The following table presents the distribution of our average deposits for the years indicated and the weighted average interest rates during the year for each category of deposits presented.
At December 31, 2024, our largest loan to a single borrower was $15.7 million; that loan was performing in accordance with its terms and was otherwise in compliance with regulatory requirements. 21 Table of Contents Community Reinvestment Act and Fair Lending The Community Reinvestment Act, as implemented by OCC regulations (“CRA”), requires each national bank to make efforts to meet the credit needs of the communities it serves, including low‑ and moderate‑income neighborhoods.
Community Reinvestment Act and Fair Lending The Community Reinvestment Act, as implemented by OCC regulations (“CRA”), requires each national bank to make efforts to meet the credit needs of the communities it serves, including low‑ and moderate‑income neighborhoods.
We currently offer adjustable-rate loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three‑ or five‑year fixed rate period. Borrowers are required to make monthly payments under the terms of such loans.
The interest rates on commercial real estate loans are based on a variety of indices, including two-year Treasury, five-year Treasury, seven-year Treasury and ten-year Treasury and the five-year FHLB. We currently offer adjustable-rate loans with interest rates that adjust either semi‑annually or semi‑annually upon expiration of an initial three‑ or five‑year fixed rate period.
Both the Washington, D.C. and the Los Angeles metropolitan areas are highly competitive banking markets for making loans and attracting deposits.
There are three banking offices as of December 31, 2025: two in California (in Los Angeles and in the nearby City of Inglewood) and one in Washington, D.C. 14 Table of Contents Both the Washington, D.C. and the Los Angeles metropolitan areas are highly competitive banking markets for making loans and attracting deposits.
Our learning & development strategy provides employees with the tools, training, and experiences they need to excel in their roles and advance within the organization.
Workforce Learning & Development We are dedicated to cultivating a culture of continuous learning and professional growth where employees can learn, grow, and be fulfilled in the work that they do. Our learning & development strategy provides employees with the tools, training, and experiences they need to excel in their roles and advance within the organization.
The Bank is also subject to federal fair lending laws, including the Equal Credit Opportunity Act (“ECOA”) and the Federal Housing Act (“FHA”), which prohibit discrimination in credit and residential real estate transactions on prohibited bases, including race, color, national origin, gender, and religion, among others.
In connection with the assessment of a savings institution’s CRA performance, the OCC assigns ratings of “outstanding,” “satisfactory,” “needs to improve” or “substantial noncompliance.” The Company’s CRA performance was rated by the OCC as “outstanding” in their most recent CRA examination which was completed in 2025. 18 Table of Contents The Bank is also subject to federal fair lending laws, including the Equal Credit Opportunity Act (“ECOA”) and the Federal Housing Act (“FHA”), which prohibit discrimination in credit and residential real estate transactions on prohibited bases, including race, color, national origin, gender, and religion, among others.
Certain loans classified as SBA are secured by commercial real estate property. All other SBA loans are secured by business assets. As of December 31, 2024 and 2023, SBA loans totaled $1.1 million and $15.0 million, respectively.
Certain loans classified as SBA are secured by commercial real estate property. All other SBA loans are secured by business assets. During the year ended December 31, 2025, we purchased $18.9 million of SBA loans at a premium of $1.4 million.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe trading price of our common stock has historically and will likely in the future fluctuate significantly as a result of a number of factors, including the following: ● actual or anticipated changes in our operating results and financial condition; ● actions by our stockholders, including sales of common stock by substantial stockholders and/or directors and executive officers, or perceptions that such actions may occur; ● the limited number of shares of our common stock that are held by the general public, commonly called the “public float,” and our small market capitalization; ● failure to meet stockholder or market expectations regarding loan and deposit volume, revenue, asset quality or earnings; ● failure to meet Nasdaq listing requirements, including failure to satisfy the $1.00 minimum closing bid price requirement; ● speculation in the press or the investment community relating to the Company or the financial services industry generally; ● fluctuations in the stock price and operating results of our competitors; ● proposed or adopted regulatory changes or developments; ● investigations, proceedings, or litigation that involve or affect us; ● the performance of the national, California and Washington, D.C. economies and the real estate markets in Southern California and Washington, D.C.; ● general market conditions and, in particular, developments related to market conditions for the financial services industry; ● additions or departures of key personnel; ● changes in financial estimates or publication of research reports and recommendations by financial analysts with respect to our common stock or those of other financial institutions; and ● actions taken by bank regulatory authorities, including required additions to our loan loss reserves or the issuance of cease and desist orders, based on adverse evaluations of our loans and other assets, operating results, or management practices and procedures or other aspects of our business.
Biggest changeThe trading price of our common stock has historically and will likely in the future fluctuate significantly as a result of a number of factors, including the following: ● actual or anticipated changes in our operating results and financial condition; ● actions by our stockholders, including sales of common stock by substantial stockholders and/or directors and executive officers, or perceptions that such actions may occur; ● the limited number of shares of our common stock that are held by the general public, commonly called the “public float,” and our small market capitalization; ● failure to meet stockholder or market expectations regarding loan and deposit volume, revenue, asset quality or earnings; ● failure to meet Nasdaq listing requirements, including failure to satisfy the $1.00 minimum closing bid price or timely financial reporting requirements; ● speculation in the press or the investment community relating to the Company or the financial services industry generally; ● fluctuations in the stock price and operating results of our competitors; ● proposed or adopted regulatory changes or developments; ● investigations, proceedings, or litigation that involve or affect us; ● the performance of the national, California and Washington, D.C. economies and the real estate markets in Southern California and Washington, D.C.; ● general market conditions and, in particular, developments related to market conditions for the financial services industry; ● additions or departures of key personnel; ● changes in financial estimates or publication of research reports and recommendations by financial analysts with respect to our common stock or those of other financial institutions; ● actions taken by bank regulatory authorities, including required additions to our loan loss reserves or the issuance of cease and desist orders, based on adverse evaluations of our loans and other assets, operating results, or management practices and procedures or other aspects of our business; and ● the loss of our CDFI certification could potentially limit our grant income awards. 23 Table of Contents 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.
In addition, interest rate fluctuations can affect how much money the Bank may be able to lend and its ability to attract and retain customer deposits, which are an important source of funds for making and holding loans. 25 Table of Contents Changes in governmental regulation may impair operations or restrict growth.
In addition, interest rate fluctuations can affect how much money the Bank may be able to lend and its ability to attract and retain customer deposits, which are an important source of funds for making and holding loans. 21 Table of Contents Changes in governmental regulation may impair operations or restrict growth.
Although the risks are organized by headings and each risk is discussed separately, many are interrelated. 24 Table of Contents Risks Relating to Our Business The macroeconomic environment could pose significant challenges for the Company and could adversely affect our financial condition and results of operations.
Although the risks are organized by headings and each risk is discussed separately, many are interrelated. 20 Table of Contents Risks Relating to Our Business The macroeconomic environment could pose significant challenges for the Company and could adversely affect our financial condition and results of operations.
In addition, the rates of delinquencies, foreclosures, bankruptcies, and loan losses may increase substantially, as uninsured property losses or sustained job interruption or loss may materially impair the ability of borrowers to repay their loans. 28 Table of Contents Risks Relating to the Company Being a Public Benefit Corporation We cannot provide any assurance that we will achieve our public benefit purposes.
In addition, the rates of delinquencies, foreclosures, bankruptcies, and loan losses may increase substantially, as uninsured property losses or sustained job interruption or loss may materially impair the ability of borrowers to repay their loans. Risks Relating to the Company Being a Public Benefit Corporation We cannot provide any assurance that we will achieve our public benefit purposes.
In the event of a delisting, we would attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements. 26 Table of Contents The market price of our common stock is volatile.
In the event of a delisting, we would attempt to take actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.
Moreover, as a community bank operating as a Community Development Financial Institution (CDFI), we face a complex and evolving regulatory and political landscape, and changes in laws, regulations, initiatives, or regulatory policies could adversely affect our business, financial condition, and results of operations.
Moreover, the Bank operates as a Community Development Financial Institution (CDFI) and as a result, we face a complex and evolving regulatory and political landscape, and changes in laws, regulations, initiatives, or regulatory policies could adversely affect our business, financial condition, and results of operations.
Additionally, such derivative litigation may be costly, which may have an adverse impact on our financial condition, results of operations, assets, or business. 29 Table of Contents
Additionally, such derivative litigation may be costly, which may have an adverse impact on our financial condition, results of operations, assets, or business.
An investment in shares of our common stock is not a deposit and is not insured against loss or guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”) or any other government agency or authority.
Our common stock is not insured and stockholders could lose the value of their entire investment. An investment in shares of our common stock is not a deposit and is not insured against loss or guaranteed by the Federal Deposit Insurance Corporation (the “FDIC”) or any other government agency or authority.
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 declared or paid cash dividends on our common stock since June 2010, initially due, in part, to regulatory restrictions and the operating losses we have previously experienced.
We have not declared or paid cash dividends on our common stock since June 2010, initially due, in part, to regulatory restrictions and the operating losses we have previously experienced. We have not determined to pay cash dividends on our common stock at any time in the near future.
For example, on May 14, 2024, we received a Staff Delisting Determination letter (the “Staff Determination”) from Nasdaq that it had initiated the delisting process with respect to the Company’s securities.
For example, on August 21, 2025, we received a Staff Delisting Determination letter (the “Staff Determination”) from Nasdaq that it had initiated the delisting process with respect to the Company’s securities.
Stockholders may not be able to resell shares of our common stock at times or at prices they find attractive.
The 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.
These provisions and the stockholder rights plan could be used by our board of directors to prevent a merger or acquisition that would be attractive to stockholders and could limit the price investors would be willing to pay in the future for our common stock. 27 Table of Contents Our common stock is not insured and stockholders could lose the value of their entire investment.
These provisions and the stockholder rights plan could be used by our board of directors to prevent a merger or acquisition that would be attractive to stockholders and could limit the price investors would be willing to pay in the future for our common stock.
If significant, sustained, or repeated, a system failure or service denial could compromise our ability to operate effectively, damage our reputation, result in a loss of customer business, and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations.
If significant, sustained, or repeated, a system failure or service denial could compromise our ability to operate effectively, damage our reputation, result in a loss of customer business, and/or subject us to additional regulatory scrutiny and possible financial liability, any of which could have a material adverse effect on our business, financial condition and results of operations. 24 Table of Contents Our information technology systems and of our third-party service providers may be vulnerable to unauthorized access, computer viruses, phishing schemes and other security breaches.
Our business is dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems and the systems of its third-party service providers. The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations.
The failure of these systems, or the termination of a third-party software license or service agreement on which any of these systems is based, could interrupt our operations.
These risk factors and other forward-looking statements that relate to future events, expectations, trends and operating periods involve certain factors that are subject to change, and important risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties should not be considered a complete discussion of all the risks and uncertainties that we might face.
These risk factors and other forward-looking statements that relate to future events, expectations, trends and operating periods involve certain factors that are subject to change, and important risks and uncertainties that could cause actual results or outcomes to differ materially.
The discussion below addresses material factors, of which we are currently aware, that could have a material and adverse effect on our businesses, results of operations, and financial condition.
The discussion below addresses material factors, of which we are currently aware, that could have a material and adverse effect on our businesses, results of operations, and financial condition. The disclosures below reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
Following the filing of the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023 and Annual Report on From 10-K for the year ended December 31, 2023, we received a letter from Nasdaq on May 20, 2024, stating that the Company had regained compliance with Nasdaq continued listing requirements and the matter was closed.
Following the filing of the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2025 and September 30, 2025, we received a letter from Nasdaq on February 17, 2026, stating that the Company had regained compliance with Nasdaq continued listing requirements and the matter was closed.
Similarly, the control deficiency, remediation efforts, and any related litigation, government investigations, or regulatory enforcement actions will require management attention and resources and cause us to incur unanticipated costs, and could negatively affect investor confidence in our financial statements, cause us reputational harm, and raise other risks to our operations.
Similarly, the control deficiency, remediation efforts, and any related litigation, government investigations, or regulatory enforcement actions will require management attention and resources and cause us to incur unanticipated costs and could negatively affect investor confidence in our financial statements, cause us reputational harm, and raise other risks to our operations. 22 Table of Contents 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.
Furthermore, as a public benefit corporation, we may be less attractive as a takeover target than a traditional company would be and, therefore, our stockholders’ ability to realize their investment through an acquisition may be reduced.
Accordingly, our corporate form as a public benefit corporation and compliance with the related obligations can have an adverse effect on our financial condition, results of operations, assets or business. 25 Table of Contents Furthermore, as a public benefit corporation, we may be less attractive as a takeover target than a traditional company would be and, therefore, our stockholders’ ability to realize their investment through an acquisition may be reduced.
We have not determined to pay cash dividends on our common stock at any time in the near future. Stock sales by us or other dilution of our equity may adversely affect the market price of our common stock.
Stock sales by us or other dilution of our equity may adversely affect the market price of our common stock.
A loss of CDFI status, and the resulting inability to obtain certain grants and awards received in the past, could have an adverse effect on our financial condition, results of operations or business. Systems 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.
Systems 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. Our business is dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems and the systems of its third-party service providers.
However, there can be no certainty that these measures will be sufficient in safeguarding against any such threats.
We likely will expend additional resources to protect against the threat of such cybersecurity incident, or to alleviate problems caused by such cybersecurity incident. However, there can be no assurance that these measures will be sufficient in safeguarding against any such threats.
In addition, our pursuit of longer-term or non-pecuniary benefits may not materialize within the timeframe we expect or at all. Accordingly, our corporate form as a public benefit corporation and compliance with the related obligations can have an adverse effect on our financial condition, results of operations, assets or business.
In addition, our pursuit of longer-term or non-pecuniary benefits may not materialize within the timeframe we expect or at all.
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. The Bank and the Company are certified as CDFIs by the United States Department of the Treasury.
If we were to lose CDFI certification at the Bank level or fail to obtain CDFI certification at the holding company level, our ability to obtain certain grants and awards received in the past may be adversely affected.
Removed
Moreover, some of the factors, events and contingencies discussed below may have occurred in the past, but the disclosures below are not representations as to whether or not the factors, events or contingencies have occurred in the past, and instead reflect our beliefs and opinions as to the factors, events, or contingencies that could materially and adversely affect us in the future.
Added
References to past events are provided by way of example only and are not intended to be a complete listing or a representation as to whether or not such factors, events, or contingencies have occurred in the past or their likelihood of occurring in the future.
Removed
As disclosed in Part I, Item 4 “Controls and Procedures,” of our Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2023, we determined that there were material weaknesses in our internal control over financial reporting.
Added
These risks and uncertainties should not be considered a complete discussion of all the risks and uncertainties that we might face.
Removed
We have determined that the material weaknesses were remediated and that our internal control over financial reporting was effective as of December 31, 2024.
Added
As disclosed in the Company’s Form 8-K filed on October 15, 2025, the Company’s management, with oversight of the Audit Committee of the Board of Directors (the “Audit Committee”) of Broadway Financial Corporation, the holding company of City First Bank, National Association, concluded that the Company’s audited consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, and the unaudited interim consolidated financial statements for the quarters ended March 31, 2024, June 30, 2024, September 30, 2024, and March 31, 2025 (collectively, the “Affected Financials”), each as previously filed with the Securities and Exchange Commission (“SEC”), should no longer be relied upon because of an error related to certain loan participation agreements and should therefore be restated.
Removed
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.
Added
In addition, as a result of the foregoing determination, related press releases, stockholder communications, investor presentations and other communications describing relevant portions of the Affected Financials should no longer be relied upon.
Removed
CDFI status increases a financial institution’s potential for receiving grants and awards that, in turn, enable the financial institution to increase the level of community development financial services that it provides to communities. Broadway Federal Bank received over $3 million in Bank Enterprise Awards from the CDFI Fund over the last ten years.
Added
In connection with the Affected Financials, the Company’s management identified material weaknesses in the Company’s internal control over financial reporting as of the dates the Affected Financials were originally filed.
Removed
We reinvest the proceeds from CDFI-related grants and awards back into the communities we serve. While we believe we will be able to meet the certification criteria required to continue our CDFI status, there is no certainty that we will be able to do so.
Added
The Bank is currently certified as a CDFI by the United States Department of the Treasury and is undergoing its periodic recertification, and CDFI certification reinforces the Bank’s primary purpose of serving low income and underserved communities and enhances eligibility for certain grants and awards.
Removed
If we do not meet one or more of the criteria, the CDFI Fund, in its sole discretion, may provide an opportunity for us to cure deficiencies prior to issuing a notice of termination of certification.
Added
The Bank has received over $6.3 million in grants and awards from the CDFI Fund over the last five years, which has been reinvested in the communities we serve; however, the Bank’s mission driven banking model is not dependent on such grant funding.
Removed
Our information technology systems and of our third-party service providers may be vulnerable to unauthorized access, computer viruses, phishing schemes and other security breaches. We likely will expend additional resources to protect against the threat of such cybersecurity incident, or to alleviate problems caused by such cybersecurity incident.
Added
The Company’s application for CDFI certification is pending, and there can be no assurance that such certification will be approved in a timely manner, if at all. As a holding company, the Company’s operations are conducted solely through the Bank, and holding company certification is related to corporate level requirements rather than separate operating activities.
Added
A loss of CDFI certification at the Bank level, a failure of the Bank to successfully recertify, or a failure of the Company to obtain CDFI certification could have a material adverse effect on our financial condition, results of operations, or business, including potential noncompliance with a shareholder agreement that requires holding company CDFI certification, loss of associated equity capital, default under one or more historical grant or award agreements, adverse impacts to certain depositor or strategic relationships, and the reduction, termination, or clawback of related grant or award funding.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework. We have not identified risks from known cybersecurity threats, including those resulting from prior cybersecurity incidents, that have materially affected us, and we face ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us.
Biggest changeSince the beginning of the last fiscal year, we have not identified risks from known cybersecurity threats, including those resulting from prior cybersecurity incidents, that have materially affected us, and we face ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us.
The Risk and Compliance Committee receives updates on cybersecurity matters at least quarterly, and our processes require ad hoc updates within two days of a breach as part of the Bank’s cybersecurity risk management strategy designed to protect the information and assets that are critical to our business.
The Risk and Compliance Committee receives updates on cybersecurity matters at least quarterly, and our processes require ad hoc updates within two days of a breach as part of the Company’s cybersecurity risk management strategy designed to protect the information and assets that are critical to our business.
The full Board receives an Annual Report from the Director of Information Technology on the Bank’s Information Technology Systems, including cybersecurity risk. 30 Table of Contents
The full Board receives an Annual Report from the Director of Information Technology on the Company’s Information Technology Systems, including cybersecurity risk.
Added
We consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework.

Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−0 removed2 unchanged
Biggest changeLocation Leased or Owned Original Date Leased or Acquired Date of Lease Expiration East Coast Administrative Offices & Branch Owned 2003 – 1432 U Street NW Washington, D.C. 20009 Employee Parking Lot Owned 2018 – 14 T Street NW Washington, D.C. 20009 West Coast Administrative Offices/Loan Origination Center Leased 2021 Oct. 2026 4601 Wilshire Blvd, Suite 150 Los Angeles, CA 90010 Branch Office/Loan Service Center Owned 1996 – 170 N.
Biggest changeLocation Leased or Owned Original Date Leased or Acquired Date of Lease Expiration East Coast Administrative Offices & Branch 1432 U Street NW Washington, D.C. 20009 Owned 2003 – Employee Parking Lot 14 T Street NW Washington, D.C. 20009 Owned 2018 – West Coast Administrative Offices/Loan Origination Center 4601 Wilshire Blvd, Suite 150 Los Angeles, CA 90010 Leased 2021 Jan. 2032 Branch Office/Loan Service Center 170 N.
Market Street Inglewood, CA 90301 Exposition Park Branch Office Owned 1996 – 4001 South Figueroa Street Los Angeles, CA 90037
Market Street Inglewood, CA 90301 Owned 1996 – Exposition Park Branch Office 4001 South Figueroa Street Los Angeles, CA 90037 Owned 1996 – 26 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−9 removed2 unchanged
Biggest changeDuring the years ended December 31, 2024 and 2023, the Company recorded $113 thousand and $104 thousand, respectively, of stock-based compensation expense related to these restricted stock awards. In March 2022, the Company issued 61,908 shares of restricted stock to its officers and employees under the LTIP, of which 21,276 shares have been forfeited as of December 31, 2024.
Biggest changeThe Company recorded $168 thousand and $96 thousand of compensation expense in the years ended December 31, 2025 and December 31, 2024, respectively, based on the fair value of the stock on the date of the award. 27 Table of Contents On March 26, 2025 and May 28, 2025, the Company issued a total of 96,478 shares of restricted stock to its officers and employees under the Amended and Restated LTIP, of which 17,048 shares have been forfeited as of December 31, 2025.
Each restricted stock award was valued based on the fair value of the stock on the date of the award. These awarded shares of restricted stock fully vest over periods ranging from 36 months to 60 months from their respective dates of grant. Stock-based compensation is recognized on a straight-line basis over the vesting period.
Each restricted stock award was valued based on the fair value of the stock on the date of the award. These awarded shares of restricted stock fully vest over periods ranging from 36 months to 48 months from their respective dates of grant. Stock-based compensation is recognized on a straight-line basis over the vesting period.
Equity Compensation Plan Information The following table provides information about the Company’s common stock that may be issued under equity compensation plans as of December 31, 2024.
Equity Compensation Plan Information The following table provides information about the Company’s common stock that may be issued under equity compensation plans as of December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “BYFC.” The closing sale price for our common stock on the Nasdaq Capital Market on March 21, 2025 was $7.59 per share.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our common stock is traded on the Nasdaq Capital Market under the symbol “BYFC.” The closing sale price for our common stock on the Nasdaq Capital Market on March 18, 2026 was $7.68 per share.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders: 2008 Long Term Incentive Plan – $ – – 2018 Long Term Incentive Plan 12,500 12.96 342,093 Equity compensation plans not approved by security holders: None – – – Total 12,500 $ 12.96 342,093 In May 2024 and February 2023, the Company awarded 19,832 and 9,230 shares of common stock, respectively, to its directors under the LTIP, which are fully vested.
Plan category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders: 2008 Long Term Incentive Plan – $ – – 2018 Long Term Incentive Plan 12,500 12.96 281,958 Equity compensation plans not approved by security holders: None – – – Total 12,500 $ 12.96 281,958 In March 2025 and May 2024, the Company awarded 23,232 and 19,832 shares of common stock, respectively, to its directors under the Amended and Restated LTIP, which are fully vested.
We suspended our prior policy of paying regular cash dividends in May 2010 in order to retain capital for reinvestment in the Company’s business.
We suspended our prior policy of paying regular cash dividends in May 2010 in order to retain capital for reinvestment in the Company’s business. Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None.
As of February 28, 2025, we had 331 registered stockholders. As of February 28, 2025, we had 6,022,227 shares of Class A voting common stock outstanding, 1,425,574 shares of Class B non‑voting common stock outstanding and 1,672,562 shares of Class C non-voting stock outstanding.
As of March 18, 2026, we had 3,708 registered stockholders. As of March 18, 2026, we had 6,206,166 shares of Class A voting common stock outstanding, 1,425,404 shares of Class B non‑voting common stock outstanding and 1,672,562 shares of Class C non-voting stock outstanding.
During the year ended December 31, 2024, the Company recorded $108 thousand of stock-based compensation expense related to these restricted stock awards. On June 21, 2023, the Company issued 92,720 shares of restricted stock to its officers and employees under the LTIP, of which 23,997 shares have been forfeited as of December 31, 2024.
During the year ended December 31, 2025, the Company recorded $114 thousand of stock-based compensation expense related to these restricted stock awards. ITEM 6. RESERVED
Removed
On October 31, 2023, the Company effected a reverse stock split of the Company’s outstanding shares of Class A common stock, Class B common stock, and Class C common stock, par value $0.01 per share, at a ratio of 1-for-8 (the “Reverse Stock Split”).
Removed
The shares of Class A Common Stock listed on The Nasdaq Capital Market commenced trading on The Nasdaq Capital Market on a post-Reverse Stock Split adjusted basis at the open of business on November 1, 2023.
Removed
As a result of the Reverse Stock Split, the number of issued and outstanding shares of common stock immediately prior to the Reverse Stock Split was reduced such that every 8 shares of common stock held by a stockholder immediately prior to the Reverse Stock Split were combined and reclassified into one share of common stock.
Removed
All common stock share amounts and per share numbers discussed herein have been retroactively adjusted, as applicable, for the Reverse Stock Split. 31 Table of Contents Unregistered Sales of Equity Securities None. Repurchases of Equity Securities None.
Removed
The Company recorded $96 thousand and $95 thousand of compensation expense in the years ended December 31, 2024 and December 31, 2023, respectively, based on the fair value of the stock on the date of the award.
Removed
On March 26, 2024 and April 5, 2024, the Company issued 126,083 shares of restricted stock to its officers and employees under the Amended and Restated 2018 Long-Term Incentive Plan (“LTIP”), of which 13,015 shares have been forfeited as of December 31, 2024.
Removed
Each restricted stock award was valued based on the fair value of the stock on the date of the award. These awarded shares of restricted stock fully vest over periods ranging from 36 months to 60 months from their respective dates of grant. Stock-based compensation is recognized on a straight-line basis over the vesting period.
Removed
Each restricted stock award was valued based on the fair value of the stock on the date of the award. These awarded shares of restricted stock fully vest over periods ranging from 36 months to 60 months from their respective dates of grant. Stock-based compensation is recognized on a straight-line basis over the vesting period.
Removed
During 2024 and 2023, the Company recorded $88 thousand and $106 thousand of stock-based compensation expense related to shares awarded to employees.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

69 edited+21 added−26 removed40 unchanged
Biggest changeFor the Years Ended December 31, 2024 2023 2022 (Dollars in thousands) Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Assets Interest-earning assets: Interest-earning deposits $ 101,873 $ 5,423 5.32 % $ 14,013 $ 573 4.09 % $ 147,482 $ 1,677 1.14 % Securities 263,227 7,034 2.67 % 322,764 8,697 2.69 % 252,285 5,596 2.22 % Loans receivable, net (1) 947,603 48,807 5.15 % 808,850 37,143 4.59 % 674,837 28,732 (2) 4.26 % FRB and FHLB stock 13,363 945 7.07 % 11,859 815 6.87 % 3,732 264 7.07 % Total interest-earning assets 1,326,066 $ 62,209 4.69 % 1,157,486 $ 47,228 4.08 % 1,078,336 $ 36,269 3.36 % Non-interest-earning assets 51,119 74,138 65,213 Total assets $ 1,377,185 $ 1,231,624 $ 1,143,549 Liabilities and Stockholders’ Equity Interest-bearing liabilities: Money market deposits $ 284,263 $ 6,929 2.44 % $ 262,827 $ 4,269 1.62 % $ 192,835 $ 1,288 0.67 % Savings deposits 55,715 374 0.67 % 59,928 147 0.25 % 66,033 58 0.09 % Interest checking and other demand deposits 74,302 549 0.74 % 100,248 360 0.36 % 240,380 220 0.08 % Certificate accounts 175,275 5,331 3.04 % 154,275 2,736 1.77 % 182,050 538 0.30 % Total deposits 589,555 13,183 2.24 % 577,278 7,512 1.30 % 681,298 2,104 0.31 % FHLB advances 199,893 9,567 4.79 % 177,261 8,331 4.70 % 61,593 1,071 1.74 % BTFP borrowing 92,308 4,787 5.19 % 822 40 4.87 % – – – % Other borrowings 80,181 2,903 3.62 % 72,465 1,883 2.60 % 61,106 234 0.38 % Total borrowings 372,382 17,257 4.63 % 250,548 10,254 4.09 % 122,699 1,305 1.06 % Total interest-bearing liabilities 961,937 $ 30,440 3.16 % 827,826 $ 17,766 2.15 % 803,997 $ 3,409 0.42 % Non-interest-bearing liabilities 131,841 125,401 115,665 Stockholders’ equity 283,407 278,397 223,887 Total liabilities and stockholders’ equity $ 1,377,185 $ 1,231,624 $ 1,143,549 Net interest rate spread (3) $ 31,769 1.53 % $ 29,462 1.93 % $ 32,860 2.94 % Net interest rate margin (4) 2.40 % 2.55 % 3.05 % Ratio of interest-earning assets to interest-bearing liabilities 137.85 % 139.82 % 134.12 % (1) Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs, loan premiums and loans receivable held for sale.
Biggest changeWe do not accrue interest on loans that are on non-accrual status; however, the balance of these loans is included in the total average balance, which has the effect of reducing average loan yields. 29 Table of Contents For the Years Ended December 31, 2025 2024 2023 (Dollars in thousands) Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Average Balance Interest Average Yield/ Cost Assets Interest-earning assets: Interest-earning deposits $ 29,057 $ 1,267 4.36 % $ 101,873 $ 5,423 5.32 % $ 14,013 $ 573 4.09 % Securities 208,058 6,412 3.08 % 263,227 7,034 2.67 % 322,764 8,697 2.69 % Loans receivable, net (1) 1,009,444 53,049 5.26 % 980,745 50,544 5.15 % 839,624 38,773 4.62 % FRB and FHLB stock 8,820 554 6.28 % 13,363 945 7.07 % 11,859 815 6.87 % Total interest-earning assets 1,255,379 $ 61,282 4.88 % 1,359,208 $ 63,946 4.70 % 1,188,260 $ 48,858 4.11 % Non-interest-earning assets 47,500 51,119 74,138 Total assets $ 1,302,879 $ 1,410,327 $ 1,262,398 Liabilities and Equity Interest-bearing liabilities: Money market deposits $ 146,793 $ 1,468 1.00 % $ 284,263 $ 6,929 2.44 % $ 262,827 $ 4,269 1.62 % Savings deposits 45,235 217 0.48 % 55,715 374 0.67 % 59,928 147 0.25 % Interest checking and other demand deposits 258,159 7,841 3.04 % 74,302 549 0.74 % 100,248 360 0.36 % Certificate accounts 268,265 10,404 3.88 % 175,275 5,331 3.04 % 154,275 2736 1.77 % Total deposits 718,452 19,930 2.77 % 589,555 13,183 2.24 % 577,278 7,512 1.30 % Borrowings 124,098 5,547 4.47 % 233,035 11,304 4.85 % 208,035 9,961 4.79 % BTFP borrowing - - - % 92,308 4,787 5.19 % 822.00 40.00 4.87 % Securities sold under agreements to repurchase 72,712 2,658 3.66 % 80,181 2,903 3.62 % 72,465 1,883 2.60 % Total borrowings 196,810 8,205 4.17 % 405,524 18,994 4.68 % 281,322 11,884 4.22 % Total interest-bearing liabilities 915,262 $ 28,135 3.07 % 995,079 $ 32,177 3.23 % 858,600 $ 19,396 2.26 % Non-interest-bearing liabilities 107,588 131,841 125,401 Equity 280,029 283,407 278,397 Total liabilities and equity $ 1,302,879 $ 1,410,327 $ 1,262,398 Net interest rate spread (2) $ 33,147 1.81 % $ 31,769 1.47 % $ 29,462 1.85 % Net interest rate margin (3) 2.64 % 2.34 % 2.48 % Ratio of interest-earning assets to interest-bearing liabilities 137.16 % 136.59 % 138.40 % (1) Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs, loan premiums and loans receivable held for sale.
Net cash inflows from operating activities during 2024 were primarily attributable to net income of $2.0 million, a $1.4 million increase in other assets and a $641 thousand net change in deferred loan origination costs, partially offset by a $3.1 million net decrease in accrued expenses and other liabilities .
Net cash inflows from operating activities during 2024 were primarily attributable to net income of $2.0 million, a $1.4 million decrease in other assets and a $641 thousand net change in deferred loan origination costs, partially offset by a $3.1 million net decrease in accrued expenses and other liabilities.
We believe the ACL is adequate to cover expected losses in the loan portfolio as of December 31, 2024, but because of uncertainty regarding the future value of the loan portfolio, there can be no assurance that actual losses will not exceed the estimated amounts.
We believe the ACL is adequate to cover expected losses in the loan portfolio as of December 31, 2025, but because of uncertainty regarding the future value of the loan portfolio, there can be no assurance that actual losses will not exceed the estimated amounts.
See Note 1 “Summary of Significant Accounting Policies” and Note 14 “Income Taxes” of the Notes to Consolidated Financial Statements for a further discussion of income taxes and a reconciliation of income tax at the federal statutory tax rate to the actual income tax benefit.
See Note 1 “Summary of Significant Accounting Policies” and Note 14 “Income Taxes” of the Notes to Consolidated Financial Statements for a further discussion of income taxes and a reconciliation of income tax at the federal statutory tax rate to the actual income tax expense.
The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter. The Company’s ACL model also includes adjustments for qualitative factors, where appropriate.
The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter. 36 Table of Contents The Company’s ACL model also includes adjustments for qualitative factors, where appropriate.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. 41 Table of Contents As a result, the Bank’s performance is influenced by general macroeconomic conditions, both domestic and foreign, the monetary and fiscal policies of the federal government, and the policies of the regulatory agencies.
Interest rates do not necessarily move in the same direction or to the same extent as the price of goods and services. As a result, the Bank’s performance is influenced by general macroeconomic conditions, both domestic and foreign, the monetary and fiscal policies of the federal government, and the policies of the regulatory agencies.
In addition, the Bank has a significant concentration of short-term borrowings from one customer that accounted for 88% of out the outstanding balance of securities sold under agreements to repurchase as of December 31, 2024. The Bank expects to maintain these relationships with the customers for the foreseeable future.
In addition, the Bank has a significant concentration of short-term borrowings from one customer that accounted for 91% of out the outstanding balance of securities sold under agreements to repurchase as of December 31, 2025. The Bank expects to maintain these relationships with the customers for the foreseeable future.
Effective January 1, 2023, the Company accounts for the ACL on loans in accordance with ASC 326, which requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition.
The Company accounts for the ACL on loans in accordance with ASC 326, which requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition.
Net cash inflows from investing activities during 2024 were primarily attributable to $117.1 of principal payments and maturities on available-for-sale securities, partially offset by $89.3 million of net loan originations. Net cash outflows from investing activities during 2023 were primarily attributable to $115.3 million of net loan originations .
Net cash inflows from investing activities during 2024 were primarily attributable to $117.1 of principal payments and maturities on available-for-sale securities, partially offset by $89.2 million of net loan originations.
See Note 1 “Summary of Significant Accounting Policies” to the Company’s Consolidated Financial Statements for further discussion. Office Properties and Equipment, Net Net office properties and equipment decreased by $286 thousand to $8.9 million at December 31, 2024 from $9.2 million as of December 31, 2023.
See Note 1 “Summary of Significant Accounting Policies” to the Company’s Consolidated Financial Statements for further discussion. Office Properties and Equipment, Net Net office properties and equipment decreased by $167 thousand to $8.7 million at December 31, 2025 from $8.9 million as of December 31, 2024.
The effective tax rate for each year differs from the 21% federal statutory rate due to the impact of state taxes as well as various permanent tax differences, vesting of stock-based compensation and other discrete items. Our deferred tax asset totaled $8.8 million at December 31, 2024 and $9.5 million at December 31, 2023.
The effective tax rate for each year differs from the 21% federal statutory rate due to the impact of state and local taxes as well as various permanent tax differences, vesting of stock-based compensation and other discrete items. Our deferred tax assets totaled $6.7 million at December 31, 2025 and $8.9 million at December 31, 2024.
As of December 31, 2024, approximately $268.8 million of our total deposits (including deposits from affiliates) were not insured by FDIC insurance, which represented 32% of total deposits. The Bank’s primary uses of funds include withdrawals of and interest payments on deposits, originations of loans, purchases of investment securities, and the payment of operating expenses.
As of December 31, 2025, approximately $413.5 million of our total deposits (including deposits from affiliates) were not insured by FDIC insurance, which represented 41% of total deposits. The Bank’s primary uses of funds include withdrawals of and interest payments on deposits, originations of loans, purchases of investment securities, and the payment of operating expenses.
In addition, the Bank had additional lines of credit of $10.0 million with other financial institutions as of that date. The Bank has a significant concentration of deposits with five long‑time customers that accounted for approximately 18% of its deposits as of December 31, 2024.
In addition, the Bank had additional lines of credit of $10.0 million with other financial institutions as of that date. 34 Table of Contents The Bank has a significant concentration of deposits with five long‑time customers that accounted for approximately 28% of its deposits as of December 31, 2025.
The Company recorded consolidated net cash outflows from financing activities of $73.4 million and inflows from financing activities of $181.5 million during the years ended December 31, 2024 and 2023, respectively.
The Company recorded consolidated net cash inflows from financing activities of $28.3 million and outflows from financing activities of $73.5 million during the years ended December 31, 2025 and 2024, respectively.
Treasury in 2022 and the private placements completed in December 2016 and April 2021, and dividends received from the Bank in 2023 and 2024. 40 Table of Contents The Company recorded consolidated net cash inflows from operating activities of $1.4 million and $7.6 million during the years ended December 31, 2024 and 2023, respectively.
Treasury in 2022 and the private placements completed in December 2016 and April 2021, and dividends received from the Bank in 2024 and 2025. The Company recorded consolidated net cash inflows from operating activities of $230 thousand and $1.4 million during the years ended December 31, 2025 and 2024, respectively.
The following table outlines the estimated amortization expense related to the core deposit intangible asset during the next five fiscal years and thereafter: (In thousands) 2025 $ 315 2026 304 2027 291 2028 279 2029 267 Thereafter 319 $ 1,775 38 Table of Contents Deposits Deposits at December 31, 2024 were $745.4 million compared to $682.6 million at December 31, 2023.
The following table outlines the estimated amortization expense related to the core deposit intangible asset during the next five fiscal years and thereafter: 32 Table of Contents (In thousands) 2026 $ 304 2027 291 2028 279 2029 267 2030 256 Thereafter 63 $ 1,460 Deposits Deposits at December 31, 2025 were $917.6 million compared to $745.4 million at December 31, 2024.
Depreciation expense was $424 thousand and $385 thousand for the years 2024 and 2023, respectively. Goodwill and Core Deposit Intangible As a result of the Merger, the Company recorded $25.9 million of goodwill.
Depreciation expense was $410 thousand and $424 thousand for the years ended December 31, 2025 and 2024, respectively. Goodwill and Core Deposit Intangible As a result of the Merger, the Company recorded $25.9 million of goodwill.
As of December 31, 2024 and 2023, approximately $268.8 million and $286.4 million of our total deposits were not insured by FDIC insurance.
As of December 31, 2025 and 2024, approximately $413.5 million and $268.8 million of our total deposits were not insured by FDIC insurance.
Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate creditworthiness on a case‑by‑case basis. Our maximum exposure to credit risk is represented by the contractual amount of the instruments.
Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate creditworthiness on a case‑by‑case basis.
Balances of outstanding FHLB advances decreased to $195.5 million at December 31, 2024, from $209.3 million at December 31, 2023, primarily due to repayments of FHLB advances of $352.8 million, partially offset by $339.0 million in advances from the FHLB. The weighted average rate on FHLB advances was 4.03% at December 31, 2024, compared to 4.91% at December 31, 2023.
Balances of outstanding FHLB advances decreased to $72.0 million at December 31, 2025, from $195.5 million at December 31, 2024, primarily due to repayments of FHLB advances of $1.1 billion, partially offset by $955.8 million in advances from the FHLB. The weighted average rate on FHLB advances was 3.79% at December 31, 2025, compared to 4.03% at December 31, 2024.
No loan charge-offs were recorded during the year ended December 31, 2024 or 2023. The Bank recorded a recovery of $216 thousand during the fourth quarter of 2023. We also recorded a recovery of provision for off-balance sheet loan commitments of $91 thousand and $2 thousand for the years ended December 31, 2024 and 2023, respectively.
During the year ended December 31, 2025, we recorded loan charge-offs of $1.2 million. No loan charge-offs were recorded during the year ended December 31, 2024. We also recorded a recovery of provision for off-balance sheet loan commitments of $53 thousand and $91 thousand for the years ended December 31, 2025 and 2024, respectively.
The Bank’s liquid assets at December 31, 2024 consisted of $61.4 million in cash and cash equivalents and $17.6 million in securities available‑for‑sale that were not pledged, compared to $105.2 million in cash and cash equivalents and $186.0 million in securities available‑for‑sale that were not pledged at December 31, 2023.
The Bank’s liquid assets at December 31, 2025 consisted of $10.5 million in cash and cash equivalents and $161.1 million in securities available‑for‑sale that were not pledged, compared to $61.4 million in cash and cash equivalents and $17.6 million in securities available‑for‑sale that were not pledged at December 31, 2024.
Loan repayments during 2023 totaled $47.2 million. 37 Table of Contents Allowance for Credit Losses Effective January 1, 2023, the Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination or acquisition.
Loan repayments during 2024 totaled $72.4 million. Allowance for Credit Losses The Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination or acquisition.
The Company recorded consolidated net cash inflows from investing activities of $28.2 million and outflows from investing activities of $100.0 million during the years ended December 31, 2024 and 2023, respectively.
The Company recorded consolidated net cash outflows from investing activities of $79.4 million and inflows from investing activities of $28.3 million during the years ended December 31, 2025 and 2024, respectively.
Interest income on securities decreased by $1.7 million to $7.0 million for the year ended December 31, 2024, compared to $8.7 million for the year ended December 31, 2023. The decrease in interest income on securities primarily resulted from a decrease of $59.5 million in the average balance of securities, which decreased interest income by $1.6 million.
Interest income on securities decreased by $622 thousand to $6.4 million for the year ended December 31, 2025, compared to $7.0 million for the year ended December 31, 2024. The decrease in interest income on securities primarily resulted from a decrease of $55.2 million in the average balance of securities, which decreased interest income by $2.4 million.
Comparison of Financial Condition at December 31, 2024 and 2023 Securities Available-For-Sale As of December 31, 2024, we had $203.9 million of investment securities classified as available-for-sale, compared to $317.0 million at December 31, 2023. The decrease during 2024 was primarily due to principal payments and maturities.
Comparison of Financial Condition at December 31, 2025 and 2024 Securities Available-For-Sale As of December 31, 2025, we had $256.8 million of investment securities classified as available-for-sale, compared to $203.9 million at December 31, 2024. The increase during 2025 was primarily due to purchases of investment securities.
The Company recorded an income tax expense of $814 thousand for the year ended December 31, 2024, representing an effective tax rate of 29.4%, compared to an income tax expense of $2.0 million for the year ended December 31, 2023, representing an effective tax rate of 30.4%.
The Company recorded an income tax expense of $338 thousand for the year ended December 31, 2025, representing an effective tax rate of (1.4)%, compared to an income tax expense of $815 thousand for the year ended December 31, 2024, representing an effective tax rate of 29.4%.
The following table summarizes the return on average assets, the return on average equity and the average equity to average assets ratios for the periods indicated: For the Years Ended December 31, 2024 2023 2022 Return on average assets 0.14 % 0.37 % 0.52 % Return on average equity 0.69 % 1.62 % 2.19 % Average equity to average assets 20.58 % 22.60 % 23.60 % Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 General Our most significant source of income is net interest income, which is the difference between our interest income and our interest expense.
The following table summarizes the return on average assets, the return on average equity and the average equity to average assets ratios for the periods indicated: For the Years Ended December 31, 2025 2024 2023 Return on average assets (1.90 )% 0.14 % 0.34 % Return on average equity (8.85 )% 0.69 % 1.56 % Average equity to average assets 21.49 % 20.10 % 22.05 % 28 Table of Contents Comparison of Operating Results for the Years Ended December 31, 2025 and 2024 General Our most significant source of income is net interest income, which is the difference between our interest income and our interest expense.
Income Taxes Income tax expense or benefit is computed by applying the statutory federal income tax rate of 21%. State taxes are recorded at the State of California tax rate and Washington, D.C. tax rate, according to the state apportionment calculation as the Bank’s operations are conducted in both California and the Washington, D.C. area.
State and local taxes are recorded at the State of California tax rate and Washington, D.C. tax rate, according to the state apportionment calculation as the Bank’s operations are conducted in both California and the Washington, D.C. area.
Tangible book value per common share is a non-GAAP measurement that excludes goodwill and the net unamortized core deposit intangible asset, which were both originally recorded in connection with the Merger.
Tangible book value per common share is a non-GAAP measurement that excludes goodwill and the net unamortized core deposit intangible asset, which were both originally recorded in connection with the CFBanc merger. The Company uses this non-GAAP financial measure to provide supplemental information regarding the Company’s financial condition and operational performance.
See “Allowance for Credit Losses” for additional information. Non‑Interest Income For the year ended December 31, 2024, non-interest income totaled $1.6 million, compared to $5.4 million for the year-ended December 31, 2023.
See “Allowance for Credit Losses” for additional information. Non‑Interest Income For the year ended December 31, 2025, non-interest income totaled $1.8 million, compared to $1.6 million for the year-ended December 31, 2024. Non‑Interest Expense Non-interest expenses totaled $57.2 million for the year ended December 31, 2025, compared to $29.9 million for the year ended December 31, 2024.
The average cost of deposits increased to 2.24% for 2024, compared to 1.30% for 2023, which increased interest expense by $5.0 million. 34 Table of Contents Interest expense on borrowings increased by $7.0 million to $17.3 million during the year ended December 31, 2024, compared to $10.3 million during the year ended December 31, 2023.
The average cost of deposits increased to 2.77% for 2025, compared to 2.24% for 2024, which increased interest expense by $2.7 million. Interest expense on borrowings decreased by $10.8 million to $8.2 million during the year ended December 31, 2025, compared to $19.0 million during the year ended December 31, 2024.
The following table sets forth information regarding changes in our interest income and expense for the years indicated. Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the total change.
Information is provided in each category with respect to (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the total change.
Diluted earnings per common share was $0.04 for the year ended December 31, 2024 compared to $0.51 of earnings per diluted common share for the year ended December 31, 2023. Diluted earnings per share for the year ended December 31, 2024 reflects preferred dividends of $0.18 per diluted common share.
Loss per diluted common share was ($3.23) for the year ended December 31, 2025, compared to $0.04 of earnings per diluted common share for the year ended December 31, 2024.
Interest expense on deposits increased by $5.7 million during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to an increase of 94 basis points in the average cost of deposits.
Interest expense on deposits increased by $6.7 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily due to a $128.9 million increase in the average balance of deposits, which increased interest expense by $4.1 million, as well as an increase of 53 basis points in the average cost of deposits.
The estimated life of the core deposit intangible is approximately 10 years. During the year ended December 31, 2024, the Company recorded $336 thousand of amortization expense related to the core deposit intangible asset.
During the year ended December 31, 2025, the Company recorded $315 thousand of amortization expense related to the core deposit intangible asset.
The increase in deposits of $62.8 million was primarily caused by an increase in Insured Cash Sweep (“ICS”) deposits. Five customer relationships accounted for approximately 18% of our deposit balances at December 31, 2024. We expect to maintain these relationships with these customers for the foreseeable future.
The increase in deposits of $172.2 million was primarily caused by increases in money market deposits and certificates of deposit. Five customer relationships accounted for approximately 28% of our deposit balances at December 31, 2025. We expect to maintain these relationships with these customers for the foreseeable future.
In addition to our lending commitments, we have contractual obligations related to operating lease commitments. Operating lease commitments are obligations under various non‑cancellable operating leases on buildings and land used for office space and banking purposes. The following table details our contractual obligations at December 31, 2024.
Our maximum exposure to credit risk is represented by the contractual amount of the instruments. 35 Table of Contents In addition to our lending commitments, we have contractual obligations related to operating lease commitments. Operating lease commitments are obligations under various non‑cancellable operating leases on buildings and land used for office space and banking purposes.
Borrowings Total borrowings at December 31, 2024 consisted of advances to the Bank from the FHLB of $195.5 million and repurchase agreements of $66.6 million, compared to advances from the FHLB of $209.3 million, repurchase agreements of $73.5 million and borrowings associated with the BTFP of $100.0 million at December 31, 2023.
Borrowings Total borrowings at December 31, 2025 consisted of advances to the Bank from the FHLB of $72.0 million and repurchase agreements of $80.8 million, compared to advances from the FHLB of $195.5 million, repurchase agreements of $66.6, and secured borrowings of $31.4 million at December 31, 2024.
The Bank is currently approved by the FHLB of Atlanta to borrow up to 25% of total assets to the extent the Bank provides qualifying collateral and holds sufficient FHLB stock. This approved limit and collateral requirement would have permitted the Bank to borrow an additional $174.3 million at December 31, 2024 based on pledged collateral.
The Bank is currently approved by the FHLB of Atlanta to borrow up to 25% of total assets to the extent the Bank provides qualifying collateral and holds sufficient FHLB stock. At December 31, 2025, the Bank had $243.3 million of credit available.
Our ACL was $8.1 million or 0.83% of our gross loans receivable held for investment at December 31, 2024 compared to $7.3 million, or 0.83% of our gross loans receivable held for investment at December 31, 2023. The increase was primarily due to growth in the loan portfolio.
Our ACL was $9.4 million or 0.92% of our gross loans receivable held for investment at December 31, 2025 compared to $8.4 million, or 0.83% of our gross loans receivable held for investment at December 31, 2024. The increase was primarily due to an increase in specific reserves on collateral dependent loans.
Less Than One Year More Than One Year to Three Years More Than Three Years to Five Years More Than Five Years Total (Dollars in thousands) Certificates of deposit $ 201,342 $ 10,186 $ 1,275 $ 36 $ 212,839 FHLB advances 195,532 – – – 195,532 Commitments to originate loans 6,255 – – – 6,255 Commitments to fund construction loans 40,724 – – – 40,724 Commitments to fund unused lines of credit 3,659 – – – 3,659 Operating lease obligations 242 182 – – 424 Total contractual obligations $ 447,754 $ 10,368 $ 1,275 $ 36 $ 459,433 Impact of Inflation and Changing Prices Our consolidated financial statements, including accompanying notes, have been prepared in accordance with GAAP which require the measurement of financial position and operating results primarily in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation.
Less Than One Year More Than One Year to Three Years More Than Three Years to Five Years More Than Five Years Total (Dollars in thousands) Certificates of deposit $ 294,642 $ 4,994 $ 98 $ – $ 299,734 FHLB advances 72,000 – – – 72,000 Commitments to originate loans 2,095 – – – 2,095 Commitments to fund construction loans 19,253 – – – 19,253 Commitments to fund unused lines of credit 3,050 – – – 3,050 Operating lease obligations 249 542 542 293 1,626 Total contractual obligations $ 391,289 $ 5,536 $ 640 $ 293 $ 397,758 Impact of Inflation and Changing Prices Our consolidated financial statements, including accompanying notes, have been prepared in accordance with GAAP which require the measurement of financial position and operating results primarily in terms of historical dollars without considering the changes in the relative purchasing power of money over time due to inflation.
The increase was primarily due to an increase in the average balance of outstanding Bank Fund Term Program borrowings of $91.5 million, which increased interest expense by $4.7 million, and a $22.6 million increase in the average balance of FHLB advances, which increased interest expense by $1.1 million.
The decrease was primarily due to a $108.9 million decrease in the average outstanding balance of borrowings, which decreased interest expense by $4.9 million, and a decrease in the average balance of outstanding Bank Fund Term Program borrowings of $92.3 million.
Net Interest Income For the year ended December 31, 2024, net interest income before provision for credit losses increased by $2.3 million, or 7.8%, to $31.8 million, compared to $29.5 million for the year ended December 31, 2023.
Net Interest Income For the year ended December 31, 2025, net interest income before provision for credit losses increased by $1.4 million, or 4.3%, to $33.1 million, compared to $31.8 million for the year ended December 31, 2024. The increase resulted from lower interest expense of $4.0 million, partially offset by a decrease in interest income of $2.7 million.
This increase was primarily due to a $138.8 million increase in the average balance of loans receivable which increased interest income by $6.9 million. In addition, the average loan yield increased from 4.59% for the year ended December 31, 2023, to 5.15% for the year ended December 31, 2024, which increased interest income by $4.8 million.
Interest income and fees on loans receivable increased by $2.5 million during the year ended December 31, 2025, compared to the year ended December 31, 2024. This increase was primarily due to a $28.7 million increase in the average balance of loans receivable which increased interest income by $1.5 million.
Management will continue to monitor events that could influence this conclusion in the future. See Note 7 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data” for further information. The Company’s accounting policies and discussion of recent accounting pronouncements is included in Note 1 to the Consolidated Financial Statements in “Item 8.
The Company’s accounting policies and discussion of recent accounting pronouncements is included in Note 1 to the Consolidated Financial Statements in “Item 8. Financial Statements and Supplementary Data.”
The Company performed its qualitative and quantitative assessment as of September 30, 2024. The Company recorded $3.3 million of core deposit intangible asset as a result of the Merger. The core deposit intangible asset is amortized on an accelerated basis reflecting the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up.
The core deposit intangible asset is amortized on an accelerated basis reflecting the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up. The estimated life of the core deposit intangible is approximately 10 years.
Other interest income increased by $5.0 million in 2024, compared to the same period in 2023, primarily due to an increase of $87.9 million in the average balance of interest-earnings deposits, which increased interest income by $4.6 million during the year ended December 31, 2024, compared to the year ended December 31, 2023.
Other interest income decreased by $4.5 million in 2025, compared to the same period in 2024, primarily due to a decrease of $72.8 million in the average balance of interest-earnings deposits, which decreased interest income by $3.3 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, as well as a 96 basis points decrease in the average interest yield earned on interest-earnings deposits, which decreased other income by $837 thousand.
As of December 31, 2024, securities sold under agreements to repurchase totaled $66.6 million at an average rate of 3.62%. These agreements mature on a daily basis. The fair value of securities pledged totaled $83.3 million as of December 31, 2024 and included $46.5 million of U.S.
In other words, there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities. As of December 31, 2025, securities sold under agreements to repurchase totaled $80.8 million at an average rate of 3.66%. These agreements mature on a daily basis. The fair value of securities pledged totaled $83.7 million as of December 31, 2025.
Goodwill acquired in a purchase business combination that is determined to have an indefinite useful life is not amortized, but is tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. No impairment charges were recorded during 2024 for goodwill impairment.
Goodwill acquired in a business combination is considered to have an indefinite useful life and is not amortized, but is tested for impairment at least annually or more frequently if events or changes in circumstances indicate that impairment may exist. The Company engaged a third-party valuation specialist to perform its annual goodwill impairment test as of September 30, 2025.
Net income attributable to common stockholders was $359 thousand for the year ended December 31, 2024 after deducting preferred dividends of $1.6 million, compared to net income attributable to common stockholders of $4.5 million for the year ended December 31, 2023.
For the year ended December 31, 2025, the Company reported consolidated net loss attributable to common stockholders of $27.8 million after preferred dividends of $3.0 million and goodwill impairment of $25.9 million, compared to net income attributable to common stockholders of $362 thousand for the year ended December 31, 2024 after preferred dividends of $1.6 million.
Net cash inflows from financing activities during 2023 were primarily attributable to $456.1 million of proceeds from FHLB advances and $100.0 million of proceeds from the BTFP, partially offset by $375.1 million of FHLB repayments.
Net cash inflows from financing activities during 2025 were primarily attributable to $955.8 million of proceeds from FHLB advances and a $172.2 million increase in deposits, partially offset by $1.1 billion of FHLB repayments and $31.4 million of repayments of other borrowings.
The increase of $88.4 million in loans receivable held for investment during 2024 was primarily due to originations of $157.7 million in new loans, $80.9 million of which were multi-family loans, $50.8 million in commercial real estate loans, $17.6 million in other commercial loans, $7.6 million in construction loans, and $800 thousand in SBA loans.
Loan repayments during 2025 totaled $36.6 million. 31 Table of Contents During 2024, the Bank originated $160.9 million in new loans, $80.9 million of which were multi-family loans, $50.8 million of which were commercial real estate loans, $19.4 million of which were other commercial loans, $8.9 million of which were construction loans, and $800 thousand of which were SBA loans.
Under these arrangements, the Bank may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Bank to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities.
The Bank enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Bank may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Bank to repurchase the assets.
(4) Net interest rate margin represents net interest income as a percentage of average interest‑earning assets. 35 Table of Contents Changes in our net interest income are a function of changes in both rates and volumes of interest earning assets and interest-bearing liabilities.
Changes in our net interest income are a function of changes in both rates and volumes of interest earning assets and interest-bearing liabilities. The following table sets forth information regarding changes in our interest income and expense for the years indicated.
Our non-performing loans consist of delinquent loans that are 90 days or more past due and other loans, including loans modified in response to a borrower’s financial difficulty, that do not qualify for accrual status. At December 31, 2024, NPLs totaled $264 thousand compared to $0 at December 31, 2023.
Our non-performing loans (“NPLs”) consist of delinquent loans that are 90 days or more past due and non-accrual loans. At December 31, 2025, non-performing loans totaled $11.2 million compared to $264 thousand at December 31, 2024. The Bank did not have any REO at December 31, 2025 or 2024.
The obligation to repurchase the securities is reflected as a liability in the Bank’s consolidated statements of financial condition, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities.
As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Bank’s consolidated statements of financial condition, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts.
Loans Receivable Held for Investment Loans receivable held for investment, net of the allowance for credit losses, totaled $968.9 million at December 31, 2024, compared to $880.5 million at December 31, 2023.
Loans Receivable Held for Investment Loans receivable held for investment, net of the allowance for credit losses, totaled $1.0 billion at December 31, 2025, compared to $1.0 billion at December 31, 2024. The increase of $16.6 million in loans receivable held for investment during 2025 was primarily due to originations of $45.6 million in new loans.
The decrease in total liabilities during 2024 resulted primarily from decreases in borrowings of $100.0 million from the Bank Fund Term Program, as well as decreases of $14.0 million in notes payable, $13.8 million in FHLB advances and $6.9 million in securities sold under agreements to repurchase, offset by a net $62.8 million increase in total deposits.
Total liabilities increased by $32.9 million to $1.1 billion at December 31, 2025 from $1.0 billion at December 31, 2024. The increase in total liabilities during 2025 resulted primarily from an increase in deposits of $172.2 million and a $14.2 million increase in securities sold under agreements to repurchase, partially offset by a $154.9 million decrease in borrowings.
The sensitivity of a range of reasonable discount rates based on the current economic environment is considered. Our quantitative annual impairment tests as of September 30, 2024 and 2023 did not result in impairment.
The sensitivity of a range of reasonable discount rates based on the current economic environment is considered. The Company engaged a third-party valuation specialist to perform its annual goodwill impairment test as of September 30, 2025.
We recorded net income attributable to Broadway of $1.9 million for the year ended December 31, 2024 or $0.04 per share compared to net income of $4.5 million or $0.52 per share for the year ended December 31, 2023.
Consolidated net income before preferred dividends and goodwill impairment was $1.1 million, or $0.12 per diluted share, for the year ended December 31, 2025, compared to consolidated net income of $1.9 million, or $0.22 per diluted share, for the year ended December 31, 2024.
(2) Includes non‑accrual interest of $102 thousand, reflecting interest recoveries on non‑accrual loans that were paid off for the year ended December 31, 2022. (3) Net interest rate spread represents the difference between the yield on average interest‑earning assets and the cost of average interest‑bearing liabilities.
(2) Net interest rate spread represents the difference between the yield on average interest‑earning assets and the cost of average interest‑bearing liabilities. (3) Net interest rate margin represents net interest income as a percentage of average interest‑earning assets.
A reconciliation between common book value (calculated in accordance with GAAP) and tangible book value per common share December 31, 2024 is shown as follows: Common Equity Capital Shares Outstanding Per Share Amount (Dollars in thousands) Common book value $ 135,157 9,120,363 $ 14.82 Less: Goodwill 25,858 Net unamortized core deposit intangible 1,775 Tangible book value $ 107,524 9,120,363 $ 11.79 Capital Resources Our principal subsidiary, City First, must comply with capital standards established by the OCC in the conduct of its business.
A reconciliation between common book value and tangible book value per common share is shown as follows: 33 Table of Contents Common Equity Capital Shares Outstanding Per Share Amount December 31, 2025 (Dollars in thousands) Common book value $ 112,751 9,180,498 $ 12.28 Less: Goodwill - Net unamortized core deposit intangible 1,460 Tangible book value $ 111,291 9,180,498 $ 12.12 Common Equity Capital Shares Outstanding Per Share Amount December 31, 2024 (Dollars in thousands) Common book value $ 134,973 9,120,363 $ 14.80 Less: Goodwill 25,858 Net unamortized core deposit intangible 1,775 Tangible book value $ 107,340 9,120,363 $ 11.77 The Company calculates net income before preferred dividends and goodwill impairment by adding preferred stock dividends and goodwill impairment to net (loss) income available to common shareholders.
In addition, we had a decrease of 2 basis points in the average interest yield earned on investment securities during 2024, which decreased interest income by $71 thousand.
This decrease was partially offset by an increase of 41 basis points in the average interest yield earned on investment securities during 2025, which increased interest income by $1.7 million.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 Increase (Decrease) in Net Interest Income Increase (Decrease) in Net Interest Income Due to Volume Due to Rate Total Due to Volume Due to Rate Total (In thousands) Interest‑earning assets: Interest‑earning deposits $ 4,627 $ 223 $ 4,850 $ (2,536 ) $ 1,432 $ (1,104 ) Securities (1,592 ) (71 ) (1,663 ) 1,753 1,348 3,101 Loans receivable, net 6,825 4,839 11,664 6,027 2,384 8,411 FRB and FHLB stock 106 24 130 559 (8 ) 551 Total interest‑earning assets 9,966 5,015 14,981 5,803 5,156 10,959 Interest‑bearing liabilities: Money market deposits 370 2,290 2,660 (580 ) 3,561 2,981 Savings deposits (11 ) 238 227 (6 ) 95 89 Interest checking and other demand deposits (113 ) 302 189 (4 ) 144 140 Certificate accounts 415 2,180 2,595 (94 ) 2,292 2,198 Total deposits 661 5,010 5,671 (684 ) 6,092 5,408 FHLB advances 1,081 155 1,236 3,807 3,453 7,260 BTFP borrowing 4,744 3 4,747 40 – 40 Other borrowings 217 803 1,020 51 1,598 1,649 Total borrowings 6,042 961 7,003 3,898 5,051 8,949 Total interest‑bearing liabilities 6,703 5,971 12,674 3,214 11,143 14,357 Change in net interest income $ 3,263 $ (956 ) $ 2,307 $ 2,589 $ (5,987 ) $ (3,398 ) Provision for Credit Losses During the year ended December 31, 2024, we recorded a provision for credit losses of $664 thousand, compared to a provision for credit losses of $933 thousand during the same period in 2023.
The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate. 30 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Increase (Decrease) in Net Interest Income Increase (Decrease) in Net Interest Income Due to Volume Due to Rate Total Due to Volume Due to Rate Total (In thousands) Interest‑earning assets: Interest‑earning deposits $ (3,319 ) $ (837 ) $ (4,156 ) $ 4,627 $ 223 $ 4,850 Securities (2,356 ) 1,734 (622 ) (1,592 ) (71 ) (1,663 ) Loans receivable, net 1,475 1,030 2,505 6,952 4,819 11,771 FRB and FHLB stock (294 ) (97 ) (391 ) 106 24 130 Total interest‑earning assets (4,494 ) 1,830 (2,664 ) 10,093 4,995 15,088 Interest‑bearing liabilities: Money market deposits (2,460 ) (3,001 ) (5,461 ) 370 2,290 2,660 Savings deposits (63 ) (94 ) (157 ) (11 ) 238 227 Interest checking and other demand deposits 3,234 4,058 7,292 (113 ) 302 189 Certificate accounts 3,338 1,735 5,073 415 2,180 2,595 Total deposits 4,049 2,698 6,747 661 5,010 5,671 Borrowings (4,930 ) (827 ) (5,757 ) 1,191 152 1,343 BTFP borrowing (2,394 ) (2,394 ) (4,788 ) 4,744 3 4,747 Securities sold under agreements to repurchase (273 ) 29 (244 ) 217 803 1,020 Total borrowings (7,597 ) (3,192 ) (10,789 ) 6,152 958 7,110 Total interest‑bearing liabilities (3,548 ) (494 ) (4,042 ) 6,813 5,968 12,781 Change in net interest income $ (946 ) $ 2,324 $ 1,378 $ 3,280 $ (973 ) $ 2,307 Provision for Credit Losses During the year ended December 31, 2025, we recorded a provision for credit losses of $2.2 million, compared to a provision for credit losses of $660 thousand during the same period in 2024.
Overview Total assets decreased by $71.7 million to $1.3 billion at December 31, 2024, compared to $1.4 billion at December 31, 2023, reflecting decreases in securities available-for-sale of $113.1 million, primarily due to maturities and paydowns, and cash and cash equivalents of $43.8 million, primarily due to repayments of borrowings.
Overview Total assets increased by $10.7 million to $1.3 billion at December 31, 2025, compared to $1.3 billion at December 31, 2024, reflecting an increase in securities available-for-sale of $53.0 million, primarily due to purchases, an increase in bank owned life insurance of $20.3 million, due to purchases, and an increase in loans held for investment, net of $16.6 million, primarily due to loan purchases.
The Bank did not have any REO at December 31, 2024 or 2023. There were no loans that were modified in response to a borrower’s financial difficulty during 2024 or 2023.
During the years ended December 31, 2025 and 2024, loans of $3.1 million and $5.9 million, respectively, were modified in response to a borrower’s financial difficulty.
This increase was partially offset by an improvement of 61 basis points in the average yield earned on average interest-earning assets. Analysis of Net Interest Income Net interest income is the difference between income on interest earning assets and the expense on interest-bearing liabilities.
In addition, the average cost of funds decreased from 3.23% for the year ended December 31, 2024 to 3.07% for the year ended December 31, 2025. Analysis of Net Interest Income Net interest income is the difference between income on interest earning assets and the expense on interest-bearing liabilities.
The decrease in net income attributable to the Company during the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily resulted from a decrease in non-interest income of $3.8 million, related to grant income received from the Equitable Recovery Program administered by the U.S.
The $28.2 million decrease in consolidated net income attributable to common stockholders during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily resulted from the goodwill impairment of $25.9 million and an increase in preferred dividends of $1.4 million.
Removed
These decreases were partially offset by growth in net loans of $88.4 million during the year ended December 31, 2024. Total liabilities decreased by $75.0 million to $1.0 billion at December 31, 2024 from $1.1 billion at December 31, 2023.
Added
These increases were partially offset by a decrease in cash and cash equivalents of $50.9 million, primarily due to repayments of borrowings, a $25.9 million goodwill impairment charge recorded in the third quarter of 2025, and a decrease in FHLB stock of $5.2 million.
Removed
Treasury’s Community Development Financial Institutions (“CDFI”) Fund in 2023, and an increase in non-interest expense of $2.5 million, partially offset by an increase in net interest income after provision for credit losses of $2.6 million, and a decrease in tax expense of $1.2 million.
Added
Diluted loss per common share for the year ended December 31, 2025 reflects preferred dividends of ($0.35) per diluted common share and goodwill impairment of ($3.01) per diluted common share. “Net income before preferred dividends and goodwill impairment” and “Earnings per common share – diluted before preferred dividends and goodwill impairment” are considered to be non-GAAP measures.
Removed
The increase resulted from higher interest income of $15.0 million, partially offset by an increase in interest expense of $12.7 million. 33 Table of Contents Interest income and fees on loans receivable increased by $11.7 million during the year ended December 31, 2024, compared to the year ended December 31, 2023.
Added
See “Use of Non-GAAP Financial Measures” section of this Form 10-K for a reconciliation of these amounts to the associated GAAP financial measure.
Removed
Further, a 102 basis point increase in the average rate paid on securities sold under agreements to repurchase increased interest expense by $803 thousand.
Added
In addition, the average loan yield increased from 5.15% for the year ended December 31, 2024, to 5.26% for the year ended December 31, 2025, which increased interest income by $1.0 million.
Removed
The net interest margin decreased to 2.40% for the year ended December 31, 2024 from 2.55% for the year ended December 31, 2023, primarily due to the average cost of funds increasing to 3.16% for the year ended December 31, 2024 from 2.15% for the year ended December 31, 2023 due to rate increases by the Federal Reserve.
Added
The net interest margin increased to 2.64% for the year ended December 31, 2025 from 2.34% for the year ended December 31, 2024, due to an increase in the average yield earned on average interest-earning assets from 4.70% for the year ended December 31, 2024 to 4.88% for the year ended December 31, 2025.
Removed
We do not accrue interest on loans that are on non-accrual status; however, the balance of these loans is included in the total average balance, which has the effect of reducing average loan yields.

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