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Broadway Financial Corporation Announces Credit Agreement with ESOP
LOS ANGELES--(BUSINESS WIRE)-- Broadway Financial Corporation (“Broadway”, “we”, or the “Company”) (NASDAQ Capital Market: BYFC), announced today that the
About this update from Broadway Financial Corporation
[{"type":"text","content":" LOS ANGELES--(BUSINESS WIRE)--\nBroadway Financial Corporation (“Broadway”, “we”, or the “Company”) (NASDAQ Capital Market: BYFC), announced today that the Board of Directors of the Company (the “Board of Directors”) has approved extending a series of loans from time to time aggregating up to $5 million to the City First Bank, National Association Employee Stock Ownership Trust, which was established by the City First Bank, National Association Employee Stock Ownership Plan (collectively, the “ESOP”), for the purpose of purchasing shares of the Company’s common stock from time to time in open market purchase or private sales, with the first of such loans to be in the amount of $0.5 million.\n\nThese loans will help increase the ownership of the Company by its employees in a non-dilutive manner and improve the Company’s ability to retain and recruit employees. As previously disclosed, Broadway has plans to use the $150 million of equity capital raised in June this year to further accelerate its growth, which will require recruiting more employees over time. Management believes that direct, long-term equity incentives are a valuable tool in retaining and recruiting employees and consistent with Broadway’s policy of increasing the alignment of the interests of its employees with those of its stockholders.\n\nIn addition, these purchases are intended to recoup a substantial portion, if not all, of the dilution in employee ownership that occurred in connection with the merger of CFBanc Corporation with and into Broadway (the “Merger”) and subsequent private placements of common stock in April 2021, as previously disclosed. Currently, the ESOP holds approximately 2.2% of the Company’s total outstanding common stock, representing approximately 3.3% of its outstanding Class A voting shares. In contrast, the ESOP held almost 5.9% of Broadway’s total outstanding common stock, representing approximately 8.6% of Broadway’s outstanding voting shares, immediately prior to the Merger.\n\nThe first loan was funded by Broadway on Monday, December 19, 2022. The timing and amounts of each of the remaining loans will depend on market conditions, trading volumes, and Company common stock prices; however, the Board of Directors believes that the Company’s shares are currently undervalued as the Company’s common stock is currently trading below tangi...