Business
Broadway Issues $150 million of Preferred Stock to the U.S. Department of the Treasury Under the Emergency Capital Investment Program
LOS ANGELES--(BUSINESS WIRE)-- Broadway Financial Corporation (“Broadway”, “we” or the “Company”) (NASDAQ Capital Market: BYFC), announced that the Company
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 that the Company completed a private placement of $150 million of Senior Non-Cumulative Perpetual Preferred Stock, Series C (the “Preferred Stock”), to the United States Department of the Treasury (the “U.S. Treasury”) pursuant to the Emergency Capital Investment Program (“ECIP”).\n\nThe ECIP investment by the U.S. Treasury is part of a program to invest over $8.7 billion into Community Development Financial Institutions and Minority Depository Institutions to provide funding for these institutions to increase access to capital for small and minority-owned businesses and consumers in traditionally underserved markets, such as low-to-moderate income communities, that may have been disproportionately impacted by the economic effects of the COVID-19 pandemic.\n\nDividends on the Preferred Stock are payable in cash quarterly at an annual rate that is dependent on Broadway’s investment of the proceeds within Target Communities in certain types of loans that are consistent with the types of loans that the Company has historically originated. The initial dividend rate is zero percent for the first two years after issuance, and thereafter the floor dividend rate is 0.50% and the ceiling dividend rate is 2.00%. The dividend rate after the initial two years will be reset annually until the tenth anniversary of the issuance of the Preferred Stock and will be based upon the annual change in actual qualified lending relative to a baseline level of qualified lending, expressed as a percentage of the aggregate liquidation amount of the Preferred Stock. The final reset will be based upon the average annual increase in qualified lending over the nine-year period preceding the last reset date, expressed as a percentage of the aggregate liquidation amount. The Preferred Stock has an aggregate liquidation amount of $150 million and is redeemable in whole, or in part, at the option of the Company on any dividend payment date on or after June 15, 2027, subject to certain limitations and exceptions as set forth in the Certificate of Designations for the Preferred Stock.\n\nThe investment by the U.S. Treasury is intended to qualify as Tier 1 Capital. At March 31, 2022, Broadway’s stockholders’ equity was $136.2 mi...