Broadway Financial Corporation · NASDAQ:BYFC
Broadway Financial — Shareholder Meeting (June 2023)
28 slides from Broadway Financial's shareholder meeting presentation, Jun 21, 2023
Slide 1: Annual Meeting Presentation
Annual Meeting Presentation June 21, 2023
Slide 2: Cautionary Forward-Looking Statements
Cautionary Forward-Looking Statements This presentation is for informational purposes only and does not purport to include a complete discussion of the topics mentioned and should not be relied upon as a basis for making an investment decision in the Company’s securities. This presentation also incl
Slide 3: Who We Are
WHO WE ARE Largest African American-led Minority Depository Institution in the U.S. • Our Bank Holding Company is Broadway Financial Corporation (“Broadway”) • A Delaware Public Benefit Corporation striving to improve the economic health of the low-to-moderate (“LMI”)* income communities that we ser
Slide 4: Our Differentiated Purpose
OUR DIFFERENTIATED PURPOSE Broadway is one of two publicly traded public benefit corporations in the financial services industry “The corporation will focus on the low- and moderate-income urban communities served in ways that are efficient and profitable, that increase access to credit and capital
Slide 5: Our Business Strategy
OUR BUSINESS STRATEGY Targeted geographic markets District of Columbia, Baltimore and their surrounding communities, The counties of Los Angeles, Ventura, Riverside, Orange, San Diego, San Bernardino and Santa Barbara, California Targeted lending customer segments Multifamily Nonprofit Small Busines
Slide 6: Targeted Lending Customer Segments
TARGETED LENDING CUSTOMER SEGMENTS Multi-family affordable housing • Focus on financing smaller multi-family properties with loans generally ranging from $500K to $6 million for properties with 5 – 50 units • Large banks have difficulty originating and servicing this segment • Demand is extremely hi
Slide 7: Who We Are Not
WHO WE ARE NOT We don’t focus on, or have significant business with: • Venture capital firms, their portfolio companies, or their executives • Start-up or early-stage companies • Advanced technology companies or industries • Cryptocurrency companies or related businesses 6
Slide 8: Loan Portfolio Mix as of March 31, 2023
LOAN PORTFOLIO MIX AS OF MARCH 31, 2023 * Total = $781.8 ($mms) $14.0 ; 2% $40.9 ; 5% $9.9 ; 1% $59.1 ; 8% $148.4 ; 19% $509.5 ; 65% Single-family residential Multi-family residential CRE Other CRE - Construction Church Comm & industrial * Gross Loans Receivable 7
Slide 9: Deposit Mix as of March 31, 2023
DEPOSIT MIX AS OF MARCH 31, 2023 Total $657.5 ($mms) $158.1; 24% $91.8; 14% $407.7; 62% Non-interest bearing deposits MMDA & savings Certificates of deposit 8
Slide 10: Insured Savings for Impact Investors
INSURED SAVINGS FOR IMPACT INVESTORS We offer savings products with insurance beyond the FDIC limit through two programs offered by IntraFi: • CDARs (Certificate of Deposit Account Registry Service) in conjunction with our City First Money Market Accounts of $250,000 • Offers competitive rates and p
Slide 11: Liquidity as of March 31, 2023
LIQUIDITY AS OF MARCH 31, 2023 Total Liquidity Cash and Equivalents $ 29,648 Securities available for sale 329,026 Less: pledged (101,131) Available securities for credit at Federal Reserve 227,895 Subtotal 257,543 Available credit at FHLB 151,953 Other bank lines of credit 10,000 Total Liquidity $
Slide 12: Strong Balance Sheet as of March 31, 2023
STRONG BALANCE SHEET AS OF MARCH 31, 2023 • $280 million in total equity or 23.2% of total assets of $1.2 billion • 15.69% Community Bank Leverage Ratio • No non-accrual loans • $419 million of total liquidity (including borrowing capacity), representing 35% of total assets • 76.0% core* deposits ra
Slide 13: Capitalization as of March 31, 2023
CAPITALIZATION AS OF MARCH 31, 2023 ($000s) Cash and equivalents, plus securities $ 358,674 Debt: Deposits $ 657,542 Securities sold under agreements to repurchase 70,941 FHLB advances 168,810 Other borrowings 14,000 Total debt 911,293 Stockholders' Equity: Non-Cumulative Redeemable Perpetual Prefer
Slide 14: ECIP Preferred Is Attractive Growth Capital
ECIP PREFERRED IS ATTRACTIVE GROWTH CAPITAL The ECIP Preferred has the following attractive terms: • No dividend requirements for two years; thereafter floor rate of 50 basis points and ceiling rate of 2.0% • Dividend rates in years 2 through 10 are based on $ amount of qualified loan originations c
Slide 15: Achievements in 2022
ACHIEVEMENTS IN 2022 Grew total interest income by 46.5% in 2022, compared to 2021 • Net interest income after provisions grew 53.0% in 2022 vs 2021 Increased net interest margins by 76 bp, or 30.4%, during 2022 Grew net loan portfolio by 18.4%, or $119.5 million, during 2022 • Originated over $273
Slide 16: Achievements in 2022 (continued)
ACHIEVEMENTS IN 2022 (continued) Received an “Outstanding” CRA* rating in September 2022; reaffirming City First’s unbroken track record of “Outstanding” ratings • For community development lending from 2019 through 2021 in the D.C. & SoCal markets As of December 31, 2022, we deployed $304 Million i
Slide 17: Achievements in Q1 2023
ACHIEVEMENTS IN Q1 2023 Maintained pristine asset quality • No NPLs and no real estate owned from foreclosures as of March 31, 2023 Adopted ASU 326 for estimating credit losses on loans and securities • Changeover to “CECL” from “ALLL” increased loan reserves by $1.8 million and reduced retained ear
Slide 18: Q1 2023 vs. Q1 2022
Q1 2023 VS. Q1 2022 Grew total interest income by 39.5% in Q1 2023, compared to Q1 2022 • Net interest income after provisions grew 16.5% in Q1 2023 vs Q1 2022 • Have increased total interest income every quarter since the Merger Increased net interest margins by 20 bp, or 7.0% Grew net income by 64
Slide 19: Growing Revenue Stream
GROWING REVENUE STREAM* Quarterly Interest Income $12,000 $11,174 $10,661 $10,000 $9,228 $8,501 $8,011 $8,000 $6,909 $7,182 $6,884 $ in 000s $6,000 $3,777 $4,000 $2,000 $- We have improved our business model since the Merger; quarterly interest income has increased 196% since the Merger and 39.5% in
Slide 20: Improving Asset Utilization
IMPROVING ASSET UTILIZATION* Annualized Net Interest Margin 3.50% 3.26% 3.02% 2.96% 2.89% 3.00% 2.76% 2.50% 2.40% 2.35% 2.50% 2.26% 2.00% 1.50% 1.00% 0.50% 0.00% Our net interest margin increased 30.4% during 2022 as we captured opportunities to improve our asset utilization created by the Merger *
Slide 21: Cost of Funds
COST OF FUNDS* Annualized Cost of Funds 1.39% 1.40% 1.20% 1.00% 0.87% 0.75% 0.80% 0.64% 0.53% 0.60% 0.36% 0.39% 0.40% 0.27% 0.28% 0.20% 0.00% The Merger allowed us to improve our funding mix, which lowered the Bank’s interest expense prior to rate increases implemented by the Federal Reserve * Merge
Slide 22: Growing Profits
GROWING PROFITS* Quarterly Net Income $3,000 $1,854 $2,000 $1,506 $1,573 $1,318 $958 $1,000 $701 $182 $0 ($1,000) $(1,446) ($2,000) ($3,000) $(3,487) ($4,000) 3/31/2021 9/30/2021 3/31/2022 9/30/2022 3/31/2023 Since the Merger, our net income has increased every quarter compared to the comparable per
Slide 23: Growing Profits for Stockholders
GROWING PROFITS FOR STOCKHOLDERS* Quarterly Fully Diluted EPS $0 $0 $0.03 $0.02 $0.02 $0.02 $0.01 $0.01 $0.00 $0 $(0.02) ($0) ($0) $(0.13) ($0) 3/31/2021 9/30/2021 3/31/2022 9/30/2022 3/31/2023 Since the Merger, our EPS has increased every quarter compared to the comparable period in the prior year.
Slide 24: Continue to Build on Our Historic Merger
CONTINUE TO BUILD ON OUR HISTORIC MERGER Completed Merger of Equals with CFBanc Corporation on April 1, 2021 • Building on a 75-year legacy of serving historically excluded urban, minority communities • Broadway was formed in 1946 to provide home loans to minority consumers in south Los Angeles, inc
Slide 25: Growth Since Merger
GROWTH SINCE MERGER* Total Interest Income Increased 195.8%, or over $7.4 million Total Liquidity Increased 27.0%, or over $89 million Total Loans Increased 32.2%, or over $190 million Total Assets Increased 26.3%, or over $251 million Stockholders’ Equity Increased 227.7%, or over $194.3 million *
Slide 26: We Remain Intently Focused On
WE REMAIN INTENTLY FOCUSED ON: Improving asset utilization and productivity Capturing efficiencies and cost savings and scale from the Merger and ECIP financing Enhancing resource aggregation (capital and deposit) Expanding revenue through improved offerings Fusing the operating culture aligned on m
Slide 27: Investment Platform for Impact Investors
INVESTMENT PLATFORM FOR IMPACT INVESTORS We are a leading national investment platform for impact investors and depositors • Largest African-American-led MDI in the U.S. • Bicoastal footprint with operations in Washington, D.C. and Los Angeles • Publicly traded common stock • Quality loan and invest
Slide 28: Annual Meeting Presentation
Annual Meeting Presentation June 21, 2023