Amendment to Quarterly Report (Form 10-Q/A)

Broadway Financial Corporation (the "Company") is filing this Amendment No. 1 on Form 10-Q/A (this "Form 10-Q/A") to amend and restate certain information included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2025, filed with the Securities and Exchange Commission ("SEC") on July 24, 2025 (the "Original Form 10-Q"). As disclosed in the Company's Current Report on Form 8-K filed with the SEC on October 17, 2025, the Audit Committee of the Board of Directors of the Company, the holding company of City First Bank, National Association ("City First Bank"), based on consultations with the Company's management, concluded that the Company's unaudited interim consolidated financial statements for the quarter ended March 31, 2025 (the "Restated Period"), as previously filed with the SEC, should no longer be relied upon because of an error related to certain loan participation agreements and should therefore be restated. Specifically, the Company determined that several loan participation agreements originated by City First Bank and sold to other financial institutions did not meet the requirements in Accounting Standards Codification Topic 860 to be treated as sales for accounting purposes, and therefore should have been recorded as secured borrowing arrangements. In addition, subsequent to the filing of the Original Form 10-Q, management discovered that an appraisal had been received for a loan that was considered to be collateral dependent prior to the date that the financial statements for the quarter ended March 31, 2025, were available to be issued. This appraisal had not been considered when estimating the amount of expected credit losses for this particular loan as of March 31, 2025.

The related adjustment to the consolidated statements of financial condition for treating such transferred interests as secured borrowing arrangements as of March 31, 2025, is to increase "Loans Receivable Held for Investment" by $21.8 million, to reflect the fact that the transfers did not meet the requirements for sale accounting treatment, and to record a "Secured Borrowing" for the same amounts as a liability. The related adjustments to the consolidated statements of operations and comprehensive income for treating such transferred interests as secured borrowing arrangements for the quarters ended March 31, 2025 and 2024, is to increase interest and fees on loans receivable and interest on borrowings by $427 thousand and $415 thousand, respectively. Net income for the quarters ended March 31, 2025 and 2024, is also impacted by a $1.2 million increase and a $13 thousand decrease in the ACL, respectively, and a $394 thousand increase in income tax benefit and a $3 thousand decrease in income tax benefit, respectively. The related consolidated statements of cash flows adjustments for treating such transferred interests as secured borrowing arrangements for the quarters ended March 31, 2025 and 2024, is to increase "Net change in loans receivable held for investment" by $9.5 million and increase "Net change in loans receivable held for investment" by $299 thousand, respectively, and to decrease the "Proceeds from secured borrowings" by $9.4 million and increase the "Proceeds from secured borrowings" by $1.8 million, respectively, for these adjustments. Net cash provided by operating activities was not impacted by the adjustments for the quarters ended March 31, 2025 and 2024.

This Form 10-Q/A restates amounts included in the Original Form 10-Q. Accordingly, investors should rely only on the financial information and other disclosures regarding the Restated Period that are contained in this Form 10-Q/A, and not on any previously filed reports, earnings releases, or similar communications relating to such period.

For more information regarding the restatement and its impact on our consolidated financial statements, refer to Note 13, Restatement of Previously Issued Consolidated Financial Statements within this Form 10-Q/A.

Items Amended in this Form 10-Q/A

This Form 10-Q/A sets forth the Original Form 10-Q, as amended and restated, in its entirety. Except as required to reflect the restated amounts, related disclosures and updates to the Company's assessment of internal control over financial reporting and disclosure controls and procedures, there were no changes to any other parts of the Original Form 10-Q, and this Form 10-Q/A does not reflect events occurring after the date of the Original Form 10-Q.

The Company is filing this Form 10-Q/A to amend the following items of the Original Form 10-Q:

The exhibit list included in Part II, Item 6 "Exhibits" herein has been amended to contain currently dated certifications from the Company's Chief Executive Officer and Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. In accordance with applicable SEC rules, this Form 10-Q/A also includes an updated signature page.

Except as expressly provided herein, this Form 10-Q/A speaks only as of the date the Original Form 10-Q was filed, and we have not undertaken herein to amend, supplement or update any information contained in the Original Form 10-Q to give effect to any subsequent events. Among other things, forward-looking statements made in the Original Form 10-Q have not been revised to reflect events, results or developments that occurred or facts that became known to us after the date of the Original Form 10-Q. Accordingly, this Form 10-Q/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Form 10-Q.

Internal Control Considerations

In connection with the restatements noted above, management has reassessed the effectiveness of our disclosure controls and procedures and has included applicable disclosures in Part I, Item 4 of this Form 10-Q/A, "Controls and Procedures." Management identified material weaknesses in our internal control over financial reporting as described under "Evaluation of Disclosure Controls and Procedures" in Part I, Item 4 of this Form 10-Q/A, resulting in the conclusion by our Chief Executive Officer and Chief Financial Officer that our disclosure controls and procedures and internal control over financial reporting were not effective as of March 31, 2025. Management has taken and is taking additional steps, as described under "Remediation Plan" in Part I, Item 4 of this Form 10-Q/A, to remediate these material weaknesses in our internal control over financial reporting.