Broadway Financial Corporation (NASDAQ: BYFC) reported a larger loss for the first quarter of 2025. The company had a net loss of $0.14 per share, compared to a loss of $0.02 per share during the same period last year. This loss grew to $451,000 from $164,000, reflecting ongoing challenges in the banking sector.
Even with the larger loss, Broadway Financial showed some operational progress. Revenue increased by 1% to $7.64 million, and net interest income rose 6.9% to $8.0 million. These gains came from reducing borrowings and earning more interest from loans.
The net interest margin improved to 2.70%, which is 43 basis points higher than last year, showing better management of assets and liabilities.
However, higher non-interest expenses impacted the quarter. These expenses rose 5.7% to $8.3 million, mainly due to increased compensation costs, which included $122,000 in severance expenses. The bank hired more staff to strengthen operations.
The provision for credit losses jumped to $689,000, driven by one non-accrual loan, even though non-accrual loans make up only a small percentage (0.09%) of total assets, indicating that overall credit quality is still strong.
On the balance sheet, Broadway Financial showed resilience. Total deposits increased by 4.2% to $776.5 million, and borrowings dropped by 60.1% to $78.0 million, improving the bank’s liquidity and capital. The Community Bank Leverage Ratio rose to 15.36%, well above regulatory minimums, and book value per share climbed to $14.73, supporting long-term stability.
Looking ahead, Broadway Financial faces challenges with rising expenses and credit provisions affecting short-term profits. However, improvements in the net interest margin, deposit growth, and capital ratios suggest the bank is laying the groundwork for recovery.
Investors will closely monitor whether the bank can manage expenses and maintain credit quality in the coming quarters while continuing to serve low-to-moderate-income communities.