Equibles

10-Q

BROADWAY FINANCIAL CORP DE (BYFC)

10-Q 2026-02-13 For: 2025-09-30
View Original
Added on April 06, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE<br> SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES<br> EXCHANGE ACT OF 1934

For transition period from__________ to___________

Commission file number      001-39043

BROADWAY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

Delaware 95-4547287
(State or other jurisdiction of<br><br> <br>incorporation or organization) (I.R.S. Employer<br><br> <br>Identification No.)
4601 Wilshire Boulevard, Suite 150<br><br> <br>Los Angeles, California 90010
--- ---
(Address of principal executive offices) (Zip Code)

(323) 634-1700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act

Title of each class: Trading Symbol(s) Name of each exchange on which registered:
Common Stock, par value $0.01 per share<br><br> <br>(including attached preferred stock purchase rights) BYFC Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒   No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated, a smaller reporting company, or an emerging growth company. See the definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐   No ☒

As of February 9, 2026, 6,082,532 shares of the registrant’s Class A voting common stock, 1,425,404 shares of the registrant’s Class B non-voting common stock and 1,672,562 shares of the registrant’s Class C non-voting common stock were outstanding.

TABLE OF CONTENTS

Page
PART I. FINANCIAL STATEMENTS
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Statements of Financial Condition as of September 30, 2025 and December 31, 2024 1
Consolidated Statements of Operations and Comprehensive (Loss) Income  for the three and nine months ended September 30, 2025 and 2024 2
Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 3
Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2025 and 2024 4
Notes to Unaudited Consolidated Financial Statements 6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27
Item 3. Quantitative and Qualitative Disclosures About Market Risk 38
Item 4. Controls and Procedures 38
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 39
Item 1A. Risk Factors 39
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39
Item 3. Defaults Upon Senior Securities 39
Item 4. Mine Safety Disclosures 39
Item 5. Other Information 39
Item 6. Exhibits 39
Signatures 40

EXPLANATORY NOTE

Broadway Financial Corporation (the “Company”) is restating certain information included in the Company’s Quarterly Report on  Form 10-Q for the three and nine months ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on November 13, 2024. As disclosed in the Company’s Current Report on Form 8-K filed with the SEC on October 17, 2025, the Company’s management, with oversight of the Audit Committee of the Board of Directors of the Company, the holding company of City First Bank, National Association (“City First Bank”), concluded that the Company’s audited consolidated financial statements for the fiscal years ended December 31, 2024 and 2023, and the unaudited interim consolidated financial statements for the quarters ended March 31, 2025, March 31, 2024, June 30, 2024, and September 30, 2024 (collectively, the “Restated Periods”), each 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 - Transfers and Servicing to be treated as sales for accounting purposes, and therefore should have been recorded as secured borrowing arrangements.

The related adjustments to the consolidated statements of operations and comprehensive (loss) income for treating such transferred interests as secured borrowing arrangements for the nine months ended September 30, 2024, is to increase both interest and fees on loans receivable and interest on borrowings by $1.3 million. Net income for the nine months ended September 30, 2024 is also impacted by a $16 thousand increase in the allowance for credit losses and a $111 thousand decrease in income tax expense. The related consolidated statements of cash flows adjustments for treating such transferred interests as secured borrowing arrangements for the nine months ended September 30, 2024, is to decrease “Net change in loans receivable held for investment” by $549 thousand, to record “Proceeds from secured borrowings” of $2.4 million and to record “Repayments of secured borrowings” of $4.2 million for these adjustments.

For more information regarding the restatement and its impact on our consolidated financial statements, refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section included within Part I, Item 7 of the Amendment No. 2 on Form 10-K/A for the year ended December 31, 2024, filed with the SEC on December 23, 2025 (the “Form10-K/A”) and Note 2, Restatement of Previously Issued Consolidated Financial Statements and Note 21, Quarterly Financial Information (Unaudited) of the Notes to Consolidated Financial Statements included within the Form 10-K/A .

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated

                                  Statements of
                                  Financial Condition

(In thousands, except share and per share amounts)

December 31, 2024
Assets:
Cash and due from banks 1,372 $ 2,255
Interest-bearing deposits in other banks 18,359 59,110
Cash and cash equivalents 19,731 61,365
Securities available-for-sale, at fair value (amortized cost of 253,792 and 219,658) 244,005 203,862
Loans receivable held for investment, net of allowance of 10,339 and 8,364 1,013,144 999,956
Accrued interest receivable 5,649 5,001
Federal Home Loan Bank (“FHLB”) stock 6,048 9,637
Federal Reserve Bank (“FRB”) stock 3,543 3,543
Office properties and equipment, net 8,726 8,899
Bank owned life insurance 23,404 3,321
Deferred tax assets, net 8,144 8,880
Core deposit intangible, net 1,539 1,775
Goodwill – 25,858
Other assets 1,632 2,786
Total assets 1,335,565 $ 1,334,883
Liabilities and equity
Liabilities:
Deposits 849,205 $ 745,399
FHLB borrowings 107,500 195,532
Securities sold under agreements to repurchase 76,118 66,610
Secured borrowings 30,166 31,356
Accrued expenses and other liabilities 10,690 10,794
Total liabilities 1,073,679 1,049,691
Non-Cumulative Redeemable Perpetual Preferred stock, Series C; authorized 150,000 shares at September 30, 2025 and December 31, 2024; issued and outstanding 150,000<br> shares at September 30, 2025 and December 31, 2024; liquidation value 1,000 per share 150,000 150,000
Common stock, Class A, 0.01<br> par value, voting; authorized 75,000,000 shares at September 30, 2025 and December 31, 2024; issued 6,410,022 shares at September<br> 30, 2025 and 6,349,455 shares at December 31, 2024; outstanding 6,082,794<br> shares at September 30, 2025 and 6,022,227 shares at December 31, 2024 64 63
Common stock, Class B, 0.01 par value, non-voting; authorized 15,000,000<br> shares at September 30, 2025 and December 31, 2024; issued and outstanding 1,425,404<br> shares at September 30, 2025; issued and outstanding 1,425,574 shares at December 31, 2024 14 14
Common stock, Class C, 0.01 par value, non-voting; authorized 25,000,000 shares at September 30, 2025 and December 31, 2024; issued and outstanding 1,672,562 at September 30, 2025 and December 31, 2024 17 17
Additional paid-in capital 143,230 142,902
(Accumulated deficit) retained earnings (15,343 ) 12,727
Unearned Employee Stock Ownership Plan (“ESOP”) shares (4,025 ) (4,201 )
Accumulated other comprehensive loss, net of tax (6,944 ) (11,223 )
Treasury stock-at cost, 327,228 shares at September 30, 2025 and at December 31, 2024 (5,326 ) (5,326 )
Total Broadway Financial Corporation and Subsidiary equity 261,687 284,973
Non-controlling interest 199 219
Total liabilities and equity 1,335,565 $ 1,334,883

All values are in US Dollars.

See accompanying notes to unaudited consolidated financial statements.

1

Table of Contents

BROADWAY FINANCIAL

    CORPORATION AND SUBSIDIARY

Consolidated Statements of Operations and Comprehensive (Loss) Income

(In thousands, except per share amounts)

(Unaudited)

Three Months Ended<br><br> <br>September 30, Nine<br> Months Ended<br><br> <br>September 30,
2025 2024 2025 2024<br><br> <br>(As Restated)
Interest income:
Interest and fees on loans receivable $ 13,418 $ 13,239 $ 39,360 $ 37,396
Interest on available-for-sale securities 1,690 1,635 4,069 5,586
Other interest income 683 1,735 1,560 4,757
Total interest income 15,791 16,609 44,989 47,739
Interest expense:
Interest on deposits 5,363 3,209 14,441 9,094
Interest on borrowings 1,811 5,070 6,131 14,873
Total interest expense 7,174 8,279 20,572 23,967
Net interest income 8,617 8,330 24,417 23,772
Provision for credit losses 679 408 2,139 1,169
Net interest income after provision for credit losses 7,938 7,922 22,278 22,603
Non-interest income:
Service charges 47 36 131 114
Grants 145 – 275 –
Other 230 380 659 881
Total non-interest income 422 416 1,065 995
Non-interest expense:
Compensation and benefits 4,340 4,432 14,036 13,170
Occupancy expense 505 505 1,530 1,440
Information services 768 754 2,248 2,124
Professional services 624 982 2,112 2,955
Advertising and promotional expense 76 19 183 110
Supervisory costs 161 196 510 589
Corporate insurance 86 27 219 152
Amortization of core deposit intangible 78 84 236 252
Operational loss (recovery) (1,603 ) – 340 –
Goodwill impairment 25,858 – 25,858 –
Other 625 595 1,965 1,892
Total non-interest expense 31,518 7,594 49,237 22,684
(Loss) income before income taxes (23,158 ) 744 (25,894 ) 914
Income tax expense (benefit) 736 206 (54 ) 291
Net (loss) income $ (23,894 ) $ 538 $ (25,840 ) $ 623
Less: Net (loss) income attributable to non-controlling interest (11 ) 22 (20 ) 5
Net (loss) income attributable to Broadway Financial Corporation $ (23,883 ) $ 516 $ (25,820 ) $ 618
Less: Preferred stock dividends 750 750 2,250 817
Net loss attributable to common stockholders $ (24,633 ) $ (234 ) $ (28,070 ) $ (199 )
Other comprehensive income, net of tax:
Unrealized gains on securities available-for-sale arising during the period $ 2,266 $ 5,900 $ 6,009 $ 5,971
Income tax expense 653 1,703 1,730 1,724
Other comprehensive income, net of tax 1,613 4,197 4,279 4,247
Comprehensive (loss) income $ (23,020 ) $ 3,963 $ (23,791 ) $ 4,048
Loss per common share-basic $ (2.86 ) $ (0.03 ) $ (3.27 ) $ (0.02 )
Loss per common share-diluted $ (2.86 ) $ (0.03 ) $ (3.27 ) $ (0.02 )

See accompanying notes to unaudited consolidated financial statements.

2

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of

                                    Cash Flows

(Unaudited)

Nine Months Ended<br><br> <br>September 30,
2025 2024<br><br> <br>(As Restated)
(In thousands)
Cash flows from operating activities:
Net (loss) income $ (25,840 ) $ 623
Adjustments to reconcile net (loss) income to net cash used in operating activities:
Provision for credit losses 2,139 1,169
Depreciation and amortization 307 502
Amortization of deferred loan origination costs 384 370
Net accretion of premiums and discounts on available-for-sale securities (226 ) (674 )
Accretion of purchase accounting marks on loans (201 ) (286 )
Amortization of core deposit intangible 236 252
Director stock compensation expense 168 96
Accretion of premium on FHLB advances – (8 )
Stock-based compensation expense 188 199
ESOP compensation expense 149 137
Earnings on bank owned life insurance (83 ) (34 )
Goodwill impairment 25,858 –
Change in assets and liabilities:
Net change in deferred taxes (994 ) (608 )
Net change in accrued interest receivable (648 ) (806 )
Net change in other assets 1,154 1,331
Net change in accrued expenses and other liabilities (104 ) 1,972
Net cash provided by operating activities 2,487 4,235
Cash flows from investing activities:
Net change in loans receivable held for investment (15,510 ) (88,133 )
Principal payments on available-for-sale securities 83,966 85,106
Purchases of available-for-sale securities (117,874 ) –
Purchase of FHLB stock (8,771 ) (136 )
Proceeds from redemption of FHLB stock 12,360 –
Purchase of office properties and equipment (134 ) (129 )
Purchases of bank owned life insurance (20,000 ) –
Net cash used in investing activities (65,963 ) (3,292 )
Cash flows from financing activities:
Net change in deposits 103,806 (10,387 )
Net change in securities sold under agreements to repurchase 9,508 16,323
Repayment of notes payable – (14,000 )
Cash dividends paid - preferred (2,250 ) (817 )
Proceeds from secured borrowings – 2,367
Repayments of secured borrowings (1,190 ) (4,169 )
Proceeds from FHLB borrowings 549,500 178,367
Repayments of FHLB borrowings (637,532 ) (176,743 )
Net cash provided by (used in) financing activities 21,842 (9,059 )
Net change in cash and cash equivalents (41,634 ) (8,116 )
Cash and cash equivalents at beginning of the period 61,365 105,195
Cash and cash equivalents at end of the period $ 19,731 $ 97,079
Supplemental disclosures of cash flow information:
Cash paid for interest $ 19,928 $ 20,577
Cash paid for income taxes – 317

See accompanying notes to unaudited consolidated financial statements.

3

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Changes

        in
        Equity

(Unaudited)

(As Restated)

Three Months Ended September 30, 2025 and 2024
Preferred<br><br> <br>Stock<br><br> <br>Non-<br><br> <br>Voting Common<br><br> Stock<br><br> Voting Common<br><br> <br>Stock<br><br> <br>Non-<br><br> <br>Voting Additional<br><br> Paid-in<br><br> Capital Accumulated<br><br> <br>Other<br><br> <br>Comprehensive<br><br> <br>Loss, Net (Accumulated<br><br> <br>deficit)<br><br> <br>retained<br><br> <br>earnings Unearned<br><br> <br>ESOP<br><br> <br>Shares Treasury<br><br> Stock Non-<br><br> <br>Controlling<br><br> <br>Interest Total<br><br> Equity
(In thousands)
Balance at June 30, 2025 $ 150,000 $ 64 $ 31 $ 143,266 $ (8,557 ) $ 9,290 $ (4,089 ) $ (5,326 ) $ 210 $ 284,889
Net loss – – – – – (23,883 ) – – (11 ) (23,894 )
Release of unearned ESOP shares – – – (14 ) – – 64 – – 50
Stock-based compensation expense – – – (22 ) – – – – – (22 )
Director stock compensation expense – – – – – – – – – –
Dividends declared and paid - preferred – – – – – (750 ) – – – (750 )
Other comprehensive income, net of tax – – – – 1,613 – – – – 1,613
Balance at September 30, 2025 $ 150,000 $ 64 $ 31 $ 143,230 $ (6,944 ) $ (15,343 ) $ (4,025 ) $ (5,326 ) $ 199 $ 261,886
Balance at June 30, 2024 $ 150,000 $ 64 $ 31 $ 142,690 $ (13,475 ) $ 12,467 $ (4,348 ) $ (5,326 ) $ 177 $ 282,280
Net income – – – – – 516 – – 22 538
Release of unearned ESOP shares – (1 ) – (26 ) – – 73 – – 46
Stock-based compensation expense – – – 84 – – – – – 84
Director stock compensation expense – – – – – – – – – –
Dividends declared and paid - preferred – – – (750 ) – – – – – (750 )
Other comprehensive income, net of tax – – – – 4,197 – – – – 4,197
Balance at September 30, 2024 $ 150,000 $ 63 $ 31 $ 141,998 $ (9,278 ) $ 12,983 $ (4,275 ) $ (5,326 ) $ 199 $ 286,395

See accompanying notes to unaudited consolidated financial statements.

4

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Consolidated Statements of Changes in Equity

(Unaudited)

(As Restated)

Nine Months Ended September 30, 2025 and 2024
Preferred<br><br> <br>Stock<br><br> <br>Non-<br><br> <br>Voting Common<br><br> Stock<br><br> Voting Common<br><br> <br>Stock<br><br> <br>Non-<br><br> <br>Voting Additional<br><br> Paid-in<br><br> Capital Accumulated<br><br> <br>Other<br><br> <br>Comprehensive<br><br> <br>Loss, Net (Accumulated deficit)<br><br> <br>retained<br><br> <br>earnings Unearned<br><br> <br>ESOP<br><br> <br>Shares Treasury<br><br> Stock Non-<br><br> <br>Controlling<br><br> <br>Interest Total<br><br> Equity
(In thousands)
Balance at December 31, 2024 $ 150,000 $ 63 $ 31 $ 142,902 $ (11,223 ) $ 12,727 $ (4,201 ) $ (5,326 ) $ 219 $ 285,192
Net loss – – – – – (25,820 ) – – (20 ) (25,840 )
Release of unearned ESOP shares – – – (27 ) – – 176 – – 149
Stock-based compensation expense – 1 – 187 – – – – – 188
Director stock compensation expense – – – 168 – – – – – 168
Dividends declared and paid - preferred – – – – – (2,250 ) – – – (2,250 )
Other comprehensive income, net of tax – – – – 4,279 – – – – 4,279
Balance at September 30, 2025 $ 150,000 $ 64 $ 31 $ 143,230 $ (6,944 ) $ (15,343 ) $ (4,025 ) $ (5,326 ) $ 199 $ 261,886
Balance at December 31, 2023 $ 150,000 $ 62 $ 31 $ 142,601 $ (13,525 ) $ 12,365 $ (4,492 ) $ (5,326 ) $ 194 $ 281,910
Net income – – – – – 618 – – 5 623
Release of unearned ESOP shares – 1 – (81 ) – – 217 – – 137
Stock-based compensation expense – – – 199 – – – – – 199
Dividends declared and paid - preferred – – – (817 ) – – – – – (817 )
Purchase of unreleased ESOP shares – – – – – – – – – –
Director stock compensation expense – – – 96 – – – – – 96
Other comprehensive income, net of tax – – – – 4,247 – – – – 4,247
Balance at September 30, 2024 $ 150,000 $ 63 $ 31 $ 141,998 $ (9,278 ) $ 12,983 $ (4,275 ) $ (5,326 ) $ 199 $ 286,395

See accompanying notes to unaudited consolidated financial statements.

5

Table of Contents

BROADWAY FINANCIAL CORPORATION AND SUBSIDIARY

Notes

                                  to Unaudited Consolidated Financial Statements

NOTE 1 – Basis of Financial Statement Presentation

The accompanying unaudited consolidated financial statements include Broadway Financial Corporation (the “Company”) and its wholly owned subsidiary, City First Bank, National Association (the “Bank” and, together with the Company, “City First Broadway”). Also included in the unaudited consolidated financial statements are the following subsidiaries of City First Bank: 1432 U Street LLC, Broadway Service Corporation, City First Real Estate LLC, City First Real Estate II LLC, City First Real Estate III LLC, City First Real Estate IV LLC, and CF New Markets Advisors, LLC (“CFNMA”). In addition, CFNMA also consolidates CFC Fund Manager II, LLC; City First New Markets Fund II, LLC; City First Capital IX, LLC; and City First Capital 45, LLC (“CFC 45”) into its financial results. All significant intercompany balances and transactions have been eliminated in consolidation.

The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for quarterly reports on Form 10-Q. These unaudited consolidated financial statements do not include all disclosures associated with the Company’s consolidated annual financial statements included in its Annual Report on Form 10-K/A for the year ended December 31, 2024, as amended (the “2024 Form 10-K/A”) and, accordingly, should be read in conjunction with such audited consolidated financial statements. In the opinion of management, all adjustments (all of which are normal and recurring in nature) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The Company operates one reportable segment — banking. The Company’s chief executive officer is its chief operating decision maker (“CODM”). The CODM assesses operating performance and manages the allocation of resources primarily based on the Company’s consolidated operating results and financial condition. The factors considered in making this determination include all of the banking products and services offered by the Company are available in each branch of the Company, management does not allocate resources based on the performance of different lending or transaction activities, and how information is reviewed by the chief executive officer and other key decision makers. The CODM uses consolidated net income to benchmark the Company against its competitors and to monitor budget to actual results.  As a result, the Company determined that all services offered relate to banking.  Loans, investments, and deposits provide the revenues in the banking operation.  Interest expense, provisions for credit losses and payroll provide the significant expenses in the banking operation.  See the Company’s operating segment information in the  unaudited consolidated statements of financial condition and the unaudited consolidated statements of operations and comprehensive income.

Our accounting policies are described in Note 1 – Summary of Significant Accounting Policies of our audited consolidated financial statements included in the 2024 Form 10-K/A.

Accounting Pronouncements Recently Issued

In November of 2025, the Financial Accounting Standards Board (“FASB”) issued

                                    Accounting Standards Update \(“ASU”\) 2025-08 – Financial Instruments-Credit Losses \(Topic 326\): Purchased Loans.
                                    The amendments in this ASC expand the population of acquired financial assets subject to the “gross-up” approach in Accounting Standards Codification \(“ASC”\) Topic 326. In accordance with this ASC, loans \(excluding
                                    credit card loans\) acquired without evidence of credit deterioration since their origination that are deemed to be “seasoned” \(as defined in the Codification\) are determined to be “purchased seasoned loans” and are
                                    to be accounted for using the gross-up approach at acquisition. Prior to this ASU, for loans that were not determined to be purchased credit deteriorated loans, GAAP required that an allowance for credit losses be
                                    established for purchased loans through a provision for credit losses at the acquisition date. The gross-up approach allows an entity to record the acquisition-date allowance for credit losses for purchased seasoned
                                    loans through an offsetting addition to the amortized cost basis of the loan \(rather than through the provision for credit losses\). The ASU does not impact the accounting for loans that were acquired in periods prior
                                    to adoption of the ASU. The amendments in ASU 2025-08 will become effective for the Company in the first quarter of 2027; early adoption is permitted. The amendments in the ASU will not affect the Company’s
                                    accounting for loans in its portfolio on the date of adoption; however, loans acquired after the adoption date will be accounted for in accordance with the provisions of this ASU.

6

Table of Contents

In December of 2025, the FASB issued ASU 2025-10 – Governments Grants (Topic 832): Accounting for Government Grants Received by Business Entities. Prior to the issuance of this ASU, GAAP did

                                    not provide authoritative guidance about the recognition, measurement, and presentation of a grant received by a business entity from a government. The amendments in this ASU establish the accounting for a government
                                    grant received by a business entity, including guidance for \(1\) a grant related to an asset and \(2\) a grant related to income. The newly issued guidance requires that a government grant received by a business entity
                                    should not be recognized until: \(1\) it is probable that a business entity will comply with the conditions attached to the grant and that the grant will be received; and \(2\) a business entity meets the recognition
                                    guidance for a grant related to an asset or a grant related to income. The ASU also prescribes requirements for the subsequent income recognition, presentation matters, and financial statement disclosures related to
                                    government grants. The guidance in this ASU will be effective for the Company beginning on January 1, 2029. Early adoption is permitted. The requirements in this ASU are similar to the guidance that the Company has
                                    been applying for accounting for government grants by analogy to guidance issued by other accounting standard setters and authoritative bodies. The Company does not expect that the adoption of this guidance will
                                    materially impact its financial condition or results of operations.

In December of 2025, the FASB issued ASU 2025-11 – Interim Reporting (Topic 270): Narrow-Scope Improvements. The amendments in this guidance clarify interim disclosure requirements and the

                                    applicability of ASC 270 by providing a comprehensive list of interim period disclosures that are required by GAAP. The updates in ASU 2025-11 also include a disclosure principal that requires entities to disclose
                                    events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 will become effective for the Company for interim reporting periods beginning in the
                                    first quarter of 2028. Early adoption is permitted. The amendments in this ASU are not expected to have a material effect on the Company’s financial position or results of operations; however, the required
                                    disclosures will be added to the Company’s interim financial statements issued after the effective date.

NOTE 2 – Earnings (Loss) Per Share and Equity (as Restated)

Basic earnings (loss) per share of common stock is computed pursuant to the two-class method by dividing net income (loss) available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed earnings attributable to participating securities by the weighted average common shares outstanding during the period. The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per share of common stock includes the dilutive effect of unvested stock awards and additional potential common shares issuable under stock options. Unvested restricted awards are considered outstanding for this calculation.

The following table shows how the Company computed basic and diluted loss per share of common stock for the periods indicated:

Three Months Ended<br><br> <br>September 30, Nine Months Ended<br><br> <br>September 30,
2025 2024 2025 2024
(In thousands, except share and per share data)
Net (loss) income attributable to Broadway Financial Corporation $ (23,883 ) $ 516 $ (25,820 ) $ 618
Net income attributable to participating securities – – – –
Preferred stock dividends (750 ) (750 ) (2,250 ) (817 )
Net loss available to common stockholders $ (24,633 ) $ (234 ) $ (28,070 ) $ (199 )
Weighted average common shares outstanding for basic earnings per common share 8,617,707 8,520,730 8,581,883 8,386,919
Add: Effects of unvested restricted stock awards – – – –
Weighted average common shares outstanding for diluted earnings per common share 8,617,707 8,520,730 8,581,883 8,386,919
Earnings (loss) per common share - basic $ (2.86 ) $ (0.03 ) $ (3.27 ) $ (0.02 )
Earnings (loss) per common share - diluted $ (2.86 ) $ (0.03 ) $ (3.27 ) $ (0.02 )
Anti-dilutive shares 163,297 163,566 183,074 179,156

Series C, Senior Non-Cumulative Perpetual Preferred Stock

On June 7, 2022, the Company issued 150,000 shares of Series C Preferred Stock with a liquidation preference of $1,000 per share for the capital investment of $150 million from the U.S. Treasury under the Emergency Capital Investment Program (“ECIP”).

The Series C Preferred Stock accrued no dividend for the first 24 months following the investment date. Thereafter, the dividend rate will be adjusted based on the qualified lending growth criteria listed in the terms of the ECIP investment with the annual dividend rate up to 2%. After the tenth anniversary of the investment date, the dividend rate will be fixed based on the average annual amount of lending in years 2 through 10. Dividends are payable quarterly in arrears on March 15, June 15, September 15, and December 15.

7

Table of Contents

Established by the Consolidated Appropriations Act, 2021, the ECIP was created to encourage low- and moderate-income community financial institutions and minority depository institutions to provide loans, grants, and forbearance for small businesses, minority-owned businesses, and consumers, especially low-income and underserved communities, including persistent poverty counties, that may be disproportionately impacted by the economic effect of the COVID-19 pandemic by providing direct and indirect capital investments in low- and moderate-income community financial institutions.

The Series C Preferred Stock may be redeemed at the option of the Company on or after the fifth anniversary of issuance (or earlier in the event of loss of regulatory capital treatment), subject to the approval of the appropriate federal banking regulator and in accordance with the federal banking agencies’ regulatory capital regulations.

On January 14, 2025, the Company entered into a Securities Purchase Option Agreement (the “Option Agreement”) with the U.S. Treasury, which grants the Company the conditional option to repurchase the Series C Preferred Stock during the first 15 years following the Company’s issuance of the Preferred Stock. The purchase price for the Series C Preferred Stock under the Option Agreement is based on a formula approximate to the fair value of the Series C Preferred Stock as of the date the Option Agreement is executed, calculated as set forth in the Option Agreement, together with any accrued and unpaid dividends thereon and could represent a discount from the Preferred Stock’s liquidation amount.

The purchase option may not be exercised during the first 10 years following the Company’s sale of the Series C Preferred Stock (“ECIP Period”) unless and until the Company meets at least one of the following three conditions (the “Threshold Conditions”): (1) an average of at least 60% of the Company’s loan originations qualify as “Deep Impact Lending” over any 16 consecutive quarters, (2) an average of at least 85% of the Company’s “total originations qualify as “Qualified Lending” over any 24 quarters or (3) the Series C Preferred Stock has a dividend rate of no more than 0.5% at each of six consecutive “Reset Dates,” in each case as defined in the Option Agreement and the terms of the Series C Preferred Stock. In addition to satisfying a Threshold Condition, the Option Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Series C Preferred Stock, maintaining qualification as either a certified community development financial institution or a minority depository institution and satisfying other legal and regulatory criteria. The Company may designate a mission aligned nonprofit affiliate as the purchaser of the Series C Preferred Stock under the terms of the Option Agreement.

The earliest possible date by which a Threshold Condition may be met is June 30, 2028, which is the end of the sixteenth consecutive quarter following the Original Closing Date. However, the Company does not currently meet any of the Threshold Conditions to exercise the purchase option, and there can be no assurance if and when the Threshold Conditions will be met.

In addition to the requirement that a Threshold Condition be met, the Repurchase Agreement requires that the Company meet certain other eligibility conditions in order to exercise the purchase option in the future, including compliance with the terms of the original ECIP purchase agreement and the terms of the Preferred Stock, maintaining qualification as either a CDFI or an MDI, and meeting other legal and regulatory criteria. Although the Company currently meets the general eligibility criteria, other than satisfying one of the Threshold Conditions, there can be no assurance that the Company will meet such criteria in the future.

The Company was required to begin paying quarterly dividends on the Series C Preferred Stock in the three month period ended June 30, 2024. Dividends on the Series C Preferred Stock totaled $750 thousand and $2.3 million for the three and nine months ended September 30, 2025, respectively, with a dividend rate of 2.0%. Dividends on the Series C Preferred Stock totaled $750 thousand and $817 thousand for the three and nine months ended September 30, 2024, respectively, with a dividend rate of 2.0%.

8

Table of Contents

NOTE 3 – Securities

The

      following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolios as of the dates indicated and the corresponding amounts of unrealized gains and losses which were recognized in accumulated
      other comprehensive loss:
Amortized <br><br> Cost Gross<br><br> <br>Unrealized<br><br> <br>Gains Gross<br><br> <br>Unrealized<br><br> <br>Losses Fair Value
(In thousands)
September 30, 2025:
Federal agency mortgage-backed securities $ 108,505 $ 754 $ (7,448 ) $ 101,811
Federal agency collateralized mortgage obligations (“CMO”) 73,127 299 (769 ) 72,657
Federal agency debt 37,224 – (1,006 ) 36,218
Municipal bonds 4,775 – (283 ) 4,492
U. S. Treasuries 10,981 – (44 ) 10,937
U.S. Small Business Administration (“SBA”) pools 9,502 2 (1,247 ) 8,257
Asset-backed securities 9,678 3 (48 ) 9,633
Total available-for-sale securities $ 253,792 $ 1,058 $ (10,845 ) $ 244,005
December 31, 2024:
Federal agency mortgage-backed securities $ 62,853 $ 8 $ (9,832 ) $ 53,029
Federal agency CMOs 21,299 6 (1,247 ) 20,058
Federal agency debt 42,100 2 (2,068 ) 40,034
Municipal bonds 4,800 – (412 ) 4,388
U. S. Treasuries 77,857 – (667 ) 77,190
SBA pools 10,749 2 (1,588 ) 9,163
Total available-for-sale securities $ 219,658 $ 18 $ (15,814 ) $ 203,862

As of September 30, 2025, investment securities with a fair value of $77.7 million were pledged as collateral for securities sold under agreements to repurchase and included $43.5 million of federal agency mortgage-backed securities, $25.8 million of federal agency debt securities, $7.0 million of U.S. Treasury securities and $1.4 million of SBA pool investments. As of December 31, 2024, investment securities with a fair value of $83.3 million were pledged as collateral for securities sold under agreements to repurchase and included $46.5 million of U.S. Treasuries, $27.1 million of federal agency debt, $5.5 million of federal agency mortgage-backed securities, and $4.2 million of SBA pools.  Accrued interest receivable on securities was $643 thousand and $796 thousand at September 30, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable on the consolidated statements of financial condition.

At September 30, 2025, and December 31, 2024, there were no holdings of securities by any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity.

The amortized cost and estimated fair value of all investment securities available-for-sale at September 30, 2025, by contractual maturities are shown below. Contractual maturities may differ from expected maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

Amortized<br><br> <br>Cost Gross<br><br> <br>Unrealized<br><br> <br>Gains Gross<br><br> <br>Unrealized<br><br> <br>Losses Fair Value
(In thousands)
Due in one year or less $ 25,815 $ – $ (145 ) $ 25,670
Due after one year through five years 28,221 4 (1,190 ) 27,035
Due after five years through ten years 20,849 7 (802 ) 20,054
Due after ten years 178,907 1,047 (8,708 ) 171,246
$ 253,792 $ 1,058 $ (10,845 ) $ 244,005

9

Table of Contents

The

        table below indicates the length of time individual securities have been in a continuous unrealized loss position:
Less than 12 Months 12 Months or Longer Total
Fair Value Unrealized<br><br> <br>Losses Fair Value Unrealized<br><br> <br>Losses Fair Value Unrealized<br><br> <br>Losses
(In thousands)
September 30, 2025:
Federal agency mortgage-backed securities $ 1,642 $ (110 ) $ 49,700 $ (7,338 ) $ 51,342 $ (7,448 )
Federal agency CMOs 24,817 (31 ) 17,009 (738 ) 41,826 (769 )
Federal agency debt 2,908 (92 ) 33,310 (914 ) 36,218 (1,006 )
Municipal bonds 1,049 (51 ) 3,443 (232 ) 4,492 (283 )
U. S. Treasuries – – 10,937 (44 ) 10,937 (44 )
SBA pools 1,343 (97 ) 6,415 (1,150 ) 7,758 (1,247 )
Asset-backed securities – – 7,492 (48 ) 7,492 (48 )
Total unrealized loss position investment securities $ 31,759 $ (381 ) $ 128,306 $ (10,464 ) $ 160,065 $ (10,845 )
December 31, 2024:
Federal agency mortgage-backed securities $ – $ – $ 52,568 $ (9,832 ) $ 52,568 $ (9,832 )
Federal agency CMOs – – 19,303 (1,247 ) 19,303 (1,247 )
Federal agency debt – – 37,508 (2,068 ) 37,508 (2,068 )
Municipal bonds – – 4,388 (412 ) 4,388 (412 )
U. S. Treasuries – – 77,190 (667 ) 77,190 (667 )
SBA pools 629 (1 ) 8,179 (1,587 ) 8,808 (1,588 )
Total unrealized loss position investment securities $ 629 $ (1 ) $ 199,136 $ (15,813 ) $ 199,765 $ (15,814 )

At September 30, 2025, and December 31, 2024, all securities in the portfolio were current with their contractual principal and interest payments. At September 30, 2025, and December 31, 2024, there were no securities purchased with deterioration in credit quality since their origination. At September 30, 2025, and December 31, 2024, there were no collateral dependent securities.

The Company’s assessment of available-for-sale investment securities as of September 30, 2025 and December 31, 2024, indicated that an allowance for credit losses (“ACL”)

was not required. The Company analyzed available-for-sale investment securities that were in an unrealized loss position and determined the decline in fair value for those

        securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no
        ACL was recorded for available-for-sale securities as of September 30, 2025 or December 31,
  1. At September 30, 2025 and December 31, 2024, approximately 94% and 98%, respectively, of the securities held by the Company were issued by U.S. government-sponsored entities and agencies.  Because the decline in fair value is attributable to changes in interest rates and liquidity, and not credit quality, and because the Company does not have the intent to sell these securities, and it is likely that it will not be required to sell the securities before their anticipated recovery, the Company did not record a provision for expected credit loss during the three or nine months ended September 30, 2025 or 2024.

NOTE 4 –

      Loans Receivable Held for Investment \(as Restated\)

Loans receivable held for investment were as follows as of the periods indicated:

September 30, 2025 December 31, 2024
(In thousands)
Real estate:
Single-family $ 21,058 $ 24,036
Multi-family 603,771 639,156
Commercial real estate 159,517 163,348
Church 9,104 9,470
Construction 85,576 91,600
Commercial – other 123,025 77,787
SBA loans 12,858 1,142
Consumer 28 13
Gross loans receivable before deferred loan costs and premiums 1,014,937 1,006,552
Unamortized net deferred loan costs and premiums 8,693 2,116
Gross loans receivable 1,023,630 1,008,668
Credit and interest marks on purchased loans, net (147 ) (348 )
Allowance for credit losses (10,339 ) (8,364 )
Loans receivable, net $ 1,013,144 $ 999,956

10

Table of Contents

Accrued interest receivable on loans receivable held for investment was $4.9 million and $4.0 million at September 30, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable on the consolidated statements of financial condition.

The Company accounts for credit losses on loans in accordance with ASC 326 – Financial Instruments-Credit Losses. ASC 326 requires the Company to recognize

                              estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition. The recognition of losses at origination or acquisition represents the Company’s best estimate of the
                              lifetime expected credit loss associated with a loan given the facts and circumstances associated with the particular loan, and involves the use of significant management judgment and estimates, which are subject to change
                              based on management’s on-going assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the model. The Company uses the WARM method when determining estimates for the ACL for each of
                              its portfolio segments. The weighted average remaining life, including the effect of estimated prepayments, is calculated for each loan pool on a quarterly basis. The Company then estimates a loss rate for each pool using
                              both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter.

The Company’s ACL model also includes adjustments for qualitative factors, where appropriate. Qualitative adjustments may be related to and include, but are not limited to, factors such as: (i) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recapture practices; (ii) changes in international, national, regional, and local conditions; (iii) changes in the nature and volume of the portfolio and terms of loans; (iv) changes in the experience, depth, and ability of lending management; (v) changes in the volume and severity of past due loans and other similar conditions; (vi) changes in the quality of the organization’s loan review system; (vii) changes in the value of underlying collateral for collateral dependent loans; (viii) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and (ix) the effect of other external factors (i.e., competition, legal and regulatory requirements) on the level of estimated credit losses. These qualitative factors incorporate the concept of reasonable and supportable forecasts, as required by ASC 326.

The following tables summarize the activity in the allowance for credit losses on loans for the nine months ended:

September 30, 2025
Beginning<br><br> <br>Balance Charge-offs Recoveries Provision<br><br> <br>(Recapture) Ending<br><br> <br>Balance
(In thousands)
Single-family $ 200 $ – $ – $ (71 ) $ 129
Multi-family 4,617 – – 1,413 6,030
Commercial real estate 1,188 – – (33 ) 1,155
Church 54 – – (17 ) 37
Construction 1,564 – – 500 2,064
Commercial - other 730 – – 47 777
SBA loans 11 – – 136 147
Total $ 8,364 $ – $ – $ 1,975 $ 10,339
September 30, 2024
--- --- --- --- --- --- --- --- --- --- --- ---
Beginning<br><br> <br>Balance Charge-offs Recoveries Provision<br><br> <br>(Recapture) Ending<br><br> <br>Balance
(In thousands)
Single family $ 264 $ – $ – $ (45 ) $ 219
Multi-family 4,464 – – 325 4,789
Commercial real estate 1,164 – – 199 1,363
Church 72 – – (12 ) 60
Construction 1,009 – – 460 1,469
Commercial - other 592 – – 232 824
SBA loans 48 – – 36 84
Total $ 7,613 $ – $ – $ 1,195 $ 8,808

11

Table of Contents

The following tables summarize the activity in the allowance for credit losses on loans for the three months ended:

September 30, 2025
Beginning<br><br> <br>Balance Charge-offs Recoveries Provision<br><br> <br>(Recapture) Ending<br><br> <br>Balance
(In thousands)
Single-family $ 122 $ – $ – $ 7 $ 129
Multi-family 6,288 – – (258 ) 6,030
Commercial real estate 1,235 – – (80 ) 1,155
Church 55 – – (18 ) 37
Construction 1,291 – – 773 2,064
Commercial - other 814 – – (37 ) 777
SBA loans 75 – – 72 147
Total $ 9,880 $ – $ – $ 459 $ 10,339
September 30, 2024
--- --- --- --- --- --- --- --- --- --- --- ---
Beginning<br><br> <br>Balance Charge-offs Recoveries Provision<br><br> <br>(Recapture) Ending<br><br> <br>Balance
(In thousands)
Single-family $ 306 $ – $ – $ (87 ) $ 219
Multi-family 4,742 – – 47 4,789
Commercial real estate 1,240 – – 123 1,363
Church 84 – – (24 ) 60
Construction 1,193 – – 276 1,469
Commercial - other 681 – – 143 824
SBA loans 130 – – (46 ) 84
Total $ 8,376 $ – $ – $ 432 $ 8,808

The Company recorded a provision for off-balance sheet loan commitments of $220 thousand and a recapture of provision of $24 thousand for the three months ended September 30, 2025 and 2024, respectively.  The Company recorded a provision for off-balance sheet loan commitments of $164 thousand and a recapture of provision of $26 thousand for the nine months ended September 30, 2025 and 2024, respectively.

The ACL increased from December 31, 2024 to September 30, 2025, primarily due to an increase in specific reserves on individually evaluated loans.

The Company evaluates loans collectively for purposes of determining the ACL in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio. These loans are typically identified from those that have exhibited deterioration in credit quality, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, downgraded to substandard or worse, and/or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to no longer possess risk characteristics similar to other loans in the portfolio, or that have been identified as collateral dependent, are evaluated individually for purposes of determining an appropriate lifetime ACL. The Company uses the remaining life approach, using the loan’s effective interest rate, for determining the ACL on individually evaluated loans, unless the loan is deemed collateral dependent, which requires evaluation based on the estimated fair value of the underlying collateral, less estimated selling costs. The Company may increase or decrease the ACL for collateral dependent loans based on changes in the estimated fair value of the collateral.

12

Table of Contents

The following table presents individually evaluated collateral dependent loans by collateral type as of the date indicated:

September 30, 2025
Single-Family Multi-Family<br><br> <br>Residential Church Business<br><br> <br>Assets Total
Real estate: (In thousands)
Multi-family $ – $ 4,218 $ – $ – $ 4,218
Construction – 8,168 – – 8,168
SBA Loans – – – 242 242
Total $ – $ 12,386 $ – $ 242 $ 12,628
December 31, 2024
--- --- --- --- --- --- --- --- --- --- ---
Single-Family Multi-Family<br><br> <br>Residential Church Business<br><br> <br>Assets Total
Real estate: (In thousands)
Single-family $ – $ – $ – $ 264 $ 264
Total $ – $ – $ – $ 264 $ 264

At September 30, 2025, $12.6 million of individually evaluated loans were evaluated based on the estimated fair value of the underlying collateral. These loans had an associated ACL of $2.4 million as of September 30, 2025. The Company had five individually evaluated loans totaling $12.9 million on non-accrual status at September 30, 2025.

At December 31, 2024, one $264 thousand individually evaluated loan was evaluated based on the estimated fair value of the underlying collateral.   This loan had no associated ACL and was on non-accrual status as of December 31, 2024.

Past Due Loans

The following tables present the aging of the recorded investment in past due loans by loan type as of the dates indicated:

September 30,<br> 2025
30-59 Days<br><br> <br>Past Due 60-89 Days<br><br> <br>Past Due Greater than 90<br><br> <br>Days Past Due Total<br><br> <br>Past Due Current Total
(In thousands)
Loans receivable held for investment:
Single-family $ 1,183 $ – $ 426 $ 1,609 $ 19,471 $ 21,080
Multi-family – – 4,218 4,218 602,237 606,455
Commercial real estate – – – – 159,452 159,452
Church – – – – 9,112 9,112
Construction – – – – 85,188 85,188
Commercial - other – – 261 261 128,246 128,507
SBA loans 150 – 316 466 13,342 13,808
Consumer – – – – 28 28
Total $ 1,333 $ – $ 5,221 $ 6,554 $ 1,017,076 $ 1,023,630
December 31, 2024
--- --- --- --- --- --- --- --- --- --- --- --- ---
30-59 Days<br><br> <br>Past Due 60-89 Days<br><br> <br>Past Due Greater than 90<br><br> <br>Days Past Due Total<br><br> <br>Past Due Current Total
(In thousands)
Loans receivable held for investment:
Single-family $ – $ 6 $ – $ 6 $ 24,042 $ 24,048
Multi-family – – – – 642,109 642,109
Commercial real estate – – – – 163,269 163,269
Church – – – – 9,475 9,475
Construction – – – – 91,140 91,140
Commercial - other – – – – 77,472 77,472
SBA loans – 264 – 264 878 1,142
Consumer – – – – 13 13
Total $ – $ 270 $ – $ 270 $ 1,008,398 $ 1,008,668

13

Table of Contents

The following tables present the recorded investment in non-accrual loans by loan type as of the dates indicated:

September 30, 2025
Non-accrual with<br><br> <br>no Allowance for<br><br> <br>Credit Losses Non-accrual with<br><br> <br>an Allowance for<br><br> <br>Credit Losses Total Non-accrual<br><br> <br>Loans
(In thousands)
Loans receivable held for investment:
Commercial - other $ 261 $ – $ 261
SBA loans – 466 466
Single family 426 – 426
Multi-family – 4,218 4,218
Construction – 8,168 8,168
Total non-accrual loans $ 687 $ 12,852 $ 13,539
December<br> 31, 2024
--- --- --- --- --- --- ---
Non-accrual with<br><br> <br>no Allowance for<br><br> <br>Credit Losses Non-accrual with<br><br> <br>an Allowance for<br><br> <br>Credit Losses Total Non-accrual<br><br> <br>Loans
(In thousands)
Loans receivable held for investment:
SBA loans $ 264 $ – $ 264
Total non-accrual loans $ 264 $ – $ 264

There were no loans 90 days or more delinquent that were accruing interest as of September 30, 2025 or December 31, 2024.

Modified Loans to

                              Troubled Borrowers

GAAP requires that certain types of modifications of loans in response to a borrower’s financial difficulty be reported, which consist of the following: (i) principal forgiveness, (ii) interest rate reduction, (iii) other-than-insignificant payment delay, (iv) term extension, or (v) any combination of the foregoing. The ACL for loans that were modified in response to a borrower’s financial difficulty is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer possess risk characteristics similar to others in the loan portfolio. In those instances, the ACL for such loans is determined through individual evaluation.

The following table presents the amortized costs basis and the financial effect of loans modified to borrowers experiencing financial difficulty during the nine months ended September 30, 2025.  There were no loan modifications to borrowers that were experiencing financial difficulty during the three months ended September 30, 2025 or the three or nine months ended September 30, 2024.

Nine Months Ended September 30, 2025
Term Extension Percentage of Total<br><br> <br>Loan Type Weighted Average Term Extension
Real estate: (In Thousands)
Commercial real estate $ 776 0.49 % 8 months
Construction 2,009 2.35 % 8 months
Commercial - other 480 0.39 % 9 months
Total $ 3,265

All of the modified loans are above current.  None of the modified loans have defaulted and the Company has not committed to lend additional amounts to borrowers whose loans were modified.

14

Table of Contents

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For single-family residential, consumer, and other smaller balance homogenous loans, a credit grade is established at inception, and generally only adjusted based on performance. Information about payment status is disclosed elsewhere herein. The Company analyzes all other loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

● Watch. Loans<br><br><br><br> classified as watch exhibit weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing and are not more than 59 days past due. A watch<br> rating is used when a material deficiency exists, but correction is anticipated within an acceptable time frame.
● Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention that appears short term in nature. If left uncorrected, these potential weaknesses may result in<br> deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
--- ---
● Substandard. Loans classified as<br> substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that<br> jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution may sustain some loss if the deficiencies are not corrected.
--- ---
● Doubtful. Loans classified as doubtful<br> have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and<br> values, highly questionable and improbable.
--- ---
● Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an<br> active asset is no longer warranted.
--- ---

Loans that are not individually evaluated as part of the above-described process are considered to be pass rated loans. Pass rated loans are generally well protected by the current net worth and paying capacity of the obligor and/or by the value of the underlying collateral. Pass rated loans are not more than 59 days past due and are generally performing in accordance with the loan terms.

15

Table of Contents

The

                                following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination as of the date indicated:
Term Loans Amortized Cost Basis by Origination Year - As of September 30, 2025
2025 2024 2023 2022 2021 Prior Revolving<br><br> <br>Loans Total
(In thousands)
Single-family:
Pass $ – $ – $ 535 $ 2,850 $ 2,639 $ 12,175 $ – $ 18,199
Watch – – – – – 1,701 – 1,701
Substandard – – – 1,180 – – – 1,180
Total $ – $ – $ 535 $ 4,030 $ 2,639 $ 13,876 $ – $ 21,080
Multi-family:
Pass $ 2,524 $ 71,240 $ 76,957 $ 152,084 $ 118,482 $ 92,802 $ – $ 514,089
Watch – – 5,569 28,787 15,386 22,693 – 72,435
Special Mention – – – – 1,780 – – 1,780
Substandard – – 1,460 7,087 4,592 809 – 13,948
Doubtful – – – 4,203 – – – 4,203
Total $ 2,524 $ 71,240 $ 83,986 $ 192,161 $ 140,240 $ 116,304 $ – $ 606,455
Commercial real estate:
Pass $ 627 $ 48,854 $ 10,867 $ 23,389 $ 28,603 $ 28,833 $ – $ 141,173
Watch – – 4,590 – 971 7,748 – 13,309
Special Mention – – 1,566 – – 1,598 – 3,164
Substandard – – – – 1,806 – – 1,806
Total $ 627 $ 48,854 $ 17,023 $ 23,389 $ 31,380 $ 38,179 $ – $ 159,452
Church:
Pass $ – $ – $ 2,360 $ – $ 2,106 $ 3,137 $ – $ 7,603
Watch – – 362 – – 1,147 – 1,509
Substandard – – – – – – – –
Total $ – $ – $ 2,722 $ – $ 2,106 $ 4,284 $ – $ 9,112
Construction:
Watch 4,714 12,764 12,877 25,386 – – – 55,741
Special Mention – – – – – 2,009 – 2,009
Substandard – 2,236 13,391 7,888 3,923 – – 27,438
Total $ 4,714 $ 15,000 $ 26,268 $ 33,274 $ 3,923 $ 2,009 $ – $ 85,188
Commercial – other:
Pass $ 30,218 $ 14,998 $ 17,762 $ 9,051 $ – $ 12,752 $ – $ 84,781
Watch – 19,278 14,988 – – 5,845 – 40,111
Special Mention – – – 1,000 – 2,250 – 3,250
Substandard – – – – 104 261 – 365
Total $ 30,218 $ 34,276 $ 32,750 $ 10,051 $ 104 $ 21,108 $ – $ 128,507
SBA:
Pass $ 1,716 $ 8,665 $ 2,927 $ – $ – $ 34 $ – $ 13,342
Substandard – – – 150 – – – 150
Doubtful – – – – – 316 – 316
Total $ 1,716 $ 8,665 $ 2,927 $ 150 $ – $ 350 $ – $ 13,808
Consumer:
Pass $ 28 $ – $ – $ – $ – $ – $ – $ 28
Total $ 28 $ – $ – $ – $ – $ – $ – $ 28
Total loans:
Pass $ 35,113 $ 143,757 $ 111,408 $ 187,374 $ 151,830 $ 149,733 $ – $ 779,215
Watch 4,714 32,042 38,386 54,173 16,357 39,134 – 184,806
Special Mention – – 1,566 1,000 1,780 5,857 – 10,203
Substandard – 2,236 14,851 16,305 10,425 1,070 – 44,887
Doubtful – – – 4,203 – 316 – 4,519
Total loans $ 39,827 $ 178,035 $ 166,211 $ 263,055 $ 180,392 $ 196,110 $ – $ 1,023,630

16

Table of Contents

Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2024
2024 2023 2022 2021 2020 Prior Revolving<br><br> <br>Loans Total
(In thousands)
Single-family:
Pass $ – $ 543 $ 4,098 $ 1,968 $ 1,796 $ 13,687 $ – $ 22,092
Watch – – – 729 1,227 – – 1,956
Total $ – $ 543 $ 4,098 $ 2,697 $ 3,023 $ 13,687 $ – $ 24,048
Multi-family:
Pass $ 81,474 $ 77,739 $ 171,836 $ 126,492 $ 26,771 $ 90,584 $ – $ 574,896
Watch – 5,633 16,244 14,761 – 13,244 – 49,882
Special Mention – – 4,210 3,150 – – – 7,360
Substandard – 1,562 – 4,691 – 3,718 – 9,971
Total $ 81,474 $ 84,934 $ 192,290 $ 149,094 $ 26,771 $ 107,546 $ – $ 642,109
Commercial real estate:
Pass $ 49,143 $ 9,655 $ 23,482 $ 29,021 $ 21,150 $ 22,606 $ – $ 155,057
Watch – 1,584 432 994 – 1,634 – 4,644
Substandard – 3,271 – $ 297 $ – – $ – $ 3,568
Total $ 49,143 $ 14,510 $ 23,914 $ 30,312 $ 21,150 $ 24,240 $ – $ 163,269
Church:
Pass $ – $ 2,442 $ – $ 2,148 $ 1,696 $ 1,002 $ – $ 7,288
Watch – 376 – – – 618 – 994
Substandard – – – – – 1,193 – 1,193
Total $ – $ 2,818 $ – $ 2,148 $ 1,696 $ 2,813 $ – $ 9,475
Construction:
Watch 9,568 31,274 227 – – 2,038 – 43,107
Substandard – 4,076 38,494 5,463 – – – 48,033
Total $ 9,568 $ 35,350 $ 38,721 $ 5,463 $ – $ 2,038 $ – $ 91,140
Commercial – other:
Pass $ 1 $ 3 $ 7,575 $ – $ 2,768 $ 9,965 $ – $ 20,312
Watch 19,260 28,157 706 – – 1,197 – 49,320
Special Mention – – 351 – – 2,250 – 2,601
Substandard – – – 106 571 4,562 – 5,239
Total $ 19,261 $ 28,160 $ 8,632 $ 106 $ 3,339 $ 17,974 $ – $ 77,472
SBA:
Pass $ 590 $ – $ – $ – $ – $ 64 $ – $ 654
Substandard – – 150 – 338 – – 488
Total $ 590 $ – $ 150 $ – $ 338 $ 64 $ – $ 1,142
Consumer:
Pass $ 13 $ – $ – $ – $ – $ – $ – $ 13
Total $ 13 $ – $ – $ – $ – $ – $ – $ 13
Total loans:
Pass $ 131,221 $ 90,382 $ 206,991 $ 159,629 $ 54,181 $ 137,908 $ – $ 780,312
Watch 28,828 67,024 17,609 16,484 1,227 18,731 – 149,903
Special Mention – – 4,561 3,150 – 2,250 – 9,961
Substandard – 8,909 38,644 10,557 909 9,473 – 68,492
Total loans $ 160,049 $ 166,315 $ 267,805 $ 189,820 $ 56,317 $ 168,362 $ – $ 1,008,668

Allowance for Credit Losses for Off-Balance Sheet Commitments

The Company maintains an allowance for credit losses on off-balance sheet commitments related to unfunded loans and lines of credit, which is included in accrued expenses and other liabilities of the consolidated statements of financial condition. The Company applies an expected credit loss estimation methodology for off-balance sheet commitments. This methodology is commensurate with the methodology applied to each respective segment of the loan portfolio in determining the ACL for loans held-for-investment. The loss estimation process includes assumptions for the probability that a loan will fund, as well as the expected amount of funding. These assumptions are based on the Company’s own historical internal loan data.

The allowance for off-balance sheet commitments was $441 thousand and $277 thousand at September 30, 2025 and December 31, 2024, respectively.

17

Table of Contents

NOTE 5 – Goodwill and Core Deposit Intangible

The following tables present the changes in the carrying amounts of goodwill and core deposit intangibles for the nine months ended September 30, 2025 and 2024:

September 30, 2025
Goodwill Core Deposit<br><br> <br>Intangible
(In thousands)
Balance at the beginning of the period $ 25,858 $ 1,775
Impairment (25,858 ) –
Amortization – (236 )
Balance at the end of the period $ – $ 1,539
September 30, 2024
--- --- --- --- --- --- ---
Goodwill Core Deposit<br><br> <br>Intangible
(In thousands)
Balance at the beginning of the period $ 25,858 $ 2,111
Amortization – (252 )
Balance at the end of the period $ 25,858 $ 1,859

18

Table of Contents

The carrying amount of the core deposit intangible consisted of the following (in thousands):

September 30, 2025 December 31, 2024
Core deposit intangible acquired $ 3,329 $ 3,329
Less: Accumulated amortization (1,790 ) (1,554 )
$ 1,539 $ 1,775

The following table outlines the estimated amortization expense for the core deposit intangible during the next five fiscal years (in thousands):

Remainder of 2025 $ 79
2026 304
2027 291
2028 279
2029 267
Thereafter 319
$ 1,539

The

        Company’s goodwill balance is tested annually for impairment.  Management engaged a third-party to complete the impairment testing as of September 30, 2025. The quantitative test indicated that the carrying amount of the goodwill exceeded its
        fair value by approximately $25.9 million. On October 15, 2025, the Company’s management, with oversight of the Audit Committee of
        the Board of Directors of the Company, concluded that, based on its annual impairment analysis, the Company’s goodwill was impaired in accordance with U.S. GAAP. Consequently, the Company recorded a non-cash $25.9 million goodwill impairment charge for the quarter ended September 30, 2025. The Company does not expect that this charge will result in future
        cash expenditures.

19

Table of Contents

NOTE 6 – Borrowings

                                        \(as Restated\)

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statements of financial condition, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities. These agreements mature on a daily basis. As of September

30, 2025

                                  securities sold under agreements to repurchase totaled $76.1 million at an average rate of 3.70%. The fair value of securities pledged totaled $77.7 million as of September 30

, 2025

. As of December 31, 2024, securities sold under agreements to repurchase totaled $66.6 million at an average rate of 3.62%. The fair value of securities pledged totaled $83.3 million as of December 31, 2024.

At September 30, 2025 and December 31, 2024, the Company had outstanding advances from the FHLB totaling $107.5 million and $195.5 million, respectively. The weighted average interest rate was 4.53% and 4.03% as of September 30, 2025 and December 31, 2024, respectively. The weighted average contractual maturity was less than one month as of both September 30, 2025 and December 31, 2024. The advances were collateralized by loans with an unpaid balance of $497.6 million at September 30, 2025 and $521.7 million at December 31, 2024. The Company is currently approved by the FHLB of Atlanta to borrow up to 25% of total assets to the extent the Company provides qualifying collateral and holds sufficient FHLB stock. Based on collateral pledged and FHLB stock held, the Company was eligible to borrow an additional $213.0 million as of

September 30, 2025

.

The Company will, from time to time, sell a portion of a loan or group of loans to third parties. In some cases, the transferred portion of the loans does not meet the requirements to be treated as sales for accounting purposes. When that occurs, the legally transferred portion of the loan balance remains classified in gross loans receivable held for investment and a secured borrowing is recorded for the proceeds received from the third party institution. As the transferred portion of the loan pays down, the secured borrowings are repaid. The Company has no obligation to make principal or interest payments on the secured borrowings unless and until payments are received from the loan borrowers. The Company has secured borrowings associated with these participation loan transactions of $30.2 million and $31.4 million as of September 30,

                                2025 and December 31, 2024, respectively. The weighted average interest rate on the secured borrowings was 5.63%
                                and 5.54% at September 30, 2025 and December 31, 2024, respectively.

On December 27, 2023, the Company borrowed $100.0 million from the Federal Reserve under the BTFP.  This borrowing was paid off in December 2024.  The interest rate on this borrowing was fixed at 4.84% and the borrowing matured on December 29, 2024.

In addition, the Company had additional lines of credit of $10.0 million with other financial institutions as of September 30, 2025 and December 31, 2024. These lines of credit are unsecured, bear interest at the Federal funds rate as of the date of utilization and mature in 30 days.  There were no amounts outstanding under these lines of credit as of September 30, 2025 or December 31, 2024.

In connection with the New Market Tax Credit activities of the Bank, CFC 45 is a partnership whose members include CFNMA and City First New Markets Fund II, LLC. This community development entity acts in effect as a pass-through for a Merrill Lynch allocation totaling $14.0 million that needed to be deployed. In December 2015, Merrill Lynch made a $14.0 million non-recourse loan to CFC 45, whereby CFC 45 passed that loan through to a Qualified Active Low-Income Business (“QALICB”). The loan to the QALICB was secured by a Leasehold Deed of Trust that, due to the pass-through, non-recourse structure, was operationally and ultimately for the benefit of Merrill Lynch rather than CFC 45. Debt service payments received by CFC 45 from the QALICB were passed through to Merrill Lynch in return for which CFC 45 received a servicing fee. The financial statements of CFC 45 are consolidated with those of the Bank and the Company.

There were two notes for CFC 45. Note A was in the amount of $9.9 million with a fixed interest rate of 5.2% per annum. Note B was in the amount of $4.1 million with a fixed interest rate of 0.24% per annum. Quarterly interest only payments commenced in March 2016 and continued through March 2023 for Notes A and B. These notes were paid off during January 2024.

NOTE 7 – Fair Value

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date.  There are three levels of inputs that may be used to measure fair values:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs).

20

Table of Contents

Assets Measured on a Recurring Basis

Assets measured at fair value on a recurring basis are summarized below:

Fair Value Measurement
Quoted Prices<br><br> <br>in Active<br><br> <br>Markets for<br><br> <br>Identical<br><br> <br>Assets (Level 1) Significant<br><br> <br>Other<br><br> <br>Observable<br><br> <br>Inputs (Level 2) Significant<br><br> <br>Unobservable<br><br> <br>Inputs (Level 3) Total
(In thousands)
At September 30, 2025:
Securities available-for-sale:
Federal agency mortgage-backed securities $ – $ 101,811 $ – $ 101,811
Federal agency CMOs – 72,657 – 72,657
Federal agency debt – 36,218 – 36,218
Municipal bonds – 4,492 – 4,492
U.S. Treasuries 10,937 – – 10,937
SBA pools – 8,257 – 8,257
Asset-backed securities – 9,633 – 9,633
At December 31, 2024:
Securities available-for-sale:
Federal agency mortgage-backed securities $ – $ 53,029 $ – $ 53,029
Federal agency CMOs – 20,058 – 20,058
Federal agency debt – 40,034 – 40,034
Municipal bonds – 4,388 – 4,388
U.S. Treasuries 77,190 – – 77,190
SBA pools – 9,163 – 9,163

There were no transfers between Level 1, Level 2, or Level 3 during the three or nine months ended September 30, 2025 and 2024.

Assets Measured on a Nonrecurring Basis

The Company measures certain assets at fair value on a nonrecurring basis and the following is a general description of the methods used to value such assets.

Collateral-Dependent Loans - The fair value of collateral-dependent loans with specific allocations of the allowance for loan losses is generally based on recent appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying loans and result in a Level 3 classification.

The table below presents assets measured at fair value on a nonrecurring basis.  As of December 31, 2024, the Company did not have any assets or liabilities carried at fair value on a nonrecurring basis.

Fair Value Measurement
Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total
(In thousands)
At September 30, 2025:
Individually evaluated loans:<br><br> <br>Real estate:
Multi-family $ – $ – $ 2,729 $ 2,729
Construction – – 8,330 8,330
SBA loans – – 35 35

21

Table of Contents

The following table represents quantitative information about Level 3 fair value assumptions for assets measured at fair value on a non-recurring basis at September 30, 2025.

Fair Value Valuation<br><br> <br>Technique(s) Unobservable Input(s) Range
(In thousands)
At September 30, 2025:
Individually evaluated loans:<br><br> <br>Real estate:
Multi-family $ 2,729 Market approach Adjustments to market data %
Construction 8,330 Market approach Adjustments to market data %
SBA loans 35 Market approach Adjustments to market data %

All values are in US Dollars.

Fair Values of Financial Instruments

The following tables present the carrying amount, fair value, and level within the fair value hierarchy of the Company’s financial instruments as of September 30, 2025 and December 31, 2024.

Fair Value Measurements at September 30, 2025
Carrying Value Level 1 Level 2 Level 3 Total
(In thousands)
Financial Assets:
Cash and cash equivalents $ 19,731 $ 19,731 $ – $ – $ 19,731
Securities available-for-sale 244,005 10,937 233,068 – 244,005
Loans receivable held for investment 1,013,144 – – 990,279 990,279
Accrued interest receivable 5,649 112 678 4,859 5,649
Financial Liabilities:
Non interest bearing deposits $ 94,518 $ – $ 94,518 $ – $ 94,518
Interest bearing deposits 464,971 – 464,971 – 464,971
Time deposits 289,716 – 289,357 – 289,357
FHLB borrowings 107,500 – 107,498 – 107,498
Secured borrowings 30,166 – 30,166 – 30,166
Securities sold under agreements to repurchase 76,118 – 76,118 – 76,118
Accrued interest payable 1,993 – 1,993 – 1,993
Fair Value Measurements at December 31, 2024
--- --- --- --- --- --- --- --- --- --- ---
Carrying Value Level 1 Level 2 Level 3 Total
(In thousands)
Financial Assets:
Cash and cash equivalents $ 61,365 $ 61,365 $ – $ – $ 61,365
Securities available-for-sale 203,862 77,190 126,672 – 203,862
Loans receivable held for investment 999,956 – – 973,183 973,183
Accrued interest receivable 5,001 5,001 – – 5,001
Bank owned life insurance 3,321 3,321 – – 3,321
Financial Liabilities:
Deposits $ 745,399 $ – $ 669,695 $ – $ 669,695
Borrowings 226,888 – 227,150 – 227,150
Securities sold under agreements to repurchase 66,610 – 66,070 – 66,070
Accrued interest payable 1,349 – 1,349 – 1,349

In accordance with ASC 820, the fair value of financial assets and liabilities was measured using an exit price notion. Although the exit price notion represents the value that would be received to sell an asset or paid to transfer a liability, the actual price received for a sale of assets or paid to transfer liabilities could be different from exit price disclosed.

NOTE 8 – Stock-based Compensation

Prior to June 21, 2023, the Company issued stock-based compensation awards to its directors and officers under the 2018 Long Term Incentive Plan (“LTIP”) which allowed the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards.  The maximum number of shares available to be awarded under the LTIP was 161,639 shares.

22

Table of Contents

On June 21, 2023, stockholders approved an Amendment and Restatement of the 2018 Long Term Incentive Plan (“Amended and Restated LTIP”) which allows the issuance of 487,500 additional shares and brought the number of shares that may be issued under the Amended and Restated LTIP to 649,139 shares.

Stock-based compensation is recognized on a straight-line basis over the vesting period. During the three months ended September 30, 2025 and 2024, the Company recorded a $22 thousand reduction of stock-based compensation and $84 thousand of stock-based compensation expense, respectively.  During the nine months ended September 30, 2025 and 2024, the Company recorded $188 thousand and $199 thousand of stock-based compensation expense, respectively. During the three months ended September 30, 2025 and 2024, the Company did not record any director stock compensation expense. During the nine months ended September 30, 2025 and 2024, the Company recorded $168 thousand and $96 thousand, respectively, of director stock compensation expense, which was determined using the fair value of the stock on the dates of the awards.

As of September 30, 2025, 367,443 shares had been awarded under the Amended and Restated LTIP and 281,696 shares were available to be awarded.  The following tables present stock award activity during the three and nine months ended September 30, 2025 and 2024:

Three months ended
September 30, 2025 September 30, 2024
(In thousands)
Outstanding at the beginning of the period 196,448 187,749
Granted during period – –
Forfeited during period (15,149 ) (452 )
Vested during period (10,617 ) –
Outstanding at the end of the period 170,682 187,297
Nine months ended
--- --- --- --- --- --- ---
September 30, 2025 September 30, 2024
(In thousands)
Outstanding at the beginning of the period 184,874 113,568
Granted during period 119,710 145,890
Forfeited during period (38,336 ) (27,601 )
Vested during period (95,566 ) (45,560 )
Outstanding at the end of the period 170,682 187,297

No stock options were granted, exercised or expired during the three and nine months ended September 30, 2025. During the nine months ended September 30, 2024, 18,750 stock options were forfeited.

Options outstanding and exercisable at September 30, 2025 were as follows:

Outstanding Exercisable
Number<br><br> <br>Outstanding Weighted Average<br><br> <br>Remaining<br><br> <br>Contractual Life Weighted<br><br> <br>Average<br><br> <br>Exercise Price Aggregate<br><br> <br>Intrinsic<br><br> <br>Value Number<br><br> <br>Outstanding Weighted<br><br> <br>Average<br><br> <br>Exercise Price Aggregate<br><br> <br>Intrinsic Value
12,500 0.38 years $ 12.96 $ – 12,500 $ 12.96 $ –

The Company did not record any stock-based compensation expense related to stock options during the three and nine months ended September 30, 2025 and 2024.

NOTE 9 – ESOP Plan

Employees

  participate in the ESOP after attaining certain age and service requirements. During 2022, the ESOP purchased 58,369 shares of the
  Company’s common stock at an average cost of $8.57 per share for a total cost of $500 thousand and during 2023, the ESOP purchased 369,958 shares of
  the Company’s common stock at an average cost of $9.19 per share for a total cost of $3.4 million. These purchases were funded with a $5.0 million line
  of credit from the Company. The loan will be repaid from the Bank’s annual discretionary contributions to the ESOP, net of dividends paid, over a period of 20
  years. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants. When loan payments are made, shares are allocated to each eligible participant based on the ratio of each
  such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value
  of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional
  paid-in capital. Any dividends on allocated shares increase participant accounts. Any dividends on unallocated shares will be used to repay the loan. Participants receive shares for their vested balance at the end of their employment. Compensation
  expense related to the ESOP was $50 thousand and $46 thousand for the three months ended September 30, 2025 and 2024, respectively, and $149 thousand and $137 thousand for the nine months ended September 30, 2025 and 2024, respectively.

Shares held by the ESOP were as follows:

September 30, 2025 December 31, 2024
(Dollars in thousands)
Allocated to participants 157,840 127,804
Committed to be released 22,013 30,036
Suspense shares 406,790 428,804
Total ESOP shares 586,643 586,644
Fair value of unearned shares $ 2,953 $ 2,937

The book value of unearned shares, which are reported as Unearned ESOP shares in the equity section of the consolidated statements of financial condition, were $4.0 million and $4.2 million at September 30, 2025 and December 31, 2024, respectively.

23

Table of Contents

NOTE 10 – Regulatory Matters

The Bank’s capital requirements are administered by the Office of the Comptroller of the Currency (“OCC”) and involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OCC. Failure to meet capital requirements can result in regulatory action.

As a result of the Economic Growth, Regulatory Relief, and Consumer Protection Act, the federal banking agencies have developed a “Community Bank Leverage Ratio” (the ratio of a bank’s tier 1 capital to average total consolidated assets) for financial institutions with assets of less than $10 billion. A “qualifying community bank” that exceeds this ratio will be deemed to be in compliance with all other capital and leverage requirements, including the capital requirements to be considered “well capitalized” under Prompt Corrective Action statutes. The federal banking agencies have set the Community Bank Leverage Ratio at 9%. Actual and required capital amounts and ratios as of the dates indicated are presented below:

Actual Minimum Required to Be<br><br> <br>Well Capitalized Under<br><br> <br>Prompt Corrective Action<br><br> <br>Provisions
Amount Ratio Amount Ratio
(Dollars in thousands)
September 30,<br> 2025:
Community Bank Leverage Ratio $ 189,646 14.56 % $ 117,260 9.00 %
December 31,<br> 2024:
Community Bank Leverage Ratio $ 188,827 13.61 % $ 124,879 9.00 %

At September 30, 2025, the Company and the Bank met all the capital adequacy requirements to which they were subject. In addition, the Bank was “well capitalized” under the regulatory framework for prompt corrective action. Management believes that no conditions or events have occurred since September 30, 2025 that would materially adversely change the Bank’s capital classifications. From time to time, the Bank may need to raise additional capital to support its further growth and to maintain its “well capitalized” status.

24

Table of Contents

NOTE 11 –

                                Income Taxes \(as Restated\)

The Company and its subsidiary are subject to U.S. federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluated both positive and negative evidence, including any cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, the forecasts of future income and tax planning strategies.

At September 30, 2025, the Company maintained a $449 thousand valuation allowance on its deferred tax assets because the number of shares sold in the private placements completed on April 6, 2021 triggered limitations on the use of certain tax attributes under the Section 382 of the federal tax code. The ability to use net operating losses (“NOLs”) to offset future taxable income will be restricted and these NOLs could expire or otherwise be unavailable. In general, under Section 382 of the Code and corresponding provisions of state law, a corporation that undergoes an “ownership change” is subject to limitations on its ability to utilize its pre-change NOLs to offset future taxable income. For these purposes, an ownership change generally occurs where the aggregate stock ownership of one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period.

The Company recorded an income tax expense of $736 thousand for the third quarter of 2025, compared to an income tax expense of $206 thousand for the third quarter of 2024.  The increase in income tax expense reflected an increase in pre-tax income of $2.0 million between the two periods, excluding goodwill impairment of $25.9 million, which is not deductible for tax purposes.

The Company recorded an income tax benefit of $54 thousand for the first nine months of 2025, compared to an income tax expense of $291 thousand for the first nine months of 2024.  The decrease in income tax expense reflected a decrease of $950 thousand in pre-tax income between the two periods, excluding goodwill impairment of $25.9 million, which is not deductible for tax purposes.

25

Table of Contents

NOTE 12 – Concentrations

The Bank has a significant concentration of deposits with five customers that accounted for approximately 23% and 18% of its deposits as of September 30, 2025 and December 31, 2024, respectively. The Bank also has a significant concentration of short-term borrowings from one customer that accounted for 76% and 88% of the outstanding balance of securities sold under agreements to repurchase as of September 30, 2025 and December 31, 2024, respectively. The Company expects to maintain the relationships with these customers for the foreseeable future.

NOTE 13 – Subsequent Events

Operational Loss (Recovery)

During the first quarter of 2025, the Company recognized an operational loss of $1.9 million due to a fraudulent wire transfer. In August 2025, the Company recovered $1.6 million of the $1.9 million which was recorded in the three month period ending September 30, 2025.  In October 2025, the Company recovered $240 thousand which will be recorded in the three month period ending December 31, 2025.

Loan Charge-off

During the fourth quarter of 2025, the Company recorded a charge-off of $1.2 million on an individually evaluated loan. Prior to the charge-off, the Company had recorded a specific allowance for credit losses for the loan that was approximately equal to the amount charged off.

26

Table of Contents

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. Our MD&A should be read in conjunction with the Consolidated Financial Statements and related Notes included in Part I, Item 1 “Financial Statements,” of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K/A for the year ended December 31, 2024, as amended (the “2024 Form 10-K”). Certain statements herein are forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the U.S. Securities Act of 1933, as amended that reflect our current views with respect to future events and financial performance. Forward-looking statements typically include words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “potential,” “continue,” “prospects,” “ability,” “looking,” “forward,” “invest,” “grow,” “improve,” “likely” and other similar expressions. These forward-looking statements are subject to risks and uncertainties, which could cause actual future results to differ materially from historical results or from those anticipated or implied by such statements. Readers should not place undue reliance on these forward-looking statements, which speak only as of their dates or, if no date is provided, then as of the date of this Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law.  The unaudited interim consolidated financial statements for the quarter ended September 30, 2024 and consolidated financial statements for the fiscal year ended December 31, 2024 presented herein are as restated.

Critical Accounting Policies and Estimates

Critical accounting policies are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition or results of operations under different assumptions and conditions. This discussion highlights those accounting policies that management considers critical. All accounting policies are important; therefore, you are encouraged to review each of the policies included in Note 1 “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements in our 2024 Form 10-K/A to gain a better understanding of how our financial performance is measured and reported. Management has identified the Company’s critical accounting policies as follows:

Allowance for Credit Losses (“ACL”) for Loans

The Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination or acquisition. The ACL is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated statements of financial condition. Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company measures the ACL for each of its loan segments using the weighted-average remaining maturity (“WARM”) method. The weighted average remaining life, including the effect of estimated prepayments, is calculated for each loan pool on a quarterly basis. The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions. The Company’s ACL model also includes adjustments for qualitative factors, where appropriate.

Certain loans, such as those that are nonperforming or are considered to be collateral dependent, are deemed to no longer possess risk characteristics similar to other loans in the loan portfolio, because the specific attributes and risks associated with the loan have likely become unique as the credit quality of the loan deteriorates. As such, these loans may require individual evaluation to determine an appropriate ACL for the loan. When a loan is individually evaluated, the Company typically measures the expected credit loss for the loan based on a discounted cash flow approach, unless the loan has been deemed collateral dependent in which case the ACL is determined using estimates of the fair value of the underlying collateral, less estimated selling costs.

Goodwill

The excess of consideration paid over fair value of net assets acquired for acquisitions is recorded as goodwill. Goodwill is not amortized but is tested at least annually for impairment or more frequently if events occur or circumstances change that indicate impairment may exist. A goodwill impairment test is performed by comparing the fair value of the reporting unit with its carrying value. An impairment charge is recorded for the amount by which the carrying amount exceeds the reporting unit’s fair value. A weighted average of both the market and income approaches is used in valuing the reporting unit’s fair value. Weightings are assigned to the approaches regarding fair value and the sensitivity of other weighting scenarios is considered. The market approach incorporates comparable public company information, valuation multiples and consideration of a market control premium along with data related to comparable observed purchase transactions in the financial services industry. The income approach consists of discounting projected future cash flows, which are derived from internal forecasts and economic expectations for the reporting unit. The significant inputs and assumptions for the income approach include a discount rate and projected earnings of the Company in future years for which there is inherent uncertainty. The sensitivity of a range of reasonable discount rates based on the current economic environment is considered.

27

Table of Contents

Overview

Total assets increased by $682 thousand at September 30, 2025 compared to December 31, 2024, reflecting increases in  securities available-for-sale of $40.1 million, bank owned life insurance of $20.1 million and loans receivable held for investment, net of the ACL, of $13.2 million, all primarily due to purchases, partially offset by decreases in cash and cash equivalents of $41.6 million, goodwill of $25.9 million, as goodwill was considered to be impaired during the quarter, and FHLB stock of $3.6 million.

Loans receivable held for investment, net of the ACL, increased by $13.2 million to $1.0 billion at September 30, 2025, compared to $1.0 billion at December 31, 2024.  The increase was primarily due to loan purchases.

Deposits increased by $103.8 million, or 13.9%, to $849.2 million at September 30, 2025, from $745.4 million at December 31, 2024.  The increase in deposits was attributable to an increase of $72.9 million in certificates of deposit accounts, $26.8 million in liquid deposits (demand, interest checking, and money market accounts), $8.0 million in Insured Cash Sweep (“ICS”) deposits and $4.0 million in Certificate of Deposit Registry Service (“CDARS”) deposits, partially offset by a $7.9 million decrease in savings deposits.  As of September 30, 2025, our uninsured deposits, including deposits from the Bank and other affiliates, represented 36% of our total deposits, compared to 32% as of December 31, 2024.

Total borrowings decreased by $89.2 million to $137.7 million at September 30, 2025, from $226.9 million at December 31, 2024, primarily due to an $88.0 million decrease in FHLB advances.

For the third quarter of 2025, the Company reported consolidated net loss attributable to common stockholders of $24.6 million after preferred dividends of $750 thousand and goodwill impairment of $25.9 million, compared to net loss attributable to common stockholders of $234 thousand for the third quarter of 2024 after preferred dividends of $750 thousand. Loss per diluted common share was ($3.23) for the third quarter of 2025, compared to ($0.03) of loss per diluted common share for the third quarter of 2024. Consolidated net income before preferred dividends and goodwill impairment was $2.0 million, or $0.26 per diluted share, for the third quarter of 2025, compared to consolidated net income of $516 thousand, or $0.06 per diluted share, for the third quarter of 2024. Diluted loss per common share for the third quarter of 2025 reflects preferred dividends of ($0.10) per diluted common share and goodwill impairment of ($3.39) per diluted common share. “Net income before preferred dividends and goodwill impairment” and “Earnings per common share – diluted before preferred dividends and goodwill impairment” are considered to be non-GAAP measures. See “Use of Non-GAAP Financial Measures” section of this Form 10-Q for a reconciliation of these amounts to the associated GAAP financial measure.

For the first nine months of 2025, the Company reported consolidated net loss attributable to common stockholders of $28.1 million after preferred dividends of $2.3 million and goodwill impairment of $25.9 million, compared to net loss attributable to common stockholders of $199 thousand for the first nine months of 2024 after preferred dividends of $817 thousand. Diluted loss per common share was ($3.76) for the first nine months of 2025, compared to ($0.02) of loss per diluted common share for the first nine months of 2024. Consolidated net income before preferred dividends and goodwill impairment was $38 thousand, or $0.01 per diluted share, compared to consolidated net income before preferred dividends of $618 thousand, or $0.07 per diluted share, for the first nine months of 2024. Diluted loss per common share for the first nine months of 2025 reflects preferred dividends of ($0.30) per diluted common share and goodwill impairment of ($3.46) per diluted common share.

28

Table of Contents

Results of Operations

Net Interest Income

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

Net interest income before provision for credit losses for the third quarter of 2025 totaled $8.6 million, representing an increase of $287 thousand, or 3.4%, from net interest income before provision for credit losses of $8.3 million for the third quarter of 2024.  The increase resulted from a $3.3 million decrease in interest expense due to a decline in interest on borrowings as a result of a decrease in the average balance of borrowings, partially offset by a $2.2 million increase in interest expense on deposits due to an increase in the average balance of deposits, partially offset by an $818 thousand decline in interest income on interest-bearing deposits.  The Company used interest-bearing deposits and cash from principal pay downs of available-for-sale securities to reduce borrowings to improve the net interest margin and to support capacity for future loan growth.

The net interest margin increased to 2.72% for the third quarter of 2025 from 2.43% for the third quarter of 2024, due to an increase in the average rate earned on interest-earning assets, which increased to 4.99% for the third quarter of 2025 from 4.84% for the third quarter of 2024, and a decrease in the cost of funds, which decreased to 3.11% for the third quarter of 2025 from 3.30% for the third quarter of 2024.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Net interest income before provision for credit losses for the first nine months of 2025 totaled $24.4 million, representing an increase of $645 thousand, or 2.7%, from net interest income before provision for credit losses of $23.8 million for the first nine months of 2024.  The increase resulted from an

                    $8.7 million decrease in interest expense due to a decline in interest on borrowings as a result of a decrease in the average balance of borrowings, partially offset by a $5.3 million increase in interest expense on deposits due to
                    deposit growth. The Company reduced borrowings to improve the net interest margin and to support capacity for future loan growth.  This increase was partially offset by a $2.8 million decrease in interest income, primarily due to a
                    decrease in interest on interest-bearing deposits, as a result of a decrease in the average balance of interest-bearing deposits, as well as a decline in interest income on available-for-sale securities due to a decrease in the
                    average balance of available-for-sale securities.  These decreases in interest income were partially offset by an increase of $2.0 million in interest income on loans receivable, as new loans were brought on at a higher rate than
                    the existing portfolio during the period.

The net interest margin increased to 2.65% for the first nine months of 2025 from 2.34% for the first nine months of 2024, due to an increase in the average rate earned on interest-earnings assets, which increased to 4.88% for the first nine months of 2025 from 4.70% for the first nine months of 2024, and a decrease in the cost of funds, which decreased to 3.08% for the first nine months of 2025 from 3.21% for the first nine months of 2024.

The following tables set forth the average balances, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances. The yields set forth below include the effect of deferred loan fees, and discounts and premiums that are amortized or accreted to interest income or expense. We do not accrue interest on loans on non-accrual status, but the balance of these loans is included in the total average balance of loans receivable, which has the effect of reducing average loan yields.

29

Table of Contents

For the Three Months Ended
September 30, 2025 September 30, 2024
(Dollars in thousands) Average Balance Interest Average<br><br> <br>Yield/Cost Average Balance Interest Average<br><br> <br>Yield/Cost
Assets
Interest-earning assets:
Interest-bearing deposits $ 49,348 $ 556 4.47 % $ 106,569 $ 1,491 5.57 %
Securities 206,224 1,690 3.25 % 248,833 1,635 2.61 %
Loans receivable ^(1)^ 993,090 13,418 5.36 % 996,868 13,239 5.28 %
FRB and FHLB stock 7,461 127 6.75 % 13,835 244 7.02 %
Total interest-earning assets 1,256,123 $ 15,791 4.99 % 1,366,105 $ 16,609 4.84 %
Non-interest-earning assets 50,659 48,980
Total assets $ 1,306,782 $ 1,415,085
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Money market deposits $ 155,121 $ 422 1.08 % $ 282,808 $ 1,740 2.45 %
Savings deposits 44,095 50 0.45 % 55,198 90 0.65 %
Interest checking and other demand deposits 263,972 2,105 3.16 % 67,023 107 0.64 %
Certificate accounts 282,955 2,786 3.91 % 165,483 1,272 3.06 %
Total deposits 746,143 5,363 2.85 % 570,512 3,209 2.24 %
FHLB borrowings 63,016 711 4.48 % 209,064 2,588 4.92 %
Bank Term Funding Program borrowing – – – % 100,000 1,220 4.85 %
Securities sold under agreements to repurchase 76,906 710 3.66 % 86,397 819 3.77 %
Secured borrowings 30,253 390 5.11 % 33,019 443 5.34 %
Total borrowings 170,175 1,811 4.22 % 428,480 5,070 4.71 %
Total interest-bearing liabilities 916,318 $ 7,174 3.11 % 998,992 $ 8,279 3.30 %
Non-interest-bearing liabilities 104,006 131,750
Equity 286,458 284,343
Total liabilities and stockholders’ equity $ 1,306,782 $ 1,415,085
Net interest rate spread ^(2)^ $ 8,617 1.88 % $ 8,330 1.54 %
Net interest rate margin^(3)^ 2.72 % 2.43 %
Ratio of interest-earning assets to interest-bearing liabilities 137.08 % 136.75 %
(1) Amount includes non-accrual loans.
--- ---
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
--- ---
(3) Net interest rate margin represents net interest income as a percentage of average interest-earning assets.
--- ---
For the Nine Months Ended
--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
September 30, 2025 September 30, 2024
(Dollars in thousands) Average Balance Interest Average<br><br> <br>Yield/Cost Average Balance Interest Average<br><br> <br>Yield/Cost
Assets
Interest-earning assets:
Interest-bearing deposits $ 34,221 $ 1,134 4.43 % $ 102,082 $ 4,024 5.27 %
Securities 195,049 4,069 2.79 % 276,892 5,586 2.69 %
Loans receivable ^(1)^ 995,521 39,360 5.29 % 971,685 37,396 5.16 %
FRB and FHLB stock 8,694 426 6.55 % 13,794 733 7.10 %
Total interest-earning assets 1,233,485 $ 44,989 4.88 % 1,364,453 $ 47,739 4.68 %
Non-interest-earning assets 49,799 50,591
Total assets $ 1,283,284 $ 1,415,044
Liabilities and Stockholders’ Equity
Interest-bearing liabilities:
Money market deposits $ 136,183 $ 1,015 1.00 % $ 276,802 $ 4,805 2.32 %
Savings deposits 46,506 179 0.51 % 57,272 294 0.69 %
Interest checking and other demand deposits 256,952 5,991 3.12 % 75,636 418 0.74 %
Certificate accounts 259,447 7,256 3.74 % 164,718 3,577 2.90 %
Total deposits 699,088 14,441 2.76 % 574,428 9,094 2.11 %
FHLB borrowings 91,585 2,950 4.31 % 209,198 7,779 4.97 %
Bank Term Funding Program borrowing – – – % 100,000 3,633 4.85 %
Securities sold under agreements to repurchase 71,302 1,948 3.65 % 80,974 2,169 3.58 %
Secured borrowings 30,946 1,233 5.33 % 33,019 1,292 5.23 %
Total borrowings 193,833 6,131 4.23 % 423,191 14,873 4.70 %
Total interest-bearing liabilities 892,921 $ 20,572 3.08 % 997,619 $ 23,967 3.21 %
Non-interest-bearing liabilities 104,684 134,455
Equity 285,679 282,970
Total liabilities and stockholders’ equity $ 1,283,284 $ 1,415,044
Net interest rate spread ^(2)^ $ 24,417 1.80 % $ 23,772 1.47 %
Net interest rate margin ^(3)^ 2.65 % 2.34 %
Ratio of interest-earning assets to interest-bearing liabilities 138.14 % 136.77 %
(1) Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs and loan premiums.
--- ---
(2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.
--- ---
(3) Net interest rate margin represents net interest income as a percentage of average interest-earning assets.
--- ---

30

Table of Contents

Provision for/Recapture of Credit Losses

For the three months ended September 30, 2025, the Company recorded a provision for credit losses of $679 thousand, compared to a provision for credit losses of $408 thousand for the three months ended September 30, 2024.  The increase in the provision was the result of changes in the required specific allocations of the ACL.

For the nine months ended September 30, 2025, the Company recorded a provision for credit losses of $2.1 million, compared to $1.2 million for the nine months ended September 30, 2024.  The increase in the provision was the result of changes in the required specific allocations of the ACL.

The Company recorded a provision for off-balance sheet loan commitments of $220 thousand and a recapture of provision of $24 thousand for the three months ended September 30, 2025 and 2024, respectively. The Company recorded a provision for off-balance sheet loan commitments of $164 thousand and a recapture of provision of $26 thousand for the nine months ended September 30, 2025 and 2024, respectively.

The ACL increased to $10.3 million as of September 30, 2025, compared to $8.4 million as of December 31, 2024, primarily due to an increase in specific reserves on individually evaluated loans.

The Company had seven non-accrual loans at September 30, 2025 with an unpaid principal balance of $13.5 million.  Credit quality remains strong with non-accrual loans as a percentage of total loans at 1.33% and non-performing assets to total assets of 1.01% despite the increase in non-accrual loans.

Non-interest Expense

Non-interest expense was $31.5 million for the third quarter of 2025, compared to $7.6 million for the third quarter of 2024, representing an increase of $23.9 million, or 315.0%. The increase was primarily due to the $25.9 million goodwill impairment charge recorded during the quarter ended September 30, 2025, partially offset by the $1.6 million operational loss recovery of the wire fraud previously recorded.

Non-interest expense was $49.2 million for the first nine months of 2025, compared to $22.7 million for the first nine months of 2024, representing an increase of $26.6 million, or 117.0%.  The increase was primarily due to the $25.9 million goodwill impairment charge recorded during the nine months ended September 30, 2025, partially offset by the operational loss recovery recorded during the nine months ended September 30, 2025.

Income Taxes

The Company recorded an income tax expense of $736 thousand for the third quarter of 2025, compared to an income tax expense of $206 thousand for the third quarter of 2024.  The increase in income tax expense reflected an increase in pre-tax income of $2.0 million between the two periods, excluding goodwill impairment of $25.9 million, which is not deductible for tax purposes.

The Company recorded an income tax benefit of $54 thousand for the first nine months of 2025, compared to an income tax expense of $291 thousand for the first nine months of 2024.  The decrease in income tax expense reflected a decrease of $950 million in pre-tax income between the two periods, excluding goodwill impairment of $25.9 million, which is not deductible for tax purposes.

31

Table of Contents

Financial Condition

Total Assets

Total assets increased by $682 thousand at September 30, 2025 compared to December 31, 2024, reflecting increases in  securities available-for-sale of $40.1 million, bank owned life insurance of $20.1 million and loans receivable held for investment, net of the ACL, of $13.2 million, all primarily due to purchases, partially offset by decreases in cash and cash equivalents of $41.6 million, goodwill of $25.9 million, as goodwill was considered to be impaired during the quarter, and FHLB stock of $3.6 million.

Securities Available-For-Sale

Securities available-for-sale totaled $244.0 million at September 30, 2025, compared to $203.9 million at December 31, 2024. The $40.1 million increase in securities available-for-sale during the nine months ended September 30, 2025 was primarily due to securities purchases.

The table below presents the carrying amount, weighted average yields and contractual maturities of our securities as of September 30, 2025. The table reflects stated final maturities and does not reflect scheduled principal payments or expected payoffs.

September 30, 2025
One Year or Less More Than One Year<br><br> <br>to Five Years More Than Five<br><br> <br>Years to Ten Years More Than Ten<br><br> <br>Years Total
Carrying<br><br> <br>Amount Weighted<br><br> <br>Average<br><br> <br>Yield Carrying<br><br> <br>Amount Weighted<br><br> <br>Average<br><br> <br>Yield Carrying<br><br> <br>Amount Weighted<br><br> <br>Average<br><br> <br>Yield Carrying<br><br> <br>Amount Weighted<br><br> <br>Average<br><br> <br>Yield Carrying<br><br> <br>Amount Weighted<br><br> <br>Average<br><br> <br>Yield
(Dollars in thousands)
Available‑for‑sale:
Federal agency mortgage‑backed securities $ 6 0.46 % $ 1,800 1.25 % $ 9,815 1.94 % $ 90,190 3.89 % $ 101,811 3.67 %
Federal agency CMO – – 2,465 4.59 % 7,224 3.82 % 62,968 5.12 % 72,657 4.97 %
Federal agency debt 14,727 1.64 % 18,476 1.96 % 3,015 4.86 % – – 36,218 2.07 %
Municipal bonds – – 3,026 1.51 % – – 1,466 1.73 % 4,492 1.58 %
U.S. Treasuries 10,937 1.68 % – – – – – – 10,937 1.68 %
SBA pools – – 1,268 2.50 % – – 6,989 2.39 % 8,257 2.40 %
Asset-backed securities – – – – – – 9,633 5.21 % 9,633 5.21 %
Total $ 25,670 1.66 % $ 27,035 2.13 % $ 20,054 3.06 % $ 171,246 4.35 % $ 244,005 3.71 %

Loans Receivable Held for Investment

Loans receivable held for investment, net of the ACL, increased by $13.2 million to $1.0 billion at September 30, 2025, compared to $1.0 billion at December 31, 2024.  The increase was primarily due to loan purchases. The Company has recently engaged in purchasing government guaranteed loans to complement organic loan growth.

The following table presents loan categories by maturity for the period indicated. Actual repayments historically have, and will likely in the future, differ significantly from contractual maturities because individual borrowers generally have the right to prepay loans, with or without prepayment penalties.

32

Table of Contents

September 30, 2025
One Year or<br><br> <br>Less More Than<br><br> <br>One Year to<br><br> <br>Five Years More Than<br><br> <br>Five Years to<br><br> <br>15 Years More Than<br><br> <br>15 Years Total
(Dollars in thousands)
Loans receivable held for investment:
Single-family $ 2,150 $ 8,200 $ 4,227 $ 6,481 $ 21,058
Multi-family 16,401 21,364 14,026 551,980 603,771
Commercial real estate 15,002 88,646 33,683 22,186 159,517
Church 2,915 546 5,643 – 9,104
Construction 50,002 33,501 2,073 – 85,576
Commercial - other 29,102 40,303 5,207 48,413 123,025
SBA loans 34 316 9,265 3,243 12,858
Consumer 28 – – – 28
$ 115,634 $ 192,876 $ 74,124 $ 632,303 $ 1,014,937
Loans maturities after one year with:
Fixed rates
Single-family $ 7,747 $ 1,542 $ – $ 9,289
Multi-family 18,392 7,557 – 25,949
Commercial real estate 78,321 26,498 – 104,819
Church – – – –
Construction 4,193 – – 4,193
Commercial - other 40,303 4,224 6,157 50,684
SBA loans – 3,386 – 3,386
Consumer – – – –
$ 148,956 $ 43,207 $ 6,157 $ 198,320
Variable rates
Single-family $ 453 $ 2,685 $ 6,481 $ 9,619
Multi-family 2,972 6,469 551,980 561,421
Commercial real estate 10,325 7,185 22,186 39,696
Church 546 5,643 – 6,189
Construction 29,308 2,073 – 31,381
Commercial - other – 983 42,256 43,239
SBA loans 316 5,879 3,243 9,438
Consumer – – – –
$ 43,920 $ 30,917 $ 626,146 $ 700,983
Total $ 192,876 $ 74,124 $ 632,303 $ 899,303

Certain multi-family loans have adjustable-rate features based on the Secured Overnight Financing Rate but are fixed for the first five years. Our experience has shown that these loans typically pay off during the first five years and do not reach the adjustable-rate phase. However, in the current high interest rate environment, we have seen more borrowers maintain their loans instead of paying them off due to interest rate caps which make the adjusted interest rate on their existing loan more desirable than getting a new loan at current interest rates. Multi-family loans in their initial fixed period totaled $431.0 million or 71.4% of our loan portfolio as of September 30, 2025.

Allowance for Credit Losses

The Company accounts for credit losses on loans in accordance with ASC 326 – Financial Instruments-Credit Losses. ASC 326 requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition. The recognition of losses at origination or acquisition represents the Company’s best estimate of the lifetime expected credit loss associated with a loan given the facts and circumstances associated with the particular loan and involves the use of significant management judgment and estimates, which are subject to change based on management’s on-going assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the model. The Company uses the WARM method when determining estimates for the ACL for each of its portfolio segments. The weighted average remaining life, including the effect of estimated prepayments, is calculated for each loan pool on a quarterly basis. The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter.

Since historical information (such as historical net losses) may not always, by itself, provide a sufficient basis for determining future expected credit losses, the Company periodically considers the need for qualitative adjustments to the ACL.

The Company has a credit portfolio review process designed to detect problem loans. Problem loans are typically those of a substandard or worse internal risk grade, and may consist of loans on non-accrual status, loans that have recently been modified in response to a borrower’s deteriorating financial condition, loans where the likelihood of foreclosure on underlying collateral has increased, collateral dependent loans, and other loans where concern or doubt over the ultimate collectability of all contractual amounts due has become elevated. Such loans may, in the opinion of management, be deemed to no longer possess risk characteristics similar to other loans in the loan portfolio because the specific attributes and risks associated with the loan have likely become unique as the credit quality of the loan deteriorates. As such, these loans may require individual evaluation to determine an appropriate ACL for the loan. When a loan is individually evaluated, the Company typically measures the expected credit loss for the loan based on a discounted cash flow approach, unless the loan has been deemed collateral dependent. The ACL for collateral dependent loans is determined using estimates of the fair value of the underlying collateral, less estimated selling costs.

33

Table of Contents

The estimation of the appropriate level of the ACL requires significant judgment by management. Although management uses the best information available to make these estimates, future adjustments to the ACL may be necessary due to economic, operating, regulatory, and other conditions that may extend beyond the Company’s control. Changes in management’s estimates of forecasted net losses could materially change the level of the ACL. Additionally, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL and credit review process. Such agencies may require the Company to recognize additions to the ACL based on judgments different from those of management.

For the three months ended September 30, 2025, the Company recorded a provision for off-balance sheet loan commitments of $220 thousand and a recapture of provision of $24 thousand for the three months ended September 30, 2025 and 2024, respectively. The Company recorded a provision for off-balance sheet loan commitments of $164 thousand and a recapture of provision of $26 thousand for the nine months ended September 30, 2025 and 2024, respectively. The Company had seven non-accrual loans at September 30, 2025 with an unpaid principal balance of $13.5 million.  Credit quality remains strong with non-accrual loans as a percentage of total loans at 1.33% and non-performing assets to total assets of 1.01% despite the increase in non-accrual loans.

Loans delinquent by 30 days or more, but less than 59 days, increased to $1.2 million at September 30, 2025, from $0 at December 31, 2024 and loan delinquencies for 60 days or more, but less than 90 days, decreased to $0 at September 30, 2025, from $270 thousand at December 31, 2024.  Loans past due greater than 90 days was $426 thousand at September 30, 2025, compared to $0 at December 31, 2024.

We believe that the ACL is adequate to cover currently expected losses in the loan portfolio as of September 30, 2025, but there can be no assurance that actual losses will not exceed the estimated amounts. The OCC and the Federal Deposit Insurance Corporation (“FDIC”) periodically review the ACL as an integral part of their examination process. These agencies may require an increase in the ACL based on their judgments of the information available to them at the time of their examinations.

The following table details our allocation of the ACL to the various categories of loans held for investment and the percentage of loans in each category to total loans at the dates indicated:

September 30, 2025 December 31, 2024 September 30, 2024
Amount Percent of<br><br> <br>Loans in<br><br> <br>Each<br><br> <br>Category to<br><br> <br>Total<br><br> <br>Loans Amount Percent of<br><br> <br>Loans in<br><br> <br>Each<br><br> <br>Category to<br><br> <br>Total<br><br> <br>Loans Amount Percent of<br><br> <br>Loans in<br><br> <br>Each<br><br> <br>Category to<br><br> <br>Total <br><br> Loans
(Dollars in thousands)
Single-family $ 129 2.07 % $ 200 2.39 % $ 219 2.42 %
Multi‑family 6,030 59.49 % 4,617 63.50 % 4,789 62.79 %
Commercial real estate 1,155 15.72 % 1,188 16.23 % 1,363 17.03 %
Church 37 0.90 % 54 0.94 % 60 0.95 %
Construction 2,064 8.43 % 1,564 9.10 % 1,469 8.93 %
Commercial - other 777 12.12 % 730 7.73 % 824 7.80 %
SBA loans 147 1.27 % 11 0.11 % 84 0.08 %
Total allowance for credit losses $ 10,339 100.00 % $ 8,364 100.00 % $ 8,808 100.00 %

Total Liabilities

Total liabilities increased by $24.0 million to $1.1 billion at September 30, 2025 from December 31, 2024, primarily due to an increase of $103.8 million in deposits, partially offset by an $88.0 million decrease in FHLB borrowings.

Deposits

Deposits increased by $103.8 million, or 13.9%, to $849.2 million at September 30, 2025, from $745.4 million at December 31, 2024.  The increase in deposits was attributable to an increase of $72.9 million in certificates of deposit accounts, $26.8 million in liquid deposits (demand, interest checking, and money market accounts), $8.0 million in Insured Cash Sweep (“ICS”) deposits and $4.0 million in Certificate of Deposit Registry Service (“CDARS”) deposits, partially offset by a $7.9 million decrease in savings deposits.  As of September 30, 2025, our uninsured deposits, including deposits from the Bank and other affiliates, represented 36% of our total deposits, compared to 32% as of December 31, 2024.

34

Table of Contents

The following table presents the maturity of time deposits, which includes CDARS, as of the dates indicated:

Three to Six<br><br> <br>Months Six Months<br><br> <br>to One Year Over One<br><br> <br>Year Total
September 30, 2025
Time deposits of 250,000 or less 83,671 $ 47,925 $ 62,676 $ 3,113 $ 197,385
Time deposits of more than 250,000 43,532 32,538 8,455 7,805 92,330
Total 127,203 $ 80,463 $ 71,131 $ 10,918 $ 289,715
Not covered by deposit insurance 40,282 $ 29,038 $ 5,205 $ 6,555 $ 81,080
December 31, 2024
Time deposits of 250,000 or less 46,350 $ 37,239 $ 92,028 $ 4,060 $ 179,677
Time deposits of more than 250,000 3,149 5,712 16,864 7,437 33,162
Total 49,499 $ 42,951 $ 108,892 $ 11,497 $ 212,839
Not covered by deposit insurance 1,399 $ 3,212 $ 12,363 $ 6,437 $ 23,411

All values are in US Dollars.

Borrowings

The Company enters into agreements under which it sells securities subject to an obligation to repurchase the same or similar securities. Under these arrangements, the Company may transfer legal control over the assets but still retain effective control through an agreement that both entitles and obligates the Company to repurchase the assets. As a result, these repurchase agreements are accounted for as collateralized financing agreements (i.e., secured borrowings) and not as a sale and subsequent repurchase of securities. The obligation to repurchase the securities is reflected as a liability in the Company’s consolidated statements of financial condition, while the securities underlying the repurchase agreements remain in the respective investment securities asset accounts. In other words, there is no offsetting or netting of the investment securities assets with the repurchase agreement liabilities. These agreements mature on a daily basis. As of September 30, 2025 securities sold under agreements to repurchase totaled $76.1 million at an average rate of 3.70%. The fair value of securities pledged for repurchase agreements totaled $77.7 million as of September 30, 2025. As of December 31, 2024, securities sold under agreements to repurchase totaled $66.6 million at an average rate of 3.62%. The fair value of securities pledged for repurchase agreements totaled $83.3 million as of December 31, 2024.  One relationship accounted for 76% of our balance of securities sold under agreements to repurchase as of September 30, 2025. We expect to maintain this relationship for the foreseeable future.

At September 30, 2025 and December 31, 2024, the Company had outstanding advances from the FHLB totaling $107.5 million and $195.5 million, respectively. The weighted average interest rate was 4.53% and 4.03% as of September 30, 2025 and December 31, 2024, respectively. The weighted average contractual maturity was less than one month as of both September 30, 2025 and December 31, 2024. The advances were collateralized by loans with an unpaid balance of $497.6 million at September 30, 2025 and $521.7 million at December 31, 2024. The Company is currently approved by the FHLB of Atlanta to borrow up to 25% of total assets to the extent the Company provides qualifying collateral and holds sufficient FHLB stock. Based on collateral pledged and FHLB stock held, the Company was eligible to borrow an additional $213.0 million as of September 30, 2025.

The Company will, from time to time, sell a portion of a loan or group of loans to third parties. In some cases, the transferred portion of the loans does not meet the requirements to be treated as sales for accounting purposes. When that occurs, the legally transferred portion of the loan balance remains classified in gross loans receivable held for investment and a secured borrowing is recorded for the proceeds received from the third party institution. As the transferred portion of the loan pays down, the secured borrowings are repaid. The Company has no obligation to make principal or interest payments on the secured borrowings unless and until payments are received from the loan borrowers. The Company has secured borrowings associated with these participation loan transactions of $30.2 million and $31.4 million as of September 30, 2025 and December 31, 2024, respectively. The weighted average interest rate on the secured borrowings was 5.63% and 5.54% at September 30, 2025 and December 31, 2024, respectively.

In addition, the Company had additional lines of credit of $10.0 million with other financial institutions as of September 30, 2025 and December 31, 2024. These lines of credit are unsecured, bear interest at the Federal funds rate as of the date of utilization and mature in 30 days.  There were no amounts outstanding under these lines of credit as of September 30, 2025 or December 31, 2024.

Stockholders’ Equity

Broadway Financial Corporation and subsidiary equity was $261.7 million, or 19.6%, of the Company’s total assets, at September 30, 2025, compared to $285.0 million, or 21.3% of the Company’s total assets, at December 31, 2024.  Book value per share was $12.17 at September 30, 2025 and $14.80 at December 31, 2024. Capital ratios remain strong with a Community Bank Leverage Ratio of 14.56% at September 30, 2025 compared to 13.61% at December 31, 2024.

On March 26, 2024, the Company issued 94,413 shares of restricted stock to its officers and employees under the Amended and Restated LTIP. Each restricted stock award was valued based on the fair value of the stock on the date of the award.  All the shares issued to officers and employees vest over periods ranging from 36 months to 60 months.

35

Table of Contents

On April 5, 2024, the Company issued 31,645 shares of restricted stock to an officer under the Amended and Restated LTIP.

During May of 2024 and March of 2025, the Company issued 19,832 and 23,232 shares of stock, respectively, to its directors under the Amended and Restated LTIP, which were fully vested.

On March 24, 2025, the Company issued 88,295 shares of restricted stock to its officers and employees under the Amended and Restated LTIP. Each restricted stock award was valued based on the fair value of the stock on the date of the award.  All the shares issued to officers and employees vest over periods ranging from 36 months to 60 months.

On May 28, 2025, the Company issued 8,183 shares of restricted stock to an officer under the Amended and Restated LTIP.

Liquidity

The objective of liquidity management is to ensure that we have the continuing ability to fund operations and meet our obligations on a timely and cost-effective basis. The Bank’s sources of funds include deposits, advances from the FHLB and other borrowings, proceeds from the sale of loans and investment securities, and payments of principal and interest on loans and investment securities. The Bank is currently approved by the FHLB of Atlanta to borrow up to 25% of total assets to the extent the Bank provides qualifying collateral and holds sufficient FHLB stock. Based on FHLB stock held and collateral pledged as of September 30, 2025, the Bank had the ability to borrow an additional $213.0 million from the FHLB of Atlanta. In addition, the Bank had additional lines of credit of $10.0 million with other financial institutions as of September 30, 2025.

The Bank’s primary uses of funds include originations of loans, withdrawals of and interest payments on deposits, purchases of investment securities, and the payment of operating expenses. Also, when the Bank has more funds than required for reserve requirements or short-term liquidity needs, the Bank invests in federal funds with the Federal Reserve Bank or in money market accounts with other financial institutions. The Bank’s liquid assets at September 30, 2025 consisted of $19.7 million in cash and cash equivalents and $154.2 million in securities available-for-sale that were not pledged, compared to $61.4 million in cash and cash equivalents and $17.6 million in securities available-for-sale that were not pledged at December 31, 2024. Currently, we believe the Bank has sufficient liquidity to support growth over the next twelve months and in the longer term.

The Bank had commitments to fund $25.2 million in loans that were approved but unfunded as of September 30, 2025.  In addition, the bank had $3.1 million in unfunded line of credit loans and $27.4 million in unfunded construction loans as of September 30, 2025.

The Bank has a significant concentration of deposits with five customers that accounted for approximately 23% of its deposits as of September 30, 2025. The Bank also has a significant concentration of short-term borrowings with one customer that accounted for 76% of the outstanding balance of securities sold under agreements to repurchase as of September 30, 2025. The Bank has long-term relationships with these customers and expects to maintain its relationships with them for the foreseeable future.

The Company’s liquidity, separate from the Bank, is based primarily on the proceeds from financing transactions, such as the private placement completed in June of 2022 and previous private placements. The Bank is currently under no prohibition from paying dividends to the Company but is subject to restrictions as to the amount of the dividends based on normal regulatory guidelines.

The Company recorded consolidated net cash outflows from investing activities of $66.0 million during the nine months ended September 30, 2025, compared to net cash outflows from investing activities of $3.3 million during the nine months ended September 30, 2024. Net cash outflows from investing activities for the nine months ended September 30, 2025 were primarily due to  purchases of available-for-sale securities of $117.9 million, purchases of bank owned life insurance of $20.0 million and funding of new loans, net of repayments, of $15.5 million, partially offset by $84.0 million in proceeds from principal paydowns on available-for-sale securities. Net cash outflows from investing activities during the nine months ended September 30, 2024 were primarily due to funding of new loans, net of repayments, of $88.1 million, partially offset by $85.1 million in proceeds from principal paydowns on available-for-sale securities.

The Company recorded consolidated net cash inflows from financing activities of $21.8 million during the nine months ended September 30, 2025, compared to consolidated net cash outflows from financing activities of $9.1 million during the nine months ended September 30, 2024. Net cash inflows from financing activities during the nine months ended September 30, 2025 were primarily due to proceeds of FHLB borrowings of $549.5 million and a net increase in deposits of $103.8 million, partially offset by repayments of FHLB borrowings of $637.5 million. Net cash outflows from financing activities during the nine months ended September 30, 2024 were primarily attributable to proceeds from FHLB borrowings of $178.4 million, partially offset by the repayment of FHLB borrowings of $176.7 million and the repayment of a note of $14.0 million.

36

Table of Contents

Capital Resources and Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary, actions by the regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors. As of September 30, 2025 and December 31, 2024, the Bank exceeded all capital adequacy requirements to which it is subject and meets the qualifications to be considered “well capitalized.” (See Note 10 – Regulatory Matters.)

Use of Non-GAAP Financial Measures

Management uses non-GAAP measures because they provide information to investors about the underlying operational performance and trends of the Company. These disclosures should not be considered in isolation or as a substitute for results determined in accordance with GAAP and are not necessarily comparable to non-GAAP performance measures which may be presented by other bank holding companies. Management compensates for these limitations by providing detailed reconciliations between GAAP information and the non-GAAP financial measures. The tables below reconciles the GAAP financial measures to the associated non-GAAP financial measures.

Tangible book value per common share is a non-GAAP measurement that excludes goodwill and the net unamortized core deposit intangible asset, which were both originally recorded in connection with the CFBanc merger. The Company uses this non-GAAP financial measure to provide supplemental information regarding the Company’s financial condition and operational performance. A reconciliation between common book value and tangible book value per common share is shown as follows:

Common Equity<br><br> <br>Capital Shares<br><br> <br>Outstanding Per Share<br><br> <br>Amount
(Dollars in thousands)
September 30, 2025:
Common book value $ 111,687 9,180,760 $ 12.17
Less:
Goodwill –
Net unamortized core deposit intangible 1,539
Tangible book value $ 110,148 9,180,760 $ 12.00
December 31, 2024:
Common book value $ 134,973 9,120,363 $ 14.80
Less:
Goodwill 25,858
Net unamortized core deposit intangible 1,775
Tangible book value $ 107,340 9,120,363 $ 11.77

The Company calculates net income before preferred dividends and goodwill impairment by adding preferred stock dividends and goodwill impairment to net loss available to common shareholders.  Earnings per common share - diluted before preferred dividends and goodwill impairment is calculated by dividing net income before preferred dividends and goodwill impairment by the weighted average common shares outstanding for diluted earnings per common share. The Company considers this information important to shareholders because it illustrates net income and earnings per common share - diluted excluding the impact of preferred dividends and goodwill impairment.

For the Three Months Ended<br><br> <br>September 30, For the Nine Months<br><br> <br>Ended September 30,
2025 2024 2025 2024
(Dollars in thousands)
Net loss available to common shareholders $ (24,633 ) $ (234 ) $ (28,070 ) $ (199 )
Add: Preferred stock dividends 750 750 2,250 817
Add: Goodwill impairment 25,858 - 25,858 -
Net income before preferred dividends and goodwill impairment $ 1,975 $ 516 $ 38 $ 618
Weighted average common shares outstanding for diluted earnings per common share 8,617,707 8,520,730 8,581,883 8,386,919
Earnings per common share - diluted before preferred dividends and goodwill impairment $ 0.23 $ 0.06 $ 0.00 $ 0.07

37

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Applicable

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of September 30, 2025 was carried out under the supervision and with the participation of the Company’s Chief Executive Officer, Chief Financial Officer and other members of the Company’s senior management. Based on the evaluation, management identified material weaknesses related to the Company’s internal control over financial reporting and, as a result, concluded that the Company’s disclosure controls and procedures were ineffective as of September 30, 2025. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements would not be prevented or detected on a timely basis.

Management identified the following material weaknesses in the Company’s internal control over financial reporting:

The Company did not maintain effective components of the COSO framework in the areas of control activities, information and communication process and monitoring activities that contributed to the following material weaknesses:

• The ineffective design of the management review control relating to the evaluation of the accounting for loan participations sold in accordance with generally accepted accounting principles, including the assignment of<br> personnel with appropriate levels of knowledge, experience and training.
• The Company did not have controls in place to identify unusual or infrequent equity-related contracts entered into which could have a material impact on accounting and financial reporting.
--- ---
• The Company did not maintain controls to consider subsequent appraisals for collateral dependent loans.
--- ---

Remediation Plans

In response to the identified material weaknesses, the Company’s management, with the oversight of the Audit Committee of our Board of Directors, has begun to dedicate significant resources, including additional employee training, toward efforts to improve our internal control over financial reporting. Management is actively engaged in the planning for, and implementation of, remediation efforts to address the material weaknesses.

• Implementation of additional control procedures, including redesigning and enhancing control activities related to preparation and review of existing and new loan participation agreements, and any amendments thereto,
• Thorough discussion and review of all new unusual or infrequent equity-related contracts each quarter with documentation of accounting treatment and disclosure with respect to such transactions that could have a potential<br> impact on the Company’s financial statements, and
--- ---
• An enhancement of the controls over the allowance for credit losses at each quarter end to evaluate that all appraisals for collateral dependent loans that are received prior to the date that the financial statements are<br> issued have been evaluated by management and considered in the estimate of the allowance for credit losses.
--- ---

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the three months ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions, and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected.

38

Table of Contents

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

None

Item 1A. RISK FACTORS

Management is not aware of any material changes to the risk factors that appeared under “Part I, Item 1A. Risk Factors” in the 2024 Form 10-K and “Part II, Item 1A. Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2025, as amended.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

Item 3. DEFAULTS UPON SENIOR SECURITIES

None

Item 4. MINE SAFETY DISCLOSURES

Not Applicable

Item 5. OTHER INFORMATION

None

Item 6. EXHIBITS
Exhibit<br><br> <br>Number*
--- ---
3.1 Amended and Restated Certificate of Incorporation of Registrant effective as of April 1, 2021 (Exhibit 3.1 to Form 8-K filed by Registrant on April 5, 2021)
3.2 Certificate of Amendment to Certificate of Incorporation of Registrant (Exhibit 3.1 to Form 8-K filed by Registrant on November 1, 2023)
3.3 Bylaws of Registrant (Exhibit 3.2 to Form 8-K filed by Registrant on August 24, 2020)
3.4 Certificate of Designations of Senior Non-Cumulative Perpetual Preferred Stock, Series C (Exhibit 3.1 to Form 8-K filed by Registrant on June 8, 2022)
31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2 Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH Inline XBRL Taxonomy Extension Schema Document
101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline XBRL Taxonomy Extension Definitions Linkbase Document
101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)
* Exhibits followed by a parenthetical reference are incorporated by reference herein from the document filed by the Registrant with the SEC described therein. Except as otherwise indicated, the SEC<br> File No. for each incorporated document is 000-27464.
--- ---
** Management contract or compensatory plan or arrangement.
--- ---

39

Table of Contents

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 13, 2026 By: /s/ Brian Argrett
Brian Argrett
Chief Executive Officer
Date: February 13, 2026 By: /s/ Zack Ibrahim
Zack Ibrahim
Chief Financial Officer

40

Exhibit 31.1

SECTION 302 CERTIFICATION

I, Brian Argrett, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Broadway Financial Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,<br> in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
--- ---
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial<br> condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
--- ---
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act<br> Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
--- ---
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material<br> information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
--- ---
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide<br> reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
--- ---
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the<br> disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
--- ---
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter<br> (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
--- ---
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the<br> registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
--- ---
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to<br> adversely affect the registrant’s ability to record, process, summarize and report financial information; and
--- ---
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial<br> reporting.
--- ---
Date: February 13, 2026 By: /s/ Brian Argrett
--- --- ---
Brian Argrett
Chief Executive Officer

Exhibit 31.2

SECTION 302 CERTIFICATION

I, Zack Ibrahim, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Broadway Financial Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made,<br> in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
--- ---
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial<br> condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
--- ---
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act<br> Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
--- ---
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material<br> information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
--- ---
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide<br> reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
--- ---
c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the<br> disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
--- ---
d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter<br> (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
--- ---
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the<br> registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
--- ---
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to<br> adversely affect the registrant’s ability to record, process, summarize and report financial information; and
--- ---
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial<br> reporting.
--- ---
Date: February 13, 2026 By: /s/ Zack Ibrahim
--- --- ---
Zack Ibrahim
Chief Financial Officer

Exhibit 32.1

SECTION 906 CERTIFICATION

The following statement is provided by the undersigned to accompany the foregoing Report on Form 10-Q pursuant to Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law.

The undersigned certifies that the foregoing Report on Form 10-Q fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Broadway Financial Corporation at the dates and for the periods indicated.

Date: February 13, 2026 By: /s/ Brian Argrett
Brian Argrett
Chief Executive Officer

Exhibit 32.2

SECTION 906 CERTIFICATION

The following statement is provided by the undersigned to accompany the foregoing Report on Form 10-Q pursuant to Title 18, Chapter 63, Section 1350 of the United States Code, as amended by Section 906 of the Sarbanes-Oxley Act of 2002, and shall not be deemed filed pursuant to any provision of the Securities Exchange Act of 1934 or any other securities law.

The undersigned certifies that the foregoing Report on Form 10-Q fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the report fairly presents, in all material respects, the financial condition and results of operations of Broadway Financial Corporation at the dates and for the periods indicated.

Date: February 13, 2026 By: /s/ Zack Ibrahim
Zack Ibrahim
Chief Financial Officer

Report a Problem

Category
Description
Email (optional, for follow-up)