Stock Split and Share Repurchase - On October 31, 2023, the Company executed a 1-for-8 reverse stock split, reducing the number of outstanding shares accordingly[17] - The Company repurchased 244,771 shares of Class A Common Stock at a price of 968.9 million, accounting for 74.3% of total assets[24] - The loan portfolio composition includes 64.94% multi-family loans, 16.01% commercial real estate loans, and 2.42% single-family loans as of December 31, 2024[28] - More than 84% of the loans in the portfolio have adjustable-rate features, reducing exposure to interest rate risk[25] - The total loans held for investment as of December 31, 2024, were 157.7 million, a decrease of 3.5% from 80.9 million in 2024, up 2.6% from 50.8 million in 2024 from 69.1 million, an increase of 46.5% compared to 264,000 as of December 31, 2024, compared to no NPAs in 2023[60] - Total criticized loans increased to 130.0 million at December 31, 2023, marking a 15.5% rise[65] - Substandard loans rose to 21.7 million in 2023, indicating a significant increase of 174%[65] - The Company reported an Allowance for Credit Losses (ACL) of 203.9 million, representing 15.6% of total assets as of December 31, 2024[84] - As of December 31, 2024, total securities amounted to 203.9 million in 2023, reflecting a growth of approximately 7.5%[89] - No ACL was required for available-for-sale investment securities as of December 31, 2024, due to declines in fair value being related to interest rates rather than credit[87] Deposits and Funding - The company’s total deposits reached 577.3 million in 2023, marking a growth of 2%[98] - The weighted average yield on total deposits for 2024 was 2.24%, up from 1.30% in 2023, indicating a significant increase in funding costs[98] - The company had 114.8 million in 2023, representing a growth of 27%[93] Regulatory and Compliance - The Company is regulated by the Federal Reserve System, and its deposits are insured by the FDIC[19] - The Company is subject to restrictions on capital distributions, including dividends, if it falls within any undercapitalized categories[141] - The Company must notify the OCC at least 30 days prior to declaring any capital distribution, allowing the OCC to object if deemed inadvisable[142] Economic and Market Conditions - The macroeconomic environment poses significant challenges, with inflation impacting business customers through loss of purchasing power and increased costs[150] - The Federal Reserve raised interest rates seven times in 2022 and four times in 2023, increasing interest rate risk for the Company[151] - A downturn in the real estate market could impair the company's loan portfolio, leading to increased loan delinquencies and defaults, which would likely cause the company to suffer losses[154] Competition and Market Position - The Bank faces significant competition in its market areas from larger financial institutions, including mortgage banking companies and commercial banks[105] - The company faces strong competition in the Washington, D.C. and Los Angeles metropolitan areas from various financial institutions, which may adversely affect its financial condition and results of operations[153] Operational Risks - Systems failures and cybersecurity breaches could have a material adverse effect on the company's operations and financial condition[171] - The financial services industry is experiencing rapid technological changes, which may lead to operational challenges and increased costs for the company[173] - The company has implemented a layered cybersecurity approach to manage risks, although threats remain high due to evolving attack methods[184]
Broadway Financial (BYFC) - 2024 Q4 - Annual Report