Broadway Financial (BYFC)

Risks

• We may not be successful in retaining key employees.
• The COVID-19 pandemic has impacted the economy and our businesses. The extent and severity of the impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted.
• The economic environment could pose significant challenges for the Company and could adversely affect our financial condition and results of operations.
• The Company is a holding company and depends primarily on dividends from the bank for operating funds.
• We may not be successful in seeking future awards under the United States Department of the Treasury CDFI Fund’s New Markets Tax Credit (“NMTC”) program or such program may not receive Congressional support in the future.
• If we were to lose our status as a CDFI, our ability to obtain grants and awards as a CDFI similar to those received in the past may be lost.
• Our future success will depend on our ability to compete effectively in the highly competitive financial services industry in the greater Washington D.C. and Los Angeles metropolitan areas.
• A downturn in the real estate market could seriously impair our loan portfolio and operating results.
• Our allowance for loan losses may not be adequate to cover actual loan losses.
• Changes in interest rates affect profitability.
• Changes in governmental regulation may impair operations or restrict growth.
• Negative public opinion regarding us or the failure to maintain our reputation in the communities we serve could adversely affect our business and prevent us from growing our business.
• Systems failures, interruptions and cybersecurity breaches in our information technology and telecommunications systems and of third-party service providers could have a material adverse effect on us.
• The financial services industry is undergoing rapid technological change, and we may not have the resources to effectively implement new technology or may experience operational challenges when implementing new technology.
• The markets in which we operate are susceptible to natural disasters, including earthquakes, fires, flooding, and other catastrophic events, any of which could result in a disruption of our operations and increases in loan losses.
• We cannot provide any assurance that we will achieve our public benefit purposes.
• As a Delaware public benefit corporation, our focus on specific public benefit purposes and producing a positive effect for society may negatively impact our financial performance.
• As a Delaware public benefit corporation, the Company’s directors have a fiduciary duty to consider not only our stockholders’ interests, but also the specific public benefit purposes we have committed to promote and the interests of other stakeholder constituencies. If a conflict between such interests arises, there is no guarantee such conflict would be resolved in favor of the interests of our stockholders.
• As a Delaware public benefit corporation, we may be subject to increased derivative litigation concerning our duty to balance stockholder and public benefit interests, the occurrence of which may have an adverse impact on its financial condition and results of operations.
• The market price of our common stock is volatile. Stockholders may not be able to resell shares of our common stock at times or at prices they find attractive.
• We have not paid cash dividends on our common stock since 2010 and we may not pay any cash dividends on our common stock for the foreseeable future.
• Stock sales by us or other dilution of our equity may adversely affect the market price of our common stock.
• Anti-takeover provisions of our certificate of incorporation and bylaws, federal and state law and our stockholder rights plan may limit the ability of another party to acquire the Company, which could depress our stock price.
• Our common stock is not insured and stockholders could lose the value of their entire investment.