Broadway Financial Corporation announced revised results for the first quarter of 2025, reporting a consolidated net loss before preferred dividends of $1.9 million, or ($0.21) per diluted share. This compares to a consolidated net loss of $164 thousand, or ($0.02) per diluted share, for the first quarter of 2024. The net loss attributable to common stockholders was $2.6 million.
The revised results highlight a significant $1.9 million loss incurred from wire fraud, which substantially increased non-interest expense by $2.4 million, or 30.6%, compared to the prior year's quarter. The company anticipates a corresponding gain if the funds are recovered. Additionally, the provision for credit losses increased to $689 thousand due to one new non-accrual loan.
The company also disclosed that it executed an ECIP Securities Purchase Option Agreement with the U.S. Treasury in Q1 2025, which provides an option to repurchase Series C Preferred Stock. This unusual contract prompted the engagement of an independent third-party to assist with proper accounting treatment and disclosure, causing a delay in financial reporting. Management identified a material weakness in internal controls over financial reporting as of March 31, 2025, specifically regarding the identification and accounting for unusual equity-related contracts.
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