Business Context and Reporting Period
Company: Broadway Financial Corporation (NASDAQ: BYFC), the holding company of City First Bank, National Association.
Filing Type: Form 8-K (Current Report)
Date of Report: October 15, 2025
Subject: Non-reliance on previously issued financial statements due to accounting errors.
Key Financial Metrics
This filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity. Instead, it announces that previously reported figures for the following periods are unreliable and will be restated:
- Fiscal years ended December 31, 2024 and 2023.
- Quarters ended March 31, 2024, June 30, 2024, September 30, 2024, and March 31, 2025.
The restatement will impact the Consolidated Statements of Financial Condition, interest income, interest expense, and the allowance for credit losses.
Material Changes and Accounting Error
The Audit Committee concluded that the "Affected Financials" should no longer be relied upon due to an error in the accounting treatment of certain loan participation agreements. The error involves non-compliance with Accounting Standards Codification (ASC) Topic 860. Consequently, the Company will file amendments to its 2024 Form 10-K and Q1 2025 Form 10-Q to restate these periods.
Management Commentary, Risks, and Internal Controls
- Material Weakness: Management has identified a material weakness in internal control over financial reporting as of the date the Affected Financials were originally filed.
- Communications: Related press releases, stockholder communications, and investor presentations describing the Affected Financials are no longer reliable.
- Auditor Involvement: The matter has been discussed with Baker Tilly US, LLP (auditor for 2024 10-K) and Crowe LLP (auditor for Q1 2025 10-Q).
- Risks: Forward-looking statements regarding the restatement involve risks of additional corrections to consolidated financial statements.
Investor Verification Checklist
- Verify the specific quantitative impact of the ASC Topic 860 error on net income and assets once the 10-K/A and 10-Q/A amendments are filed.
- Review the detailed description of the material weakness in internal controls in the upcoming amendments.
- Confirm the timeline for the filing of the amended 2024 10-K and Q1 2025 10-Q.
- Assess the scope of loan participation agreements affected by the restatement.