BROADWAY FINANCIAL CORP DE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (form 10-Q)
BYFC
Critical Accounting Policies and Estimates
Allowance for Loan Losses
Business Combinations
Acquired Loans
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The estimates used to determine the fair values of non-PCI and PCI acquired loans can be complex and require significant judgment regarding items such as default rates, timing and amount of future cash flows, prepayment rates and other factors.
Goodwill and Intangible Assets
Income Taxes
Fair Value Measurements
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 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.
COVID-19 Pandemic Impact
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Overview
Net Interest Income
First Quarter of 2022 Compared to First Quarter of 2021
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(Dollars in Thousands) Average Balance Interest Cost
(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
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Loan Loss Provision
Non-interest Income
Income Tax Expense or Benefit
Securities Available-For-Sale
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There were no recoveries or charge-offs recorded during the first quarter of 2022 or 2021.
The Bank has a loan modification program for the effects of COVID-19 on its borrowers. At the date of this filing, two borrowers have requested applications, but no applications for loan modifications have been formally submitted. Both borrowers were current at the time the modification program was implemented. To date, no modifications have been granted.
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Goodwill and Intangible Assets
No impairment charges were recorded during the three months ended March 31, 2022 related to goodwill or the core deposit intangible.
Total Liabilities
Total liabilities increased by $42.4 million to $994.8 million at March 31, 2022 from $952.4 million at December 31, 2021, largely due to growth in deposits.
Deposits
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One relationship accounted for 74% of our balance of securities sold under agreements to repurchase as of March 31, 2022. We expect to maintain this relationship for the foreseeable future.
At March 31, 2022, CBLR was 9.45% compared to 9.32% as of December 31, 2021. The increase in CBLR was due to growth in the Bank's net earnings.
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Capital Resources and Regulatory Capital
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