The sequential earnings decline and elevated provision expense due to a specific reserve on a non-accrual loan warrant close monitoring of credit quality in upcoming quarters. However, the strong balance sheet growth (loans +6%, deposits +4% QoQ) and 82% QoQ surge in pre-provision net revenue suggest the underlying business momentum remains intact. Watch for further updates on the specific non-accrual loan and any impact on the net interest margin trajectory.
Price Chart
Executive Summary
Broadway Financial Corporation reported Q2 2026 net income attributable to common stockholders of $218K ($0.02/diluted share), down 47% sequentially from $409K in Q1 2026, driven by a $1.5M provision for credit losses (vs $200K in Q1) tied to a specific reserve on a non-accrual loan. Despite strong balance sheet growth (total assets +10% QoQ to $1.56B, loans +6% QoQ, deposits +4% QoQ) and a 404% YoY surge in pre-provision net revenue to $3.0M, the elevated provision and a one-time $0.5M interest calculation error weighed on bottom-line results. The net interest margin compressed 10bp QoQ to 2.65% as funding costs rose. The sequential earnings decline and credit event temper the otherwise positive growth narrative.
Key Financial Metrics
Key Facts
- Net income attributable to common stockholders was $218K in Q2 2026, down 47% from $409K in Q1 2026.
- Diluted EPS was $0.02, down from $0.05 in Q1 2026.
- Pre-provision net revenue (non-GAAP) surged 82.2% QoQ to $3.0M, up 404% YoY.
- Provision for credit losses jumped to $1.5M from $200K in Q1, driven by a specific reserve on a non-accrual loan.
- Total gross loans increased 6% QoQ to $1.14B; total deposits grew 4% QoQ to $1.11B.
- Net interest margin compressed to 2.65% from 2.75% in Q1, as cost of funds rose to 3.02%.
- Non-interest expense fell 7% QoQ to $7.5M; efficiency ratio improved to 71.6% from 83.1%.
- A one-time correction of errors in interest calculation had a pre-tax impact of ($0.5M) in Q2.
- Community Bank Leverage Ratio remained strong at 13.20%, down from 14.09% at year-end 2025.
- Nonperforming assets were stable at $11.2M (0.71% of total assets).
Financial Impact
Net income attributable to common stockholders fell to $218K from $409K QoQ; pre-provision net revenue rose to $3.0M from $1.6M QoQ. Provision expense increased by $1.3M QoQ.
Risk Factors
- Further credit deterioration or additional specific reserves on non-accrual loans could pressure earnings.
- Net interest margin compression (down 10bp QoQ) and rising cost of funds (3.02% vs 2.91%) may persist if deposit competition intensifies.
- One-time interest calculation errors ($0.5M pre-tax impact) raise questions about internal controls.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001140361-26-029886 |
| Document: ef20078897_ex99-2.htm | 0001140361-26-029886 |
| Document: ef20078897_8k.htm | 0001140361-26-029886 |
| Document: 0001140361-26-029886-index-headers.html | 0001140361-26-029886 |
| Document: 0001140361-26-029886-index.html | 0001140361-26-029886 |
| Document: 0001140361-26-029886.txt | 0001140361-26-029886 |
| 8-K Data (Synthetic) | 0001140361-26-029886 |
Track record builds as more directional reports settle.
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| Type | Now | ||||
|---|---|---|---|---|---|
Jul 28, 2026 13w ago | 8-K | $10.04 $11.32 | ▲ +12.70% | ▲ +7.97% | $11.27 (+12.25%) |
Jun 23, 2026 18w ago | 8-K | $9.58 $11.86 | ▲ +23.80% | ▲ +20.55% | $11.27 (+17.64%) |
Jun 18, 2026 18w ago | 8-K | $9.58 $11.86 | ▲ +23.75% | ▲ +22.00% | $11.27 (+17.64%) |
Apr 30, 2026 25w ago | DEFA14A | $8.12 $10.16 | ▲ +25.12% | ▲ +22.05% | $11.27 (+38.79%) |
Apr 28, 2026 26w ago | 8-K | $7.77 $10.23 | ▲ +31.66% | ▲ +27.55% | $11.27 (+45.05%) |
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