WASHINGTON & LOS ANGELES--(BUSINESS WIRE)--Broadway Financial Corporation (NASDAQ: BYFC) and CFBanc Corporation jointly announced today that they have received the regulatory approvals required to complete their proposed merger of equals transaction from the Office of the Comptroller of the Currency on December 24, 2020 and from the Federal Reserve Bank of San Francisco acting on behalf of the Board of Governors of the Federal Reserve System on December 28, 2020. Pursuant to the merger, City First will merge with and into Broadway, with Broadway as the surviving corporation, and, subsequently, Broadway Federal Bank, f.s.b., Broadway’s bank subsidiary, will merge with and into City First Bank of D.C., N.A., City First’s bank subsidiary, with City First Bank as the surviving bank.
In addition, City First Enterprises, Inc., a nonprofit corporation that is the largest stockholder of City First, received regulatory approval from the Federal Reserve Bank of San Francisco to acquire approximately 18.85% of Broadway pursuant to the merger and thereby indirectly acquire control of BFB.
The merger will create the largest African American-led Minority Depository Institution (“MDI”) in the nation with more than $1 billion in combined assets under management and over $900 million in total depository institution assets as of September 30, 2020. Combining the two institutions will increase their collective commercial lending capacity for investments in multi-family affordable housing, small businesses, and nonprofit development in financially underserved urban areas, while creating a national platform for impact investors.
“I am excited that we are announcing regulatory approval for our historic merger. This represents a critical milestone in our process for creating a dynamic banking institution with sufficient scale to begin addressing the systemic inequities in access to capital and financial opportunities available within low-to-moderate income communities. The need for such an institution has been highlighted by the confluence of domestic social unrest, the global pandemic, and resulting pervasive unemployment that has occurred in 2020,”said Brian E. Argrett, President and CEO of City First Bank and the Vice Chair and CEO of the new combined institution. “These events have invigorated our resolve to pursue our bank’s mission. Our management teams are continuing to work diligently to plan for a successful integration of the two organizations, and to obtain shareholder approval of the merger.”
“We greatly appreciate the prompt review of the merger by all of the regulators involved with oversight of Broadway, City First, and our respective bank subsidiaries, and their assessments and determinations to approve the merger. These approvals are pivotal achievements in helping us create a combined institution with over $90 million in equity capital and the capabilities to drive both sustainable economic growth and societal returns for the low-to-moderate income communities that we serve,” said Mr. Wayne-Kent A. Bradshaw, CEO of Broadway and the Chair of the new combined institution.
The merger is expected to be completed in the first half of 2021, subject to the satisfaction of customary closing conditions, including approval by the stockholders of each company. As previously announced, at the closing of the merger, City First common shareholders will receive 13.626 shares of Broadway common stock for each share of City First common stock they own, resulting in Broadway stockholders owning approximately 52.5% and City First shareholders owning approximately 47.5% of the combined institution, before dilution from a proposed private placement of Broadway’s common stock with certain institutional investors. Completion of Broadway’s private placement at its maximum proposed amount would result in the issuance of up to 12,720,000 shares of common stock at a price of $1.78 per share.
About CFBanc Corporation
City First conducts its operations through its wholly owned subsidiary, City First Bank. Founded over 25 years ago in direct response to systemic disinvestment in our communities, City First has been an innovator and a financial first responder for equitable economic development in Washington, D.C. Together with its affiliates, City First has since invested over $1.3 billion as of September 30, 2020 with a vision to advance economic equity and social justice, impacting families and communities today and for generations to come. City First is part of a dedicated network of CDFIs and certified BCorps, and is a member of the Global Alliance of Banking on Values, entities whose values are aligned with sustainable solutions, healthier families, and more prosperous communities for our collective well-being. For more information, please visit www.cityfirstbank.com.
About Broadway Financial Corporation
Broadway conducts its operations through its wholly owned subsidiary, Broadway Federal Bank, f.s.b., which is the leading community-oriented savings bank in Southern California serving low-to-moderate income communities. Broadway Federal Bank offers a variety of residential and commercial real estate loan products for consumers, businesses and nonprofit organizations, other loan products and a variety of deposit products, including checking, savings and money market accounts, certificates of deposits and retirement accounts. Broadway Federal Bank operates three full-service branches, two in the city of Los Angeles, and one located in the nearby city of Inglewood, California. For more information, please visit www.broadwayfederalbank.com.
