Broadway Financial Corporation (BYFC): ANSOFF MATRIX [Dec-2025 Updated]

You're looking at Broadway Financial Corporation's Q2 2025 numbers-a solid 15.69% Community Bank Leverage Ratio and a $798.9 million deposit base-and wondering where the real growth comes from next. Honestly, navigating expansion when you're sitting on 34% uninsured deposits and a 2.63% NIM requires a clear map, not just hope. So, I've broken down the four paths using the Ansoff Matrix: from aggressively cross-selling loans in your current footprint to launching a digital-only platform or even acquiring a FinTech firm. Below, you'll see the precise, actionable steps Broadway Financial Corporation can take right now to move beyond its current markets and product set, giving you a clear view of both the safe bets and the big swings.

Broadway Financial Corporation (BYFC) - Ansoff Matrix: Market Penetration

You're looking at how Broadway Financial Corporation (BYFC) can deepen its hold in its existing markets, which is the essence of Market Penetration in the Ansoff Matrix. This strategy focuses on selling more of what you already offer to the customers you already serve, or can easily reach in your current footprint.

The immediate goal here is clear: increase deposit market share from the Q2 2025 base of $798.9 million. This isn't just about volume; it's about solidifying the funding base. To support this, you need to aggressively cross-sell commercial real estate loans to existing deposit customers in current markets. This dual approach-deepening banking relationships through lending-is key to locking in that deposit base.

A major lever for profitability within this strategy is boosting the net interest margin (NIM) above the Q2 2025 figure of 2.63%. You achieve this via better loan pricing, meaning you need to be disciplined on the asset side while managing the cost of funds. Honestly, the balance sheet structure is already supportive; you can use the strong Community Bank Leverage Ratio of 15.69% to support higher loan volume without immediately straining capital.

Here's a quick look at where the numbers stood as of the end of Q2 2025, giving you the backdrop for these actions:

The risk around uninsured deposits needs direct action. You must run targeted campaigns to convert uninsured deposits, which the plan sets at 34% of total, into stickier, insured products. This is about managing potential liquidity sensitivity by increasing the stickiness of your funding sources. You've already seen borrowings reduced by $126.3 million year-to-date, which helps the NIM, but converting those operational deposits into core deposits is the next logical step.

To execute this Market Penetration drive, focus on these specific actions:

• Increase deposit market share from the Q2 2025 base of $798.9 million.
• Aggressively cross-sell commercial real estate loans to existing deposit customers in current markets.
• Boost the net interest margin (NIM) above the Q2 2025 2.63% via better loan pricing.
• Utilize the strong Community Bank Leverage Ratio of 15.69% to support higher loan volume.
• Run targeted campaigns to convert uninsured deposits (34% of total) into stickier, insured products.

The ability to price loans better, pushing the NIM up from 2.63%, relies on having a stable, lower-cost funding base, which is what the deposit conversion work helps secure. Also, remember that the cost of funds already dropped to 3.07% in Q2 2025, so you have momentum to build on. Finance: draft the 13-week cash view by Friday.

Broadway Financial Corporation (BYFC) - Ansoff Matrix: Market Development

You're looking at how Broadway Financial Corporation can use its existing structure to enter new geographic areas, which is the Market Development quadrant of the Ansoff Matrix. This strategy relies heavily on the capital base already established.

The $150 million capital infusion from the United States Department of the Treasury via the Emergency Capital Investment Program (ECIP) in June 2022 provides the foundation for this scale-up. This investment was intended to qualify as Tier 1 Capital. The dividend structure on this preferred stock is tied to qualified lending, starting at zero percent for the first two years, with a floor of 0.50% and a ceiling of 2.00% annually thereafter.

Broadway Financial Corporation, through its subsidiary City First Bank, National Association, currently serves low-to-moderate income communities in the Southern California and Washington, D.C. markets. The bank is a Community Development Financial Institution (CDFI), requiring it to deploy at least 60% of its lending into low- to moderate-income communities.

Here's a look at the scale of the balance sheet supporting this expansion effort, using the latest reported figures:

The growth in the deposit base is a key enabler for funding new market lending. Deposits grew by $53.5 million, or 7.18%, in the first half of 2025. This growth is being actively managed, with the appointment of Justin Jennings as Executive Vice President, Chief Deposit Officer in October 2025.

The Market Development strategy involves specific actions:

• Expand CDFI lending operations into new, high-growth urban markets like Atlanta or Houston.
• Target national non-profit and mission-aligned institutional investors for large, low-cost deposits.
• Launch a digital-only deposit platform to defintely capture customers outside the physical Southern California and D.C. footprint.
• Leverage the ECIP investment to fund strategic expansion into one new, underserved state.

The total gross loans receivable had grown 43.7% since the June 2022 ECIP investment, reaching $934.8 million as of March 31, 2024. This demonstrates the capacity to deploy capital outside the existing footprint, which is critical for new state entry. The reduction in funding costs, with borrowings dropping by $126.3 million (or 64.6%) from $195.5 million at December 31, 2024, to $69.2 million at June 30, 2025, improves the economics for new lending initiatives.

The existing deposit base at March 31, 2025, stood at $776.5 million. A portion of these deposits, 34% as of March 31, 2025, were uninsured, leveraging a partnership with IntraFi Deposit Solutions for coverage above the $250,000 FDIC limit.

For context on recent performance, the net interest margin expanded to 2.70% in Q1 2025. However, the consolidated net loss before preferred dividends for Q1 2025 was $1.9 million.

Finance: draft 13-week cash view by Friday.

Broadway Financial Corporation (BYFC) - Ansoff Matrix: Product Development

You're looking at how Broadway Financial Corporation (BYFC) can grow by introducing new products to its current customer base, which is the Product Development strategy in the Ansoff Matrix. This means taking what we know about our existing commercial, non-profit, and Low-to-Moderate Income (LMI) customers and building specific tools for them. We have a solid base to build upon, with total deposits reaching $798.9 million as of June 30, 2025.

Here are some key financial figures from the first half of 2025 to frame these product decisions:

Introduce a specialized treasury management suite for existing commercial and non-profit clients.

This suite targets the existing commercial and non-profit segments that contribute to our deposit base. We need to offer services that manage large balances efficiently. As of June 30, 2025, uninsured deposits, which include deposits from affiliates, represented 35% of our total deposits. This suggests a significant need among our commercial clients for sophisticated cash management and deposit sweep solutions beyond standard FDIC insurance limits, like the arrangements we leverage with IntraFi Deposit Solutions. The net interest margin for the second quarter of 2025 was 2.63%, so any new treasury product must enhance this margin or significantly increase low-cost core deposits.

Develop a new, high-yield money market account to better compete for existing customer funds.

We can use this to attract more of the existing customer funds currently held in lower-yielding accounts or those that might be moving to competitors. The goal is to capture more of the total deposit base, which grew by $53.5 million in the first half of 2025. A high-yield offering directly addresses the need to compete for funds, especially given that 35% of our current deposits are uninsured and thus more rate-sensitive.

• Target a yield competitive with the average rate earned on interest-earning assets, which was 4.83% for the three months ended June 30, 2025.
• Aim to increase the deposit base by at least $22.4 million within the quarter following launch, matching the recent quarter-over-quarter growth rate.
• Ensure the product structure supports the reduction in the cost of funds, which fell to 3.07% in Q2 2025.

Create a proprietary mobile banking app to enhance digital access for LMI community customers.

Broadway Financial Corporation operates as a mission-driven bank serving low-to-moderate income communities in Southern California and the Washington, D.C. market. Enhancing digital access is key for this demographic. Our total assets stood at approximately $1.225 billion as of June 30, 2025, based on stockholders' equity of $285.5 million being 23.3% of total assets. A successful app should drive engagement across our customer base, which includes those who rely on our mission-driven lending and depository accounts.

Outline a new construction-to-permanent loan product specifically for affordable housing developers.

This product development directly supports our mission to increase access to capital in underserved areas. We are creating a product that bridges the gap between construction financing and long-term permanent financing for affordable housing projects. Industry examples show that construction/permanent options can involve two notes, where interest accrues during construction based on different rates for each note, for instance, one at 4% and another at 5%. Such a product would be designed for projects that must contain at least 20% affordable housing units in some markets. The financing structure would aim to retire the construction note, perhaps with a principal pay down of around $6,000,000 in one model, at the end of construction. The minimum loan amount in similar state programs is often set at $1 million.

Broadway Financial Corporation (BYFC) - Ansoff Matrix: Diversification

You're looking at how Broadway Financial Corporation (BYFC), currently focused on low-to-moderate income (LMI) communities in Southern California and the Washington, D.C. market, can expand into new markets and products. This diversification strategy moves beyond the current core of residential mortgage lending and commercial real estate products.

Acquire a small, non-bank Financial Technology (FinTech) firm focused on LMI consumer credit.

Acquiring a specialized FinTech firm targets market development within the LMI consumer credit space, a segment City First Bank, National Association, already serves but perhaps not with the latest digital tools. Based on Q3 2025 North American fintech M&A data, a strategic acquisition in the lending subsector might command an Enterprise Value (EV) to Last Twelve Months (LTM) Revenue multiple of 6.4x. For a smaller, early-stage target, the EV/Revenue multiple could range higher, perhaps closer to 7x based on comparable Banking - Consumer fintech multiples for smaller revenue bands in early 2025. If the target has annual recurring revenue of $5 million, the purchase price could be in the range of $23 million to $35 million (using 4.6x to 7x multiples). This is a significant capital outlay compared to BYFC's Market Cap of $55.36 million as of November 25, 2025. Remember, BYFC invested $2.7 million in technology infrastructure in 2024, so an acquisition is a step change in digital capability.

Launch a national Small Business Administration (SBA) lending division, moving beyond current geographic limits.

Expanding SBA lending nationally is a market development play, leveraging an existing product line into a new geographic market. The national SBA 7(a) market is robust; Q2 Fiscal Year 2025 saw over $10 billion in approvals. To put that into perspective, the entire program averaged only $23-$24 billion annually in the mid-2010s. A major national player like Huntington Bank approved $2.1 billion in 7(a) loans in the 2025 fiscal year. To establish a meaningful national presence, BYFC would need to aim for a volume that justifies the infrastructure. If BYFC targets just 1% of the Q2 FY2025 volume, that's $100 million in new loan originations, requiring a dedicated, technology-enabled division since many small banks avoid the complexity. Currently, only 1,414 institutions participate in the SBA 7(a) program out of 4,421 insured banks and savings institutions at the end of Q2 2025.

Enter the wealth management space by offering basic financial planning services to high-net-worth individuals in new states.

This is a product development move, offering a new service line to clients, potentially starting in new states where City First Bank has no physical presence. The standard industry fee for wealth management charging Assets Under Management (AUM) is 1.0% annually for accounts under $1 million. For basic financial planning, advisors often set a minimum account size to make the service economically viable; this entry point is often around $250,000. To justify more comprehensive service, which includes tax strategy and estate planning, the minimum often rises to $500,000. If BYFC attracts 50 new high-net-worth clients in a new state with an average initial portfolio of $750,000 each, the initial Assets Under Management (AUM) would be $37.5 million (50 clients $\times$ $750,000). At a 1.0% fee, this generates $375,000 in annual recurring revenue.

Invest in a new, non-traditional asset class like renewable energy project finance outside of core real estate.

Diverting capital into renewable energy project finance is a classic diversification into a non-traditional asset class for a community bank. Global banks facilitated $776 billion in low-carbon financing in 2023. For the U.S. market, the tax equity component, essential for many renewable projects, needs to grow from an $18-$20 billion annual market to over $50 billion to meet post-Inflation Reduction Act (IRA) demand. A community bank like BYFC, with $285.5 million in Stockholders' Equity as of June 30, 2025, cannot fund a utility-scale project alone, but could participate in syndicates or tax equity structures. For instance, small-scale solar projects, which are often financed through retail arms of banks, are increasing faster than the measured bank financing data suggests. A prudent initial investment might target a small allocation of the bank's total assets, which stood at approximately $1.23 billion on June 30, 2025.

Here's a quick view mapping BYFC's current state against the diversification targets:

The move into FinTech would require assessing the target's revenue against the 4.4x to 6.4x EV/Revenue multiple range seen in 2025. For the wealth management push, targeting clients with a minimum of $250,000 is the floor for basic service entry.

• Acquisition Target Revenue Multiple Range: 4.6x to 7x
• SBA Lending Volume Target (1% of Q2 2025): $100 million
• Wealth Management Minimum AUM for Basic Service: $250,000
• Renewable Finance Tax Equity Gap: Needs to grow by over $30 billion annually

Finance: draft pro-forma capital allocation for a $30 million FinTech acquisition by next Tuesday.