Broadway Financial (BYFC) Announces Additional Commitments in Private Placement of Common Stock

Broadway Financial Corporation (“Broadway”) (NASDAQ: BYFC) today announced the execution of additional stock purchase agreements with institutional and accredited investors to raise an additional $20.2 million, adding to the three previous stock purchase agreements announced on November 25, 2020. Together with the previously announced capital commitments, the private placements represent total commitments for 18.474 million shares of Broadway’s common stock, at an offering price of $1.78 per share, for aggregate gross proceeds of $32.88 million.

The additional investors that have executed stock purchase agreements include Ally Financial Inc., Banner Bank, Citicorp Banking Corporation, an affiliate of Citigroup Inc., First Republic Bank, clients and affiliates of Grace & White, Inc., J.P. Morgan Chase, and Texas Capital Community Development Corporation, an affiliate of Texas Capital Bancshares, Inc. The previously announced investors are affiliates of Bank of America Corporation and Wells Fargo & Company, and Cedars-Sinai Medical Center.

The closing of the private placements is subject to several conditions, including the completion of Broadway’s previously announced merger of equals with CFBanc Corporation (“City First”), which is subject to the approval of the stockholders of both companies at special stockholders’ meetings scheduled to be held on March 17, 2021. The merger between Los Angeles-based Broadway and Washington, D.C.-based City First has already received the necessary regulatory approvals. The closing of the private placements is also contingent upon receipt of stockholder approvals at the Broadway special meeting of proposals to increase the number of Broadway’s authorized voting shares and to issue the subscribed shares pursuant to NASDAQ Listing Rules requiring stockholder approval under certain circumstances for private placements of voting common stock exceeding 20% of a company’s pre-placement outstanding voting common shares. The total of stock purchase commitments Broadway has received equals the maximum number of shares that Broadway is seeking stockholders approval to issue under the NASDAQ Listing Rules. If the merger, stock issuance, and voting share increase proposals are approved, and all other closing conditions are satisfied, the merger is expected to be completed at the beginning of the second quarter of 2021 and the private placements are expected to close shortly thereafter.

The net proceeds from the private placements will be used to support the combined company’s mission of advancing economic and social equity through the provision of capital in low-to-moderate income communities. The additional capital will increase the combined company’s commercial lending capacity for investments in multi-family affordable housing, small businesses, and nonprofit development in financially underserved urban areas.

The shares of common stock proposed to be sold in the private placements referred to herein will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent such registration or an applicable exemption from registration requirements.

You May Also Be Interested In

• Sparton, Glen Eagle ink joint venture deal for Ontario silver mine
• CNS Pharmaceuticals outlines oncology and neurology pipeline strategy
• Chesapeake Utilities sells 49% stake in Florida gas pipeline project