BROADWAY FINANCIAL CORP \DE\BYFC

BROADWAY FINANCIAL CORP \DE\ Leases Disclosure

10-KFiled Mar 31, 20262 min read
Note 6 – Leases
Effective October 1, 2021, the Bank entered into an operating lease for its administrative offices at 4601 Wilshire Boulevard in Los Angeles. The operating lease has one 5-year extension option at the then fair market rate which was exercised during the year ended December 31, 2025.

The ROU asset represents our right to use the underlying asset during the lease term. Operating lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized based on the present value of the remaining lease payments using a discount rate that represents our incremental borrowing rate at the date of the lease’s inception. The ROU asset totaled $1.5 million and $420 thousand as of December 31, 2025 and 2024, respectively,  and was included in other assets on the consolidated statements of financial condition. The lease liability totaled $1.5 million and $420 thousand as of December 31, 2025 and 2024, respectively, and was included in accrued expenses and other liabilities on the consolidated statements of financial condition.

The Bank has no finance leases.

The Company recognized rent expense of $242 thousand in both 2025 and 2024.
Additional information regarding our operating leases is summarized below for the periods indicated (dollars in thousands):
 
Year Ended
December 31, 2025
    
Year Ended
December 31, 2024
  
Cash paid for amounts included in the measurement of lease liabilities for operating leases
  
$
242
     $ 242  
ROU assets obtained in exchange for lease liabilities
  
1,310
     –  
Weighted average remaining lease term in months
    
73
       21  
Weighted average discount rate
     3.8 %     5.5 %

The future minimum payments for operating leases with remaining terms of one year or more as of December 31, 2025 were as follows (in thousands):

Year ended December 31, 2026
  
$
249
  
Year ended December 31, 2027
    
271
  
Year ended December 31, 2028
    271  
Year ended December 31, 2029
    271  
Year ended December 31, 2030
    271  
Thereafter
    293  
Total future minimum lease payments
    
1,626
  
Amounts representing interest
    
(135
)
Present value of net future minimum lease payments
  
$
1,491
  

Historical Timeline

Fiscal YearFiled
2025Mar 31, 2026Showing above
2024Mar 31, 2025
2023May 20, 2024
2022Apr 11, 2023
2021Apr 15, 2022
2020Mar 31, 2021
2019Mar 27, 2020

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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