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U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-QSB

(Mark One)



|[X]   |  | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
|----- |  | ---------------------------------------------------------------------------------
|     
|      |  | For the quarterly period ended June 30, 2001                                     
|     
|[   ] |  | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT       
|     
|      |  | For transition period from__________to__________                                 
|     
|      |  | Commission file number      0-27464                                              

BROADWAY FINANCIAL CORPORATION

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(Exact Name of Small Business Issuer as Specified in its Charter)


|                         |  |                                  
|------------------------ |  | ---------------------------------
|Delaware                 |  | 95-4547287                       
|                         |  |                                  
|(State of Incorporation) |  | (IRS Employer Identification No.)

4800 Wilshire Boulevard, Los Angeles, California 90010

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(Address of Principal Executive Offices)


(323) 634-1700

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(Issuers Telephone Number, Including Area Code)


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.   Yes   [X]    No   [   ]

State the number of shares outstanding of each of the issuers classes of
common equity, as of the latest practicable date: 901,333 shares of the
Companys Common Stock, par value $0.01 per share, were issued and outstanding
as of August 10, 2001.

Transitional Small Business Disclosure Format (Check one):

Yes   [   ]    No   [X]







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TABLE OF CONTENTS



|                              |                                                                                               |                                                              |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------------ |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | Item 1. Financial Statements                                                                 
|                              |                                                                                               | Consolidated Balance Sheets                                 
|                              |                                                                                               | Consolidated Statements of Operations and Comprehensive Loss
|                              |                                                                                               | Consolidated Statements of Cash Flows                       
|                              |                                                                                               | NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS        
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|PART II. OTHER INFORMATION   
|                              | Item 1. LEGAL PROCEEDINGS                                                                    
|                              | Item 2. CHANGES IN SECURITIES                                                                
|                              | Item 3. DEFAULTS ON SENIOR SECURITIES                                                        
|                              | Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS                                    
|                              | Item 5. OTHER INFORMATION                                                                    
|                              | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                   



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TABLE OF CONTENTS

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|PART I  |  | FINANCIAL INFORMATION |  |                                                                                                                                                   
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|        |  | Item 1.               |  | Financial Statements                                                                                                                               |  |     
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|        |  |                       |  | Consolidated Balance Sheets (unaudited)
as of June 30, 2001 and December 31, 2000                                                                  |  | 3   
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|        |  |                       |  | Consolidated Statements of Operations
and Comprehensive Loss (unaudited) for the three months and six months
ended June 30, 2001 and June 30, 2000 |  | 4   
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|        |  |                       |  | Consolidated Statements of Cash Flows
(unaudited) for the six months ended
June 31, 2000 and June 30, 2000                                         |  | 5   
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|        |  |                       |  | Notes to Unaudited Consolidated Financial Statements                                                                                               |  | 7   
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|        |  | Item 2.               |  | Managements Discussion and Analysis of
Financial Condition and Results of Operations                                                              |  | 9   
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|PART II |  | OTHER INFORMATION     |  |                                                                                                                                                   
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|        |  | Item 1.               |  | Legal Proceedings                                                                                                                                  |  | 15  
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|        |  | Item 2.               |  | Change in Securities                                                                                                                               |  | 15  
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|        |  | Item 3.               |  | Defaults on Senior Securities                                                                                                                      |  | 15  
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|        |  | Item 4.               |  | Submission of Matters to a Vote of Security Holders                                                                                                |  | 15  
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|        |  | Item 5.               |  | Other Information                                                                                                                                  |  | 15  
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|        |  | Item 6.               |  | Exhibits and
Reports on Form 8-K                                                                                                                   |  | 16  



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##### Table of Contents






BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
(Unaudited)

|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |   |              |       |   | 
|--------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------- | -------- | - | - | ------------ | ----- | - | 
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         | June 30, |   |   | December 31, |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         | 2001     |   |   | 2000         |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |   |              |      
|Assets:                                                         |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |   |              |      
|                                                               
|                                                               
|                                                               
|                                                               
|Cash                                                            |                                                                                                                                         | $                                                                                                                                                                                         | 4,267   |          |   | $ | 5,367        |      
|                                                               
|                                                               
|                                                               
|                                                               
|Fed funds sold                                                  |                                                                                                                                         |                                                                                                                                                                                           | 9,400   |          |   |   | 4,900        |      
|                                                               
|                                                               
|                                                               
|                                                               
|Investment securities held-to-maturity                          |                                                                                                                                         |                                                                                                                                                                                           | 2,000   |          |   |   | 10,623       |      
|                                                               
|                                                               
|                                                               
|                                                               
|Investment securities available-for-sale                        |                                                                                                                                         |                                                                                                                                                                                           | 4,595   |          |   |   |             |      
|                                                               
|                                                               
|                                                               
|                                                               
|Mortgage-backed
securities held-to-maturity                     |                                                                                                                                         |                                                                                                                                                                                           | 10,501  |          |   |   | 10,748       |      
|                                                               
|                                                               
|                                                               
|                                                               
|Loans receivable, net                                           |                                                                                                                                         |                                                                                                                                                                                           | 129,725 |          |   |   | 126,815      |      
|                                                               
|                                                               
|                                                               
|                                                               
|Loans receivable held for sale, at lower of cost or fair value  |                                                                                                                                         |                                                                                                                                                                                           | 7,163   |          |   |   | 59           |      
|                                                               
|                                                               
|                                                               
|                                                               
|Accrued interest receivable                                     |                                                                                                                                         |                                                                                                                                                                                           | 995     |          |   |   | 1,071        |      
|                                                               
|                                                               
|                                                               
|                                                               
|Investments in capital stock of Federal Home Loan Bank, at cost |                                                                                                                                         |                                                                                                                                                                                           | 1,360   |          |   |   | 1,316        |      
|                                                               
|                                                               
|                                                               
|                                                               
|Office properties and equipment, net                            |                                                                                                                                         |                                                                                                                                                                                           | 6,063   |          |   |   | 6,357        |      
|                                                               
|                                                               
|                                                               
|                                                               
|Other assets                                                    |                                                                                                                                         |                                                                                                                                                                                           | 484     |          |   |   | 670          |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  
|Total assets                                                    |                                                                                                                                         | $                                                                                                                                                                                         | 176,553 |          |   | $ | 167,926      |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  
|Liabilities and stockholders equity                            |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |   |              |      
|                                                               
|                                                               
|                                                               
|                                                               
|Deposits                                                        |                                                                                                                                         | $                                                                                                                                                                                         | 152,193 |          |   | $ | 141,594      |      
|                                                               
|                                                               
|                                                               
|                                                               
|Advances from Federal Home Loan Bank                            |                                                                                                                                         |                                                                                                                                                                                           | 8,250   |          |   |   | 10,000       |      
|                                                               
|                                                               
|                                                               
|                                                               
|Advance payments by borrowers for taxes and insurance           |                                                                                                                                         |                                                                                                                                                                                           | 177     |          |   |   | 194          |      
|                                                               
|                                                               
|                                                               
|                                                               
|Deferred income taxes                                           |                                                                                                                                         |                                                                                                                                                                                           | 400     |          |   |   | 402          |      
|                                                               
|                                                               
|                                                               
|                                                               
|Other liabilities                                               |                                                                                                                                         |                                                                                                                                                                                           | 1,293   |          |   |   | 1,759        |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  
|Total liabilities                                               |                                                                                                                                         |                                                                                                                                                                                           | 162,313 |          |   |   | 153,949      |      
|                                                               
|                                                               
|                                                               
|                                                               
|Stockholders Equity:                                           |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |   |              |      
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                |                                                                                                                                         | Preferred non-convertible, non-cumulative, and non-voting stock, $.01 par
value, authorized 1,000,000 shares; issued and outstanding 55,199 shares
at June 30, 2001 and December 31, 2000 |         |          | 1 |   |              |       | 1 | 
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Common stock, $.01 par value, authorized 3,000,000 shares; issued and
outstanding 901,333 shares at June 30, 2001 and December 31, 2000 |                                                                                                                                                                                           |         | 10       |   |   |              | 10    |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Additional paid-in capital                                                                                                              |                                                                                                                                                                                           |         | 9,460    |   |   |              | 9,460 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Accumulated other comprehensive loss, net of taxes                                                                                      |                                                                                                                                                                                           |         | (3       | ) |   |              |      |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Retained earnings-substantially restricted                                                                                              |                                                                                                                                                                                           |         | 5,557    |   |   |              | 5,322 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Treasury stock, at cost-60,402 shares at June 30, 2001 and December 31, 2000                                                            |                                                                                                                                                                                           |         | (554     | ) |   |              | (554  | )
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Unearned Employee Stock Ownership Plan shares                                                                                           |                                                                                                                                                                                           |         | (231     | ) |   |              | (262  | )
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  
|Total stockholders equity                                      |                                                                                                                                         |                                                                                                                                                                                           | 14,240  |          |   |   | 13,977       |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  
|Total liabilities and stockholders equity                      |                                                                                                                                         | $                                                                                                                                                                                         | 176,553 |          |   | $ | 167,926      |      
|                                                                |                                                                                                                                         |                                                                                                                                                                                           |         |          |   |  

See Notes to Consolidated Financial Statements



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##### Table of Contents






BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(Dollars in thousands, except per share amounts)
(Unaudited)

|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |    |       |   |         |   |       |  
|------------------------------------------------------- | ------------------------------------------------ | --------------------------------------------- | ------- | ------------------ | --- | - | ---------------- | - | --- | ---- | ------- | -- | ----- | - | ------- | - | ----- | -
|                                                        |                                                  |                                               |         | Three Months Ended |     |   | Six Months Ended |  
|                                                        |                                                  |                                               |         | June 30,           |     |   | June 30,         |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |  
|                                                        |                                                  |                                               |         | 2001               |     |   | 2000             |   |     | 2001 |         |    | 2000  |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |    |       |  
|Interest on loans receivable                            |                                                  | $                                             | 2,860   |                    |     | $ | 2,682            |   |     | $    | 5,595   |    |       | $ | 5,368   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on investment securities held-to-maturity      |                                                  |                                               | 42      |                    |     |   | 158              |   |     |      | 137     |    |       |   | 323     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on investment securities held-for-sale         |                                                  |                                               | 36      |                    |     |   |                 |   |     |      | 36      |    |       |   |        |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on mortgage-backed securities held-to-maturity |                                                  |                                               | 175     |                    |     |   | 190              |   |     |      | 345     |    |       |   | 389     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Other interest income                                   |                                                  |                                               | 192     |                    |     |   | 26               |   |     |      | 426     |    |       |   | 42      |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Total interest income                                   |                                                  |                                               | 3,305   |                    |     |   | 3,056            |   |     |      | 6,539   |    |       |   | 6,122   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on deposits                                    |                                                  |                                               | 1,475   |                    |     |   | 1,182            |   |     |      | 2,965   |    |       |   | 2,327   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Interest on borrowings                                  |                                                  |                                               | 146     |                    |     |   | 195              |   |     |      | 312     |    |       |   | 440     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Total interest expense                                  |                                                  |                                               | 1,621   |                    |     |   | 1,377            |   |     |      | 3,277   |    |       |   | 2,767   |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Net interest income before provision for loan losses    |                                                  |                                               | 1,684   |                    |     |   | 1,679            |   |     |      | 3,262   |    |       |   | 3,355   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Provision for loan losses                               |                                                  |                                               | 45      |                    |     |   | 90               |   |     |      | 75      |    |       |   | 180     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Net interest income after provision for loan losses     |                                                  |                                               | 1,639   |                    |     |   | 1,589            |   |     |      | 3,187   |    |       |   | 3,175   |  
|                                                       
|                                                       
|                                                       
|                                                       
|Noninterest income:                                     |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |    |       |   |         |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Service charges                               |         |                    | 175 |   |                  |   | 137 |      |         |    | 320   |   |         |   | 261   |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Gain (loss) on loans receivable held for sale |         |                    |    |   |                  |   |    |      |         |    |      |   |         |   | (6    | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Other                                         |         |                    | 23  |   |                  |   | 35  |      |         |    | 52    |   |         |   | 53    |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Total noninterest income                                |                                                  |                                               | 198     |                    |     |   | 172              |   |     |      | 372     |    |       |   | 308     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Noninterest expense:                                    |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |    |       |   |         |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Compensation and benefits                     |         |                    | 807 |   |                  |   | 747 |      |         |    | 1,638 |   |         |   | 1,415 |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Occupancy expense, net                        |         |                    | 309 |   |                  |   | 315 |      |         |    | 563   |   |         |   | 605   |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Advertising and promotional expense           |         |                    | 37  |   |                  |   | 51  |      |         |    | 87    |   |         |   | 84    |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Professional services                         |         |                    | 72  |   |                  |   | 72  |      |         |    | 113   |   |         |   | 158   |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Real estate operations, net                   |         |                    |    |   |                  |   | (54 | )    |         |    |      |   |         |   | (42   | )
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Contracted security services                  |         |                    | 41  |   |                  |   | 39  |      |         |    | 80    |   |         |   | 77    |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Telephone and postage                         |         |                    | 58  |   |                  |   | 40  |      |         |    | 114   |   |         |   | 85    |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Stationary, printing and supplies             |         |                    | 30  |   |                  |   | 40  |      |         |    | 54    |   |         |   | 67    |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        |                                                  | Other                                         |         |                    | 227 |   |                  |   | 126 |      |         |    | 339   |   |         |   | 369   |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Total noninterest expense                               |                                                  |                                               | 1,581   |                    |     |   | 1,376            |   |     |      | 2,988   |    |       |   | 2,818   |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Earnings before income taxes                            |                                                  |                                               | 256     |                    |     |   | 385              |   |     |      | 571     |    |       |   | 665     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Income taxes                                            |                                                  |                                               | 100     |                    |     |   | 157              |   |     |      | 234     |    |       |   | 270     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Net earnings                                            |                                                  | $                                             | 156     |                    |     | $ | 228              |   |     | $    | 337     |    |       | $ | 395     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Other comprehensive loss:                               |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |    |       |   | `       |  
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Unrealized loss on securities available for sale |                                               |         | (5                 | )   |   |                  |  |     |      |         | (5 | )     |   |         |  |      
|                                                       
|                                                       
|                                                       
|                                                       
|                                                        | Income tax benefits                              |                                               |         | 2                  |     |   |                  |  |     |      |         | 2  |       |   |         |  |      
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Other comprehensive loss                                |                                                  |                                               | (3      | )                  |     |   |                 |   |     |      | (3      | )  |       |   |        |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Comprehensive earnings                                  |                                                  | $                                             | 153     |                    |     | $ | 228              |   |     | $    | 334     |    |       | $ | 395     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Net earnings                                            |                                                  | $                                             | 156     |                    |     | $ | 228              |   |     | $    | 337     |    |       | $ | 395     |  
|                                                       
|                                                       
|                                                       
|                                                       
|Dividends paid on preferred stock                       |                                                  |                                               | (7      | )                  |     |   | (7               | ) |     |      | (14     | )  |       |   | (14     | )
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Earnings available to common shareholders               |                                                  | $                                             | 149     |                    |     | $ | 221              |   |     | $    | 323     |    |       | $ | 381     |  
|                                                        |                                                  |                                               |         |                    |     |   |                  |   |     |      |         |   
|Earnings per share-basic                                |                                                  | $                                             | 0.17    |                    |     | $ | 0.24             |   |     | $    | 0.37    |    |       | $ | 0.41    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Earnings per share-diluted                              |                                                  | $                                             | 0.17    |                    |     | $ | 0.24             |   |     | $    | 0.37    |    |       | $ | 0.41    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Dividend declared per share-common stock                |                                                  | $                                             | 0.05    |                    |     | $ | 0.05             |   |     | $    | 0.10    |    |       | $ | 0.10    |  
|                                                       
|                                                       
|                                                       
|                                                       
|Basic and diluted weighted average shares outstanding   |                                                  |                                               | 876,349 |                    |     |   | 917,793          |   |     |      | 875,538 |    |       |   | 925,144 |  

See Notes to Consolidated Financial Statements



4



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##### Table of Contents






BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

|                                                                                              |                                                          |                             |         |      |                           |   |        |        |     |   | 
|--------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------- | ------- | ---- | ------------------------- | - | ------ | ------ | --- | - | 
|                                                                                              |                                                          |                             |         |      | Six months ended June 30, |  
|                                                                                              |                                                          |                             |         |      |                           |  
|                                                                                              |                                                          |                             |         |      | 2001                      |   |        | 2000   |    
|                                                                                              |                                                          |                             |         |      |                           |   |        |        |    
|Cash flows from operating activities                                                          |                                                          |                             |         |      |                           |   |        |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Net earnings                                                                                  |                                                          | $                           | 337     |      |                           | $ | 395    |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Adjustments to reconcile net earnings to net cash (used in)
provided by operating activities: |                                                          |                             |         |      |                           |   |        |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Depreciation                                             |                             |         | 185  |                           |   |        | 179    |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Amortization of premium on loans purchased               |                             |         | 2    |                           |   |        | 2      |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Amortization of net deferred loan origination fees       |                             |         | 40   |                           |   |        | (36    | )  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Amortization of discounts and premium on securities      |                             |         | (2   | )                         |   |        | 63     |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Amortization of deferred compensation                    |                             |         | 31   |                           |   |        | 49     |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Gain on sale of real estate acquired through foreclosure |                             |         |     |                           |   |        | (59    | )  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Gain on sale of fixed assets                             |                             |         | (15  | )                         |   |        |       |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Loss on sale of loans receivable held for sale           |                             |         |     |                           |   |        | 116    |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Provision for loan losses                                |                             |         | 75   |                           |   |        | 180    |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Loans originated for sale, net of refinances             |                             |         | (126 | )                         |   |        | (3,055 | )  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Proceeds from sale of loans receivable held for sale     |                             |         | 185  |                           |   |        | 5,397  |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Changes in operating assets and liabilities:             |                             |         |      |                           |   |        |        |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                          | Accrued interest receivable |         |      | 76                        |   |        |        | (47 | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                          | Other assets                |         |      | 186                       |   |        |        | (66 | )
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                          | Accrual
for branch closure  |         |      | 50                        |   |        |        |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                          | Deferred income taxes       |         | (2   | )                         |   |        |       |    
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                          | Other liabilities           |         |      | (466                      | ) |        |        | 37  |  
|                                                                                              |                                                          |                             |         |      |                           |  
|Total adjustments                                                                             |                                                          |                             | 219     |      |                           |   | 2,760  |       
|                                                                                              |                                                          |                             |         |      |                           |  
|Net cash provided by operating activities                                                     |                                                          |                             | 556     |      |                           |   | 3,155  |       
|                                                                                              |                                                          |                             |         |      |                           |  
|Cash flows from investing activities                                                          |                                                          |                             |         |      |                           |   |        |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Loans originated, net of refinances                                                           |                                                          |                             | (11,177 | )    |                           |   | (6,234 | )     
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Principal repayment on loans                                                                  |                                                          |                             | 8,988   |      |                           |   | 7,008  |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Purchases of investment securities held-to-maturity                                           |                                                          |                             | (2,000  | )    |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Purchase of mortgage-backed securities held to maturities                                     |                                                          |                             | (1,323  | )    |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Purchase of securities held for sale                                                          |                                                          |                             | (4,600  | )    |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Purchase of loans held for sale                                                               |                                                          |                             | (8,001  | )    |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Proceeds from maturities of investment securities held-to-maturity                            |                                                          |                             | 10,624  |      |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Proceeds from maturities of mortgage-backed securities held-
to-maturity                      |                                                          |                             | 1,572   |      |                           |   | 1,345  |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Purchase of Federal Home Loan stock                                                           |                                                          |                             | (44     | )    |                           |   | (43    | )     
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Proceeds from sale of fixed assets                                                            |                                                          |                             | 210     |      |                           |   |       |       
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Capital expenditures for office properties and equipment                                      |                                                          |                             | (136    | )    |                           |   | (40    | )     
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Proceeds from sale of real estate acquired through foreclosure                                |                                                          |                             |        |      |                           |   | 517    |       
|                                                                                              |                                                          |                             |         |      |                           |  
|Net cash (used in) provided by investing activities                                           |                                                          |                             | (5,887  | )    |                           |   | 2,553  |       
|                                                                                              |                                                          |                             |         |      |                           |  

See notes to Consolidated Financial Statements



5



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##### Table of Contents



BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in thousands)
(Unaudited)

|                                                                            |  |                           |        |   |      |   |        |  
|--------------------------------------------------------------------------- |  | ------------------------- | ------ | - | ---- | - | ------ | -
|                                                                            |  | Six months ended June 30, |       
|                                                                            |  |                           |       
|                                                                            |  | 2001                      |        |   | 2000 |  
|                                                                            |  |                           |        |   |      |  
|Cash flows from financing activities                                        |  |                           |        |   |      |   |        |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Net increase (decrease) in deposits                                         |  | $                         | 10,599 |   |      | $ | (2,522 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Decrease in advances from Federal Home Loan Bank                            |  |                           | (1,750 | ) |      |   | (1,800 | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Dividends paid                                                              |  |                           | (101   | ) |      |   | (106   | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Increase in treasury stock                                                  |  |                           |       |   |      |   | (236   | )
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Decrease in advances by borrowers
for taxes and insurance                   |  |                           | (17    | ) |      |   | (23    | )
|                                                                            |  |                           |        |   |      |  
|Net cash provided by (used in) financing activities                         |  |                           | 8,731  |   |      |   | (4,687 | )
|                                                                            |  |                           |        |   |      |  
|Net increase in cash and cash equivalents                                   |  |                           | 3,400  |   |      |   | 1,021  |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash and cash equivalents at beginning of period                            |  |                           | 10,267 |   |      |   | 3,135  |  
|                                                                            |  |                           |        |   |      |  
|Cash and cash equivalents at end of period                                  |  | $                         | 13,667 |   |      | $ | 4,156  |  
|                                                                            |  |                           |        |   |      |  
|Supplemental disclosures of cash flow information:                          |  |                           |        |   |      |   |        |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Cash paid for interest                                                      |  | $                         | 3,286  |   |      | $ | 2,727  |  
|                                                                            |  |                           |        |   |      |  
|Cash paid for income taxes                                                  |  | $                         | 649    |   |      | $ | 255    |  
|                                                                            |  |                           |        |   |      |  
|Supplemental disclosure of noncash investing and
financing activities       |  |                           |        |   |      |   |        |  
|                                                                           
|                                                                           
|                                                                           
|                                                                           
|Transfers of real estate acquired through foreclosure from loans receivable |  | $                         |       |   |      | $ | 225    |  

See Notes to Consolidated Financial Statements



6



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##### Table of Contents






BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2001



|1. |  | In the opinion of management of Broadway Financial Corporation (the
Company), the preceding unaudited consolidated financial statements
contain all material adjustments, consisting solely of normal recurring
accruals necessary to present fairly the consolidated financial position
of the Company at June 30, 2001 and the results of its operations for the
three months and six months ended June 30, 2001 and 2000, and its cash
flows for the six months ended June 30, 2001 and 2000. These consolidated
financial statements do not include all disclosures associated with the
Companys consolidated annual financial statements included in its annual
report on Form 10-KSB for the year ended December 31, 2000 and,
accordingly, should be read in conjunction with such audited statements.
The results of operations for the three months and six months ended June
30, 2001 are not necessarily indicative of the results to be expected for
the full year.                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Cash and Cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   |  | For purposes of reporting cash
flows on the Consolidated Statements of Clash Flows, cash
and cash equivalents include cash and fed funds sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|3. |  | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   |  | In July 2001, the FASB issued
Statement No. 141, Business Combinations, and
Statement No. 142, Goodwill and Other Intangible
Assets. Statement No. 141 requires that the purchase
method of accounting be used for all business combinations initiated
after June 30, 2001 as well as all purchase method business
combinations completed after June 30, 2001. Statement No. 141
also specifies criteria which intangible assets acquired in a
purchase method business combination must meet to be recognized and
reported apart from goodwill. Statement No. 142 will require
that goodwill and intangible assets with indefinite useful lives no
longer be amortized, but instead tested for impairment at least
annually in accordance with the provisions of Statement No. 142.
Statement No. 142 will also require that intangible assets with
estimable useful lives be amortized over their respective estimated
useful lives to their estimated residual values, and reviewed for
impairment in accordance with FAS Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed of. The Company is required to
adopt the provisions of Statement No. 141 immediately and
Statement No. 142 effective January 1, 2002. Management
does not expect the implementation of these Statements to have a
material impact on the Company's consolidated financial statements.



7



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##### Table of Contents






ITEM 2.     MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF    
               OPERATIONS

General

Broadway Financial Corporation (the Company) is primarily engaged in the
savings and loan business through its wholly owned subsidiary, Broadway Federal
Bank, f.s.b. (Broadway Federal or the Bank). Broadway Federals business
is that of a financial intermediary and consists primarily of attracting
deposits from the general public and using such deposits, together with
borrowings and other funds, to make mortgage loans secured by residential real
estate located in Southern California. At June 30, 2001, Broadway Federal
operated five retail banking offices, including a loan processing center, in
Southern California. Broadway Federal is subject to significant competition
from other financial institutions, and is also subject to regulation by federal
agencies and undergoes periodic examinations by those regulatory agencies.

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries, Broadway Federal and BankSmart,
Inc. (BankSmart). BankSmart ceased its primary operations
as of March 31, 2001. All significant inter-company balances and transactions
have been eliminated in consolidation.

The Companys principal business is serving as a holding company for Broadway
Federal. The Companys results of operations are dependent
primarily on its net interest income, which is the difference between the
interest income earned on its interest-earning assets, such as loans and
investments, and the interest expense paid on its interest-bearing liabilities,
such as deposits and borrowings. Broadway Federal also generates recurring
non-interest income, such as transactional fees on its loan and deposit
portfolios. The Companys operating results are affected by the amount of the
Banks non-interest expenses, which consist principally of employee
compensation and benefits, occupancy expenses, federal deposit insurance
premiums and by its periodic provisions for loan losses. More generally, the
results of operations of thrift and banking institutions are also affected by
prevailing economic conditions, competition, and the monetary and fiscal
policies of governmental agencies.



8



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##### Table of Contents



Comparison of Operating Results for the three months and six months ended June
30, 2001 and June 30, 2000

General

The Company recorded net earnings of $156,000 and $337,000, respectively, or $
0.17 and $0.37 per diluted common share, for the three months and six months
ended June 30, 2001, as compared to net earnings of $228,000 and $395,000,
respectively, or $0.24 and $0.41 per diluted common share for the three months
and six months ended June 30, 2000. The decrease in net earnings from 2000 to
2001 resulted primarily from higher interest expense and higher noninterest
expense, offset by a lower provision for loan losses, higher interest income
and higher noninterest income.

Interest Expense

Interest expense increased by $244,000 and $510,000, respectively, for the
three months and six months ended June 30, 2001 as compared to the same periods
in 2000. The increase in interest expense was due to an increase in interest
on deposits offset by a decrease in interest on borrowings. The increases in
interest on deposits were due to an increase in average deposits of $16.5
million and $14.3 million, to $150.9 million and $148.8 million, respectively,
for the three months and six months ended June 30, 2001 as compared to $134.5
million for both periods in 2000. Average borrowings decreased by $4.7
million and $6.1 million, respectively, for the three months and six months
ended June 30, 2001 as compared to the same periods in 2000. The impact of the
increase in interest expense was also reflected by an increase in the average
cost of deposits and borrowings, which increased 52-basis points and 50-basis
points, respectively, from 3.71% and 3.68% for the three months and six months
ended June 30, 2000, respectively, to 4.23% and 4.18% for the same periods in
2001.

Noninterest Expense

Noninterest expense increased by $205,000 or 15%, during the three months ended
June 30, 2001, as compared to the same period in 2000. The increase in
noninterest expense primarily resulted from increases in compensation and
benefits and other noninterest expenses. For the six months ended June 30,
2001, noninterest expense increased by $170,000 as compared to the same period
in 2000. The increase primarily resulted from increases in compensation and
benefits, offset primarily by decreases in occupancy expense, professional
services and other noninterest expenses.

Compensation and benefits expense increased by $60,000 and $223,000,
respectively, for three months and six months ended June 30, 2001, as compared
to the same periods in 2000. The increase was principally due to a higher
accrual for bonuses, vested stock grants, merit salary increases and employment
of replacement staff at higher market salaries.



9



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##### Table of Contents



Noninterest expense was also impacted by a decrease in occupancy expense.
Occupancy expense decreased by $6,000 and $42,000, respectively, for the three
months and six months ended June 30, 2001 as compared to the same periods in
2000. The $42,000 decrease was primarily due to a $137,000 decrease in costs
associated with SmartCopy, offset by a $56,000 increase in the Companys
occupancy expense, a $16,000 increase in the Companys maintenance and repair
and an $18,000 increase in the Companys computer expenses. The decrease in
costs associated with SmartCopy were primarily due to the reversal of $108,000
in equipment lease termination costs accrued at December 31, 2000 as a result
of the closure of SmartCopy operations on March 31, 2001. The reversal of a
portion of the costs resulted from a decision to use parts of the equipment in
other areas of the Company.

Other noninterest expense increased by $101,000 and decreased by $30,000,
respectively, for the three months and six months ended June 30, 2001 as
compared to the same periods in 2000. The $101,000 increase from $126,000 for
the three months ended June 30, 2000 to $227,000 for the same period in 2001,
included a $37,000 increase in losses from savings operations, an accrual of
$50,000 to write-off leasehold improvements resulting from a decision to close
the Banks Watts branch, and $21,000 in broker fees paid on loans purchased
during the quarter. The decision to close the Watts branch is part of
managements ongoing efforts to reduce noninterest expenses. The branch will
close in October 2001. Watts branch deposits will be transferred to another
nearby branch. Management projects annual savings resulting from the closure
of the Watts branch of approximately $94,000.

The $30,000 decrease in other noninterest expenses for the six months ended
June 30, 2001 as compared to the same period in 2000 is primarily due to a
decline associated with unrealized losses on loans held for sale,
which totaled $116,000 for the six months ended June 30, 2000, compared to zero
for the same period in 2001.

Provision for Loan Losses

The provision for loan losses decreased by $45,000 and $105,000, respectively,
from $90,000 and $180,000, respectively, for the three months and six months
ended June 30, 2000 to $45,000 and $75,000, respectively, for the same periods
in 2001.

As of June 30, 2001 the Companys allowance for loan losses totaled $1.5
million, representing a $75,000 increase from the balance at December 31, 2000.
The allowance for loan losses represents 1.07% of gross loans at June 30, 2001
compared to 1.10% at December 31, 2000. The allowance for loan losses was
194.29% of non-accrual loans at June 30, 2001, compared to 224.84% at December
31, 2000.

Total non-performing assets, consisting of non-accrual loans and real estate
acquired through foreclosure (REO), increased by $138,000, from $632,000 at
December 31, 2000 to $770,000 at June 30, 2001. The increase primarily
resulted from an increase in unsecured non-accrual loans. Non-accrual loans at
June 30, 2001 included three loans totaling $241,000 secured by one- to
four-unit properties, one loan for $191,000 secured by a multifamily property
and three unsecured loans totaling $338,000. As of June 30, 2001 the $338,000
in unsecured loans is fully reserved. As a percentage of total assets,
non-performing assets were 0.44% at June 30, 2001, compared to 0.38% at
December 31, 2000. The Companys current asset quality is the result of
improved loan underwriting, and aggressive collection efforts.



10



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##### Table of Contents



The provision for loan losses for the quarter ended June 30, 2001 results from
managements ongoing assessment of the Companys level of credit risk inherent
in the portfolio and changes within the loan categories resulting from various
factors, including new loan originations, loan repayments, prepayments and
changes in asset classifications. Management will continue to monitor the
allowance for loan losses and adjust the Companys provision for loan losses
based on the risks inherent in the loan portfolio.

Management believes that the allowance for loan losses is adequate to cover
inherent losses in its loan portfolio as of June 30, 2001, but there can be no
assurance that actual losses will not exceed the estimated amounts. In
addition, the Office of Thrift Supervision and the Federal Deposit Insurance
Corporation periodically review the Companys allowance for loan losses as an
integral part of their examination process. These agencies may require the
Company to increase the allowance for loan losses based on their judgments of
the information available to them at the time of the examination.

Interest Income

Interest income for the three months and six months ended June 30, 2001 totaled
$3.3 million and $6.5 million, respectively, as compared to $3.1 million and
$6.1 million, respectively, for the same periods in 2000. The increases were
primarily the result of an increase in average interest earning assets of $8.2
million and $6.2 million, respectively, for the three months and six months
ended June 30, 2001 as compared to the same periods in 2000. The increase in
average interest earning assets during the three months and six months ended
June 30, 2001 was funded by an increase in savings deposits.

Noninterest Income

Noninterest income increased by $26,000 and $64,000 for the three months and
six months ended June 30, 2001, to $198,000 and $372,000, respectively, as
compared to the same periods in 2000. Service charges increased by $38,000 and
$59,000 for the three months and six months ended June 30, 2001, to $175,000
and $320,000, respectively, as compared to the same periods in 2000. The
increases primarily resulted from higher fees earned from customers on deposit
accounts, including returned check fees on checking accounts. The Company has
emphasized growth in transaction accounts through its marketing during the past
year.

Other income decreased by $12,000 and $1,000, respectively, for the three
months and six months ended June 30, 2001, principally due to the closing of
SmartCopys operations, offset by a gain on the sale of property owned by the
Bank, which had a book value of $196,000.

Income Taxes

The Companys effective tax rate was
approximately 39% and 41%, respectively, for the three months and
six months ended June 30, 2001, compared to approximately 41% for the same
periods in the prior year. Broadway Federal computed income taxes by applying
the statutory federal income tax rate of 34% and California income tax rate of
10.84% to earnings before income taxes.



11



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##### Table of Contents



Comparison of Financial Condition at June 30, 2001 and December 31, 2000

Total assets at June 30, 2001 were $176.6 million compared to $167.9 million at
December 31, 2000, representing an increase of $8.6 million. Net loans
receivable (excluding loans held for sale) increased from $126.8 million at
December 31, 2000 to $129.7 million at June 30, 2001
as a result of $11.1
million in new loan originations, offset by $8.1 million in principal
repayments and a $75,000 of provision for loan losses. Loans held for sale at
June 30, 2001 were $7.2 million as compared to $59,000 at December 31, 2000.
During the period, loans originated that were classified as held-for-sale
totaled $126,000, loans purchased totaled $8.0 million, principal repayments
totaled $838,000 and loans sold totaled $185,000.

Total liabilities at June 30, 2001 were $162.3 million compared to $153.9
million at December 31, 2000. The $8.4 million increase was primarily
attributable to an increase in deposits, offset by decrease in advances from
Federal Home Loan Bank, other liabilities and advance payments by borrowers for
taxes and insurance.

Total capital at June 30, 2001 was $14.2 million compared to $14.0 million at
December 31, 2000. The $263,000 increase was primarily due to net earnings for
the period and the allocation of ESOP shares, offset by cash dividends
declared.

Liquidity, Capital Resources and Market Risk

Sources of liquidity and capital for the Company on a stand-alone basis include
distributions from the Bank and borrowings such as securities sold under
agreements to repurchase. Dividends and other capital distributions from the
Bank are subject to regulatory restrictions.

The Banks primary sources of funds are Bank deposits, principal and interest
payments on loans and, to a lesser extent, proceeds from the sale of loans and
advances from the Federal Home Loan Bank (FHLB). While maturities and scheduled amortization of Bank
loans are predictable sources of funds, deposit flows and mortgage prepayments
are greatly influenced by general interest rates, economic conditions, and
competition. Broadway Federals average liquidity ratio was 20.48% and 20.17%,
for the three-month and six-month periods ended June 30, 2001, as compared to
11.14% and 11.52% for the same periods during 2000. The increase is due to the
fact that at June 30, 2001, liquid assets, which are a component of the
liquidity calculation, included $9.4 million in fed funds. At June 30, 2000
there were no fed funds included in liquid assets. The Banks liquidity ratio
included qualifying unpledged marketable securities being held to maturity.

The Bank has other sources of liquidity in the event that a need for additional
funds arises, including FHLB advances. At June 30, 2001 and December 31, 2000,
FHLB advances totaled $8.3 million and $10.0 million, respectively. Broadway
Federal had borrowed from the FHLB to meet its short-term loan funding needs.
Other sources of liquidity include principal repayments on mortgage-backed
securities.

Since December 31, 2000 there has been no material change in the Companys
interest rate sensitivity as of June 30, 2001. For a discussion on the
Companys interest rate sensitivity and market risk, see the Companys annual
report for the year ended December 31, 2000 and the notes thereto.



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##### Table of Contents



Regulatory Capital

The OTS capital regulations include three separate minimum capital requirements
for savings institutions that are subject to OTS supervision. First, the
tangible capital requirement mandates that the Banks stockholders equity,
less intangible assets, be at least 1.50% of adjusted total assets as defined
in the capital regulations. Second, the core capital requirement currently
mandates that core capital (tangible capital plus certain qualifying intangible
assets) be at least 4.00% of adjusted total assets as defined in the capital
regulations. Third, the risk-based capital requirement presently mandates that
core capital plus supplemental capital (as defined by the OTS) be at least
8.00% of risk-weighted assets as prescribed in the capital regulations. The
capital regulations assign specific risk weightings to all assets and
off-balance sheet items.

Broadway Federal was in compliance with all capital requirements in effect at
June 30, 2001, and meets all standards necessary to be considered
well-capitalized under the prompt corrective action regulations adopted by
the OTS pursuant to the Federal Deposit Insurance Corporation Improvement Act
of 1991 (FDICIA). The following table reflects the required and actual
regulatory capital ratios of Broadway Federal at the date indicated:

|                          |  |             |     |                    |     |             |     |     |    
|------------------------- |  | ----------- | --- | ------------------ | --- | ----------- | --- | --- | ---
|                          |  | FIRREA      |     | FDICIA             |     | Actual     
|Regulatory Capital Ratios |  | Minimum     |     | Well-capitalized |     | At June 30,
|for Broadway Federal      |  | Requirement |     | Requirement        |     | 2001       
|                          |  |             |     |                    |     |            
|Tangible capital          |  | 1.          | 50% |                    | N/A |             | 6.  | 95%
|                         
|                         
|                         
|                         
|Core capital              |  | 4.          | 00% |                    | 5.  | 00%         |     | 6.  | 95%
|                         
|                         
|                         
|                         
|Risk-based capital        |  | 8.          | 00% |                    | 10. | 00%         |     | 11. | 94%
|                         
|                         
|                         
|                         
|Tier 1 Risk-based capital |  | N/A         |     | 6.                 | 00% |             | 10. | 91%



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##### Table of Contents






PART II. OTHER INFORMATION




Item 1. LEGAL PROCEEDINGS

None




Item 2. CHANGES IN SECURITIES

None




Item 3. DEFAULTS ON SENIOR SECURITIES

None




Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS



| |  | The Annual Meeting of Stockholders of the Company was held on
June 20, 2001 for the following purposes:
| |  | -------------------------------------------------------------------------------------------------------



| | (a) |  | To elect three directors to serve until
the Annual Meeting to be held in the year 2004 and or
until their successors are elected and have been
qualified.                                                                        
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The Stockholders re-elected Mr. Elbert T. Hudson, Dr.
Willis K. Duffy and Ms. Rosa M. Hill to serve as
directors for terms of three years each. The number of
votes FOR and WITHHELD for each of the directors is
detailed below:

|                     |  |  |         | 
|-------------------- |  |  | ------- | 
|Mr. Elbert T. Hudson |  |  |         | 
|                    
|                    
|                    
|                    
|For                  |  |  | 605,894 | 
|                    
|                    
|                    
|                    
|Withheld             |  |  | 33,496  | 
|                    
|Dr. Willis K. Duffy  |  |  |         | 
|                    
|                    
|                    
|                    
|For                  |  |  | 605,894 | 
|                    
|                    
|                    
|                    
|Withheld             |  |  | 33,496  | 
|                    
|Ms. Rosa Hill        |  |  |         | 
|                    
|                    
|                    
|                    
|For                  |  |  | 605,894 | 
|                    
|                    
|                    
|                    
|Withheld             |  |  | 33,496  | 



| | (b) |  | To ratify the appointment of KPMG LLP as
the Companys independent auditors for 2001.                                                                                          
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | The Stockholders ratified the appointment of KPMG LLP
as the Companys independent auditors based upon total
votes FOR of 625,412, votes of 108 AGAINST and 13,870
ABSTENTIONS.



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##### Table of Contents






Item 5. OTHER INFORMATION

None




Item 6. EXHIBITS AND REPORTS ON FORM 8-K

None




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                      |                                       |                   
|--------------------- | ------------------------------------- | ------------------
|                      | BROADWAY FINANCIAL CORPORATION       
|                      |                                       |                   
|                      |                                       |                   
|Date: August 11, 2001 | By:                                   | /s/ PAUL C. HUDSON
|                      |                                       |                   
|                      | Paul C. Hudson                       
|                      | President and Chief Executive Officer
|                      |                                       |                   
|                      |                                       |                   
|                      | By:                                   | /s/ BOB ADKINS    
|                      |                                       |                   
|                      | Bob Adkins                           
|                      | Chief Financial Officer              



15