<PAGE>

                       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 March 31, 1999

[ ]       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
                          -------------------------------
      (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
         -------------------------------------------------------------
                  (Address of Principal Executive Offices)

                                  (323) 634-1700
                                  --------------
                 (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: 932,494 shares of the 
Company's Common Stock, par value $.01 per share, were issued and outstanding 
as of April 30, 1999.

Transitional Small Business Disclosure Format (Check one):

Yes [ ]  No [x]

                                       1
<PAGE>

                                     INDEX

PART I--  FINANCIAL INFORMATION

<TABLE>
<CAPTION>
          Item 1.   Financial Statements                         Page
<S>                 <C>                                          <C>
                    Consolidated Balance Sheets (unaudited)
                    as of March 31, 1999
                    and December 31, 1998                        3

                    Consolidated Statements of 
                    Earnings (unaudited) for the
                    three months ended March 31,
                    1999 and March 31, 1998                      4

                    Consolidated Statements of 
                    Cash Flows (unaudited) for the three 
                    months ended March 31, 1999
                    and March 31, 1998                           5

                    Notes to Consolidated Financial
                    Statements                                   7


          Item 2.   Management's Discussion and
                    Analysis of Financial Condition and 
                    Results of Operations                        8
</TABLE>

                                       2
<PAGE>

                         BROADWAY FINANCIAL CORPORATION
                                 AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                       MARCH 31,            DECEMBER 31,
                                                                                         1999                   1998
                                                                                   ---------------       -----------------
<S>                                                                                <C>                   <C>
ASSETS:

Cash ........................................................................     $          2,507       $          4,605
Fed funds sold...............................................................                    -                  2,600
Investment securities held to maturity.......................................               10,622                  8,622
Mortgage-backed securities held to maturity..................................               15,809                 12,096
Loans receivable, net........................................................              108,514                107,055
Loans receivable held for sale, at lower of cost or fair value...............                2,688                  2,495
Accrued interest receivable..................................................                  939                    888
Real estate acquired through foreclosure, net................................                  318                    222
Investments in capital stock of Federal Home Loan Bank, at cost..............                1,000                    987
Office properties and equipment, net.........................................                5,710                  5,360
Other assets.................................................................                  686                    721
                                                                                   ----------------       ----------------

Total assets.................................................................      $       148,793        $       145,651
                                                                                   ----------------       ----------------
                                                                                   ----------------       ----------------


LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits ....................................................................      $       127,654        $       125,998
Advance from Federal Home Loan Bank..........................................                6,000                  4,500
Advance payments by borrowers for taxes and insurance........................                   50                    205
Other liabilities............................................................                1,475                  1,395
                                                                                   ----------------       ----------------

Total liabilities............................................................              135,179                132,098
Stockholders' Equity:
    Preferred nonconvertible, non-cumulative, and non-voting stock, $.01 par
        value, authorized 1,000,000 shares; issued and outstanding 55,199
        shares at  March 31, 1999............................................                    1                      1
   Common stock, $.01 par value, authorized 3,000,000 shares; issued and
        outstanding  932,494 shares at March 31, 1999........................                   10                     10
   Additional paid-in capital................................................                9,644                  9,633
   Retained earnings-substantially restricted................................                4,699                  4,664
   Treasury stock-29,241 shares at cost......................................                 (318)                  (318)
   Unearned Employee Stock Ownership Plan shares.............................                 (422)                  (437)
                                                                                   ----------------       ----------------

Total stockholders' equity...................................................               13,614                 13,553
                                                                                   ----------------       ----------------

Total liabilities and stockholders'  equity..................................      $       148,793        $       145,651
                                                                                   ----------------       ----------------
                                                                                   ----------------       ----------------
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       3
<PAGE>

                         BROADWAY FINANCIAL CORPORATION
                                 AND SUBSIDIARY
                       CONSOLIDATED STATEMENTS OF EARNINGS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                               THREE MONTHS ENDED
                                                                                    MARCH 31,
                                                                    -----------------------------------------
                                                                          1999                     1998
                                                                    ----------------         ----------------
<S>                                                                 <C>                      <C>
Interest on loans receivable....................................    $         2,255          $         2,172
Interest on investment securities held-to-maturity..............                168                       91
Interest on mortgage-backed securities held-to-maturity.........                204                       49
Other interest income...........................................                 15                       15
                                                                    ----------------         ----------------
Total interest income...........................................              2,642                    2,327


Interest on deposits............................................              1,083                    1,042
Interest on borrowings..........................................                 57                        3
                                                                    ----------------         ----------------
Total interest expense..........................................              1,140                    1,045
                                                                    ----------------         ----------------

Net interest income before provision for loan losses............              1,502                    1,282

Provision for loan losses.......................................                 75                       75
                                                                    ----------------         ----------------
Net interest income after provision for loan losses.............              1,427                    1,207

Noninterest income:
     Service charges............................................                119                      102
     Gain on sale of loans receivable held for sale ............                  -                       19
     Gain on sale of office properties and equipment............                  -                        6
     Other  ....................................................                 12                      181
                                                                    ----------------         ----------------
Total noninterest income                                                        131                      308
                                                                    ----------------         ----------------

Noninterest expense:
     Compensation and benefits..................................                777                      693
     Occupancy expense, net.....................................                257                      280
     Advertising and promotional expense........................                 46                       37
     Professional service.......................................                 19                       22
     Federal insurance premiums.................................                 27                       25
     Insurance bond premiums....................................                 28                       26
     Real estate operations, net................................                 11                        6
     Contracted security services...............................                 38                       36
     Net branch losses..........................................                 29                       10
     Telephone and postage......................................                 39                       24
     Stationary, printing and supplies..........................                 30                       26
     Other .....................................................                108                       80
                                                                    ----------------         ----------------
Total noninterest expense                                                     1,409                    1,265
                                                                    ----------------         ----------------

Earnings before income taxes ...................................                148                      250

Income taxes ...................................................                 61                      105
                                                                    ----------------         ----------------
Net earnings ...................................................    $            87          $           145
                                                                    ----------------         ----------------
                                                                    ----------------         ----------------

Earnings per share-basic........................................               $.09                     $.15
Earnings per share-diluted......................................                .09                      .15
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       4
<PAGE>

                         BROADWAY FINANCIAL CORPORATION
                                 AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                                           Three Months Ended
                                                                                               March 31,
                                                                                       1999                1998
                                                                                 ----------------    ---------------
<S>                                                                              <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings                                                                                 $87               $145

Adjustments to reconcile net earnings to net cash provided by (used in)
    operating activities:
      Depreciation                                                                            81                 31
      Amortization of premium on loans purchased                                              37                  -
      Amortization of net deferred loan origination fees                                     (17)               (92)
      Amortization of discounts and premium on securities                                     25                  1
      Federal Home Loan Bank stock dividends                                                 (13)               (14)
      Gain on sale of real estate owned                                                        -                (25)
      Gain on sale of loans receivable held for sale                                           -                (25)
      Gain on sale of office properties and equipment                                          -                 (6)
      Provision for loan losses                                                               75                 75
      Provision for write-downs and losses on real estate                                      6                 17
      Loans originated for sale, net of refinances                                        (1,394)            (1,713)
      Proceeds from sale of loans receivable held for sale                                 1,195              1,144
      Discount on sale of loans receivable held for sale                                       6                  -
      Changes in operating assets and liabilities:
         Accrued interest receivable                                                         (51)                68
         Other assets                                                                         35               (281)
         Other liabilities                                                                    80               (425)
                                                                                 ----------------    ---------------

Total adjustments                                                                             65             (1,126)
                                                                                 ----------------    ---------------

Net cash provided by (used in) operating activities                                          152               (981)
                                                                                 ----------------    ---------------

CASH FLOWS FROM INVESTING ACTIVITIES
Loans originated, net of refinances                                                       (9,176)            (1,808)
Loans purchased                                                                                -             (4,780)
Principal repayment on loans                                                               7,520              4,736
Proceeds from sale of office properties and equipment                                          -                132
Purchases of investment securities held-to-maturity                                       (3,500)            (3,125)
Purchases of mortgage-backed securities held-to-maturity                                  (4,595)                 -
Proceeds from maturities of investment securities held-to-
      maturity                                                                             1,500              3,502
Proceeds from maturities of mortgage-backed securities held-
      to-maturity                                                                            857                191
Capital expenditures for office properties and equipment                                    (431)              (452)
Proceeds from sale of real estate acquired through foreclosure                                 -                836
                                                                                 ----------------    ---------------

Net cash used in investing activities                                                     (7,825)              (768)
                                                                                 ----------------    ---------------
</TABLE>

                                       5
<PAGE>

                         BROADWAY FINANCIAL CORPORATION
                                 AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
                                   (UNAUDITED)
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              Three Months Ended
                                                                                 March 31,
                                                                         1999                   1998
                                                                  -------------------    -------------------
<S>                                                               <C>                    <C>


CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in deposits                                                       1,656                  3,687
Increase in advance from Federal Home Loan Bank                                1,500                      -
Additional paid-in capital                                                        11                     12
Dividends paid                                                                   (53)                   (50)
Unearned Employee Stock Ownership Plan                                            16                     16
Increase in advances by borrowers
     for taxes and insurance                                                    (155)                  (182)
                                                                  -------------------    -------------------

Net cash provided by financing activities                                      2,975                  3,483
                                                                  -------------------    -------------------

Net increase (decrease) in cash and cash equivalents                          (4,698)                 1,734

Cash and cash equivalents at beginning of period                               7,205                  4,831
                                                                  -------------------    -------------------

Cash and cash equivalents at end of period                                    $2,507                 $6,565
                                                                  -------------------    -------------------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash paid for interest                                                        $1,100                 $1,049
Cash paid for income taxes                                                        10                      -
                                                                  -------------------    -------------------
                                                                  -------------------    -------------------

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
      FINANCING ACTIVITIES
Additions to real estate acquired through foreclosure                            102                    245
</TABLE>

                 See Notes to Consolidated Financial Statements

                                       6
<PAGE>

                            BROADWAY FINANCIAL CORPORATION
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                    MARCH 31, 1999

1.   In the opinion of management of Broadway Financial Corporation (the
     "Company"), the preceding unaudited consolidated financial statements
     contain all material adjustments,  necessary to present fairly the
     consolidated financial position of the Company at March 31, 1999 and the
     results of its operations for the three months  ended March 31, 1999 and
     1998, and its cash flows for the three months ended March 31, 1999 and
     1998. 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, 1998 and, accordingly, should be read in conjunction with such
     audited statements.  The results of operations for the three months ended
     March 31, 1999 are not necessarily indicative of the results  to be
     expected for the full year. 

2.   RECENT ACCOUNTING PRONOUNCEMENTS

     DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES - In June 1998, the Financial
     Accounting Standards Board issued  SFAS  No. 133, "Accounting for
     Derivative Instruments and Hedging Activities."  SFAS  No. 133 established
     accounting and reporting standards for derivative instruments and hedging
     activities.  SFAS No. 133 required recognition of all derivative
     instruments in the statement of financial position as either assets or
     liabilities and the measurement of derivative instruments at fair value. 
     SFAS No. 133 is effective for fiscal years beginning after June 15, 1999. 
     The adoption of SFAS No. 133 is not expected to have a material effect on
     the Company's consolidated results of operations or financial condition.

     MORTGAGE-BACKED SECURITIES RETAINED AFTER THE SECURITIZATION OF MORTGAGE
     LOANS HELD FOR SALE  - In October 1998, the Financial Accounting Standards
     Board issued SFAS No. 134, "Accounting for Mortgage-Backed Securities
     Retained after the Securitization of Mortgage Loans held for Sale by a
     Mortgage Banking Enterprise."  SFAS No. 134 is an amendment of SFAS No. 65,
     "Accounting for Certain Mortgage Banking Activities."  SFAS No. 134
     requires mortgage banking enterprises to classify loans held for sale that
     they have securitized, based on their intent to sell or hold those
     investments.  SFAS No. 134 was adopted on January 1, 1999.  The adoption of
     SFAS No. 134 did not have a material impact on the Company's consolidated 
     results of operations or financial condition, as currently there are no 
     mortgage loans that have been securitized by the Company.

                                       7
<PAGE>

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

GENERAL

Broadway Financial Corporation (the "Company") is a Delaware corporation, 
primarily engaged in the savings and loan business through its wholly owned 
subsidiary, Broadway Federal Bank, f.s.b. (Broadway Federal).  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 March 31, 1999, 
Broadway Federal operated five retail banking offices and a loan center, in 
Southern California. Broadway Federal is subject to significant competition 
from other financial institutions, and is also subject to regulation by 
certain federal agencies and undergoes periodic examinations by those 
regulatory agencies.

All of the Company's operations are considered by management to be aggregated 
in one reportable operating segment-banking.

The Company's principal business is serving as a holding company for Broadway 
Federal.  The Company's results of operations are dependent primarily on 
Broadway Federal's 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 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 also affected by the amount 
of the Bank's general and administrative expenses, which consist principally 
of employee compensation and benefits, occupancy expense, and 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.

COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 
MARCH 31, 1998

GENERAL

The Company recorded net earnings of $87,000, or $0.09 per diluted share for 
the three months ended March 31, 1999, as compared to net earnings of 
$145,000, or $0.15 per diluted share for the three months ended March 31, 
1998.    The decrease in first quarter net earnings from 1998 to 1999 
resulted primarily from the following: 1) higher net interest income, 2) 
lower noninterest income, and 3) higher noninterest expense.

                                       8
<PAGE>

INTEREST INCOME

Interest income increased by $315,000 during the three months ended March 31, 
1999 as compared to the same period in 1998.   This increase was primarily 
the result of an increase in average assets of $20.5 million, to $147.5 
million for the three months ended March 31, 1999 from $127.0  million for 
the same period in 1998.  The increase in assets during the three months 
ended March 31, 1999 was funded by an increase in savings deposits and 
advances from the Federal Home Loan Bank.  The increase in average assets 
primarily resulted from the Company's continued focus on increasing its loan 
portfolio and its investment in mortgage-backed securities.

INTEREST EXPENSE

Interest on deposits and borrowings increased by $95,000 during the three 
months ended March 31, 1999 as compared to the same period in 1998.  The 
increase in interest on deposits was due to an increase in average deposits 
of $15.7 million, to $127.5 million for the three months ended March 31, 1999 
from $111.8 million during the same period in 1998.  Average borrowings also 
increased by $4.9 million for the three months ended March 31, 1999 as 
compared to the same period in 1998.  The impact of the increase in interest 
on deposits was mitigated by the current interest rate  environment as the 
average cost of deposits decreased 26-basis points, from 3.73% for the three 
months ended March 31, 1998 to 3.46% for the three months ended March 31, 
1999.

PROVISION FOR LOAN LOSSES

The provision for loan losses remained at $75,000 for the three months ended 
March 31, 1999 and March 31, 1998. 

Total non-performing assets, consisting of non-accrual loans and real estate 
acquired through foreclosure ("REO"), increased by $130,000, from $1.5 
million at March 31, 1998 to $1.7 million at March 31, 1999.  The increase 
resulted from an increase in non-accrual loans of $326,000 and a decrease in 
REO of $197,000. As a percentage of total assets, non-performing assets were 
1.14% at March 31, 1999, compared to 1.22% and 0.90% at March 31, 1998 and 
December 31, 1998, respectively.  Since December 1998, Non-accrual loans  
increased by $286,000 during the 1999 first quarter, to $1.4 million, and REO 
has decreased by $96,000, to $318,000.  Non-accrual loans at March 31, 1999 
included eleven loans totaling $1.1 million secured by one- to four-unit 
properties and  two loans totaling $264,000 secured by multi-family 
properties.  REO at March 31, 1999 included one single family property for 
$102,000, one commercial property for $93,000 and one parcel of land for 
$265,000 

                                       9
<PAGE>

offset by allowance for REO of $142,000.

As of March 31, 1999 the Company's allowance for loan losses totaled $1.2 
million, representing a $75,000 increase from the balance at December 31, 
1998. The allowance for loan losses represents 1.08% of total loans at March 
31, 1999 compared to 1.03% at December 31, 1998. The allowance for loan 
losses was 89.10% of non-accrual loans at March 31, 1999, compared to 105.60% 
at December 31, 1998.  There were no loan charge-offs or recoveries for the 
three months ended March 31, 1999.   Management believes that the allowance 
for loan losses is adequate to cover inherent losses in its loan portfolio as 
of March 31, 1999, but there can be no assurance that such losses will not 
exceed the estimated amounts.  

In addition, the Office of Thrift Supervision and the Federal Deposit 
Insurance Corporation as an integral part of their examination process, 
periodically review the Company's allowance for loan losses.  These agencies 
may require the Company to increase the allowance for loan losses based on 
their judgements of the information available at the time of the examination.


NONINTEREST INCOME

Noninterest income decreased by $177,000, from $308,000 for the three months 
ended March 31, 1998 to $131,000 for the same period during 1999.  Service 
charges increased by $17,000 during the three-month period ended March 31, 
1999 as compared to the same period in 1998. The increase resulted primarily 
from increased fees charged on various savings products and from a greater 
number of checking accounts at March 31, 1999 as compared to March 31, 1998.  
The Company reported no gain on sale of mortgage loans  for the three months 
ended March 31, 1999 as compared to a $19,000 of gain on sale for the same 
period a year ago. The Company realized no gain on sale of office properties 
and equipment for the three months ended March 31, 1999 as compared to the 
gain on sale of $6,000 for the three months ended March 31, 1998  which was 
attributable to the sale of property located at 8467 South Van Ness Avenue, 
Inglewood, California.  Finally, other noninterest income decreased by 
$169,000, from $181,000 for the three months ended March 31, 1998 to $12,000 
for the same period in 1999.  The decrease primarily resulted from the 
reversal of a $170,000 accrual during the first quarter of 1998 that had been 
set up for interest and penalties on funds escheated to the State of 
California in 1992.  Upon review by management, it was determined that the 
interest and penalties were not due.

NONINTEREST EXPENSE

Noninterest expense increased by $144,000 during the three-month period ended 
March 31, 1999 as compared to the same period in 1998.  The increase in 
noninterest 

                                       10
<PAGE>

expense was due primarily to increases in compensation and benefits and 
other expense, offset by decreases in occupancy expense.    Compensation and 
benefits increased by $84,000 for the three-month period ended March 31, 1999 
as compared to the same period in 1998.  The increases resulted from the 
accrual of vested stock grants and an increase in the number of staff.   
Other noninterest expense increased by $28,000 for the three-month  period 
ended March 31, 1999 as compared to the same period during 1998.  The 
increase was primarily caused by an increase in legal fees.  Offsetting these 
increases is a $23,000 decrease in occupancy expense for the three months 
ended March 31, 1999 as compared to the same period in 1998.  The decrease 
was primarily due to decreases in computer expenses, repair and maintenance 
and furniture, fixture, equipment expense offset by increases in depreciation 
expense, rent and utilities expense.

INCOME TAXES

Income tax expense decreased by $44,000  for the three-month period ended 
March 31, 1999, as compared to the same period in 1998.  The decrease in 
income taxes was the result of lower earnings before income taxes during the 
first quarter of 1999 as compared to the same period during 1998.  Broadway 
Federal computed income taxes by applying the statutory federal income tax 
rate of 34% and California income tax rate of 11.01% to earnings before 
income taxes.   

COMPARISON OF FINANCIAL CONDITION AT MARCH 31, 1999 AND DECEMBER 31, 1998 

Total assets at March 31, 1999 were $148.8 million compared to $145.7 million 
at December 31, 1998, representing an increase of $3.1 million.   Net loans 
receivable increased from $107.0 million at December 31, 1998 to $108.5 
million at March 31, 1999 as a result of $10.5 million in new loan 
originations, offset by $7.5 million in principal repayments, $102,000 in 
loans transferred to foreclosure and $1.4 million in loans originated and 
classified as held for sale.  Loans held for sale at March 31, 1999 totaled 
$2.7 million as compared to $2.5 million at December 31, 1998.  During the 
period loans originated that were classified as held-for-sale totaled $1.4 
million and loans sold totaled $1.2 million. Office properties and equipment 
increased from $5.4 million at December 31, 1998 to $5.7 million at March 31, 
1999, primarily as a result of construction costs incurred for the Bank's 
branch office located at Figueroa and Martin Luther King in the City of Los 
Angeles.   

Total liabilities at March 31, 1999 were $135.2 million compared to $132.1 
million at December 31, 1998.  The $3.1 million increase is primarily 
attributable to the increase in deposits,  advances from Federal Home Loan 
Bank and other liabilities, offset by the decrease in advance payments by 
borrowers and deferred income taxes.

Total capital at March 31, 1999 remained unchanged as compared to total 
capital at 

                                       11
<PAGE>

March 31, 1998 at $13.6 million.

LIQUIDITY AND CAPITAL RESOURCES

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 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 ratios were 
18.62% and 13.35% for the period ended March 31, 1999 and 1998, respectively. 
The relatively high liquidity ratio results from the fact that Conversion 
proceeds, which the Company has not yet invested into Bank loans, are held as 
investments in treasury securities and federal agency obligations, which are 
included in the liquidity ratio under OTS regulations. Management is 
currently attempting to reduce the liquidity ratio to a range of 10% to 12% 
as part of the Company's strategy to invest excess liquidity in Bank loans or 
other higher yielding interest-earnings assets.

The Bank has other sources of liquidity in the event that a need for 
additional funds arises, including FHLB advances to the Bank. At March 31, 
1999 and 1998 FHLB advances totaled $6.0 million and zero, respectively. 
Broadway Federal had borrowed from the FHLB to meet its short-term loan 
funding needs. Other sources of liquidity include investment securities 
maturing within one year.

REGULATORY CAPITAL

The OTS capital regulations include three separate minimum capital 
requirements for savings institutions subject to OTS supervision.  First, the 
tangible capital requirement mandates that the Association'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 core capital (tangible capital plus qualifying supervisory 
goodwill) be at least 3.00% 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 
March 31, 1999, 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 Feral at the date indicated:

<TABLE>
<CAPTION>
                                  FIRREA            FDICIA                Actual
Regulatory Capital Ratios         Minimum        "Well-capitalized"    At March 31,
for Broadway Federal              Requirement       Requirement            1999
------------------------------   ------------    ------------------    ------------
<S>                              <C>             <C>                   <C>
Tangible capital                     1.50%              N/A                7.67%

Core Capital                         3.00%              5.00%              7.67%

Risk-based capital                   8.00%              10.00%            14.20%

Tier 1 Risk-based capital            N/A                6.00%             13.08%
</TABLE>

YEAR 2000 COMPLIANCE

Many existing computer programs use only two digits to identify a year in the 
date field with the assumption that the first two digits are always 19.  
Systems that calculate, compare or sort data using the incorrect date may 
cause erroneous results, ranging from system malfunctions to incorrect or 
incomplete processing.  If not remedied, potential risks include: business 
disruption or temporary shutdown and financial loss.  Pursuant to its 
information technology strategy, the Company principally utilizes third-party 
computer service providers and third-party software for 

                                       12
<PAGE>

its information technology needs.  As a result, the Year 2000 compliance of 
the Company's information technology assets ("IT assets"), such as computer 
hardware, software and systems, is primarily dependent upon the Year 2000 
compliance efforts and results of its third-party vendors.  The Year 2000 
compliance of the Company's non-IT assets, which include automated teller 
machines (ATMs), copiers, fax machines, coin/currency counters, and emergency 
communications radios, is also primarily dependent upon the Year 2000 
compliance efforts and results of third parties.

State of Readiness

In June 1998, the Company developed a plan to address Year 2000 issues and 
appointed a Year 2000 Committee comprised of representatives from all 
divisions of the Company.  The Year 2000 Committee has developed and is 
currently implementing a comprehensive initiative to make the Company's  IT 
assets and non-IT assets Year 2000 compliant.  A Year 2000 compliance review 
and test of the computer hardware and software used by the Company was 
conducted in the first quarter of 1998.  As a result, the Company replaced 
approximately 95% of its existing personal computers and monitors, as well as 
its data processing service bureau.

The Company's non-IT assets were also assessed for Year 2000 compliance. 
Manufacturers, installers, and/or servicers of each have been contacted for 
certification of Year 2000 readiness.

The Year 2000 Committee's initiative to make the Company's IT assets and 
non-IT assets Year 2000 compliant is comprised of the following phases:

1.   Awareness-Educational initiative on Year 2000 issues and concerns.  This
     phase has been completed.

2.   Assessment-Inventory of IT assets and non-IT assets as well as
     identification of third-party vendors and service providers with which the
     Company has material relationships.  This phase has been completed.

3.   Renovation-Review of vendor and service providers'  responses to the
     Company's Year 2000 inquiries and development of a follow-up plan and 
     time-line.  This phase has been completed. 

4.   Validation-The Year 2000 Committee's readiness initiative is currently in
     this phase.  This phase consists of testing of IT assets and non-IT assets
     as well as testing of third-party vendors and service providers of Year
     2000 issues.  The testing of IT assets and non-IT assets is substantially
     complete.  The testing of third-party vendors and service providers has
     begun and will continue through June 30, 1999.  Testing of all 
     mission-critical systems is scheduled to be 

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<PAGE>

     completed by June 30, 1999.  

5.   Implementation-As mentioned above, the Company replaced 95% of its computer
     hardware and software, and converted to a data processing service bureau
     that is considered to be Year 2000 compliant.  The Company has conducted
     sufficient testing to satisfy itself of such compliance.  The Company has
     also tested its new hardware and software and ascertained their compliance.
     The major focus of the Company's efforts is currently to ensure that its
     vendors are compliant.  This process is expected to be completed by the end
     of the second quarter of 1999.

Costs to Address the Year 2000 Issue

The total cost of carrying out the Company's plan to address the Year 2000 
issue is currently estimated to be approximately $500,000, including 
estimates of personnel costs, and is comprised primarily of costs for 
equipment and software that will be acquired and depreciated over its useful 
life in accordance with Company policy.  Any personnel and additional costs 
have been and will continue to be expensed as incurred.  These currently 
contemplated Year 2000 compliance costs are expected to be funded primarily 
through operating cash flow and are not expected to have a material adverse 
effect on the Company's business, financial condition or results of 
operations.  To date, the costs incurred related to Year 2000, excluding 
estimates of personnel costs, are approximately $469,000, of which $37,000 
were expensed.  The major part of the costs incurred to date relate to the 
replacement of hardware and software which have been capitalized in 
accordance with Company policies.

Risks Presented by the year 2000 Issue

Because the Company is substantially dependent upon the proper functioning of 
its computer systems and the computer systems and services of third parties, 
a failure of those computer systems and services to be Year 2000 compliant 
could have a material adverse effect on the Company's business, financial 
condition or results of operations.  The Company relies heavily on 
third-party vendors and service providers for its information technology 
needs.  The Company's primary third-party computer service provider is a 
computer service bureau that provides data processing for virtually all of 
the Company's savings and checking accounts, real estate lending and real 
estate loan servicing, general ledger, fixed assets and accounts payable.  
This third-party's data processing services are mission-critical services for 
the Company and a failure of this provider's services to be Year 2000 
compliant could cause substantial disruption of the Company's business and 
could have a material adverse financial impact on the Company. Testing of 
this third-party data processing service bureau was performed with 
satisfactory results.

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<PAGE>

If this third-party service provider or other third-party providers with 
which the Company has material relationships are not Year 2000 compliant, the 
following problems could result: (i) in the case of vendors, important 
services upon which the Company depends, such as telecommunications and 
electrical power, could be interrupted, (ii) in the case of third-party 
service providers, the Company could receive inaccurate or outdated 
information, which could impair the Company's ability to perform critical 
data functions, such as the processing of deposit accounts, loan servicing 
and internal accounting, and (iii) in the case of governmental agencies, such 
as the FHLB, and correspondent banks, such agencies and financial 
institutions could fail to provide funds to the Company, which could 
materially impair the Company's liquidity and affect the Company's ability to 
fund loans and deposit withdrawals.  In addition, whether or not the Company 
is Year 2000 compliant, the Company may experience an outflow of deposits if 
customers are concerned about the integrity of financial institutions' 
records regarding customers' accounts.

Contingency Plans

The Company is currently in the process of completing testing of its vendors 
and service providers.  Where this is not possible, the Company will rely 
upon certifications of Year 2000 compliance from vendors and service 
providers.   The Company is currently developing a contingency plan to 
minimize disruption of operations due to Year 2000 issues.  Included are 
plans to recover critical business operations and alternatives to mitigate 
potential effects of critical third-party vendors and service providers whose 
own failure to properly address Year 2000 issues may adversely impact the 
ability to perform certain functions. Alternative strategies and contingency 
plans for liquidity and cash will also be included as part of the plan.  The 
contingency plan is expected to be substantially completed for critical 
business operations by June 30, 1999.  

There can be no assurance that the Company's Year 2000 initiative will 
effectively address the Year 2000 issues, that the Company's estimates of the 
timing and costs of completing the initiative will ultimately be accurate or 
that the impact of any failure of the Company or its third-party vendors and 
service providers to be Year 2000 compliant will not have a material adverse 
effect on the Company's business, financial condition or results of 
operations. 

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<PAGE>

                                   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:   MAY 7, 1999                By:  /s/ PAUL C. HUDSON
      -------------------              ---------------------------------
                                   Paul C. Hudson
                                   President and Chief Executive Officer

                                   By:  /s/ BOB ADKINS
                                       ---------------------------------
                                   Bob Adkins
                                   Secretary and Chief Financial Officer




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