Los Angeles-based Broadway Financial Corp. is aiming to fund $1.5 billion in loans to low- and moderate-income clients across its bi-coastal footprint with a recent government investment and its better-than-peers deposit growth.

The company's Washington, D.C.-based banking subsidiary City First Bank NA, which is the largest African American minority depository institution, or MDI, in the U.S., recently received a $150 million grant from the U.S. Treasury as part of the Emergency Capital Investment Program.

The program, which was created by Congress in 2021, allocated up to $9 billion in capital to certified community development financial institutions and MDIs to provide financing to small businesses, minority-owned businesses and consumers in low-income and underserved communities.

"We are planning to grow substantially in the next couple of years, partly with this Treasury funding," said Tom Nida, executive vice president and market executive for Broadway Financial and City First.

The company also plans to focus on deposit growth in order to achieve its loan growth goals, Nida said. Additionally, City First may look to further acquisitions to bridge the sizable gap in its footprint. In April 2021, Broadway and CFBanc Corp. combined in a cross-country merger-of-equals.

"Between D.C. and [Los Angeles], it's about 3,000 miles, so at some point, it's not unreasonable to think we might fill in a gap there geographically," Nida said.

City First's performance

As of June 30, the bank has grown deposits 25.4% year over year and loans by 5.1% in that same time frame, both above the medians for all African American MDIs and all MDIs in the U.S.

The bank posted a return on average assets of 0.73% at June 30 and an efficiency ratio of 71.56%, both better than the median for all African American MDIs.

Despite that outperformance, Broadway's total returns have underperformed the S&P U.S. BMI Banks Index since at least December 2021 and also mostly underpeformed fellow-African American MDI Carver Bancorp Inc.'s total returns during the same time frame.

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Green lending

In addition to the bank's work with low- to moderate-income clients in Los Angeles and Washington, D.C., City First works closely with DC Green Bank, which provides long-term funding for commercial property owners to reduce carbon emissions in the city through its Property Assessed Clean Energy Program, or PACE.

PACE finances projects such as solar panels, energy-efficient windows, water conservation and LED lighting, among others.

City First helped to finance four of DC Green Bank's eight PACE deals so far this year, including an apartment building, a charter school, a co-op and a healthcare center in different parts of the city, according to Ronald Hobson, DC Green Bank's PACE program manager.