Broadway Financial Corporation (the “Company”) (NASDAQ Small-Cap: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported a fourth quarter net loss of ($7.5) million, or ($4.43) per diluted share, down $7.9 million, compared to net earnings of $369 thousand, or $0.13 per diluted share, in the fourth quarter of 2008. The decrease in net earnings was primarily due to a $15.3 million increase in the provision for loan losses which was partially offset by a $1.2 million increase in net interest income before provision for loan losses.
For the year ended December 31, 2009, the Company reported a net loss of ($6.5) million or ($4.14) per diluted share, compared to net earnings of $2.3 million or $1.18 per diluted share for the year ended December 31, 2008.
Chief Executive Officer, Paul C. Hudson stated, “In the fourth quarter, we aggressively increased our allowance for loan losses in order to address the effects of high unemployment and depressed real estate values on the credit quality of our loan portfolio.” He went on to say, “Maintaining our net interest margin and improving asset quality will be our primary focus for returning the Company to profitability.”
Fourth Quarter Highlights:
Summary of Operating Results
Net Interest Income
- Net interest income before provision for loan losses totaled $5.0 million, up $1.2 million, or 33%, compared to the fourth quarter of 2008.
- Average interest earning assets increased $110.9 million, or 28%, and net interest margin increased by 14 basis points compared to the fourth quarter of 2008.
- Allowance for loan losses as a percentage of total gross loans, excluding loans held for sale, increased from 1.06% at December 31, 2008 to 4.52% at December 31, 2009, with provision for loan losses of $15.7 million for the fourth quarter of 2009 compared to $425 thousand for the fourth quarter of 2008.
- The Bank was awarded a $591 thousand grant by the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund.
Fourth quarter 2009 net interest income before provision for loan losses was $5.0 million, up $1.2 million, or 33%, from the fourth quarter 2008. The improvement was due to an increase of $110.9 million in average interest-earning assets, combined with an increase in the net interest margin of 14 basis points.