Broadway Financial Corporation (the “Company”) (NASDAQ Small-Cap: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net earnings for the first quarter ended March 31, 2010 of $988 thousand, or $0.39 per diluted common share, which represented an increase of $326 thousand, or 49%, over the net earnings of $662 thousand, or $0.29 per diluted common share, for the first quarter of 2009. The increase in net earnings was primarily due to higher net interest income.
Chief Executive Officer, Paul C. Hudson stated, “The strength of the Bank’s franchise and business model were evident in the first quarter, as we returned to profitability despite continuing softness in the local economy and real estate market. We were able to increase our net interest margin above the levels earned in 2009, and lower our efficiency ratio relative to the comparable quarter last year. In addition, total non-performing assets declined and net charge-offs were reduced by approximately $1.4 million compared to the fourth quarter of 2009. We are optimistic that we can continue to generate profits within this difficult economic environment. However, given the prospects for continued high unemployment and depressed real estate values within the markets that we serve, we intend to focus on maintaining our net interest margin and improving asset quality for the balance of 2010.”
First Quarter Highlights
First Quarter 2010 Earnings Summary
- Net interest income before provision for loan losses grew $1.3 million, an increase of 32% over first quarter 2009.
- Return on equity was 12.34% and return on average assets was 0.76%.
- Non-performing assets (“NPAs”) as a percentage of total assets decreased to 6.85% from 7.10% at year-end 2009.
For the quarter ended March 31, 2010, net interest income before provision for loan losses was $5.4 million, which represented an increase of $426 thousand, or 9%, from the fourth quarter of 2009 and $1.3 million, or 32%, from the first quarter of 2009. The increases were primarily attributable to the substantial growth in our loan portfolio during 2009, as well as an increase in our net interest margin. Average interest- earning assets increased $11.0 million, or 2%, from the fourth quarter of 2009 and $114.5 million, or 28%, from the first quarter of 2009. Our net interest margin for the quarter ended March 31, 2010 increased to 4.17%, 24 basis points above the fourth quarter and 10 basis points higher than the first quarter of 2009 net interest margin primarily because we were able to reduce the cost of our liabilities more rapidly than the decline in the yield on our interest-earning assets.