Broadway Financial Corporation (the “Company”) (NASDAQ Small-Cap: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net earnings of $846 thousand for the second quarter ended June 30, 2010 compared with net earnings of $34 thousand for the second quarter of 2009. The increase in net earnings was primarily due to higher net interest income and a lower provision for loan losses. Earnings available to common shareholders for the quarter ended June 30, 2010 were $0.32 per fully diluted common share compared to a loss of ($0.09) per fully diluted common share for the quarter ended June 30, 2009.
For the six months ended June 30, 2010, the Company reported net earnings of $1.8 million compared to $696 thousand of net earnings for the same period in 2009. Fully diluted earnings per common share for the six months ended June 30, 2010 and 2009 were $0.72 and $0.20, respectively.
Chief Executive Officer, Paul C. Hudson stated, “We are encouraged by our ability to post consecutive quarters of positive earnings despite the weak local economy and real estate market and believe that our focus on serving the needs of low- to moderate-income communities continues to represent a differentiated strategy with enduring strength.” He went on to explain, “We are optimistic that we can continue to generate profits for the balance of 2010, but expect continuing pressure on profitability and net interest margins as we focus on improving asset quality.”
Second Quarter Highlights
Second Quarter 2010 Earnings Summary
- Net interest income before provision for loan losses grew $833 thousand, an increase of 19% over second quarter 2009.
- Provision for loan losses for the second quarter 2010 totaled $309 thousand, compared to $1.6 million for the second quarter 2009.
- Non-performing assets (“NPAs”) as a percentage of total assets decreased to 6.77%, from 6.85% at March 31, 2010 and 7.10% at year-end 2009.
- Return on equity was 10.28% and return on average assets was 0.62%.
For the quarter ended June 30, 2010, net interest income before provision for loan losses was $5.3 million, which represented an increase of $833 thousand, or 19%, from the second quarter of 2009. The increase was primarily attributable to the substantial growth in our loan portfolio during 2009. Average interest-earning assets increased $88.1 million, or 20%, from the second quarter of 2009. Our net interest margin for the quarter ended June 30, 2010 decreased to 3.92%, down 2 basis points from the second quarter 2009 net interest margin, as the yield on our interest-earning assets declined more rapidly than the cost of our interest-bearing liabilities.