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Broadway Financial Corporation Reports Profit For 4th Quarter And Year Ended December 31, 2010

Forward-Looking Statements

Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to, among other things, the Company’s plans for Recapitalizing and raising capital, expectations regarding the business environment in which the Company operates, projections of future performance, perceived opportunities in the market, and statements regarding strategic objectives. These forward-looking statements are based upon current management expectations, and involve risks and uncertainties. Actual results or performance may differ materially from those suggested, expressed, or implied by the forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, the real estate market, competitive conditions in the business and geographic areas in which the Company conducts its business, regulatory actions or changes and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission, including the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

About Broadway Financial Corporation

Broadway Financial Corporation conducts its operations through its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which is the leading community-oriented savings bank in Southern California serving low to moderate income communities. We offer a variety of residential and commercial real estate loan products for consumers, businesses, and non-profit organizations, other loan products, and a variety of deposit products, including checking, savings and money market accounts, certificates of deposits and retirement accounts. The Bank operates five full service branches, four in the city of Los Angeles, and one located in the nearby city of Inglewood, California.

Shareholders, analysts and others seeking information about the Company are invited to write to: Broadway Financial Corporation, Investor Relations, 4800 Wilshire Blvd., Los Angeles, CA 90010, or visit our website at www.broadwayfederalbank.com.

 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
   
December 31, December 31,
  2010     2009  
(Unaudited)
ASSETS
Cash $ 8,203 $ 7,440
Federal funds sold   13,775     -  
Cash and cash equivalents 21,978 7,440
 
Securities available for sale, at fair value 10,524 14,961
Securities held to maturity 12,737 16,285
Loans receivable held for sale, net 29,411 20,940
Loans receivable, net of allowance of $20,458 and $20,460 382,616 432,640
Accrued interest receivable 2,216 2,419
Federal Home Loan Bank (FHLB) stock, at cost 4,089 4,305
Office properties and equipment, net 5,094 5,363
Real estate owned (REO) 3,036 2,072
Bank owned life insurance 2,522 2,418
Deferred tax assets 5,369 4,986
Other assets   4,338     7,217  
Total assets $ 483,930   $ 521,046  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 348,445 $ 385,488
Federal Home Loan Bank advances 87,000 91,600
Junior subordinated debentures 6,000 6,000
Other borrowings 5,000 -
Advance payments by borrowers for taxes and insurance 272 372
Other liabilities   4,353     6,071  
Total liabilities   451,070     489,531  
 
Stockholders' Equity:

Senior preferred, cumulative and non-voting stock, $1,000 par value, authorized, issued and outstanding 9,000 shares of Series D at December 31, 2010 and 2009; liquidation preference of $9,000 at December 31, 2010 and 2009

8,963 8,963

Senior preferred, cumulative and non-voting stock, $1,000 par value, authorized, issued and outstanding 6,000 shares of Series E at December 31, 2010 and 2009; liquidation preference of $6,000 at December 31, 2010 and 2009

5,974 5,974

Preferred, non-cumulative and non-voting stock, $.01 par value, authorized 1,000,000 shares; issued and outstanding 55,199 shares of Series A, 100,000 shares of Series B and 76,950 shares of Series C at December 31, 2010 and 2009; liquidation preference of $552 for Series A, $1,000 for Series B and $1,000 for Series C at December 31, 2010 and 2009

2 2
Preferred stock discount (1,380 ) (1,756 )

Common stock, $.01 par value, authorized 8,000,000 shares; issued 2,013,942 shares at December 31, 2010 and 2009; outstanding 1,743,965 shares at December 31, 2010 and 1,743,365 shares at December 31, 2009

20 20
Additional paid-in capital 14,395 14,273
Retained earnings-substantially restricted 8,074 7,322

Accumulated other comprehensive income, net of taxes of $176 at December 31, 2010 and $118 at December 31, 2009

263 176

Treasury stock-at cost, 269,977 shares at December 31, 2010 and 270,577 shares at December 31, 2009

  (3,451 )   (3,459 )
Total stockholders' equity   32,860     31,515  
 
Total liabilities and stockholders' equity $ 483,930   $ 521,046  
 
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings (Loss)
(Dollars in thousands, except per share amounts)
         
Three Months ended December 31,   Twelve Months ended December 31,
  2010     2009     2010     2009  
(Unaudited) (Unaudited)
 
Interest and fees on loans receivable $ 6,800 $ 7,108 $ 28,821 $ 27,366
Interest on mortgage-backed securities 185 312 914 1,158
Interest on investment securities 12 12 50 50
Other interest income   11     (3 )   52     94  
Total interest income   7,008     7,429     29,837     28,668  
 
Interest on deposits 1,347 1,613 5,910 6,922
Interest on borrowings   852     821     3,363     3,066  
Total interest expense   2,199     2,434     9,273     9,988  
 
Net interest income before provision for loan losses 4,809 4,995 20,564 18,680
Provision for loan losses   1,842     15,693     4,465     19,629  
Net interest income after provision for loan losses   2,967     (10,698 )   16,099     (949 )
 
Non-interest income:
Service charges 270 269 1,175 1,222
Net gains (losses) on sales of loans 114 - (22 ) 6
Net losses on sales of REO - - (88 ) -
Other   630     626     1,593     731  
Total non-interest income   1,014     895     2,658     1,959  
 
Non-interest expense:
Compensation and benefits 1,234 1,586 6,657 6,118
Occupancy expense, net 360 337 1,429 1,393
Information services 205 192 807 813
Professional services 357 58 1,167 630
Provision for losses on loans held for sale 85 117 1,188 734
Provision for losses on REO 322 - 1,102 -
FDIC insurance 348 177 1,043 819
Office services and supplies 124 137 548 572
Other   501     293     1,560     1,036  
Total non-interest expense   3,536     2,897     15,501     12,115  
 
Earnings (loss) before income taxes 445 (12,700 ) 3,256 (11,105 )
Income tax expense   208     (5,212 )   1,341     (4,646 )
Net earnings (loss) $ 237   $ (7,488 ) $ 1,915   $ (6,459 )
 
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities available for sale $ 10 $ (36 ) $ 145 $ 240
Income tax effect   (4 )   14     (58 )   (96 )
Other comprehensive income (loss), net of tax   6     (22 )   87     144  
 
Comprehensive earnings (loss) $ 243   $ (7,510 ) $ 2,002   $ (6,315 )
 
Net earnings (loss) $ 237 $ (7,488 ) $ 1,915 $ (6,459 )
Dividends and discount accretion on preferred stock   (282 )   (234 )   (1,145 )   (749 )
Earnings (loss) available to common shareholders $ (45 ) $ (7,722 ) $ 770   $ (7,208 )
 
Earnings (loss) per common share-basic $ (0.03 ) $ (4.43 ) $ 0.44 $ (4.14 )
Earnings (loss) per common share-diluted $ (0.03 ) $ (4.43 ) $ 0.44 $ (4.14 )
Dividends declared per share-common stock $ - $ 0.05 $ 0.01 $ 0.20
Basic weighted average shares outstanding 1,743,965 1,743,365 1,743,728 1,743,127
Diluted weighted average shares outstanding 1,744,565 1,743,365 1,744,559 1,743,127
 
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
             
As of December 31,
  2010     2009  
Regulatory Capital Ratios:
 
Core Capital 8.82 % 6.69 %
Tangible Capital 8.82 % 6.69 %
Tier 1 Risk-Based Ratio 11.76 % 8.91 %
Total Risk-Based Capital 13.05 % 10.19 %
 
Asset Quality Ratios and Data:
 

Non-performing loans as a percentage of total gross loans, excluding loans held for sale

9.31 % 6.82 %
 

Non-performing assets as a percentage of total assets

9.60 % 7.10 %
 

Allowance for loan losses as a percentage of total gross loans, excluding loans held for sale

5.08 % 4.52 %
 

Allowance for loan losses as a percentage of non-performing loans, excluding loans held for sale

54.53 % 66.20 %
 

Allowance for loan losses as a percentage of non-performing assets

44.03 % 55.31 %
 

 

Net loan charge-offs (recoveries) as a percentage of average loans for twelve months ended December 31

0.97 % 0.64 %
 
Non-performing assets:
Non-accrual loans
Loans receivable, net $ 37,514 $ 30,908
Loans receivable held for sale   5,918     4,013  
Total non-accrual loans 43,432 34,921
Loans delinquent 90 days or more and still accruing - -
Real estate acquired through foreclosure   3,036     2,072  
Total non-performing assets $ 46,468   $ 36,993  
 

Three Months ended December 31,

Twelve Months ended December 31,

  2010     2009   2010   2009  
Performance Ratios:
 
Return on average assets 0.19 % (A) -5.72 % (A) 0.37 % -1.35 %
Return on average equity 2.87 % (A) -90.31 % (A) 5.85 % -19.47 %
Average equity to average assets 6.58 % 6.33 % 6.26 % 6.92 %
Non-interest expense to average assets 2.82 % (A) 2.21 % (A) 2.96 % 2.53 %
Efficiency ratio (1) 53.74 % 47.20 % 56.89 % 55.14 %
Net interest rate spread (2) 3.74 % (A) 3.83 % (A) 3.84 % 3.91 %
Net interest rate margin (3) 3.87 % (A) 3.93 % (A) 3.96 % 4.02 %
 
(1 ) Efficiency ratio represents non-interest expense divided by net interest income plus non-interest income.
(2 )

Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities.

(3 ) Net interest rate margin represents net interest income as a percentage of average interest-earning assets.
 
(A) Annualized
 
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Support for Calculations
(Dollars in thousands)
             

Three Months ended December 31,

Twelve Months ended December 31,

  2010     2009     2010     2009  
Total assets $ 483,930 $ 521,046 $ 483,930 $ 521,046
Total gross loans, excluding loans held for sale $ 403,074 $ 453,100 $ 403,074 $ 453,100
Total equity $ 32,860 $ 31,515 $ 32,860 $ 31,515
Average assets $ 501,499 $ 523,553 $ 523,513 $ 479,632
Average loans $ 446,338 $ 468,360 $ 462,800 $ 423,078
Average equity $ 32,993 $ 33,165 $ 32,761 $ 33,174
Average interest-earning assets $ 497,067 $ 508,392 $ 519,089 $ 464,345
Average interest-bearing liabilities $ 462,189 $ 483,099 $ 485,121 $ 441,130
Net income $ 237 $ (7,488 ) $ 1,915 $ (6,459 )
Total income $ 5,823 $ 5,890 $ 23,222 $ 20,639
Non-interest expense $ 3,536 $ 2,897 $ 15,501 $ 12,115
Efficiency ratio 53.74 % 47.20 % 56.89 % 55.14 %
Non-accrual loans $ 43,432 $ 34,921 $ 43,432 $ 34,921
REO, net $ 3,036 $ 2,072 $ 3,036 $ 2,072
ALLL $ 20,458 $ 20,460 $ 20,458 $ 20,460
Allowance for loss on loans held for sale $ 1,281 $ 994 $ 1,281 $ 994
REO-Allowance $ 54 $ - $ 54 $ -
Interest income $ 7,008 $ 7,429 $ 29,837 $ 28,668
Interest expense $ 2,199 $ 2,434 $ 9,273 $ 9,988
Net interest income $ 4,809 $ 4,995 $ 20,564 $ 18,680
Net loan charge-offs (recoveries) $ (134 ) $ 2,302 $ 4,467 $ 2,728




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