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Broadway Financial Corporation Reports Net Loss For Third Quarter 2011

Stocks in this article: BYFC

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)
 
  September 30,   December 31,
2011 2010
(Unaudited)
ASSETS
Cash $ 13,735 $ 8,203
Federal funds sold   7,240     13,775  
Cash and cash equivalents 20,975 21,978
 
Securities available for sale, at fair value 8,612 10,524
Securities held to maturity 11,000 12,737
Loans receivable held for sale, net 15,212 29,411
Loans receivable, net of allowance of $19,805 and $20,458 339,479 382,616
Accrued interest receivable 1,759 2,216
Federal Home Loan Bank (FHLB) stock, at cost 4,089 4,089
Office properties and equipment, net 4,821 5,094
Real estate owned (REO) 5,385 3,036
Bank owned life insurance 2,588 2,522
Deferred tax assets 2,873 5,369
Other assets   5,444     4,338  
Total assets $ 422,237   $ 483,930  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 294,850 $ 348,445
Federal Home Loan Bank advances 87,000 87,000
Junior subordinated debentures 6,000 6,000
Other borrowings 5,000 5,000
Advance payments by borrowers for taxes and insurance 584 272
Other liabilities   5,768     4,353  
Total liabilities   399,202     451,070  
 
Stockholders' Equity:

Senior preferred, cumulative and non-voting stock, $0.01 par value, authorized, issued and outstanding 9,000 shares of Series D at September 30, 2011 and December 31, 2010; liquidation preference of $9,619 at September 30, 2011 and $9,281 at December 31, 2010

8,963 8,963

Senior preferred, cumulative and non-voting stock, $0.01 par value, authorized, issued and outstanding 6,000 shares of Series E at September 30, 2011 and December 31, 2010; liquidation preference of $6,412 at September 30, 2011 and $6,188 at December 31, 2010

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 September 30, 2011 and December 31, 2010; liquidation preference of $552 for Series A, $1,000 for Series B and $1,000 for Series C at September 30, 2011 and December 31, 2010

2 2
Preferred stock discount (1,092 ) (1,380 )

Common stock, $.01 par value, authorized 8,000,000 shares at September 30, 2011 and December 31, 2010; issued 2,013,942 shares at September 30, 2011 and December 31, 2010; outstanding 1,744,565 shares at September 30, 2011 and 1,743,965 shares at December 31, 2010

20 20
Additional paid-in capital 14,460 14,395
Retained earnings (accumulated deficit) (2,141 ) 8,074

Accumulated other comprehensive income, net of taxes of $206 at September 30, 2011 and $176 at December 31, 2010

293 263

Treasury stock-at cost, 269,377 shares at September 30, 2011 and 269,977 shares at December 31, 2010

(3,444 ) (3,451 )
Total stockholders' equity   23,035     32,860  
 
Total liabilities and stockholders' equity $ 422,237   $ 483,930  
 
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings (Loss)
(Dollars in thousands, except per share amounts)
(Unaudited)
 
  Three Months ended Nine Months ended
September 30, September 30,
2011   2010 2011   2010
 
Interest and fees on loans receivable $ 6,062 $ 7,231 $ 18,730 $ 22,186
Interest on securities 176 228 539 767
Other interest income   9     16     28     41  
Total interest income   6,247     7,475     19,297     22,994  
 
Interest on deposits 1,056 1,492 3,492 4,563
Interest on borrowings   859     865     2,699     2,511  
Total interest expense   1,915     2,357     6,191     7,074  
 
Net interest income before provision for loan losses 4,332 5,118 13,106 15,920
Provision for loan losses   3,814     1,740     8,488     2,623  
Net interest income after provision for loan losses   518     3,378     4,618     13,297  
 
Non-interest income:
Service charges 176 275 533 677
Net gains (losses) on mortgage banking activities (80 ) 13 (73 ) (72 )
Net losses on sales of REO (7 ) (53 ) (56 ) (88 )
Other   25     788     90     962  
Total non-interest income   114     1,023     494     1,479  
 
Non-interest expense:
Compensation and benefits 1,618 1,696 4,982 5,423
Occupancy expense, net 330 359 1,018 1,069
Information services 200 198 647 602
Professional services 284 214 744 810
Provision for losses on loans held for sale 702 556 728 1,103
Provision for losses on REO 1,251 669 2,033 780
FDIC insurance 144 233 781 695
Office services and supplies 135 147 417 424
Other   447     516     1,380     1,059  
Total non-interest expense   5,111     4,588     12,730     11,965  
 
Earnings (loss) before income taxes (4,479 ) (187 ) (7,618 ) 2,811
Income tax expense (benefit)   3,055     (31 )   1,767     1,133  
Net earnings (loss) $ (7,534 ) $ (156 ) $ (9,385 ) $ 1,678  
 
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities available for sale $ (11 ) $ (122 ) $ 60 $ 135
Income tax effect   (2 )   49     (30 )   (54 )
Other comprehensive income (loss), net of tax   (13 )   (73 )   30     81  
 
Comprehensive earnings (loss) $ (7,547 ) $ (229 ) $ (9,355 ) $ 1,759  
 
Net earnings (loss) $ (7,534 ) $ (156 ) $ (9,385 ) $ 1,678
Dividends and discount accretion on preferred stock   (264 )   (282 )   (830 )   (863 )
Earnings (loss) available to common shareholders $ (7,798 ) $ (438 ) $ (10,215 ) $ 815  
 
Earnings (loss) per common share-basic $ (4.47 ) $ (0.25 ) $ (5.86 ) $ 0.47
Earnings (loss) per common share-diluted $ (4.47 ) $ (0.25 ) $ (5.86 ) $ 0.47
Dividends declared per share-common stock $ - $ - $ - $ 0.01
Basic weighted average shares outstanding 1,744,565 1,743,965 1,744,251 1,743,649
Diluted weighted average shares outstanding 1,744,565 1,743,965 1,744,251 1,744,967
 
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
 
  As of September 30,
2011   2010
Regulatory Capital Ratios:
 
Core Capital 8.16 % 8.34 %
Tangible Capital 8.16 % 8.34 %
Tier 1 Risk-Based Ratio 10.91 % 11.31 %
Total Risk-Based Capital 12.20 % 12.59 %
 
Asset Quality Ratios and Data:
 

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

11.59 % 6.89 %
 

Non-performing assets as a percentage of total assets

12.63 % 7.71 %
 

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

5.52 % 4.24 %
 

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

47.67 % 61.60 %
 

Allowance for losses as a percentage of non-performing assets

40.79 % 51.92 %
 

Net loan charge-offs (recoveries) as a percentage of average loans for nine months ended September 30

2.98 % (A) 1.31 % (A)
 
Non-performing assets:
Non-accrual loans
Loans receivable, net $ 41,549 $ 30,004
Loans receivable held for sale   6,408     5,722  
Total non-accrual loans 47,957 35,726
Loans delinquent 90 days or more and still accruing - -
Real estate acquired through foreclosure   5,385     3,530  
Total non-performing assets $ 53,342   $ 39,256  
 
  Three Months ended   Nine Months ended
September 30, September 30,
2011   2010 2011   2010
Performance Ratios:
 
Return on average assets -6 .89% (A) -0 .12% (A) -2 .71% (A) 0 .42% (A)
Return on average equity -104 .17% (A) -1 .87% (A) -39 .86% (A) 6 .83% (A)
Average equity to average assets 6 .61% 6 .30% 6 .79% 6 .17%
Non-interest expense to average assets 4 .67% (A) 3 .47% (A) 3 .67% (A) 3 .00% (A)
Efficiency ratio (1) 71 .03% 54 .76% 73 .30% 57 .95%
Net interest rate spread (2) 3 .90% (A) 3 .80% (A) 3 .69% (A) 3 .91% (A)
Net interest rate margin (3) 4 .02% (A) 3 .92% (A) 3 .83% (A) 4 .03% (A)
 
(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   Nine Months ended
September 30,   September 30,
2011   2010 2011   2010
Total assets $ 422,237 $ 508,884 $ 422,237 $ 508,884
Total gross loans, excluding loans held for sale $ 358,538 $ 435,433 $ 358,538 $ 435,433
Total equity $ 23,035 $ 32,784 $ 23,035 $ 32,784
Average assets $ 437,422 $ 528,889 $ 462,155 $ 531,036
Average loans $ 391,196 $ 459,290 $ 408,578 $ 468,348
Average equity $ 28,929 $ 33,341 $ 31,393 $ 32,740
Average interest-earning assets $ 430,936 $ 521,966 $ 456,617 $ 526,511
Average interest-bearing liabilities $ 402,684 $ 489,581 $ 425,203 $ 492,903
Net income (loss) $ (7,534 ) $ (156 ) $ (9,385 ) $ 1,678
Total income $ 4,446 $ 6,141 $ 13,600 $ 17,399
Non-interest expense $ 5,111 $ 4,588 $ 12,730 $ 11,965
Efficiency ratio 71.03 % 54.76 % 73.30 % 57.95 %
Non-accrual loans $ 47,957 $ 35,726 $ 47,957 $ 35,726
REO, net $ 5,385 $ 3,530 $ 5,385 $ 3,530
ALLL $ 19,805 $ 18,482 $ 19,805 $ 18,482
Allowance for loss on loans held for sale $ 1,308 $ 1,335 $ 1,308 $ 1,335
REO-Allowance $ 646 $ 565 $ 646 $ 565
Interest income $ 6,247 $ 7,475 $ 19,297 $ 22,994
Interest expense $ 1,915 $ 2,357 $ 6,191 $ 7,074
Net interest income $ 4,332 $ 5,118 $ 13,106 $ 15,920
Net loan charge-offs (recoveries) $ 6,254 $ 1,720 $ 9,141 $ 4,601
 




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