Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market:BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net loss of ($60) thousand, or ($0.20) per diluted common share, for the first quarter of 2012, compared to net loss of ($129) thousand, or ($0.24) per diluted common share, for the first quarter of 2011. The decrease in net loss was primarily due to lower provision for loan losses, higher net gains on sales of real estate owned (“REO”) and lower compensation and benefits expense, which were partially offset by lower net interest income and higher provision for losses on loans held for sale and REO.
Chief Executive Officer, Wayne Kent Bradshaw stated, “We are encouraged by positive trends in asset quality, as well as, the success of strategies to reduce expenses and increase capital.”
First Quarter 2012 Earnings Summary
For the first quarter of 2012, our net interest income before provision for loan losses was $3.7 million, which represented a decrease of $660 thousand, or 15%, from the first quarter of 2011. The $660 thousand decrease in net interest income primarily resulted from a $75.1 million decrease in average interest-earning assets.
Average interest-earning assets for the first quarter of 2012 decreased $75.1 million to $404.7 million from $479.8 million for the first quarter of 2011, which resulted in a $1.2 million reduction in interest income. The decline in average interest-earning assets, primarily loans receivable, reflects our strategy throughout 2011 to maintain our capital ratios above the required regulatory thresholds, in part by shrinking total assets. The annualized yield on our average interest-earning assets decreased 5 basis points to 5.43% for the first quarter of 2012, from 5.48% for the same period a year ago.
Average interest-bearing liabilities for the first quarter of 2012 decreased $58.0 million to $386.1 million from $444.1 million for the first quarter of 2011. The decrease in average interest-bearing liabilities resulted in a $226 thousand reduction in interest expense. The annualized cost of our average interest-bearing liabilities decreased 14 basis points to 1.87% for the first quarter of 2012 from 2.01% for the same period a year ago, and resulted in a decrease of $194 thousand in interest expense.