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Broadway Financial Corporation Announces Revised Net Earnings For First Quarter Ended March 31, 2012

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.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our management’s current 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. The Company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances, except to the extent required by law.

 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
  As Originally Announced     As Revised   As Restated
March 31, March 31, December 31,
  2012   Adjustments   2012     2011  
(Unaudited) (Unaudited)
ASSETS
Cash $ 13,572 $ - $ 13,572 $ 12,127
Federal funds sold   31,605     -     31,605     19,470  
Cash and cash equivalents 45,177 - 45,177 31,597
 
Securities available for sale, at fair value 18,027 - 18,027 18,979
Loans receivable held for sale, net 13,277 (369 ) 12,908 12,983
Loans receivable, net of allowance of $17,752 and $17,299 313,276 (3,698 ) 309,578 322,770
Accrued interest receivable 1,601 - 1,601 1,698
Federal Home Loan Bank (FHLB) stock, at cost 3,901 - 3,901 4,089
Office properties and equipment, net 4,548 - 4,548 4,626
Real estate owned (REO) 4,335 (377 ) 3,958 6,699
Bank owned life insurance 2,629 - 2,629 2,609
Investment in affordable housing partnership 1,629 - 1,629 1,675
Deferred tax assets 828 (56 ) 772 850
Other assets   4,155     (23 )   4,132     5,162  
Total assets $ 413,383   $ (4,523 ) $ 408,860   $ 413,737  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 290,352 $ - $ 290,352 $ 294,686
Federal Home Loan Bank advances 83,000 - 83,000 83,000
Junior subordinated debentures 6,000 - 6,000 6,000
Other borrowings 5,000 - 5,000 5,000
Advance payments by borrowers for taxes and insurance 335 - 335 813
Other liabilities   5,904     -     5,904     5,962  
Total liabilities   390,591     -     390,591     395,461  
 
Stockholders' Equity:

Senior preferred, cumulative and non-voting stock, $0.01 par value, authorized, issued and outstanding 9,000 shares of Series D at March 31, 2012 and December 31, 2011; liquidation preference of $9,844 at March 31, 2012 and $9,731 at December 31, 2011

8,963 - 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 March 31, 2012 and December 31, 2011; liquidation preference of $6,563 at March 31, 2012 and $6,488 at December 31, 2011

5,974 - 5,974 5,974

Preferred, non-cumulative and non-voting stock, $.01 par value, authorized 985,000 shares; issued and outstanding 55,199 shares of Series A, 100,000 shares of Series B and 76,950 shares of Series C at March 31, 2012 and December 31, 2011; liquidation preference of $552 for Series A, $1,000 for Series B and $1,000 for Series C at March 31, 2012 and December 31, 2011

3,657 - 3,657 3,657
Preferred stock discount (896 ) - (896 ) (994 )

Common stock, $.01 par value, authorized 8,000,000 shares at March 31, 2012 and December 31, 2011; issued 2,013,942 shares at March 31, 2012 and December 31, 2011; outstanding 1,744,565 shares at March 31, 2012 and December 31, 2011

20 - 20 20
Additional paid-in capital 10,844 - 10,844 10,824
Accumulated deficit (2,904 ) (4,523 ) (7,427 ) (7,295 )

Accumulated other comprehensive income, net of taxes of $400 at March 31, 2012 and December 31, 2011

578 - 578 571
Treasury stock-at cost, 269,377 shares at March 31, 2012 and December 31, 2011   (3,444 )   -     (3,444 )   (3,444 )
Total stockholders' equity   22,792     (4,523 )   18,269     18,276  
 
Total liabilities and stockholders' equity $ 413,383   $ (4,523 ) $ 408,860   $ 413,737  
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings (Loss)
(Dollars in thousands, except per share amounts)
(Unaudited)
  Three Months Ended March 31,
As Originally Announced     As Revised  
  2012   Adjustments   2012     2011  
 
Interest and fees on loans receivable $ 5,330 $ - $ 5,330 $ 6,384
Interest on securities 148 - 148 181
Other interest income   16     -     16     9  
Total interest income   5,494     -     5,494     6,574  
 
Interest on deposits 975 - 975 1,239
Interest on borrowings   833     -     833     989  
Total interest expense   1,808     -     1,808     2,228  
 
Net interest income before provision for loan losses 3,686 - 3,686 4,346
Provision for loan losses   427     532     959     1,240  
Net interest income after provision for loan losses   3,259     (532 )   2,727     3,106  
 
Non-interest income:
Service charges 153 - 153 182
Net losses on mortgage banking activities (166 ) - (166 ) (25 )
Net gains (losses) on sales of REO 272 140 412 (15 )
Other   24     -     24     39  
Total non-interest income   283     140     423     181  
 
Non-interest expense:
Compensation and benefits 1,589 - 1,589 1,809
Occupancy expense, net 287 - 287 354
Information services 213 - 213 227
Professional services 108 - 108 168
Provision for losses on loans held for sale 503 (505 ) (2 ) 20
Provision for losses on REO 160 (179 ) (19 ) 80
FDIC insurance 217 - 217 283
Office services and supplies 109 - 109 142
Other   419     -     419     419  
Total non-interest expense   3,605     (684 )   2,921     3,502  
 
Earnings (loss) before income taxes (63 ) 292 229 (215 )
Income tax expense (benefit)   (3 )   78     75     (86 )
Net earnings (loss) $ (60 ) $ 214   $ 154   $ (129 )
 
Other comprehensive income (loss), net of tax:
Unrealized gain (loss) on securities available for sale $ 7 $ - $ 7 $ (15 )
Income tax effect   -     -     -     6  
Other comprehensive income (loss), net of tax   7     -     7     (9 )
 
Comprehensive earnings (loss) $ (53 ) $ 214   $ 161   $ (138 )
 
Net earnings (loss) $ (60 ) $ 214 $ 154 $ (129 )
Dividends and discount accretion on preferred stock   (286 )   -     (286 )   (283 )
Loss available to common shareholders $ (346 ) $ 214   $ (132 ) $ (412 )
 
Loss per common share-basic $ (0.20 ) $ 0.12 $ (0.08 ) $ (0.24 )
Loss per common share-diluted $ (0.20 ) $ 0.12 $ (0.08 ) $ (0.24 )
Dividends declared per share-common stock $ - $ - $ - $ -
Basic weighted average shares outstanding 1,744,565 - 1,744,565 1,743,965
Diluted weighted average shares outstanding 1,744,565 - 1,744,565 1,743,965
 
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
(Unaudited)
  As of March 31,  
  2012         2011  
Regulatory Capital Ratios:
 
Core Capital Ratio 7.70 % 8.71 %
Tangible Capital Ratio 7.70 % 8.71 %
Tier 1 Risk-Based Capital Ratio 10.92 % 11.70 %
Total Risk-Based Capital Ratio 12.23 % 12.98 %
 
Asset Quality Ratios and Data:
 

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

12.79 % 11.10 %
 

Non-performing assets as a percentage of total assets

12.57 % 11.52 %
 

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

5.42 % 5.32 %
 

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

42.39 % 47.93 %
 

Allowance for losses as a percentage of non-performing assets

36.21 % 40.70 %
 

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

0.74 % (A) 0.66 % (A)
 
Non-performing assets:
Non-accrual loans
Loans receivable, net $ 41,877 $ 43,796
Loans receivable held for sale   5,555     5,982  
Total non-accrual loans 47,432 49,778
Loans delinquent 90 days or more and still accruing - -
Real estate acquired through foreclosure   3,958     5,123  
Total non-performing assets $ 51,390   $ 54,901  
 
Three Months ended March 31,
  2012     2011  
Performance Ratios:
 
Return on average assets 0.15 % (A) -0.11 % (A)
Return on average equity 3.34 % (A) -1.55 % (A)
Average equity to average assets 4.48 % 6.88 %
Non-interest expense to average assets 2.84 % (A) 2.90 % (A)
Efficiency ratio (1) 71.60 % 75.15 %
Net interest rate spread (2) 3.60 % (A) 3.47 % (A)
Net interest rate margin (3) 3.67 % (A) 3.62 % (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)
(Unaudited)
  Three Months ended March 31,
  2012       2011  
Total assets $ 408,860 $ 476,734
Total gross loans, excluding loans held for sale $ 327,330 $ 394,613
Total equity $ 18,269 $ 32,558
Average assets $ 411,302 $ 482,793
Average loans $ 345,803 $ 427,883
Average equity $ 18,424 $ 33,201
Average interest-earning assets $ 401,647 $ 479,775
Average interest-bearing liabilities $ 386,057 $ 444,106
Net earnings (loss) $ 154 $ (129 )
Total income $ 4,109 $ 4,527
Non-interest expense $ 2,921 $ 3,502
Efficiency ratio 71.60 % 75.15 %
Non-accrual loans $ 47,432 $ 49,778
REO, net $ 3,958 $ 5,123
ALLL $ 17,752 $ 20,991
Allowance for loss on loans held for sale $ 667 $ 1,301
REO-Allowance $ 188 $ 52
Interest income $ 5,494 $ 6,574
Interest expense $ 1,808 $ 2,228
Net interest income $ 3,686 $ 4,346
Net loan charge-offs (recoveries) $ 644 $ 707




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