Broadway Financial Corporation Reports Net Loss For 4th Quarter And Year 2011

Broadway Financial Corporation (the “Company”) (NASDAQ: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net loss of ($132) thousand, or ($0.24) per diluted common share, for the fourth quarter of 2011, compared to net earnings of $237 thousand, or ($0.03) loss per diluted common share, for the fourth quarter of 2010. The decrease from net earnings to net loss primarily reflected lower net interest income, lower non-interest income and higher non-interest expense which were partially offset by lower provision for loan losses.

For the year ended December 31, 2011, the Company reported a net loss of ($9.5) million, or ($6.10) per diluted common share compared to net earnings of $1.9 million, or $0.44 per diluted common share for the year ended December 31, 2010. The decrease from net earnings to net loss primarily reflected higher provisions for losses, lower net interest income, lower non-interest income and higher non-interest expense.

Chairman Paul C. Hudson stated, “Asset quality has improved in each of the past three consecutive quarters, which is a significant indicator of future profitability.” Chief Executive Officer Wayne Kent Bradshaw added, “Bank performance trends are beginning to show positive movement and management is focused on increasing capital ratios while continuing to manage the reduction of problem assets.”

Fourth Quarter 2011 Earnings Summary

For the quarter ended December 31, 2011, our net interest income before provision for loan losses was $4.0 million, which represented a decrease of $912 thousand, or 19%, from the fourth quarter of 2010. The decrease was primarily attributable to a decrease of $82.4 million in average interest-earning assets, combined with a 5 basis point decrease in net interest margin from 3.87% in the fourth quarter of 2010 to 3.82% in the fourth quarter of 2011. The decline in interest-earning assets reflects our strategy throughout the year to maintain our capital ratios above the required regulatory thresholds and strengthen our liquidity and deposit base, in part by shrinking total assets and reducing both potential problem loans and non-performing assets.

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