Broadway Financial Corp. Reports Improved Earnings for the First Quarter of 2001.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--May 3, 2001 Broadway Broadway, famous thoroughfare in New York City. It extends from Bowling Green near the foot of Manhattan island N to 262d St. in the Bronx. Throughout its length Broadway is chiefly a commercial street. Financial Corp. (the "company") (Nasdaq:BYFC), the holding company for Broadway Federal Bank, f.s.b. (the "bank"), today reported net earnings of $181,000, or $0.20 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the three months ended March 31, 2001, compared to $167,000, or $0.17 per diluted share, for the three months ended March 31, 2000. The 8.38% increase in net earnings is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to increases in non-interest income, as well as reductions in non-interest expenses. The increase in net earnings caused the company's return on equity to increase to 5.17% at March 31, 2001, compared to 4.80% at March 31, 2000. Non-interest income grew by 27.94%, or $38,000, from $136,000 for the three-month period ended March 31, 2000, to $174,000 for the same period in 2001. The majority of the increase came from bank service charges that jumped by 16.94%, or $21,000, to $145,000 for the three-month period ended March 31, 2001, from $124,000 for the same period in the prior year. The increase primarily resulted from higher fees earned from customers on deposit accounts, including returned check fees on checking accounts. Non-interest expenses dropped by 2.43%, or $35,000, from $1,442,000 for the three-month period ended March 31, 2000, to $1,407,000 for the same period in 2001. The decrease in non-interest expenses resulted from reductions in losses on sales of loans and other expenses, offset primarily by increases in salary and benefits. Net interest income before provision for loan losses for the quarter ended March 31, 2001, amounted to $1.6 million compared to $1.7 million for the same period a year ago. Net interest margin for the three months ended March 31, 2001, was 3.94%, a 38-basis point decrease compared to the same period in the prior year. Net interest rate spread decreased 43 basis points, from 4.11% at March 31, 2000, to 3.68% at March 31, 2001. These decreases for the three months ended March 31, 2001, were primarily a result of an increase in the cost of interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities partially offset by an increase in the yield on interest-earning assets. The increase in the cost of interest-bearing liabilities was driven by an increase in the average cost of deposits and the average deposit balance from March 31, 2000, to March 31, 2001. For the three-month period ended March 31, 2001, the bank's average cost of deposits was 3.97% compared to 3.41% for the same period in the prior year, and its average deposits increased 9.27% to $147.3 million from $134.8 million, respectively. Management anticipates that the cost of deposits will trend downward during the coming months as maturing certificate accounts are re-priced in the current interest rate environment. The increase in the yield on interest-earning assets was primarily due to the growth in interest-earning assets as compared to March 31, 2000. Average interest-earning assets for the period were $160.3 million as compared to $155.3 million for the same period in the prior year. The growth in interest-earning assets since Dec. 31, 2000, resulted from the inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. of deposits during the quarter that were invested in Fed Funds fed funds See federal funds. sold at March 31, 2001. Management anticipates using these funds to increase its loan portfolio through the company's improved loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. process. The provision for loan losses decreased $60,000, from $90,000 for the three months ended March 31, 2000, to $30,000 for the same period in 2001. This loan loss provision reflects the decrease in the real estate loan portfolio coupled with recognition of improvement in non-accrual loans. Total non-performing assets decreased by $94,000, from $632,000 at Dec. 31, 2000, to $538,000 at March 31, 2001. The decrease resulted from a decrease of non-accrual loans. As a percentage of total assets, non-performing assets were 0.30% at March 31, 2001, compared to 0.38% at Dec. 31, 2000. The provision for loan losses for the quarter ended March 31, 2001, results from management's ongoing assessment of the company's level of credit risk inherent in the portfolio and changes within the loan categories resulting from various factors, including loan originations, repayments, prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. and changes in asset classifications. At March 31, 2001, consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. totaled $14.1 million, and the bank met the regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. necessary to be deemed "well capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. ." Broadway Federal Bank, f.s.b. is a community-oriented savings bank savings bank, financial institution that, until recently, performed only the following functions: receiving savings deposits of individuals, investing them, and providing a modest return to its depositors in the form of interest. that primarily originates residential mortgage loans in the geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. areas known as Mid-City Mid-City can refer to:
adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. branches, four in the city of Los Angeles
Shareholders, analysts and others seeking information about the company are invited to write to: Broadway Financial Corp., Investor Relations Investor relations The process by which the corporation communicates with its investors. , 4800 Wilshire Not to be confused with Wiltshire. Wilshire may refer to:
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, which can be identified by the use of forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. terminology The terminology used in the computer and telecommunications field adds tremendous confusion not only for the lay person, but for the technicians themselves. What many do not realize is that terms are made up by anybody and everybody in a nonchalant, casual manner without any regard or , including "may," "will," "should," "expect," "anticipate," "estimate" or "continue," or the negatives thereof or other comparable terminology. The company's actual results could differ materially from those anticipated in such forward-looking statements as a result of various factors, including those set forth in the documents filed by the company with the Securities and Exchange Commission.
BROADWAY FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
(Unaudited)
March 31, Dec. 31,
2001 2000
Assets:
Cash $ 4,452 $ 5,367
Fed funds sold 24,200 4,900
Investment securities held-to-maturity 4,000 10,623
Mortgage-backed securities
held-to-maturity 9,991 10,748
Loans receivable, net 125,246 126,815
Loans receivable held for sale, at lower
of cost or fair value -- 59
Accrued interest receivable 1,006 1,071
Investments in capital stock of Federal
Home Loan Bank, at cost 1,338 1,316
Office properties and equipment, net 6,344 6,357
Other assets 654 670
Total assets $ 177,231 $ 167,926
Liabilities and stockholders' equity:
Deposits $ 151,262 $ 141,594
Advances from Federal Home Loan Bank 10,000 10,000
Advance payments by borrowers for taxes
and insurance 5 194
Deferred income taxes 402 402
Other liabilities 1,441 1,759
Total liabilities 163,110 153,949
Stockholders' Equity:
Preferred non-convertible, non-cumulative,
and non-voting stock, $.01 par value,
authorized 1,000,000 shares; issued and
outstanding 55,199 shares at March 31,
2001, and Dec. 31, 2000 1 1
Common stock, $.01 par value, authorized
3,000,000 shares; issued and outstanding
901,333 shares at March 31, 2001, and
Dec. 31, 2000 10 10
Additional paid-in capital 9,459 9,460
Retained earnings - substantially
restricted 5,451 5,322
Treasury stock - 60,402 shares at March 31,
2001, and Dec. 31, 2000 (554) (554)
Unearned Employee Stock Ownership
Plan shares (246) (262)
Total stockholders' equity 14,121 13,977
Total liabilities and
stockholders' equity $ 177,231 $ 167,926
BROADWAY FINANCIAL CORP.
AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2001 2000
Interest on loans receivable $ 2,735 $ 2,686
Interest on investment securities
held-to-maturity 95 165
Interest on mortgage-backed securities
held-to-maturity 170 199
Other interest income 234 17
Total interest income 3,234 3,067
Interest on deposits 1,491 1,146
Interest on borrowings 165 244
Total interest expense 1,656 1,390
Net interest income before provision
for loan losses 1,578 1,677
Provision for loan losses 30 90
Net interest income after provision
for loan losses 1,548 1,587
Non-interest income:
Service charges 145 124
Gain (loss) on loans receivable
held-for-sale 1 (6)
Other 28 18
Total non-interest income 174 136
Non-interest expense:
Compensation and benefits 831 668
Occupancy expense, net 254 290
Advertising and promotional expense 50 33
Professional services 41 86
Real estate operations, net -- 12
Contracted security services 39 38
Telephone and postage 56 45
Stationery, printing and supplies 25 28
Other 111 242
Total non-interest expense 1,407 1,442
Earnings before income taxes 315 281
Income taxes 134 114
Net earnings $ 181 $ 167
Dividends paid on preferred stock (7) (7)
Earnings available to common shareholders $ 174 $ 174
Earnings per share - basic $ 0.20 $ 0.17
Earnings per share - diluted 0.20 0.17
Dividend declared per share - common stock 0.05 0.05
BROADWAY FINANCIAL CORP.
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
March 31, Dec. 31,
2001 2000 Required
Broadway Federal Bank, f.s.b.
Regulatory Capital Ratios:
Tangible capital 6.80% 7.42% 1.50%
Core capital 6.80% 7.42% 4.00%
Total Risk-Based Capital 12.65% 13.26% 8.00%
Asset Quality Ratios and Data:
Non-performing loans as a percentage
of total loans 0.42% 0.49%
Non-performing assets as a percentage
of total assets 0.30% 0.38%
Allowance for loan losses as a
percentage of total loans 1.14% 1.10%
Allowance for loan losses as a
percentage of non-performing loans 269.70% 224.84%
Allowance for losses as a percentage
of non-performing assets (a) 269.70% 224.84%
Non-performing assets:
Non-accrual loans $ 538 $ 632
Real estate acquired
through foreclosure -- --
Total non-performing assets $ 538 $ 632
Three Months Ended
March 31,
2001 2000
Performance Ratios:
Return on average assets 0.42% 0.40%
Return on average equity 5.17% 4.80%
Average equity to average assets 8.07% 8.30%
Non-interest expense to
average assets 3.24% 3.44%
Net interest rate spread (b) 3.68% 4.11%
Net interest margin (c) 3.94% 4.32%
(a) Allowance for losses includes valuation allowances on loans and
real estate acquired through foreclosure.
(b) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of
interest-bearing liabilities.
(c) Net interest margin represents net interest income as a
percentage of average interest-earning assets.
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