Broadway Financial Corporation Reports Record Earnings for the First Quarter of 2000.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--May 2, 2000 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 Corporation (the "Company") (Nasdaq:BYFC), the holding company of Broadway Federal Bank, f.s.b. (the "Bank"), today reported net earnings of $167,000, or $0.17 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, 2000, compared to $87,000, or $0.09 per diluted share, for the three months ended March 31, 1999. The 92% increase in net earnings is attributable to a 12% increase in net interest income before provision for loan losses, partially offset by a 2% increase in non-interest expenses. Net interest income before provision for loan losses increased by $175,000 from $1.5 million for the first quarter of 1999 to $1.7 million for the first quarter of 2000. The growth in net interest income before provision for loan losses resulted from higher interest income from loans and investments, which grew by $425,000, offset by higher interest expense on deposits and borrowings, which grew by $250,000 during the period. The increase in interest income is attributable to a 0.07% improvement in the yield on interest earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin and a $20.9 million increase in average loans and investments for the quarter ended March 31, 2000, as compared to the same period in 1999. The increase in interest expense is attributable to a $19.5 million increase in average deposits and borrowings and a 0.17% increase in the Bank's cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. for the quarter ended March 31, 2000, as compared to the same period in 1999. At March 31, 2000, the Bank maintained a net interest spread of 4.11%, down 0.10% from the same period in 1999. During the first quarter of 2000, non-interest expense increased $32,000, to $1.4 million as compared to the same quarter in 1999. Non-interest expense was impacted during the first quarter of 2000 by a $96,000 unrealized loss Unrealized Loss A loss that results from holding onto an asset rather than cashing it in and officially taking the loss. Notes: Let's say you own a stock that is down 50%, but you haven't sold it to realize the loss yet. This is said to be an unrealized loss. on loans held for sale. These loans totaled $4.1 million at March 31, 2000. The loss was due to fluctuations in market interest rates resulting in a diminution Taking away; reduction; lessening; incompleteness. The term diminution is used in law to signify that a record submitted by an inferior court to a superior court for review is not complete or not fully certified. in the value of such assets. The Bank is in the process of selling its existing portfolio of loans held for sale, and is implementing a program to originate o·rig·i·nate v. 1. To bring into being; create. 2. To come into being; start. and sell multifamily loans Multifamily loans Loans usually represented by conventional mortgages on multi-family rental apartments. to the secondary market at par pricing or better. During the first quarter of 2000 the Bank also recorded a $40,000 payment for penalties and interest on late remittances
Remittances are transfers of money by foreign workers to their home countries. of backup withholding backup withholding Compulsory withholding from payments to an investor in order to take care of a potential tax liability. Payments of interest, dividends, and proceeds from a sale of securities are subject to backup withholding when certain requirements are . The Bank is pursuing recovery of the penalty portion of this payment. Non-performing assets, consisting of non-accrual loans and real estate acquired through foreclosure foreclosure Legal proceeding by which a borrower's rights to a mortgaged property may be extinguished if the borrower fails to live up to the obligations agreed to in the loan contract. ("REO reo Noun NZ a language [Maori] "), decreased by $326,000, from $1.7 million at March 31, 1999 to $1.4 million at March 31, 2000. The decrease resulted from a decrease in non-accrual loans of $546,000, offset by an increase in REO of $220,000. As a percentage of total assets, non-performing assets were 0.83% at March 31, 2000, compared to 1.14% and 1.15% at March 31, 1999 and December December: see month. 31, 1999, respectively. Since December 1999, non-accrual loans decreased by $565,000, to $830,000, and REO has increased by $23,000, to $538,000. At March 31, 2000 total assets, including loans receivable, remained relatively unchanged from December 31, 1999. However, between March 31, 1999 to March 31, 2000 total assets grew by 11.29% to $165.6 million, from $148.8 million at March 31, 1999. The loan portfolio increased to $130.3 million at March 31, 2000 compared to $111.2 million at March 31, 1999. To fund loans, deposits and FHLB FHLB Federal Home Loan Bank borrowing increased by $8.0 million and $8.6 million, respectively at March 31, 2000, compared to March 31, 1999. At March 31, 2000 deposits and borrowings totaled $135.6 million and $14.6 million, respectively. Consolidated 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 $13.9 million at March 31, 2000, representing 8.42% of total assets, 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. ." The Company, through its banking operations, continues to focus on increasing its earning assets, controlling expenses, limiting its branch losses and resolving its non-performing assets. 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. , which primarily originates residential mortgage loans in the geographic areas known as Mid-City Mid-City can refer to:
The process by which the corporation communicates with its investors. , 4800 Wilshire Not to be confused with Wiltshire. Wilshire may refer to:
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
(Unaudited)
March 31, December 31,
2000 1999
Assets:
Cash $ 2,214 $ 3,135
Investment securities
held to maturity 10,623 10,623
Mortgage-backed securities
held to maturity 12,459 13,210
Loans receivable, net 126,191 126,871
Loans receivable held for sale,
at lower of cost or fair value 4,060 2,458
Accrued interest receivable 1,053 1,013
Real estate acquired
through foreclosure, net 538 515
Investments in capital stock
of Federal Home Loan Bank, at cost 1,246 1,229
Office properties
and equipment, net 6,459 6,533
Other assets 737 717
Total assets $ 165,580 $ 166,304
Liabilities and stockholders' equity
Deposits $ 135,607 $ 133,984
Advances from
Federal Home Loan Bank 14,600 16,900
Advance payments by borrowers
for taxes and insurance 56 192
Deferred income taxes 605 605
Other liabilities 772 822
Total liabilities 151,640 152,503
Stockholders' Equity:
Preferred nonconvertible,
non-cumulative,
and non-voting stock,
$.01 par value, authorized
1,000,000 shares; issued and
outstanding 55,199 shares at
March 31, 2000 and
December 31, 1999 1 1
Common stock, $.01 par value,
authorized 3,000,000 shares;
issued and outstanding
932,494 shares at
March 31, 2000 and
December 31, 1999 10 10
Additional paid-in capital 9,684 9,674
Retained earnings-substantially
restricted 4,922 4,809
Treasury stock-29,241 shares
at cost (318) (318)
Unearned Employee Stock
Ownership Plan shares (359) (375)
Total stockholders' equity 13,940 13,801
Total liabilities and
stockholders' equity $ 165,580 $ 166,304
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
2000 1999
Interest on loans receivable $ 2,686 $ 2,255
Interest on investment
securities held-to-maturity 165 168
Interest on mortgage-backed
securities held-to-maturity 199 204
Other interest income 17 15
Total interest income 3,067 2,642
Interest on deposits 1,146 1,083
Interest on borrowings 244 57
Total interest expense 1,390 1,140
Net interest income before
provision for loan losses 1,677 1,502
Provision for loan losses 90 75
Net interest income after
provision for loan losses 1,587 1,427
Noninterest income:
Service charges 124 119
Loss on sale of loans
receivable held for sale (6) --
Other 18 12
Total noninterest income 136 131
Noninterest expense:
Compensation and benefits 668 777
Occupancy expense, net 290 257
Advertising and promotional expense 33 46
Professional services 86 77
Real estate operations, net 12 11
Contracted security services 38 38
Telephone and postage 45 39
Stationery, printing and supplies 28 30
Other 242 135
Total noninterest expense 1,442 1,410
Earnings before income taxes 281 148
Income taxes 114 61
Net earnings $ 167 $ 87
Earnings per share-basic $ 0.17 $ 0.09
Earnings per share-diluted 0.17 0.09
Dividend declared
per share-common stock 0.05 0.05
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
As of March 31,
2000 1999 Required
Broadway Federal Bank, f.s.b.
Regulatory Capital Ratios:
Tangible capital 7.13% 7.67% 1.50%
Core capital 7.13% 7.67% 3.00%
Risk-based capital 11.57% 14.20% 8.00%
Asset Quality Ratios
and Data:
Non-performing loans
as a percentage
of total loans 0.62% 1.21%
Non-performing assets
as a percentage
of total assets 0.83% 1.14%
Allowance for loan
losses as a percentage
of total loans 1.04% 1.08%
Allowance for loan
losses as a percentage
of non-performing loans 166.14% 89.10%
Allowance for losses
as a percentage
of non-performing assets (a) 114.18% 80.76%
Non-performing assets:
Non-accrual loans $830 $1,376
Real estate acquired
through foreclosure 538 318
Total non-performing assets $1,368 $1,694
Three Months Ended
March 31,
2000 1999
Performance Ratios:
Return on average assets 0.40% 0.24%
Return on average equity 4.80% 2.56%
Average equity to average assets 8.30% 9.22%
Noninterest expense to average assets 3.44% 3.82%
Net interest rate spread (b) 4.11% 4.21%
Net interest margin (c) 4.32% 4.45%
(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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