Broadway Financial Corporation Reports Record Earnings.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- 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 NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :BYFC), the holding company of Broadway Federal Bank, f.s.b. (the "Bank"), today reported record net earnings of $1,708,000, or $0.99 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 year ended December December: see month. 31, 2004, compared to $1,549,000, or $0.77 per diluted share, for the year ended December 31, 2003, an increase of 10.26%. Fourth quarter 2004 net earnings amounted to $419,000, or $0.25 per diluted share, compared to $450,000, or $0.22 per diluted share, for the fourth quarter of 2003, a decrease of 6.89%. President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. C. Hudson Hudson, towns, United States Hudson. 1 Industrial town (1990 pop. 17,233), Middlesex co., E central Mass., on the Assabet River, in an apple-growing region; settled c.1699, inc. 1866. stated, "For the year 2004, we successfully implemented the Bank's strategy to increase loan originations 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. , which grew by 24% and reached a record volume of $103 million." He went on to state that, "The loan strategy was designed to offset anticipated net interest margin compression compression, external stress applied to an object or substance, tending to cause a decrease in volume (see pressure). Gases can be compressed easily, solids and liquids to a very small degree if at all. with increased loan volume." Hudson also noted that, "Although deposits grew 9%, our primary deposit strategy to grow core deposits resulted in a 30% increase in core deposits." Balance Sheet highlights follow: Net loans receivable increased $42.1 million, or 21.90%, from $192.1 million at December 31, 2003 to $234.2 million at December 31, 2004. Gross loan originations grew from $83.0 million in 2003 to $102.9 million in 2004, but the anticipated slow down in loan volume was evident as fourth quarter loan originations decreased from $45.2 million in fourth quarter 2003 to $12.7 million in fourth quarter 2004. The record level of loan originations in 2004 was tempered by continued high levels of loan repayments, which amounted to $48.3 million in 2004 compared to $49.4 million in 2003. Loan purchases of $9.2 million and loan sales of $21.7 million were transacted in 2004 as part of the Bank's asset/liability management Asset/Liability Management A technique companies employ in coordinating the management of assets and liabilities so that an adequate return may be earned. Also known as "surplus management. , and reduced net loan growth by $12.5 million. Deposit growth amounted to $16.0 million, or 8.90%, from $179.9 million at December 31, 2003 to $195.9 million at December 31, 2004. Our focus on growing core deposits (NOW, money market, and passbook accounts) resulted in an increase of $23.0 million, or 29.94%, and core deposits represented 51.03% of total deposits at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2004 compared to 42.77% at year-end 2003. We also focused on lengthening lengthening (lengkˑ·the·ning), n the use of various massage or muscle energy techniques to relax and stretch muscle and connective tissue. the maturities of our CD accounts, and the weighted average term to maturity increased from 25 months at year-end 2003 to 29 months at year-end 2004. FHLB FHLB Federal Home Loan Bank borrowings increased $26.8 million, or 94.04%, from $28.5 million at December 31, 2003 to $55.3 million at December 31, 2004. This facility was a vital alternative source of funds for loan growth. Overall, average interest-earning assets increased by $38.7 million, or 18.50%, from $209.0 million in 2003 to $247.7 million in 2004, due primarily to the increase in net loans receivable. Average interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities increased by $40.5 million, or 20.62%, from $196.7 million in 2003 to $237.2 million in 2004 due to the growth in deposits and FHLB borrowings. 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. decreased from $18.2 million at December 31, 2003 to $15.1 million at December 31, 2004. The net reduction of $3.1 million, or 17.03% was due primarily to the Company's purchase of the holdings of Hot Creek Hot Creek could refer to one of a number of streams or rivers, including: United States
Income Statement Highlights: Net interest income before provision for loan losses increased from $8.4 million in 2003 to $9.4 million in 2004. The $1.1 million increase resulted from the effect of a $38.7 million increase in average interest-earning assets, in combination with a $40.5 million increase in interest-bearing liabilities (change in volume), offset by the effect of 17 basis point decrease in the weighted average interest rate ("WAIR n. 1. (Carp.) A piece of plank two yard long and a foot broad. ") spread (change in rate) from 3.89% during 2003 compared to 3.72% during 2004. The volume effect increased net interest income by $1.9 million, and the rate effect decreased net interest income by $0.8 million. During 2004, provisions for loan losses amounted to $108,000. During 2003, certain loans that had specific reserves were paid in full, and the specific reserves amounting to $117,000 were recognized as a credit to income. Non-interest expense, net of non-interest income, increased by $498,000, comparing 2004 to 2003, primarily due to the $579,000 increase in compensation and benefits. In late 2003, we added experienced management and staff in the accounting and loan origination departments, and in 2004, we added experienced management and staff to the internal audit and savings operations departments Operations department See: Back office. operations department See back office. , and experienced staff to the loan service department. Asset Quality and Performance Ratios: Non-performing assets totaled $114,000 at December 31, 2004 compared to $80,000 at December 31, 2003, or 0.04% and 0.03% of total assets, at those respective dates. Delinquent delinquent 1) adj. not paid in full amount or on time. 2) n. short for an underage violator of the law as in juvenile delinquent. DELINQUENT, civil law. He who has been guilty of some crime, offence or failure of duty. loans 60 or more days past due were $114,000 at December 31, 2004 compared to $80,000 at December 31, 2003. The allowance for loan losses as a percentage of total loans was 0.60% and 0.67% at December 31, 2004 and 2003, respectively. The return on average equity increased from 9.08% in 2003 to 11.44% in 2004. In addition to the increased profitability, the repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. of the Company's Common Stock from Hot Creek Venture 1, L.P. and its affiliates, and the sale of the Company's Common Stock to Cathay impacted this ratio. The growth in average assets from $217.8 million in 2003 to $255.8 million in 2004, a 17.45% increase, exceeded the 10.26% growth in net income, causing the return on average assets to decline from 0.71% in 2003 to 0.67% in 2004. The efficiency ratio improved slightly from 74.01% in 2003 to 73.50% in 2004. At December 31, 2004, the Bank met the 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" for 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. purposes. 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 and conducts funds acquisition 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:
Certain matters discussed in this news release may constitute 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. 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. These forward-looking statements relate to, among other things, expectations regarding the business environment in which the Company operates, projections of future performance, perceived per·ceive tr.v. per·ceived, per·ceiv·ing, per·ceives 1. To become aware of directly through any of the senses, especially sight or hearing. 2. To achieve understanding of; apprehend. opportunities in the market, and statements regarding strategic objectives. These forward-looking statements are based upon current management expectations, and involve risks and uncertainties. Actual results or performance may differ materially from those suggested, expressed, or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by 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, including the Company's Annual Reports on Form 10-KSB and Quarterly Reports on Form 10-QSB. Shareholders, analysts and others seeking information about the Company are invited to write to: Broadway Financial Corporation, 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:
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands)
December December
31, 31,
2004 2003
--------- ---------
Assets
Cash $3,998 $5,029
Fed funds sold 3,500 2,600
Investment securities available for sale 3,980 -
Investment securities held to maturity 2,000 3,996
Mortgage-backed securities available for sale, at
fair value - 9,122
Mortgage-backed securities held to maturity 17,172 6,317
Loans receivable held for sale, at lower of cost
or fair value 1,145 1,671
Loans receivable, net 234,196 192,116
Accrued interest receivable 1,056 883
Investments in capital stock of Federal Home Loan
Bank, at cost 2,827 1,789
Office properties and equipment, net 5,725 5,603
Other assets 939 689
--------- ---------
Total assets $276,538 $229,815
========= =========
Liabilities and stockholders' equity
Deposits $195,912 $179,907
Advances from Federal Home Loan Bank 55,317 28,502
Junior subordinated debentures 6,000 -
Advance payments by borrowers for taxes and
insurance 472 324
Deferred income taxes 1,058 1,019
Other liabilities 2,682 1,872
--------- ---------
Total liabilities 261,441 211,624
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 of series A
and 100,000 shares of series B at
December 31, 2004 and December 31, 2003 2 2
Common stock, $.01 par value, authorized
3,000,000 shares; issued 1,868,942 shares
at December 31, 2004 and December 31, 2003;
outstanding 1,520,347 shares at December 31,
2004 and 1,832,507 shares at December 31, 2003 19 19
Additional paid-in capital 10,425 10,498
Accumulated other comprehensive loss, net of
taxes (7) (68)
Retained earnings-substantially restricted 9,561 8,207
Treasury stock-at cost, 348,595 shares at
December 31, 2004 and 36,435 shares at
December 31, 2003 (4,859) (375)
Unearned Employee Stock Ownership Plan shares (44) (92)
--------- ---------
Total stockholders' equity 15,097 18,191
--------- ---------
Total liabilities and stockholders' equity $276,538 $229,815
========= =========
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings
(Dollars in thousands, except per share amounts)
Three Months ended Year ended
December 31, December 31,
-------------------------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Interest on loans
receivable $3,446 $2,757 $13,234 $10,426
Interest on investment
securities 57 58 213 194
Interest on mortgage-
backed securities 115 286 368 1,438
Other interest income 62 8 165 111
---------- ---------- ---------- ----------
Total interest income 3,680 3,109 13,980 12,169
---------- ---------- ---------- ----------
Interest on deposits 906 746 3,300 3,061
Interest on borrowings 422 185 1,255 741
---------- ---------- ---------- ----------
Total interest
expense 1,328 931 4,555 3,802
---------- ---------- ---------- ----------
Net interest income before
provision for (recovery
of) loan losses 2,352 2,178 9,425 8,367
Provision for (recovery
of) loan losses 50 (117) 108 (117)
---------- ---------- ---------- ----------
Net interest income
after provision for
(recovery of) loan
losses 2,302 2,295 9,317 8,484
---------- ---------- ---------- ----------
Non-interest income:
Service charges 288 248 1,076 1,021
Gain on sale of loans
available for sale 23 9 269 27
Gain (loss) on sale of
securities available
for sale (8) 9 (29) 94
Other 31 9 105 36
---------- ---------- ---------- ----------
Total non-interest
income 334 275 1,421 1,178
---------- ---------- ---------- ----------
Non-interest expense:
Compensation and
benefits 1,093 1,014 4,579 4,000
Occupancy expense 272 237 1,073 1,032
Information services 161 154 654 588
Professional services 137 97 518 469
Office service and
supplies 117 93 432 408
Other 157 243 636 654
---------- ---------- ---------- ----------
Total non-interest
expense 1,937 1,838 7,892 7,151
---------- ---------- ---------- ----------
Earnings before income
taxes 699 732 2,846 2,511
Income taxes 280 282 1,138 962
---------- ---------- ---------- ----------
Net earnings $419 $450 $1,708 $1,549
========== ========== ========== ==========
Other comprehensive income
(loss), net of tax :
Unrealized gain (loss)
on securities available
for sale $(8) $(145) $70 $(116)
Reclassification of
realized net (gain) loss
included in net earnings 8 (9) 29 (94)
Income tax benefit
(expense) - 60 (38) 85
---------- ---------- ---------- ----------
Other comprehensive
income (loss), net
of tax - (94) 61 (125)
---------- ---------- ---------- ----------
Comprehensive earnings $419 $356 $1,769 $1,424
========== ========== ========== ==========
Net earnings $419 $450 $1,708 $1,549
Dividends paid on
preferred stock (19) (19) (78) (78)
---------- ---------- ---------- ----------
Earnings available to
common shareholders $400 $431 $1,630 $1,471
========== ========== ========== ==========
Earnings per share-basic $0.26 $0.24 $1.05 $0.82
Earnings per share-diluted $0.25 $0.22 $0.99 $0.77
Dividend declared per
share-common stock $0.05 $0.04 $0.19 $0.15
Basic weighted average
shares outstanding 1,510,059 1,813,527 1,557,392 1,799,465
Diluted weighted average
shares outstanding 1,592,156 1,918,989 1,646,998 1,900,794
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
As of December 31,
------------------
2004 2003
-------- --------
Regulatory Capital Ratios:
Tangible capital 7.04% 7.52%
Core capital 7.04% 7.52%
Total Risk-Based capital 11.01% 11.77%
Asset Quality Ratios and Data:
Non-performing loans as a percentage
of total gross loans 0.05% 0.04%
Non-performing assets as a percentage
of total assets 0.04% 0.03%
Allowance for loan losses as a percentage
of total gross loans 0.60% 0.67%
Allowance for loan losses as a percentage
of non-performing loans 1245.61% 1640.00%
Allowance for losses as a percentage
of non-performing assets 1245.61% 1640.00%
Non-performing assets:
Non-accrual loans $114 $80
Real estate acquired through foreclosure - -
-------- --------
Total non-performing assets $114 $80
======== ========
Three Months ended Year ended
December 31, December 31,
---------------- ------------
2004 2003 2004 2003
------ ------ ------ ------
Performance Ratios:
Return on average assets 0.61% 0.79% 0.67% 0.71%
Return on average equity 11.21% 9.84% 11.44% 9.08%
Average equity to average assets 5.46% 7.99% 5.83% 7.83%
Non-interest expense to average assets 2.83% 3.21% 3.09% 3.28%
Efficiency ratio (1) 73.48% 71.52% 73.50% 74.01%
Net interest rate spread (2) 3.45% 3.87% 3.72% 3.89%
Effective net interest rate spread (3) 3.54% 3.99% 3.81% 4.00%
(1) Efficiency ratio represents non-interest expense divided by net
interest income after provision for loan losses plus non-interest
income.
(2) Net interest rate spread represents the difference between the
yield on average interest-earning assets and the cost of
interest-bearing liabilities.
(3) Effective net interest rate spread represents net interest
income as a percentage of average interest-earning assets.
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Support for Calculations
(Dollars in thousands)
Three Months ended Year ended
December 31, December 31,
---------------------------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Total assets $276,543 $229,815 $276,543 $229,815
Total gross loans $237,779 $195,691 $237,779 $195,691
Total equity $ 15,097 $ 18,191 $ 15,097 $ 18,191
Average assets $273,990 $228,772 $255,786 $217,799
Average loans $237,103 $173,224 $223,827 $156,902
Average equity $ 14,954 $ 18,285 $ 14,925 $ 17,051
Average interest-earning
assets $265,689 $218,386 $247,669 $209,003
Average interest-bearing
liabilities $254,718 $204,372 $237,165 $196,629
Net income $ 419 $ 450 $ 1,708 $ 1,549
Total income $ 2,636 $ 2,570 $ 10,738 $ 9,662
Non-interest expense $ 1,937 $ 1,838 $ 7,892 $ 7,151
Efficiency ratio 73.48% 71.52% 73.50% 74.01%
Non-accrual loans $ 114 $ 80 $ 114 $ 80
REO, net $ - $ - $ - $ -
ALLL $ 1,420 $ 1,312 $ 1,420 $ 1,312
REO-Allowance $ - $ - $ - $ -
Interest income $ 3,680 $ 3,109 $ 13,980 $ 12,169
Interest expense $ 1,328 $ 931 $ 4,555 $ 3,802
Net interest income $ 2,352 $ 2,178 $ 9,425 $ 8,367
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