Broadway Financial Corporation Reports Third Quarter Net 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 net earnings of $385,000 and $1,289,000, or $0.23 and $0.74 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 and nine months ended September September: see month. 30, 2004, compared to $379,000 and $1,099,000, or $0.19 and $0.55 per diluted share, respectively, for the three and nine months ended September 30, 2003. Compared to 2003, third quarter net earnings increased 1.58% and net earnings for the nine months increased 17.29%. The stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. transaction in the first quarter of 2004 reduced the weighted average shares outstanding and increased the earnings per share. President 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, "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. volume was lower compared to the second quarter, reflecting the dampening effect of rising rates." He noted that, "Third quarter originations of $21.5 million was lower by $14.0 million compared to the $35.5 million in the second quarter." He went on to state, "We expect lower loan volumes in the months ahead, and will have to wait and see what unfolds after the elections with interest rates." Net Earnings The increase in net earnings, comparing 2004 to 2003, was primarily attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the increase in net interest income and non-interest income, offset by an increase in non-interest expense. Net interest income after provision for loan losses increased $268,000 and $826,000, or 13.16% and 13.35%, respectively, for the three and nine months ended September 30, 2004 compared to the same periods in 2003. Non-interest income decreased $16,000, or 4.48%, and increased $184,000, or 20.38%, respectively, for the three and nine months ended September 30, 2004, compared to the same periods in 2003. Non-interest expense increased $212,000 and $642,000, or 11.82% and 12.08%, respectively, for the three and nine months ended September 30, 2004, compared to the same periods in 2003. Net Interest Income Net interest income after provision for loan losses increased to $2.3 million and $7.0 million for the three and nine months ended September 30, 2004, from $2.0 million and $6.2 million for the same periods in 2003. A nine-month rate/volume analysis indicates that the $884,000 increase in net interest income before provision for loan losses was primarily attributable to the impact of the growth in average interest-earning assets of $35.8 million, or 17.38%, and interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid liabilities of $37.2 million, or 19.14%, which resulted in an increase in net interest income of $1,549,000 (volume impact), offset by the impact of a decrease in the net interest rate spread of 8 basis points (rate impact), which resulted in a decrease in net interest income of $665,000. Gross loan originations were $21.5 million and $90.2 million for the three and nine months ended September 30, 2004, compared to $18.8 million and $37.8 million for the same periods in 2003. Loan purchases totaled $155,000 and $2.0 million for the three and nine months ended September 30, 2004, compared to $3.8 million and $17.8 million for the same periods in 2003. There were no purchases of mortgage-backed securities Mortgage-backed securities (MSBs) Securities backed by a pool of mortgage loans. for the three and nine months ended September 30, 2004, compared to $3.4 million and $17.4 million of such purchases for the same periods in 2003. Loan prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. amounted to $12.0 million and $33.4 million for the three and nine months ended September 30, 2004, compared to $12.9 million and $36.0 million for the same periods in 2003. Interest-bearing liabilities increased $12.5 million during the third quarter. The increase was primarily attributable to increases in Federal Home Loan Bank ("FHLB FHLB Federal Home Loan Bank ") advances of $3.9 million and deposits of $8.6 million. For the nine months ended September 30, 2004, interest-bearing liabilities increased $40.2 million. The increase was comprised of a $12.7 million increase in deposits, a $21.5 million increase in FHLB advances and a $6.0 million issuance of junior subordinated debentures subordinated debenture An unsecured bond with a claim to assets that is subordinate to all existing and future debt. Thus, in the event that the issuer encounters financial difficulties and must be liquidated, all other claims must be satisfied before . The net interest rate spread for the three and nine months ended September 30, 2004 was 3.66% and 3.82%, respectively, compared to 3.78% and 3.90%, respectively, for the same periods in 2003. The 12 and 8 basis points decreases in spread were attributable to the larger decline in the weighted average yield on interest-earning assets compared to the decline in the weighted average 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. on interest-bearing liabilities. The yield on interest-earning assets declined 4 and 19 basis points to 5.61% and 5.68%, respectively, for the three and nine months ended September 30, 2004, from 5.65% and 5.87%, respectively, for the same periods in 2003. The weighted average cost of funds increased 7 basis points to 1.95% and declined 11 basis points to 1.86%, respectively, for the three and nine months ended September 30, 2004, from 1.88% and 1.97%, respectively, for the same periods in 2003. The primary spread (weighted average interest rate on loans minus weighted average interest rate on deposits) at September 30, 2004 was 3.93% compared to 4.62% at September 30, 2003, a decline of 69 basis points. Non-interest Income Non-interest income totaled $341,000 and $1,087,000 for the three and nine months ended September 30, 2004, compared to $357,000 and $903,000 for the same periods in 2003. While the third quarter results were substantially the same, the Bank earned more on the sale of loans in 2004 than in 2003. Non-interest Expense Total non-interest expense increased to $2.0 million and $6.0 million for the three and nine months ended September 30, 2004, from $1.8 million and $5.3 million for the same periods in 2003. Compensation and benefits increased $131,000 as we added management personnel. Allowance for Loan Losses The allowance for loan losses as a percentage of gross loans was 0.58% at September 30, 2004, compared to 0.67% at December December: see month. 31, 2003 and 0.87% at September 30, 2003. The Bank's non-performing assets to total assets ratio was 0.04% at September 30, 2004, compared to 0.03% at December 31, 2003 and 0.04% at September 30, 2003. At September 30, 2004, the Bank had no loans in 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. or REO reo Noun NZ a language [Maori] (real estate owned Real Estate Owned Property owned by a lender - usually a bank - after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank: the minimum bid in most ) properties. Non-performing assets, which also include total loans 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. 90 or more days, amounted to $115,000 at September 30, 2004, compared to $80,000 at September 30, 2003. The $58,000 loan loss provision was primarily related to losses on savings overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers accounts. Deposits Total deposits increased $12.7 million, or 7.05%, to $192.6 million from $179.9 million at December 31, 2003. Core deposits (NOW, demand, money market and passbook accounts) increased by $15.0 million during the first nine months of 2004. At September 30, 2004, core deposits represented 47.71% of total deposits, compared to 42.77% at December 31, 2003 and 44.62% at September 30, 2003. Management has focused on increasing core deposit customers, extending deposit maturities on time deposits, and closely managing the Bank's cost of deposits. Performance Ratios For the three months ended September 30, 2004, the Company's return on average equity increased to 10.42%, compared to 8.49% for the same period in 2003. The return on average assets decreased to 0.59% for the three months ended September 30, 2004, compared to 0.69% for the same period in 2003. The ratio of non-interest expense to average assets improved to 3.07% for the three months ended September 30, 2004, compared to 3.28% for the same period in 2003. The efficiency ratio improved to 74.15% in third quarter 2004, compared to 74.90% in third quarter 2003. About us 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:
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. " 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. capital purposes. 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)
(Unaudited)
September December
30, 31,
2004 2003
--------- ---------
Assets
Cash $3,566 $5,029
Fed funds sold 8,800 2,600
Investment securities available for sale 5,988 -
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 3,697 6,317
Loans receivable held for sale, at lower of cost
or fair value - 1,671
Loans receivable, net 233,206 192,116
Accrued interest receivable 975 883
Investments in capital stock of Federal Home Loan
Bank, at cost 2,413 1,789
Office properties and equipment, net 5,639 5,603
Other assets 966 689
--------- ---------
Total assets $267,250 $229,815
========= =========
Liabilities and stockholders' equity
Deposits $192,586 $179,907
Advances from Federal Home Loan Bank 49,970 28,502
Junior subordinated debentures 6,000 -
Advance payments by borrowers for taxes and
insurance 837 324
Deferred income taxes 1,058 1,019
Other liabilities 2,068 1,872
--------- ---------
Total liabilities 252,519 211,624
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 September 30, 2004 and December 31,
2003 2 2
Common stock, $.01 par value, authorized
3,000,000 shares; issued and outstanding
1,518,890 shares at September 30, 2004 and
1,832,507 shares at December 31, 2003 10 10
Additional paid-in capital 10,426 10,507
Accumulated other comprehensive loss, net of
taxes (7) (68)
Retained earnings-substantially restricted 9,236 8,207
Treasury stock-at cost, 350,052 shares at
September 30, 2004 and 36,435 shares at
December 31, 2003 (4,880) (375)
Unearned Employee Stock Ownership Plan shares (56) (92)
--------- ---------
Total stockholders' equity 14,731 18,191
--------- ---------
Total liabilities and stockholders' equity $267,250 $229,815
========= =========
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months ended Nine Months ended
September 30, September 30,
-------------------------------------------
2004 2003 2004 2003
---------- ---------- ---------- ----------
Interest on loans
receivable $3,391 $2,556 $9,788 $7,669
Interest on investment
securities 54 33 156 136
Interest on mortgage-
backed securities 60 345 253 1,153
Other interest income 41 27 103 102
---------- ---------- ---------- ----------
Total interest income 3,546 2,961 10,300 9,060
---------- ---------- ---------- ----------
Interest on deposits 820 730 2,394 2,315
Interest on borrowings 363 194 833 556
---------- ---------- ---------- ----------
Total interest expense 1,183 924 3,227 2,871
---------- ---------- ---------- ----------
Net interest income
before provision for loan
losses 2,363 2,037 7,073 6,189
Provision for loan losses 58 - 58 -
---------- ---------- ---------- ----------
Net interest income
after provision for
loan losses 2,305 2,037 7,015 6,189
---------- ---------- ---------- ----------
Non-interest income:
Service charges 255 255 788 773
Net gains on sale of
loans and securities
available for sale 51 81 225 103
Other 35 21 74 27
---------- ---------- ---------- ----------
Total non-interest
income 341 357 1,087 903
---------- ---------- ---------- ----------
Non-interest expense:
Compensation and
benefits 1,169 1,038 3,486 2,986
Occupancy expense, net 271 152 801 795
Information services 161 267 493 434
Professional services 135 104 381 372
Office service and
supplies 116 103 315 315
Other 153 129 479 411
---------- ---------- ---------- ----------
Total non-interest
expense 2,005 1,793 5,955 5,313
---------- ---------- ---------- ----------
Earnings before income
taxes 641 601 2,147 1,779
Income taxes 256 222 858 680
---------- ---------- ---------- ----------
Net earnings $385 $379 $1,289 $1,099
========== ========== ========== ==========
Other comprehensive income
(loss), net of tax :
Unrealized gain (loss)
on securities available
for sale $- $(545) $120 $(141)
Reclassification of
realized net gains
(loss) included in net
earnings - 85 (21) 85
Income tax benefit
(expense) - 179 (38) 25
---------- ---------- ---------- ----------
Other comprehensive
income (loss), net
of tax - (281) 61 (31)
---------- ---------- ---------- ----------
Comprehensive earnings $385 $98 $1,350 $1,068
========== ========== ========== ==========
Net earnings $385 $379 $1,289 $1,099
Dividends paid on
preferred stock (19) (19) (58) (58)
---------- ---------- ---------- ----------
Earnings available to
common shareholders $366 $360 $1,231 $1,041
========== ========== ========== ==========
Earnings per share-basic $0.24 $0.20 $0.78 $0.58
Earnings per share-diluted $0.23 $0.19 $0.74 $0.55
Dividend declared per
share-common stock $0.05 $0.04 $0.14 $0.11
Basic weighted average
shares outstanding 1,497,958 1,802,204 1,573,284 1,794,726
Diluted weighted average
shares outstanding 1,578,904 1,908,887 1,665,348 1,894,614
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
As of September
30,
-----------------
2004 2003
-------- --------
Broadway Federal Bank, f.s.b.
Regulatory Capital Ratios:
Tangible capital 7.10% 7.53%
Core capital 7.10% 7.53%
Total Risk-Based capital 10.73% 13.19%
Asset Quality Ratios and Data:
Non-performing loans as a percentage of total gross
loans 0.05% 0.05%
Non-performing assets as a percentage of total assets 0.04% 0.04%
Allowance for loan losses as a percentage of total
gross loans 0.58% 0.87%
Allowance for loan losses as a percentage of non-
performing loans 1191.30% 1786.25%
Allowance for losses as a percentage of non-
performing assets 1191.30% 1786.25%
Non-performing assets:
Non-accrual loans $115 $80
Real estate acquired through foreclosure - -
-------- --------
Total non-performing assets $115 $80
======== ========
Three Months Nine Months
ended ended
September September
30, 30,
------------- -------------
2004 2003 2004 2003
------ ------ ------ ------
Performance Ratios:
Return on average assets 0.59% 0.69% 0.69% 0.68%
Return on average equity 10.42% 8.49% 11.41% 8.70%
Average equity to average assets 5.66% 8.18% 6.03% 7.86%
Non-interest expense to average assets 3.07% 3.28% 3.18% 3.30%
Efficiency ratio (1) 74.15% 74.90% 72.98% 74.92%
Net interest rate spread (2) 3.66% 3.78% 3.82% 3.90%
Effective net interest rate spread (3) 3.74% 3.89% 3.90% 4.01%
(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
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 Nine Months ended
September 30, September 30,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Total assets $267,250 $221,713 $267,250 $221,713
Total gross loans $235,474 $164,535 $235,474 $164,535
Total equity $14,731 $17,914 $14,731 $17,914
Average assets $261,126 $218,383 $249,826 $214,460
Average loans $232,941 $155,143 $219,369 $151,401
Average equity $14,784 $17,862 $15,064 $16,851
Average interest-earning
assets $252,794 $209,463 $241,618 $205,842
Average interest-bearing
liabilities $242,537 $196,794 $231,274 $194,120
Net income $385 $379 $1,289 $1,099
Total income $2,704 $2,394 $8,160 $7,092
Non-interest expense $2,005 $1,793 $5,955 $5,313
Efficiency ratio 74.15% 74.90% 72.98% 74.92%
Non-accrual loans $115 $80 $115 $80
REO, net $- $- $- $-
ALLL $1,370 $1,429 $1,370 $1,429
REO-Allowance $- $- $- $-
Interest income $3,546 $2,961 $10,300 $9,060
Interest expense $1,183 $924 $3,227 $2,871
Net interest income $2,363 $2,037 $7,073 $6,189
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