Broadway Financial Corporation Reports Third Quarter Results.Business Editors LOS LOS Length of stay, see there ANGELES--(BUSINESS WIRE)--Oct. 30, 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 Corporation ("Company") (Nasdaq:BYFC), the holding company for Broadway Federal Bank, f.s.b. ("Bank"), today reported net earnings of $240,000, or $0.26 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 quarter ended September September: see month. 30, 2001, compared to net earnings of $282,000, or $0.32 per diluted share for the third quarter of 2000. For the nine-month period ended September 30, 2001, the Company reported net earnings of $577,000, or $0.63 per diluted share, which compares to $677,000, or $0.74 per diluted share, for the same period in 2000. Net earnings for the quarter ended September 30, 2000 included non-recurring income of $178,000 representing proceeds from insurance reimbursements. Excluding the non-recurring income, net earnings for the three-month and nine-month periods ended September 30, 2000 would have been $185,000, or $0.20 per diluted share and $575,000, or $0.63 per diluted share, respectively. Since 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. , the Company has increased deposits by 11% or $15.6 million, to $157.2 million at September 30, 2001 compared to $141.6 million at December December: see month. 31, 2000. The 11% increase in deposits enabled the Company to fund $11.7 in net loan growth, reduce advances from the Federal Home Loan Bank ("FHLB FHLB Federal Home Loan Bank ") by $1.8 million and increase its Federal Funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. Management intends to reduce its portfolio of low yielding Federal Funds by utilizing such funds to pay down higher rate FHLB borrowings and to fund new loans. The decrease in net earnings for the third quarter resulted from a decrease in non-interest income of 49% or $184,000. The decrease in non-interest income from $377,000 for the three months ended September 30, 2000 to $193,000 for the same period in 2001, was due primarily to the decrease in non-recurring insurance reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. income discussed above. For the quarter ended September 30, 2001, the Company also experienced an increase in non-interest expenses of 9% or $126,000, which was offset by an increase in net interest income before provision for loan losses of 9% or $137,000. The increase in non-interest expenses resulted primarily from increases in compensation and benefits and other non-interest expenses. Net interest income before provision for loan losses increased to $1.7 million for the period ended September 30, 2001, from $1.6 million for the same period in the prior year. Interest income on loans increased 11% or $296,000, which was the result of an increase in average loans receivable and the average yield on loans. Average loans receivable increased 10% or $12.8 million, to $138.2 million for the quarter ended September 30, 2001 from $125.4 million for the same period in 2000. The average yield on loans increased 7-basis points, to 8.56% for the quarter ended September 30, 2001 from 8.49% for the same period in the prior year. The Company's net interest margin was also impacted by an increase of 8% or $109,000 in interest expense. The increase was primarily due to an increase in average deposits, offset by a decrease in the average cost of deposits. Average deposits increased 17% or $22.0 million, to $154.7 million for the quarter ended September 30, 2001 from $132.8 million for the same period in 2000. The average cost of deposits decreased 11-basis points, to 3.67% for the third quarter 2001 from 3.78% for the same period in the prior year. At September 30, 2001 the Company had total assets of $182.0 million, an increase of 8% over the balance at December 31, 2000. For the same comparative period the Bank's net loan portfolio grew by $11.7 million, from $126.9 million at December 31, 2000 to $138.6 million at September 30, 2001. The loan growth is consistent with management's strategy of investing in higher yielding assets. While growing the loan portfolio, the Bank has maintained its commitment to sound underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. standards, which has contributed to the Bank's improved asset quality. Given the current interest rate environment, the Bank's net interest rate spread has continued to decrease by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 18-basis points from 4.09% for the three months ended September 30, 2000 to 3.91% for the same period in 2001. This decrease is due to falling interest rates and the increase in the amount of Federal Funds held during the quarter. For the quarter ended September 30, 2001 the average month-end Federal Funds balances totaled $7.9 million compared to a $250,000 for the same period in 2000. Subsequent to the end of the quarter, Federal Funds were significantly reduced due to increased short-term investments, deposit portfolio reductions and loan fundings. Total non-performing assets increased by $421,000, from $632,000 at December 31, 2000 to $1.0 million at September 30, 2001. The increase resulted from the addition of one secured non-accrual commercial real estate loan, offset by a decrease of $187,000 in the outstanding balances of the Bank's unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. non-accrual loans. The one secured loan added to non-accrual status was a $616,000 loan secured by church property located in 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. . The unsecured non-accrual loans totaled $280,000 at September 30, 2001. The Company determined that these loans are impaired See assistive technology. and has established an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. loss of $280,000. As a percentage of total assets, non-performing assets were 0.58% at September 30, 2001, compared to 0.38% at December 31, 2000. The Company's allowance for loan losses as a percentage of total loans at September 30, 2001 was 1.08% compared to 1.10% at December 31, 2000. At September 30, 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 $14.5 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. , which 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:
tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. its branch offices and investing those deposits into residential mortgage loans. 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:
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 CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands, except share amounts)
(Unaudited)
September 30, December 31,
2001 2000
Assets:
Cash $ 4,621 $ 5,367
Fed funds sold 7,100 4,900
Investment securities held to maturity 4,000 10,623
Investment securities available-for-sale 4,604 --
Mortgage-backed securities held to maturity 13,983 10,748
Loans receivable, net 131,505 126,815
Loans receivable held for sale, at lower
of cost or fair value 7,142 59
Accrued interest receivable 1,039 1,071
Investments in capital stock of Federal
Home Loan Bank, at cost 1,380 1,316
Office properties and equipment, net 6,033 6,357
Other assets 610 670
Total assets $ 182,017 $ 167,926
Liabilities and stockholders' equity
Deposits $ 157,240 $ 141,594
Advances from Federal Home Loan Bank 8,250 10,000
Advance payments by borrowers for
taxes and insurance 418 194
Deferred income taxes 404 402
Other liabilities 1,158 1,759
Total liabilities 167,470 153,949
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 September 30, 2001 and December 31, 2000 1 1
Common stock, $.01 par value,
authorized 3,000,000 shares; issued and
outstanding 909,898 and 901,333 shares
at September 30, 2001 and December 31,
2000, respectively 10 10
Additional paid-in capital 9,478 9,460
Accumulated other comprehensive gain,
net of taxes 2 --
Retained earnings-substantially restricted 5,747 5,322
Treasury stock -- 51,837 and 60,402
shares, at cost at September 30, 2001
and December 31, 2000, respectively (475) (554)
Unearned Employee Stock Ownership Plan
shares (216) (262)
Total stockholders' equity 14,547 13,977
Total liabilities and stockholders'
equity. $ 182,017 $ 167,926
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
(Dollars in thousands, except per share amounts)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Interest on loans
receivable $ 2,957 $ 2,661 $ 8,552 $ 8,029
Interest on investment
securities held-to-
maturity 16 120 153 443
Interest on investment
securities held-for-sale 55 -- 91 --
Interest on mortgage-
backed securities held-
to-maturity 194 183 539 572
Other interest income 50 62 476 103
Total interest income 3,272 3,026 9,811 9,147
Interest on deposits 1,418 1,254 4,382 3,580
Interest on borrowings 138 193 451 634
Total interest expense 1,556 1,447 4,833 4,214
Net interest income
before provision for
loan losses 1,716 1,579 4,978 4,933
Provision for loan
losses 30 90 105 270
Net interest income
after provision for
loan losses 1,686 1,489 4,873 4,663
Noninterest income:
Service charges 169 184 489 445
Gain (loss) on loans
receivable held for
sale (1) -- (1) --
Other 25 193 77 246
Total noninterest income 193 377 565 691
Noninterest expense:
Compensation and benefits 796 761 2,434 2,176
Occupancy expense, net 315 305 878 910
Advertising and
promotional expense 35 41 122 125
Professional services 56 56 169 214
Real estate operations, net -- (36) -- (78)
Contracted security services 41 44 121 121
Telephone and postage 46 40 160 125
Stationary, printing and
supplies 36 40 89 106
Other 147 95 487 471
Total noninterest expense 1,472 1,346 4,460 4,170
Earnings before income
taxes 407 520 978 1,184
Income taxes 167 238 401 507
Net earnings $ 240 $ 282 $ 577 $ 677
Other comprehensive income (loss):
Unrealized income (loss)
on securities available
for sale $ 4 $ -- $ 4 $ --
Income tax benefits (2) -- (2) --
Other comprehensive
income 2 -- 2 --
Comprehensive earnings $ 242 $ 282 $ 579 $ 677
Net earnings $ 240 $ 282 $ 577 $ 677
Dividends paid on
preferred stock (7) (7) (21) (21)
Earnings available to
common shareholders $ 233 $ 275 $ 556 $ 656
Earnings per share-basic $0.26 $0.32 $0.63 $0.74
Earnings per share-diluted $0.26 $0.32 $0.63 $0.74
Dividend declared
per share-common stock $0.05 $0.05 $0.15 $0.15
Basic weighted
average shares
outstanding 885,369 869,824 876,802 883,796
Diluted weighted average
shares outstanding 891,698 869,824 879,101 883,796
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
September 30, December 31,
2001 2000
Asset Quality Ratios and Data:
Non-performing loans as a percentage
of total loans 0.74% 0.49%
Non-performing assets as a percentage
of total assets 0.58% 0.38%
Allowance for loan losses as a percentage
of total loans 1.08% 1.10%
Allowance for loan losses as a percentage
of non-performing loans 144.92% 224.84%
Allowance for losses as a percentage
of non-performing assets (a) 144.92% 224.84%
Non-performing assets:
Non-accrual loans $ 1,053 $ 632
Real estate acquired through
foreclosure -- --
Total non-performing assets $ 1,053 $ 632
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
Performance Ratios:
Return on average assets 0.54% 0.70% 0.44% 0.55%
Return on average equity 6.68% 8.02% 5.42% 6.46%
Average equity to average
assets 8.02% 8.70% 8.07% 8.50%
Non-interest expense to
average assets 3.29% 3.33% 3.38% 3.38%
Net interest rate
spread (b) 3.91% 4.09% 3.89% 4.14%
Net interest margin (c) 4.13% 4.28% 4.10% 4.34%
(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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