-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LhigEP4aaFmERRZgAC0NHCmEgS7BQQkTMqlS+mNUiXVLW5CpSAzPYABhzRzlcUif 0+virg6QoTTTaDoEvxG3Nw== 0001193125-06-102205.txt : 20060505 0001193125-06-102205.hdr.sgml : 20060505 20060505170137 ACCESSION NUMBER: 0001193125-06-102205 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060505 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060505 DATE AS OF CHANGE: 20060505 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROADWAY FINANCIAL CORP \DE\ CENTRAL INDEX KEY: 0001001171 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] IRS NUMBER: 954547287 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-27464 FILM NUMBER: 06813826 BUSINESS ADDRESS: STREET 1: 4800 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90010 BUSINESS PHONE: 2136341700 MAIL ADDRESS: STREET 1: 4800 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90010 8-K 1 d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 5, 2006

BROADWAY FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware   000-27464   95-4547287
(State of Incorporation)   (Commission File Number)   (IRS Employer Identification No.)

 

4800 Wilshire Boulevard, Los Angeles, California   90010
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (323) 634-1700

NOT APPLICABLE

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 



Item 2.02 Results of Operations and Financial Condition.

On May 5, 2006, Broadway Financial Corporation (the “Company”) issued a Press Release on earnings for the quarter ended March 31, 2006. A copy of the Press Release is attached as Exhibit 99.1.

 

Item 9.01 Financial Statements and Exhibits.

 

(c) Exhibits

 

99.1    Press release dated May 5, 2006, announcing earnings for the quarter ended March 31, 2006.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

BROADWAY FINANCIAL CORPORATION

(Registrant)

Date: May 5, 2006

   

by

 

/s/ Sam Sarpong

       

Sam Sarpong

Chief Financial Officer

EX-99.1 2 dex991.htm PRESS RELEASE Press release

Exhibit 99.1

News Release

 

FOR IMMEDIATE RELEASE  

Contact:

   Paul C. Hudson, CEO
     Sam Sarpong, CFO
     (323) 634-1700
     www.broadwayfederalbank.com

Broadway Financial Corporation Reports First Quarter Net Earnings

LOS ANGELES, CA – (BUSINESS WIRE) – May 5, 2006 – Broadway Financial Corporation (the “Company”) (NASDAQ Small-Cap: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported first quarter net earnings of $388,000, or $0.23 per diluted share, up 13.45% when compared with net earnings of $342,000, or $0.20 per diluted share, in the first quarter of 2005.

Chief Executive Officer, Paul C. Hudson stated, “The increase in first quarter net earnings reflects progress in controlling margin compression and success in slowing loan prepayments and building retail loan production.” Hudson noted, “The challenge going forward remains our ability to continue to increase retail loan production and grow core deposits. Thus to facilitate profitable growth, we are focused on improving marketing and sales execution.”

First Quarter Results:

 

    The net interest rate spread increased 6 basis points to 3.22% in the first quarter of 2006 from 3.16% in the first quarter of 2005, reflecting an improvement from the 27 basis points decline comparing fourth quarter 2005 to fourth quarter 2004;

 

    Net interest income before provision for loan losses of $2.3 million in the first quarter of 2006 was up $86,000 from the first quarter of 2005 reflecting a higher level of average interest-earning assets and improved net interest margin;

 

    Non-interest income in the first quarter of 2006 was down $56,000 from the first quarter of 2005, primarily reflecting lower loan prepayment fees partially offset by higher deposit related fees in the 2006 period;

 

    Non-interest expense in the first quarter of 2006 was down $36,000 from the first quarter of 2005, primarily reflecting lower professional services expense offset by higher occupancy expense.

Net Interest Income

Net interest income before provision for loan losses of $2.3 million in the first quarter of 2006 was up $86,000, or 3.81%, from the first quarter a year ago. The increase reflected a higher level of average interest-earning assets and improved net interest margin. Interest-earning assets averaged $280.1 million in the current quarter, up 0.95% from the same period a year ago. Net interest margin improved 9 basis points to 3.34% in the current quarter from 3.25% a year ago. The net interest rate spread improved 6 basis points to 3.22% in the current quarter from 3.16% a year ago. The increase in the net interest rate spread was primarily due to the increase in the overall yield of our loan portfolio resulting from new and renewing loans priced at higher rates because of increases in interest rates. The increase in the overall yield was partially offset by the increase in interest rates paid on deposits and borrowings. The market for deposits remained competitive throughout the first quarter resulting in higher rates paid for interest-bearing deposits. The primary spread (weighted average interest rate on loans minus weighted average interest rate on deposits) at March 31, 2006 was 3.85% compared to 3.65% at March 31, 2005, an increase of 20 basis points.


Provision for Loan Losses

No addition to the allowance for loan losses was made during the first quarter of 2006 compared to $10,000 of provision a year ago. The allowance for loan losses was $1.5 million, or 0.64% of total gross loans receivable, at March 31, 2006 and December 31, 2005.

Non-Interest Income

Non-interest income totaled $302,000 in the first quarter of 2006, down $56,000, or 15.64%, from the first quarter a year ago. The decrease is primarily due to lower loan prepayment fees partially offset by higher deposit related fees in the first quarter of 2006 compared to same quarter in 2005. Loan prepayment fees totaled $37,000 in the first quarter of 2006 compared to $113,000 a year ago, a decrease of $76,000. Partially offsetting this decrease was higher deposit related fees, which totaled $190,000 in the first quarter of 2006 compared to $157,000 a year ago, an increase of $33,000. The overdraft program, which was implemented during the second quarter of 2005, contributed $29,000 to the increase in deposit related fees.

Non-Interest Expense

Non-interest expense totaled $2.0 million in the first quarter of 2006, down $36,000, or 1.77%, from the first quarter a year ago, primarily due to lower professional services expense partially offset by higher occupancy expense. Professional services expense decreased $62,000, primarily reflecting lower fees for professional services as a result of the deferral of certain Sarbanes-Oxley compliance requirements for small businesses. Partially offsetting this decrease was a $17,000 increase in occupancy expense resulting from office repairs and maintenance work.

Assets, Loan Originations and Deposits

At March 31, 2006, assets totaled $285.5 million, down $6.8 million, or 2.32%, from year-end 2005. Net loans receivable decreased $1.2 million, or 0.51%, from year-end 2005. Loan originations were $9.3 million for the quarter ended March 31, 2006 compared to $6.6 million for the same period in 2005. Loan purchases totaled $4.9 million for the quarter ended March 31, 2006 compared to $10.3 million for the same period in 2005. Loan repayments amounted to $15.1 million for the quarter ended March 31, 2006 compared to $17.9 million for the same period in 2005.

Deposits totaled $207.6 million at March 31, 2006, down $1.9 million, or 0.91%, from year-end 2005. During the first quarter of 2006, core deposits (NOW, demand, money market and passbook accounts) decreased $1.5 million, while certificates of deposit decreased $0.4 million. At March 31, 2006, core deposits represented 48.16% of total deposits compared to 48.45% at December 31, 2005 and 49.15% at March 31, 2005.

Since the end of 2005, FHLB borrowings decreased $4.7 million, or 8.36%, to $51.8 million at March 31, 2006, as a result of lower loan growth financing needs.

Asset Quality and Performance Ratios

Non-performing assets, consisting of non-accrual and delinquent loans 90 or more days past due, totaled $35,000, or 0.01% of total assets, at March 31, 2006, unchanged from year-end 2005.

For the quarter ended March 31, 2006, the Company’s annualized return on average equity increased to 9.13% compared to 8.94% for the same period in 2005. This was primarily attributable to the increase in


net earnings in 2006. The annualized return on average assets also increased to 0.54% for the quarter ended March 31, 2006 compared to 0.48% for the same period in 2005. The efficiency ratio improved to 75.57% in first quarter 2006 compared to 77.81% in first quarter 2005, reflecting lower non-interest expenses compared to revenues for the first quarter of 2006 as compared to the same period in 2005.

At March 31, 2006, the Bank met the capital requirements necessary to be deemed “well-capitalized” for regulatory purposes.

Certain matters discussed in this news release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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 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 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.

About Broadway Federal Bank

Broadway Federal Bank, f.s.b. is a community-oriented savings bank, which primarily originates residential mortgage loans and conducts funds acquisition in the geographic areas known as Mid-City and South Los Angeles. The Bank operates four full service branches, three in the city of Los Angeles, and one located in the nearby city of Inglewood, California.

Shareholders, analysts and others seeking information about the Company are invited to write to: Broadway Financial Corporation, Investor Relations, 4800 Wilshire Blvd., Los Angeles, CA 90010, or visit our website at www.broadwayfederalbank.com.


BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

     March 31,
2006
    December 31,
2005
 

ASSETS

    

Cash

   $ 4,981     $ 5,386  

Federal funds sold

     1,500       4,400  
                

Cash and cash equivalents

     6,481       9,786  

Securities held to maturity

     42,860       45,369  

Loans receivable, net of allowance of $1,460 and $1,455

     225,382       226,542  

Accrued interest receivable

     1,254       1,241  

Federal Home Loan Bank (FHLB) stock, at cost

     3,193       3,332  

Office properties and equipment, net

     5,415       5,459  

Other assets

     921       565  
                

Total assets

   $ 285,506     $ 292,294  
                

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Deposits

   $ 207,565     $ 209,464  

Federal Home Loan Bank advances

     51,789       56,513  

Junior subordinated debentures

     6,000       6,000  

Advance payments by borrowers for taxes and insurance

     129       559  

Deferred income taxes

     1,229       1,229  

Other liabilities

     1,536       1,752  
                

Total liabilities

     268,248       275,517  
                

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 March 31, 2006 and December 31, 2005

     2       2  

Common stock, $.01 par value, authorized 3,000,000 shares; issued 1,868,942 shares at March 31, 2006 and December 31, 2005; outstanding 1,554,971 shares at March 31, 2006 and 1,554,610 shares at December 31, 2005

     19       19  

Additional paid-in capital

     10,314       10,296  

Retained earnings-substantially restricted

     11,300       10,842  

Treasury stock-at cost, 313,971 shares at March 31, 2006 and 314,332 shares at December 31, 2005

     (4,377 )     (4,382 )
                

Total stockholders’ equity

     17,258       16,777  
                

Total liabilities and stockholders’ equity

   $ 285,506     $ 292,294  
                


BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Earnings

(Dollars in thousands, except per share amounts)

(Unaudited)

 

    

Three Months ended

March 31,

 
     2006     2005  

Interest on loans receivable

   $ 3,516     $ 3,358  

Interest on mortgage-backed securities

     466       243  

Interest on investment securities

     18       35  

Other interest income

     94       103  
                

Total interest income

     4,094       3,739  
                

Interest on deposits

     1,189       1,012  

Interest on borrowings

     563       471  
                

Total interest expense

     1,752       1,483  
                

Net interest income before provision for loan losses

     2,342       2,256  

Provision for loan losses

     —         10  
                

Net interest income after provision for loan losses

     2,342       2,246  
                

Non-interest income:

    

Service charges

     268       310  

Gain on sale of securities

     12       15  

Other

     22       33  
                

Total non-interest income

     302       358  
                

Non-interest expense:

    

Compensation and benefits

     1,214       1,212  

Occupancy expense, net

     310       293  

Information services

     151       152  

Professional services

     79       141  

Office services and supplies

     104       96  

Other

     140       140  
                

Total non-interest expense

     1,998       2,034  
                

Earnings before income taxes

     646       570  

Income taxes

     258       228  
                

Net earnings

   $ 388     $ 342  
                

Other comprehensive income, net of tax:

    

Unrealized gain (loss) on securities available for sale

   $ —       $ (8 )

Reclassification of realized net loss included in net earnings

     —         20  

Income tax effect

     —         (5 )
                

Other comprehensive income, net of tax

     —         7  
                

Comprehensive earnings

   $ 388     $ 349  
                

Net earnings

   $ 388     $ 342  

Dividends paid on preferred stock

     (20 )     (19 )
                

Earnings available to common shareholders

   $ 368     $ 323  
                

Earnings per share-basic

   $ 0.24     $ 0.21  

Earnings per share-diluted

   $ 0.23     $ 0.20  

Dividends declared per share-common stock

   $ 0.05     $ 0.04  

Basic weighted average shares outstanding

     1,554,642       1,513,189  

Diluted weighted average shares outstanding

     1,611,038       1,590,725  


BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES

Selected Ratios and Data

(Dollars in thousands)

 

     As of March 31,  
     2006     2005  

Regulatory Capital Ratios:

    

Tangible capital

     7.80 %     6.70 %

Core capital

     7.80 %     6.70 %

Total Risk-Based capital

     12.67 %     11.15 %

Asset Quality Ratios and Data:

    

Non-performing loans as a percentage of total gross loans

     0.02 %     0.05 %

Non-performing assets as a percentage of total assets

     0.01 %     0.04 %

Allowance for loan losses as a percentage of total gross loans

     0.64 %     0.61 %

Allowance for loan losses as a percentage of non-performing loans

     4,171.43 %     1,265.49 %

Allowance for losses as a percentage of non-performing assets

     4,171.43 %     1,265.49 %

Non-performing assets:

    

Non-accrual loans

   $ 35     $ 113  
                

Total non-performing assets

   $ 35     $ 113  
                

 

    

Three Months ended

March 31,

 
     2006     2005  

Performance Ratios:

    

Return on average assets

   0.54 %(A)   0.48 %(A)

Return on average equity

   9.13 %(A)   8.94 %(A)

Average equity to average assets

   5.91 %   5.35 %

Non-interest expense to average assets

   2.78 %(A)   2.85 %(A)

Efficiency ratio (1)

   75.57 %   77.81 %

Net interest rate spread (2)

   3.22 %(A)   3.16 %(A)

Net interest rate margin (3)

   3.34 %(A)   3.25 %(A)

(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 yield on average interest-earning assets and the cost of interest-bearing liabilities.

 

(3) Net interest rate margin represents net interest income as a percentage of average interest-earning assets.

 

(A) Annualized


BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES

Support for Calculations

(Dollars in thousands)

 

     Three Months ended
March 31,
 
     2006     2005  

Total assets

   $ 285,506     $ 297,769  

Total gross loans, including loans held for sale

   $ 225,382     $ 233,721  

Total equity

   $ 17,258     $ 15,380  

Average assets

   $ 287,898     $ 285,946  

Average loans

   $ 226,988     $ 233,760  

Average equity

   $ 17,002     $ 15,299  

Average interest-earning assets

   $ 280,110     $ 277,474  

Average interest-bearing liabilities

   $ 266,711     $ 266,396  

Net income

   $ 388     $ 342  

Total income

   $ 2,644     $ 2,614  

Non-interest expense

   $ 1,998     $ 2,034  

Efficiency ratio

     75.57 %     77.81 %

Non-accrual loans

   $ 35     $ 113  

REO, net

   $ —       $ —    

ALLL

   $ 1,460     $ 1,430  

REO-Allowance

   $ —       $ —    

Interest income

   $ 4,094     $ 3,739  

Interest expense

   $ 1,752     $ 1,483  

Net interest income

   $ 2,342     $ 2,256  
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