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): September 27, 2012
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 September 27, 2012, Broadway Financial Corporation (the “Company”) issued a Press Release on earnings for the quarter ended June 30, 2012. A copy of the Press Release is attached as Exhibit 99.1.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits |
| 99.1 | Press release dated September 27, 2012, announcing net earnings for the quarter ended June 30, 2012. |
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: September 27, 2012 | By | /s/ Samuel Sarpong | ||||||
| Samuel Sarpong Chief Financial Officer | ||||||||
Exhibit 99.1
News Release
FOR IMMEDIATE RELEASE
Broadway Financial Corporation Reports Net Earnings for Second Quarter 2012
LOS ANGELES, CA – (BUSINESS WIRE) – September 27, 2012 – Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported net earnings of $1.7 million, or $0.81 per diluted common share, for the second quarter of 2012, compared to a net loss of ($1.7) million, or ($1.15) per diluted common share, for the second quarter of 2011. Earnings available to common shareholders for the second quarter of 2012 was $1.4 million, compared to a loss of ($2.0) million for the second quarter of 2011.
For the six months ended June 30, 2012, the Company reported net earnings of $1.9 million, or $0.73 per diluted common share compared to a net loss of ($1.9) million, or ($1.39) per diluted common share for the same period in 2011. Earnings available to common shareholders for the six months ended June 30, 2012 was $1.3 million, compared to a loss of ($2.4) million for the same period in 2011.
The increase from a net loss to net earnings for both the second quarter and first half primarily reflected lower provisions for loan losses and a gain on the sale of our headquarters building during June. In addition, net earnings for the second quarter and first half benefited from lower provisions for losses on REO and lower non-interest expenses.
Chief Executive Officer, Wayne Kent Bradshaw stated, “Our results for the first half indicate that we are making progress in improving our portfolio, and building our capital. In addition, with the forthcoming filing of our Form 10Q for the second quarter, we will be current with our filings, which will assist us in executing our previously announced Recapitalization Plan. Also, I am pleased to state that as of June 30th, the Bank’s Total Risk-Based Capital ratio was 13.34% and its Core Capital and Tangible Capital ratios were 8.57%.”
Second Quarter 2012 Earnings Summary
For the second quarter of 2012, our net interest income before provision for loan losses was $3.5 million, which represented a decrease of $938 thousand, or 21%, from the second quarter of 2011. The decrease in net interest income was primarily attributable to a decrease in average interest-earning assets, combined with a decrease in net interest margin.
Average interest-earning assets for the second quarter of 2012 decreased $64.4 million to $395.3 million from $459.7 million for the second quarter of 2011, which resulted in a $1.1 million reduction in interest income. The decline in average interest-earning assets, primarily loans receivable, reflects our strategy throughout 2011 and 2012 to maintain our capital ratios above the required regulatory thresholds, in part by shrinking total assets. Additionally, the annualized yield on our average interest-earning assets decreased 39 basis points to 5.25% for the second quarter of 2012, compared to the annualized yield of 5.64% for the same period a year ago. The 39 basis point decline in the annualized yield on our average interest-earning assets resulted in a decrease of $159 thousand in interest income. Continued higher levels of non-performing loans contributed to the decline in the annualized yield on our interest-earning assets.
Average interest-bearing liabilities for the second quarter of 2012 decreased $52.6 million to $376.7 million from $429.3 million for the second quarter of 2011. The decrease in average interest-bearing liabilities resulted in a $209 thousand reduction in interest expense. The annualized cost of our average interest-bearing liabilities decreased 11 basis points to 1.80% for the second quarter of 2012 from 1.91% for the same period a year ago, and resulted in a decrease of $144 thousand in interest expense.
1
The provision for loan losses for the second quarter of 2012 totaled $102 thousand, compared to $3.4 million for the same period a year ago. The provision for loan losses decreased as a result of our loan portfolio shrinking by $14.0 million during the second quarter of 2012 and by lower charge-offs. During the second quarter, we increased the general valuation allowance on our church loan portfolio to reflect continued elevated delinquencies and lower valuations on collateral dependent church loans.
Non-interest income for the second quarter of 2012 totaled $2.7 million, compared to $199 thousand for the second quarter of 2011. The $2.5 million increase from the second quarter of 2011 was due to a $2.5 million gain on the sale of our headquarters building. During the quarter, non-interest income also benefited from a $50 thousand gain on a sale of securities and lower net losses on sales of REOs, which were partially offset by lower service charges for loan-related fees and retail banking fees.
Non-interest expense for the second quarter of 2012 totaled $3.6 million, compared to $4.1 million for the second quarter of 2011. Lower non-interest expense in the second quarter of 2012 was primarily due to lower provision for losses on REO, lower professional services expense and lower FDIC insurance expense resulting from asset shrinkage.
Balance Sheet Summary
Total assets were $390.9 million at June 30, 2012, which represented a decrease of $22.8 million, or 5.5%, from December 31, 2011. During the first six months of 2012, net loans decreased by $27.4 million, loans held for sale decreased by $409 thousand, securities decreased by $3.3 million, REO decreased by $3.2 million, office properties and equipment decreased by $1.9 million and deferred tax assets decreased by $850 thousand, while cash and cash equivalents increased by $14.5 million. As of June 30, 2012, our deferred tax assets have been fully reserved.
Our gross loan portfolio decreased by $26.7 million to $313.1 million at June 30, 2012 from $339.8 million at December 31, 2011, as loan repayments, foreclosures and charge-offs exceeded loan originations during the first six months of 2012. The decrease in our loan portfolio primarily consisted of a $9.8 million decrease in our five or more units residential real estate loan portfolio, a $6.9 million decrease in our commercial real estate loan portfolio, a $2.8 million decrease in our one-to-four family residential real estate loan portfolio, a $2.6 million decrease in our church loan portfolio, a $2.8 million decrease in our construction loan portfolio, a $1.0 million decrease in our commercial loan portfolio, and a $798 thousand decrease in our consumer loan portfolio.
Loan originations for the first six months of 2012 totaled $11.3 million, compared to $2.3 million for the first six months of 2011. Loan repayments for the first six months of 2012 totaled $34.7 million, compared to $12.8 million for the comparable period in 2011. The increase in loan repayments was primarily attributable to a higher level of refinancings by borrowers who could take advantage of historically low interest rates and new financing opportunities in the stabilized commercial and single family markets. Loans transferred to REO during the first six months of 2012 totaled $2.7 million, compared to $6.4 million during the first six months of 2011. There were no loans transferred to loans held for sale during the first six months of 2012, compared to $1.1 million of loans transferred to loans held for sale during the first six months of 2011.
Loans held for sale decreased from $13.0 million at December 31, 2011 to $12.6 million at June 30, 2012. The $409 thousand decrease during the first six months of 2012 was primarily due to loan repayments and charge-offs.
Deposits totaled $270.0 million at June 30, 2012, down $24.6 million, or 8%, from year-end 2011. During the first six months of 2012, core deposits (NOW, demand, money market and passbook accounts)
2
decreased by $2.8 million and represented 35% of total deposits at June 30, 2012, compared to 33% at December 31, 2011. Our certificates of deposit (“CDs”) decreased by $21.8 million during the first six months of 2012 and represented 65% of total deposits at June 30, 2012, compared to 67% at December 31, 2011. Brokered deposits represented 1% and 3% of total deposits at June 30, 2012 and December 31, 2011.
Since year-end 2011, FHLB borrowings remained unchanged at $83.0 million and were equal to 21% and 20% of total assets at June 30, 2012 and December 31, 2011, respectively. During the second quarter of 2012, $13.5 million of FHLB advances were restructured which resulted in a decrease of the weighted average cost of advances from 3.09% at December 31, 2011 to 2.56% at June 30, 2012.
Stockholders’ equity was $19.7 million, or 5% of the Company’s total assets, at June 30, 2012. At June 30, 2012, the Bank’s Total Risk-Based Capital ratio was 13.34%, its Tier 1 Risk-Based Capital ratio was 12.02%, and its Core Capital and Tangible Capital ratios were 8.57%.
As previously announced, the Company is currently implementing a Recapitalization Plan to increase capital and reduce debt and senior securities, including a sale of additional common stock and exchanges of preferred stock for common stock at a discount to the preferred stock’s liquidation preference amount, to further strengthen the Company’s capital ratios and position the Bank for future growth.
Asset Quality
Non-performing assets (“NPAs”) include non-accrual loans and real estate owned through foreclosure or deed in lieu of foreclosure (“REO”). NPAs at June 30, 2012 were $48.3 million, or 12.35% of total assets, compared to $51.4 million, or 12.43% of total assets, at December 31, 2011. At June 30, 2012, non-accrual loans were $44.7 million compared to $44.7 million at December 31, 2011. These loans consist of delinquent loans that are 90 days or more past due and troubled debt restructurings (“TDRs”) that do not qualify for accrual status.
The non-accrual loans at June 30, 2012 included 34 church loans totaling $25.2 million, 22 one-to-four family residential real estate loans totaling $8.7 million, 14 commercial real estate loans totaling $6.1 million, 9 five or more units residential real estate loans totaling $4.3 million, a land loan for $292 thousand, and a consumer loan for $70 thousand.
During the first six months of 2012, REO decreased by $3.2 million to $3.5 million at June 30, 2012, from $6.7 million at the end of 2011. At June 30, 2012, the Bank’s REO consisted of two one-to-four family residential properties, and eight commercial real estate properties, seven of which are church buildings. As part of our efforts to reduce non-performing assets, we sold seven REO properties for total proceeds of $5.9 million, and recorded a corresponding net gain of $395 thousand, during the first six months of 2012.
At June 30, 2012 our allowance for loan losses was $17.9 million, or 5.70% of our gross loans receivable, compared to $17.3 million, or 5.09% of our gross loans, at year-end 2011. The ratio of the allowance for loan losses to NPLs, excluding loans held for sale, increased to 45.17% at June 30, 2012, compared to 44.20% at year-end 2011. As of June 30, 2012, 67% of our NPLs had been written down to their adjusted fair value less estimated selling costs, by establishing specific reserves or charged-off as necessary. On the remaining 33% of NPLs, the fair value of collateral less estimated selling costs exceeded the recorded investment in the loan and did not require specific reserves or charge-offs.
Impaired loans at June 30, 2012 were $57.2 million, compared to $56.3 million at December 31, 2011. Specific reserves for impaired loans were $3.8 million, or 6.67% of the aggregate impaired loan amount at June 30, 2012, compared to $3.9 million, or 7.00%, at December 31, 2011. Excluding specific reserves for impaired loans, our coverage ratio (general allowance as a percentage of total non-impaired loans) was 5.49% at June 30, 2012, compared to 4.71% at December 31, 2011.
3
Loan charge-offs during the first six months of 2012 were $800 thousand, or 0.47% of average loans, compared to $2.9 million, or 1.38% of average loans, during the first six months of 2011. Most of the $800 thousand of charge-offs were not reserved for at year-end 2011 and were primarily related to loans that became impaired during the first six months of 2012 and with respect to which recent valuations of the underlying collateral reflected impairment losses. Charge-offs in church loans totaled $387 thousand and represented 49% of charge-offs during 2012. Charge-offs in one-to-four family residential real estate loans totaled $355 thousand and represented 44% of charge-offs during 2012. Charge-offs in commercial real estate loans totaled $58 thousand and represented 7% of charge-offs during 2012.
Forward-Looking Statements
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, the Company’s plans for recapitalizing and raising capital, 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 the 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-K, as amended by subsequently filed Forms 10-K/A, and Quarterly Reports on Form 10-Q.
About Broadway Financial Corporation
Broadway Financial Corporation conducts its operations through its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which is the leading community-oriented savings bank in Southern California serving low to moderate income communities. We offer a variety of residential and commercial real estate loan products for consumers, businesses, and non-profit organizations, other loan products, and a variety of deposit products, including checking, savings and money market accounts, certificates of deposits and retirement accounts. The Bank operates three full service branches, two 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.
SOURCE: Broadway Financial Corporation
| Contact: |
Wayne-Kent A. Bradshaw, Chief Executive Officer, (323) 556-3231; or | |
| Sam Sarpong, Chief Financial Officer, (323) 556-3224; or | ||
| investor.relations@broadwayfederalbank.com |
4
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in thousands except per share amounts)
| June 30,
2012 (Unaudited) |
December 31, 2011 | |||||||
| Assets | ||||||||
| Cash |
$ | 14,596 | $ | 12,127 | ||||
| Federal funds sold |
31,540 | 19,470 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents |
46,136 | 31,597 | ||||||
| Securities available-for-sale, at fair value |
15,705 | 18,979 | ||||||
| Loans receivable held for sale, net |
12,574 | 12,983 | ||||||
| Loans receivable, net of allowance of $17,856 and $17,299 |
295,363 | 322,770 | ||||||
| Accrued interest receivable |
1,476 | 1,698 | ||||||
| Federal Home Loan Bank (FHLB) stock, at cost |
3,901 | 4,089 | ||||||
| Office properties and equipment, net |
2,772 | 4,626 | ||||||
| Real estate owned (REO) |
3,530 | 6,699 | ||||||
| Bank owned life insurance |
2,649 | 2,609 | ||||||
| Investment in affordable housing limited partnership |
1,586 | 1,675 | ||||||
| Deferred tax assets |
— | 850 | ||||||
| Other assets |
5,239 | 5,162 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 390,931 | $ | 413,737 | ||||
|
|
|
|
|
|||||
| Liabilities and shareholders’ equity | ||||||||
| Deposits |
$ | 270,047 | $ | 294,686 | ||||
| Federal Home Loan Bank advances |
83,000 | 83,000 | ||||||
| Junior subordinated debentures |
6,000 | 6,000 | ||||||
| Other borrowings |
5,000 | 5,000 | ||||||
| Advance payments by borrowers for taxes and insurance |
705 | 813 | ||||||
| Other liabilities |
6,516 | 5,962 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
371,268 | 395,461 | ||||||
|
|
|
|
|
|||||
| Shareholders’ Equity: |
||||||||
| Senior preferred cumulative and non-voting stock, $.01 par value, authorized, issued and outstanding 9,000 shares of Series D at June 30, 2012 and December 31, 2011; liquidation preference of $9,956 at June 30, 2012 and $9,731 at December 31, 2011 |
8,963 | 8,963 | ||||||
| Senior preferred cumulative and non-voting stock, $.01 par value, authorized, issued and outstanding 6,000 shares of Series E at June 30, 2012 and December 31, 2011; liquidation preference of $6,638 at June 30, 2012 and $6,488 at December 31, 2011 |
5,974 | 5,974 | ||||||
| Preferred non-cumulative and non-voting stock, $.01 par value, authorized 985,000 shares; issued and outstanding 55,199 shares of Series A, 100,000 shares of Series B and 76,950 shares of Series C at June 30, 2012 and December 31, 2011; liquidation preference of $552 for Series A, $1,000 for Series B and $1,000 for Series C at June 30, 2012 and December 31, 2011 |
3,657 | 3,657 | ||||||
| Preferred stock discount |
(798 | ) | (994 | ) | ||||
| Common stock, $.01 par value, authorized 8,000,000 shares at June 30, 2012 and December 31, 2011; issued 2,013,942 shares at June 30, 2012 and December 31, 2011; outstanding 1,744,565 shares at June 30, 2012 and December 31, 2011 |
20 | 20 | ||||||
| Additional paid-in capital |
10,864 | 10,824 | ||||||
| Accumulated deficit |
(6,015 | ) | (7,295 | ) | ||||
| Accumulated other comprehensive income, net of taxes of $400 at June 30, 2012 and December 31, 2011 |
442 | 571 | ||||||
| Treasury stock-at cost, 269,377 shares at June 30, 2012 and December 31, 2011 |
(3,444 | ) | (3,444 | ) | ||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
19,663 | 18,276 | ||||||
|
|
|
|
|
|||||
| Total liabilities and shareholders’ equity |
$ | 390,931 | $ | 413,737 | ||||
|
|
|
|
|
|||||
5
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Earnings (Loss)
(Dollars in thousands, except per share amounts)
(Unaudited)
| Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Interest and fees on loans receivable |
$ | 5,030 | $ | 6,284 | $ | 10,360 | $ | 12,668 | ||||||||
| Interest on securities |
135 | 182 | 283 | 363 | ||||||||||||
| Other interest income |
20 | 10 | 36 | 19 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest income |
5,185 | 6,476 | 10,679 | 13,050 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Interest on deposits |
880 | 1,197 | 1,855 | 2,436 | ||||||||||||
| Interest on borrowings |
815 | 851 | 1,648 | 1,840 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total interest expense |
1,695 | 2,048 | 3,503 | 4,276 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income before provision for loan losses |
3,490 | 4,428 | 7,176 | 8,774 | ||||||||||||
| Provision for loan losses |
102 | 3,434 | 1,061 | 4,674 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net interest income after provision for loan losses |
3,388 | 994 | 6,115 | 4,100 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-interest income: |
||||||||||||||||
| Service charges |
143 | 175 | 296 | 357 | ||||||||||||
| Net gains (losses) on mortgage banking activities |
4 | 32 | (162 | ) | 7 | |||||||||||
| Net gains (losses) on sales of REO |
(17 | ) | (34 | ) | 395 | (49 | ) | |||||||||
| Gain on sale of office properties and equipment |
2,523 | — | 2,523 | — | ||||||||||||
| Gain on sale of securities |
50 | — | 50 | — | ||||||||||||
| Other |
21 | 26 | 45 | 65 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest income |
2,724 | 199 | 3,147 | 380 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Non-interest expense: |
||||||||||||||||
| Compensation and benefits |
1,538 | 1,555 | 3,127 | 3,364 | ||||||||||||
| Occupancy expense, net |
297 | 334 | 584 | 688 | ||||||||||||
| Information services |
239 | 220 | 452 | 447 | ||||||||||||
| Professional services |
176 | 292 | 284 | 460 | ||||||||||||
| Provision for losses on loans held for sale |
188 | 6 | 186 | 26 | ||||||||||||
| Provision for losses on REO |
331 | 702 | 312 | 782 | ||||||||||||
| FDIC insurance |
216 | 354 | 433 | 637 | ||||||||||||
| Office services and supplies |
108 | 140 | 217 | 282 | ||||||||||||
| Other |
550 | 514 | 969 | 933 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total non-interest expense |
3,643 | 4,117 | 6,564 | 7,619 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings (loss) before income taxes |
2,469 | (2,924 | ) | 2,698 | (3,139 | ) | ||||||||||
| Income tax expense (benefit) |
772 | (1,202 | ) | 847 | (1,288 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net earnings (loss) |
$ | 1,697 | $ | (1,722 | ) | $ | 1,851 | $ | (1,851 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income (loss), net of tax: |
||||||||||||||||
| Unrealized gain (loss) on securities available for sale |
$ | (86 | ) | $ | 86 | $ | (79 | ) | $ | 71 | ||||||
| Reclassification of realized net gains included in net earnings |
(50 | ) | — | (50 | ) | |||||||||||
| Income tax effect |
— | (34 | ) | — | (28 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income (loss), net of tax |
(136 | ) | 52 | (129 | ) | 43 | ||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Comprehensive earnings (loss) |
$ | 1,561 | $ | (1,670 | ) | $ | 1,722 | $ | (1,808 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Net earnings (loss) |
$ | 1,697 | $ | (1,722 | ) | $ | 1,851 | $ | (1,851 | ) | ||||||
| Dividends and discount accretion on preferred stock |
(285 | ) | (283 | ) | (571 | ) | (566 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings (loss) available to common shareholders |
$ | 1,412 | $ | (2,005 | ) | $ | 1,280 | $ | (2,417 | ) | ||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Earnings (loss) per common share-basic |
$ | 0.81 | $ | (1.15 | ) | $ | 0.73 | $ | (1.39 | ) | ||||||
| Earnings (loss) per common share-diluted |
$ | 0.81 | $ | (1.15 | ) | $ | 0.73 | $ | (1.39 | ) | ||||||
| Dividends declared per share-common stock |
$ | — | $ | — | $ | — | $ | — | ||||||||
| Basic weighted average shares outstanding |
1,744,565 | 1,744,216 | 1,744,565 | 1,744,091 | ||||||||||||
| Diluted weighted average shares outstanding |
1,744,565 | 1,744,216 | 1,744,565 | 1,744,091 | ||||||||||||
6
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
(Unaudited)
| As of June 30, | ||||||||
| 2012 | 2011 | |||||||
| Regulatory Capital Ratios: |
||||||||
| Core Capital Ratio |
8.57 | % | 8.87 | % | ||||
| Tangible Capital Ratio |
8.57 | % | 8.87 | % | ||||
| Tier 1 Risk-Based Capital Ratio |
12.02 | % | 11.94 | % | ||||
| Total Risk-Based Capital Ratio |
13.34 | % | 13.26 | % | ||||
| Asset Quality Ratios and Data: |
||||||||
| Non-performing loans as a percentage of total gross loans, excluding loans held for sale |
12.62 | % | 11.15 | % | ||||
| Non-performing assets as a percentage of total assets |
12.35 | % | 12.53 | % | ||||
| Allowance for loan losses as a percentage of total gross loans, excluding loans held for sale |
5.70 | % | 5.83 | % | ||||
| Allowance for loan losses as a percentage of non-performing loans, excluding loans held for sale |
45.17 | % | 52.27 | % | ||||
| Allowance for loan losses as a percentage of non-performing assets |
38.71 | % | 42.46 | % | ||||
| Net loan charge-offs (recoveries) as a percentage of average loans for six months ended June 30 |
0.47 | % (A) | 1.38 | % (A) | ||||
| Non-performing assets: |
||||||||
| Non-accrual loans |
||||||||
| Loans receivable, net |
$ | 39,533 | $ | 41,992 | ||||
| Loans receivable held for sale |
5,207 | 6,764 | ||||||
|
|
|
|
|
|||||
| Total non-accrual loans |
44,740 | 48,756 | ||||||
| Loans delinquent 90 days or more and still accruing |
— | 569 | ||||||
| Real estate acquired through foreclosure |
3,530 | 6,690 | ||||||
|
|
|
|
|
|||||
| Total non-performing assets |
$ | 48,270 | $ | 56,015 | ||||
|
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|
|
|
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| Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||||||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||
| Performance Ratios: |
||||||||||||||||||||||||||||||||
| Return on average assets |
1.69 | % | (A | ) | (1.48 | %) | (A | ) | 0.91 | % | (A | ) | (0.78 | %) | (A | ) | ||||||||||||||||
| Return on average equity |
36.54 | % | (A | ) | (21.41 | %) | (A | ) | 19.97 | % | (A | ) | (11.32 | %) | (A | ) | ||||||||||||||||
| Average equity to average assets |
4.62 | % | 6.90 | % | 4.56 | % | 6.89 | % | ||||||||||||||||||||||||
| Non-interest expense to average assets |
3.62 | % | (A | ) | 3.53 | % | (A | ) | 3.23 | % | (A | ) | 3.21 | % | (A | ) | ||||||||||||||||
| Efficiency ratio (1) |
50.27 | % | 73.68 | % | 58.76 | % | 74.40 | % | ||||||||||||||||||||||||
| Net interest rate spread (2) |
3.45 | % | (A | ) | 3.73 | % | (A | ) | 3.52 | % | (A | ) | 3.60 | % | (A | ) | ||||||||||||||||
| Net interest rate margin (3) |
3.53 | % | (A | ) | 3.85 | % | (A | ) | 3.60 | % | (A | ) | 3.74 | % | (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 the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
| (3) | Net interest rate margin represents net interest income as a percentage of average interest-earning assets. |
| (A) | Annualized |
7
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Support for Calculations
(Dollars in thousands)
(Unaudited)
| Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Total assets |
$ | 390,931 | $ | 447,074 | $ | 390,931 | $ | 447,074 | ||||||||
| Total gross loans, excluding loans held for sale |
$ | 313,219 | $ | 381,659 | $ | 313,219 | $ | 381,659 | ||||||||
| Total equity |
$ | 19,663 | $ | 30,728 | $ | 19,663 | $ | 30,728 | ||||||||
| Average assets |
$ | 402,066 | $ | 466,260 | $ | 406,719 | $ | 474,846 | ||||||||
| Average loans |
$ | 334,268 | $ | 407,057 | $ | 340,035 | $ | 417,412 | ||||||||
| Average equity |
$ | 18,578 | $ | 32,174 | $ | 18,535 | $ | 32,706 | ||||||||
| Average interest-earning assets |
$ | 395,259 | $ | 459,675 | $ | 398,452 | $ | 469,669 | ||||||||
| Average interest-bearing liabilities |
$ | 376,729 | $ | 429,273 | $ | 381,359 | $ | 436,703 | ||||||||
| Net earnings (loss) |
$ | 1,697 | $ | (1,722 | ) | $ | 1,851 | $ | (1,851 | ) | ||||||
| Total income |
$ | 6,214 | $ | 4,627 | $ | 10,323 | $ | 9,154 | ||||||||
| Non-interest expense |
$ | 3,643 | $ | 4,117 | $ | 6,564 | $ | 7,619 | ||||||||
| Efficiency ratio |
50.27 | % | 73.68 | % | 58.76 | % | 74.40 | % | ||||||||
| Non-accrual loans |
$ | 44,740 | $ | 48,756 | $ | 44,740 | $ | 48,756 | ||||||||
| REO, net |
$ | 3,530 | $ | 6,690 | $ | 3,530 | $ | 6,690 | ||||||||
| ALLL |
$ | 17,856 | $ | 22,245 | $ | 17,856 | $ | 22,245 | ||||||||
| Allowance for loss on loans held for sale |
$ | 628 | $ | 1,307 | $ | 628 | $ | 1,307 | ||||||||
| REO-Allowance |
$ | 201 | $ | 230 | $ | 201 | $ | 230 | ||||||||
| Interest income |
$ | 5,185 | $ | 6,476 | $ | 10,679 | $ | 13,050 | ||||||||
| Interest expense |
$ | 1,695 | $ | 2,048 | $ | 3,503 | $ | 4,276 | ||||||||
| Net interest income |
$ | 3,490 | $ | 4,428 | $ | 7,176 | $ | 8,774 | ||||||||
| Net loans charge-offs (recoveries) |
$ | 156 | $ | 2,180 | $ | 800 | $ | 2,887 | ||||||||
8