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Broadway Financial Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 15, 2011 04:58PM

Broadway Financial Corp. (BYFC) filed Quarterly Report for the period ended 2011-06-30. Broadway Financial Corp. has a market cap of $3.49 million; its shares were traded at around $2.074 with and P/S ratio of 0.11. Broadway Financial Corp. had an annual average earning growth of 21.5% over the past 10 years. GuruFocus rated Broadway Financial Corp. the business predictability rank of 3-star.



Highlight of Business Operations:

Non-interest expense for the quarter ended June 30, 2011 totaled $4.1 million, compared to $3.8 million for the second quarter of 2010. Higher non-interest expense in the second quarter of 2011 was primarily due to a $672 thousand increase in provision for losses on REO, a $139 thousand increase in FDIC insurance expense, and a $234 thousand increase in other expense, primarily higher REO expenses and appraisal expenses related to delinquent loans. These increases were partially offset by a $466 thousand decrease in provision for losses on loans held for sale, and a $241 thousand decrease in compensation and benefits expense.

Our gross loan portfolio decreased by $20.9 million to $381.7 million at June 30, 2011 from $402.6 million at December 31, 2010, primarily as loan repayments exceeded loan originations during the six months ended June 30, 2011. The $20.9 million decrease in our loan portfolio primarily consisted of a $6.6 million decrease in our commercial real estate loan portfolio, a $6.5 million decrease in our multi-family residential real estate loan portfolio, a $2.6 million decrease in our church loan portfolio, a $2.3 million decrease in our consumer loan portfolio, a $1.7 million decrease in our one-to-four family residential real estate loan portfolio, and a $1.1 million decrease in our construction loan portfolio.

Loan originations for the first six months of 2011 totaled $2.3 million compared to $15.3 million for the first six months of 2010. Loan repayments for the six months ended June 30, 2011 totaled $12.8 million compared to $19.3 million for the comparable period in 2010. Loans transferred to REO during the first six months of 2011 totaled $6.4 million, compared to $4.0 million during the first six months of 2010. Loans transferred to loans held for sale during the first six months of 2011 totaled $1.1 million, compared to $1.4 million during the first six months of 2010.

Deposits totaled $312.4 million at June 30, 2011, down $36.1 million, or 10%, from year-end 2010. During the first six months of 2011, core deposits (NOW, demand, money market and passbook accounts) decreased by $9.8 million and represented 32% of total deposits at June 30, 2011 and December 31, 2010. Our certificates of deposit (“CDs”) decreased by $26.3 million during the first six months of 2011 and represented 68% of total deposits at June 30, 2011 and December 31, 2010. The $26.3 million decrease in CDs was primarily due to maturities of $20.0 million of State of California CDs and a reduction of $8.3 million in brokered deposits. Over the past year, our funding strategy has included a plan to substantially eliminate brokered deposits, including deposits under the Certificate of Deposit Account Registry Service. To date, we have successfully reduced our brokered deposits to a level representing only 3% of total deposits at June 30, 2011, compared to 5% at December 31, 2010 and 17% at June 30, 2010.

The NPLs included 31 church loans totaling $25.3 million, 13 commercial real estate loans totaling $9.1 million, 19 one-to-four family residential real estate loans totaling $5.8 million, 10 multi-family residential real estate loans totaling $4.2 million, four commercial loans totaling $4.6 million, and one land loan of $0.3 million. In addition to the NPLs discussed above, there were $20.6 million and $22.5 million of accruing TDRs at June 30, 2011 and December 31, 2010. These TDRs are on accrual status as the loans have complied with the terms of their restructured agreements for a period of six months or longer.

During the six months ended June 30, 2011, REO increased by $3.7 million to $6.7 million from $3.0 million at the end of 2010. At June 30, 2011 the Bank’s REO consisted of three one-to-four family residential properties, two multi-family residential properties and seven commercial real estate properties, four of which are church buildings. As we continue our efforts to reduce non-performing assets, we sold nine REO properties totaling $2.4 million and recorded net loss of $49 thousand during the first six months of 2011. Net lower of cost or market write-downs on REO totaled $782 thousand for the six months ended June 30, 2011 compared to $111 thousand for the same period in 2010.

Read the The complete Report



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