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Broadway Financial Corp. Reports Operating Results (10-K)
Posted by: gurufocus (IP Logged)
Date: June 17, 2010 10:18PM
Broadway Financial Corp. (BYFC) filed Annual Report for the period ended 2009-12-31. Broadway Financial Corp. has a market cap of $4.6 million; its shares were traded at around $2.58 with a P/E ratio of 5.8 and P/S ratio of 0.2. The dividend yield of Broadway Financial Corp. stocks is 1.5%. 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:
As a result of the continuing recession experienced in the national economy, including the communities we serve, throughout most of 2008 and 2009, we experienced substantial increases in loan delinquencies and defaults and increased our provision for loan losses by $18.2 million during 2009 from $1.4 million for 2008 to $19.6 million for 2009. Primarily for this reason, we had a net loss of ($6.5 million) for the year 2009 compared to net earnings of $2.3 million for the year 2008. In the course of a regularly scheduled comprehensive examination of Broadway Federal by the OTS and the FDIC, which commenced in January 2010, the OTS informed us that it considers the Company and the Bank to be in troubled condition and has imposed limitations on various aspects of our operations, including among others, limitations on our growth and ability to pay dividends and on our ability to use brokered deposits to fund our operations. For the purposes of both addressing concerns raised by the OTS and providing a support for future growth in our business, we are engaged in efforts to increase our capital and improve our capital ratios, which efforts may include sales of additional common stock or other equity securities in one or more private or public transactions. Further discussions of these subjects and other important aspects of our operations and financial condition are contained in Part II, Item 7 Managements Discussion and Analysis of Financial Condition and Results of Operations.
Our multi-family loans amounted to $146.3 million and $87.7 million at December 31, 2009 and 2008, respectively. At December 31, 2009, multi-family loans represented 32% of our gross loan portfolio, compared to 26% at December 31, 2008. Almost 100% of the multi-family residential mortgage loans outstanding at December 31, 2009 were ARMs. The vast majority of multi-family loans is amortized over and matures in 30 years. As of December 31, 2009, our single largest multi-family credit had an outstanding balance of $3.3 million, was current and was secured by a 38-unit apartment complex in Montebello, California. At December 31, 2009, the average balance of loans in our multi-family portfolio was approximately $400 thousand. Our ten largest multi-family loans at December 31, 2009, aggregated $17.3 million.
Our commercial real estate loans amounted to $183.3 million and $150.9 million at December 31, 2009 and 2008, respectively. At December 31, 2009, commercial real estate lending represented 40% of our gross loan portfolio, compared to 45% at December 31, 2008. Of the commercial real estate loans outstanding at December 31, 2009, 7% were fixed rate loans and 93% were ARMs. Most commercial real estate loans are originated with principal repayments on a 30 year amortization schedule but are due in 15 years. As of December 31, 2009, our single largest commercial real estate credit had an outstanding principal balance of $3.9 million, was current and was secured by a church building located in Los Angeles, California. At December 31, 2009, the average balance of loans in our commercial real estate portfolio was approximately $619 thousand. Our ten largest commercial real estate loans at December 31, 2009, aggregated $29.7 million.
Stocks Discussed: BYFC,