Brooklyn Federal Bancorp Inc. Reports Operating Results (10-Q)
Brooklyn Federal Bancorp Inc. has a market cap of $148.4 million; its shares were traded at around $11.45 with a P/E ratio of 27.4 and P/S ratio of 4.5. The dividend yield of Brooklyn Federal Bancorp Inc. stocks is 3.5%. Highlight of Business Operations:Securities. Security investments, which represent securities available-for-sale and securities held-to-maturity, decreased approximately $1.5 million, or 1.9%, to $80.2 million at March 31, 2009, from $81.7 million at September 30, 2008. This decrease was primarily due to repayments in mortgage-backed securities of approximately $6.6 million and the recording of an other-than-temporary impairment of approximately $866,000, offset by purchases of mortgage-backed securities of approximately $5.3 million and a purchase in a community reinvestment mutual fund of $500,000. Our holdings of securities held-to-maturity and securities available-for-sale totaled $76.9 million and $3.3 million, at March 31, 2009, respectively. At September 30, 2008, our holdings of securities held-to-maturity and securities available-for-sale totaled $78.1 million and $3.6 million, respectively.
Net Loans. Net loans before allowance for loan losses, which includes loans held-for-sale, increased approximately $35.5 million, or 9.4%, to $411.0 million at March 31, 2009, from $375.5 million at September 30, 2008, primarily due to increases in multi-family loans of $13.1 million, construction loans of $20.3 million and land loans of $5.2 million, offset by decreases of $734,000 in commercial real estate loans, $2.0 million in one-to four-family loans and $166,000 in consumer and other loans. Net deferred fees and costs increased approximately $232,000.
On the basis of management s review of classified assets at March 31, 2009, we classified $12.7 million of our assets as special mention representing three commercial real estate loans, two construction loans, one residential loan and one consumer loan. One commercial real estate loan of $1.1 million has an appraised value of $2.0 million and is still making payments after their contractual due date; another commercial real estate loan of $258,000, which represents 10.0% of the total loan has an appraised value of approximately $4.0 million and is current with their payment; and the other commercial real estate loan of approximately $8.8 million, which represents 38.9% of the total loan has an appraised value of approximately $35.0 million, is past maturity and is currently one payment past due. One construction loan of $1.9 million, which represents 76.0% of the total loan has an appraised value of $5.3 million and is current with their payment. The other construction loan for approximately $407,000 was granted an extension until June 1, 2009 to complete the project and they are current with their payment. The residential loan of $152,000 is on a condominium property, located at the same address as the construction loan mentioned above for $407,000 and is to the same borrower. This loan is also current with their payment. The consumer loan of $703 is still making payments after the contractual due date.
Prepaid Expenses and Other Assets, Premises and Equipment, net and Accrued Interest Receivable. Prepaid expenses and other assets, premises and equipment, net and accrued interest receivable increased approximately $1.1 million, or 11.1%, to $11.5 million at March 31, 2009, from $10.4 million at September 30, 2008. This increase was mainly due to an increase in miscellaneous other assets of approximately $941,000, which included an increase in deferred tax assets of $1.1 million, offset in part by a decrease in unprocessed branch and department operations work of approximately $175,000. Accrued interest receivable increased approximately $353,000. Premises and equipment, net, decreased approximately $143,000.
Accrued Expenses and Other Liabilities. Accrued expenses and other liabilities increased $60,000, or 0.7%, to $8.5 million at March 31, 2009, from $8.4 million at September 30, 2008. This increase was primarily due to increases in loan payables of $655,000 and the Supplemental Executive Retirement Plan (“SERP”) accruals of approximately $606,000, offset in part by decreases in miscellaneous payables of approximately $436,000, which mainly represents outstanding official checks that have cleared. The Company also had decreases in accrued expenses of $337,000, unprocessed banking liabilities of $331,000 and taxes payable of $97,000.
At March 31, 2009, the Company had approximately $134.2 million in off-balance sheet arrangements. The Company had approximately $132.1 million in commitments to originate loans and unused lines of credit outstanding, which included $84.5 million in undisbursed construction loans, $5.6 million to originate one- to four-family loans, $2.6 million in unused home equity lines of credit, $12.4 million in commercial real estate lines of credit and $27.0 million to originate multi-family and nonresidential mortgage loans. The Bank had a stand by letter of credit commitment of approximately $2.1 million. The Bank had no commitments to sell loans. Certificates of deposit due within one year of March 31, 2009 totaled $177.2 million, or 75.2% of certificates of deposit. If these maturing deposits do not remain with the Company, the Company will be required to seek other sources of funds, including other certificates of deposit and borrowings. Depending on market conditions, the Company may be required to pay higher rates on such deposits or other borrowings than the Company currently pays on the certificates of deposit due on or before March 31, 2010. Management believes, however, based on past experience that a significant portion of its certificates of deposit will remain with the Company. The Company has the ability to attract and retain deposits by adjusting the interest rates offered.
Read the The complete ReportBFSB is in the portfolios of Martin Whitman of Third Avenue Value Fund, Third Avenue Management.