Broadway Financial Corp. (BYFC, Financial) filed Quarterly Report for the period ended 2009-06-30.
Broadway Financial Corporation\'s principal business is serving as a holding company for Broadway Federal. The company\'s and Broadway Federal\'s results of operations are dependent primarily on net interest income which is the difference between the interest income earned on its interest-earning assets such as loans and investments and the interest expense on interest-bearing liabilities such as deposits and borrowings. Broadway Financial Corp. has a market cap of $10.1 million; its shares were traded at around $5.75 with a P/E ratio of 5.1 and P/S ratio of 0.4. The dividend yield of Broadway Financial Corp. stocks is 3.4%. Broadway Financial Corp. had an annual average earning growth of 25.9% over the past 10 years. GuruFocus rated Broadway Financial Corp. the business predictability rank of 3.5-star.
For the six months ended June 30, 2009, net earnings totaled $0.7 million, or $0.20 per diluted common share, down $0.6 million, or 46.58%, when compared with net earnings of $1.3 million, or $0.69 per diluted common share, for the same period in 2008.
Non-interest expense totaled $3.0 million for the second quarter of 2009, up $351 thousand, or 13.46%, from the second quarter a year ago. A large portion of the increase was due to an increase of $358 thousand, or 1,234.48%, in FDIC insurance premium expense. The significant increase in FDIC insurance expense for the second quarter of 2009 is primarily due to an accrual for a special assessment imposed by the FDIC which is payable by September 30, 2009. Additionally, the regular assessment rate was increased over the prior year rate. The increase in FDIC assessments became necessary to recapitalize the FDIC insurance fund as the result of insurance claims paid for numerous bank failures in 2008 and year-to-date in 2009. Management expects FDIC insurance premiums to remain at elevated levels through at least 2011. Also contributing to higher non-interest expense were increases in occupancy expense ($40 thousand, or 11.66%), information services expense ($35 thousand, or 19.89%) and professional services expense ($41 thousand, or 30.15%). Partially offsetting these increases in non-interest expense was lower compensation and benefits expense, which decreased by $143 thousand, or 9.46%. The decrease in compensation and benefits expense was primarily due to reversal of accrued bonus which was partially offset by higher salaries expense resulting from annual pay increases and staff addition.
Loan originations, including purchases, for the six months ended June 30, 2009 totaled $97.8 million, up $29.4 million, or 42.98%, from $68.4 million for the same period a year ago. Loan repayments, including loan sales, amounted to $21.6 million for the six months ended June 30, 2009, down $13.2 million, or 37.93%, from $34.8 million for the same period a year ago.
Deposits totaled $367.9 million at June 30, 2009, up $78.0 million, or 26.91%, from year-end 2008, as turmoil in the credit and equity markets has made deposit products in healthy financial institutions, like the Bank, attractive for many customers. During the first half of 2009, our core deposits (NOW, demand, money market and passbook accounts) increased $38.2 million and our certificates of deposit increased $27.0 million. Additionally, brokered deposits grew $12.8 million during 2009, primarily in CDARS. A significant portion of the increase in our core deposits was from our online NOW account. At June 30, 2009, core deposits represented 41.42% of total deposits compared to 39.38% at December 31, 2008, and brokered deposits represented 25.35% of total deposits compared to 27.75% at December 31, 2008.
Non-performing assets, consisting of non-accrual and delinquent loans 90 or more days past due, at June 30, 2009 were $10.4 million, or 2.15% of total assets, compared to $3.5 million, or 0.85% of total assets, at December 31, 2008. At June 30, 2009, one-to-four family non-performing loans totaled $3.1 million, multi-family/CRE non-performing loans totaled $4.9 million and commercial and unsecured consumer non-performing loans totaled $2.4 million compared to $3.3 million of multi-family/CRE non-performing loans and $0.2 million of commercial and unsecured consumer loans at December 31, 2008.
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Broadway Financial Corporation\'s principal business is serving as a holding company for Broadway Federal. The company\'s and Broadway Federal\'s results of operations are dependent primarily on net interest income which is the difference between the interest income earned on its interest-earning assets such as loans and investments and the interest expense on interest-bearing liabilities such as deposits and borrowings. Broadway Financial Corp. has a market cap of $10.1 million; its shares were traded at around $5.75 with a P/E ratio of 5.1 and P/S ratio of 0.4. The dividend yield of Broadway Financial Corp. stocks is 3.4%. Broadway Financial Corp. had an annual average earning growth of 25.9% over the past 10 years. GuruFocus rated Broadway Financial Corp. the business predictability rank of 3.5-star.
Highlight of Business Operations:
Net earnings for the second quarter of 2009 were $34 thousand, or ($0.09) diluted loss per common share, down $662 thousand, or 95.11%, when compared with net earnings of $696 thousand, or $0.36 per diluted common share, in the second quarter of 2008. The decrease in net earnings was due to a $1.4 million increase in the provision for loan losses, which was partially offset by higher net interest income before provision for loan losses.For the six months ended June 30, 2009, net earnings totaled $0.7 million, or $0.20 per diluted common share, down $0.6 million, or 46.58%, when compared with net earnings of $1.3 million, or $0.69 per diluted common share, for the same period in 2008.
Non-interest expense totaled $3.0 million for the second quarter of 2009, up $351 thousand, or 13.46%, from the second quarter a year ago. A large portion of the increase was due to an increase of $358 thousand, or 1,234.48%, in FDIC insurance premium expense. The significant increase in FDIC insurance expense for the second quarter of 2009 is primarily due to an accrual for a special assessment imposed by the FDIC which is payable by September 30, 2009. Additionally, the regular assessment rate was increased over the prior year rate. The increase in FDIC assessments became necessary to recapitalize the FDIC insurance fund as the result of insurance claims paid for numerous bank failures in 2008 and year-to-date in 2009. Management expects FDIC insurance premiums to remain at elevated levels through at least 2011. Also contributing to higher non-interest expense were increases in occupancy expense ($40 thousand, or 11.66%), information services expense ($35 thousand, or 19.89%) and professional services expense ($41 thousand, or 30.15%). Partially offsetting these increases in non-interest expense was lower compensation and benefits expense, which decreased by $143 thousand, or 9.46%. The decrease in compensation and benefits expense was primarily due to reversal of accrued bonus which was partially offset by higher salaries expense resulting from annual pay increases and staff addition.
Loan originations, including purchases, for the six months ended June 30, 2009 totaled $97.8 million, up $29.4 million, or 42.98%, from $68.4 million for the same period a year ago. Loan repayments, including loan sales, amounted to $21.6 million for the six months ended June 30, 2009, down $13.2 million, or 37.93%, from $34.8 million for the same period a year ago.
Deposits totaled $367.9 million at June 30, 2009, up $78.0 million, or 26.91%, from year-end 2008, as turmoil in the credit and equity markets has made deposit products in healthy financial institutions, like the Bank, attractive for many customers. During the first half of 2009, our core deposits (NOW, demand, money market and passbook accounts) increased $38.2 million and our certificates of deposit increased $27.0 million. Additionally, brokered deposits grew $12.8 million during 2009, primarily in CDARS. A significant portion of the increase in our core deposits was from our online NOW account. At June 30, 2009, core deposits represented 41.42% of total deposits compared to 39.38% at December 31, 2008, and brokered deposits represented 25.35% of total deposits compared to 27.75% at December 31, 2008.
Non-performing assets, consisting of non-accrual and delinquent loans 90 or more days past due, at June 30, 2009 were $10.4 million, or 2.15% of total assets, compared to $3.5 million, or 0.85% of total assets, at December 31, 2008. At June 30, 2009, one-to-four family non-performing loans totaled $3.1 million, multi-family/CRE non-performing loans totaled $4.9 million and commercial and unsecured consumer non-performing loans totaled $2.4 million compared to $3.3 million of multi-family/CRE non-performing loans and $0.2 million of commercial and unsecured consumer loans at December 31, 2008.
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