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FOR IMMEDIATE RELEASE
Broadway Financial Corporation Announces Results for Fourth Quarter and Full Year 2019
LOS ANGELES, CA – (BUSINESS WIRE) – February 27, 2020 – Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market: BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported a net loss of $69 thousand, or less than $0.01 per share, for the fourth quarter of 2019 compared to net income of $275 thousand, or $0.01 per diluted share, for the fourth quarter of 2018.
During the fourth quarter of 2019, the Bank reported increases in net interest income of $336 thousand, service charges on deposits of $25 thousand, and miscellaneous fee income of $34 thousand compared to the fourth quarter of 2018. Results for the fourth quarter of 2019 were impacted, however, by a loan loss provision of $294 thousand, resulting from growth in the Bank’s loan portfolio, whereas results for the fourth quarter of 2018 included a loan loss provision recapture of $254 thousand. Also, during the fourth quarter of 2019, the Company did not sell any loans and therefore did not report any gain on sale of loans, whereas during the fourth quarter of 2018, the Bank recorded a gain on sale of loans of $50 thousand. In addition, certain non-recurring professional expenses contributed to an increase of $45 thousand in non-interest expense in the fourth quarter of 2019 compared to the fourth quarter of 2018.
For the year ended December 31, 2019, the Company reported a net loss of $206 thousand, or ($0.01) per diluted share, compared to net earnings of $815 thousand, or $0.03 per diluted share for the year ended December 31, 2018. The decrease in net earnings was attributable to a decline in the loan loss provision recapture of $1.25 million from the prior year. Also, non-interest expense increased by $515 thousand during 2019 compared to 2018, primarily due to higher professional services fees of $491 thousand and higher compensation costs of $302 thousand, offset by lower REO costs of $166 and lower marketing costs of $88 thousand. These items were partially offset by higher net interest income of $153 thousand and higher gain on sale of loans of $134 thousand during 2019 compared to 2018.
Chief Executive Officer, Wayne Bradshaw, commented, “Overall, our results for 2019 reflected the difficult interest rate environment that persisted throughout the year. In addition, non-recurring professional fees of $437 thousand incurred during 2019 created an additional constraint on profitability. Despite these headwinds, we were able to improve our net interest margin by 27 basis points during the fourth quarter compared to the fourth quarter of 2018, while increasing the total loan portfolio by over $36 million, or 10%, for the year. As a result, we increased the Bank’s net interest income for the fourth quarter and the full year.”
“Moreover, during 2019 Broadway completed a transition from a banking institution that has generated a substantial portion of its income through loan recaptures and recoveries, created by cleansing the loan portfolio, to a financial organization that has its profits tied to loan growth, net interest margins, and operating efficiency. This transition reflects, in part, our success in lowering non-performing assets, which we were able to decrease to 0.10% of total assets by year end, representing a decrease of 77% from the end of 2018.”
“I am also pleased to report that we increased originations to over $114 million for 2019, representing 16% growth for the year. As part of this loan growth, we increased our originations of commercial real estate and construction loans by 289%; typically, these loans generate higher yields than are available from single family and multi-family residential loans. Also, these products help us leverage our existing lending relationships and expertise, and increase Broadway’s ability to address the unrelenting demand for affordable housing, particularly within the Bank’s target market of low to moderate income communities in Southern California.”
The following information was filed by Broadway Financial Corp De (BYFC) on Thursday, February 27, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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