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FOR IMMEDIATE RELEASE
Broadway Financial Corporation Announces Results for 2017
Pre-tax Earnings Improved for Fourth Quarter and Full Year 2017
LOS ANGELES, CA (BUSINESS WIRE) February 26, 2018 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 $399 thousand, or ($0.01) per diluted share, for the fourth quarter of 2017, reflecting an additional tax expense of $519 thousand due to the enactment of the Tax Cuts and Jobs Act of 2017, which required adjustment of the Companys deferred tax asset to recognize the decrease in the federal corporate income tax rate to 21% from 34%. In comparison, the Company recorded net income of $2.2 million, or $0.08 per diluted share, for the fourth quarter of 2016 due to an income tax benefit of $2.2 million that resulted from the reversal of the valuation allowance on the deferred tax assets.
Pre-tax earnings increased by $270 thousand during the fourth quarter of 2017, compared to the fourth quarter of 2016, due to an increase of $386 thousand in non-interest income and a loan loss provision recapture of $150 thousand, which were partially offset by a decrease of $256 thousand in net interest income and an increase of $10 thousand in non-interest expense.
For the year ended December 31, 2017, the Company reported net income of $1.9 million, or $0.07 per diluted share, compared to $3.5 million, or $0.12 per diluted share, for the year ended December 31, 2016. Pre-tax earnings increased by $2.5 million during calendar year 2017, compared to calendar year 2016, primarily due to an increase of $1.5 million in non-interest income, an increase of $526 thousand in net interest income, and an increase of $550 thousand in loan loss provision recaptures, which were partially offset by an increase of $85 thousand in non-interest expense.
Chief Executive Officer, Wayne Bradshaw, commented, I am pleased to announce that Broadway increased its pre-tax profitability for the fourth quarter of 2017 and the full calendar year relative to the comparable periods in 2016. Like many corporations, we incurred a non-recurring charge to earnings during the fourth quarter to recognize the impact of lower corporate income tax rates from the new federal tax legislation, which reduced the value of our deferred tax assets, and lowered our net income.
This performance is a direct reflection of the skill and persistence of Broadways team, who have continued to improve the strength of Broadways capital base and the quality of the Banks loan portfolio, while ensuring that the Bank maintains compliance with the full gamut of regulatory guidelines. I am pleased to report that the Banks Total Capital Ratio increased to 19.88% at the end of the year, and the Banks non-accrual loans decreased to less than $1.8 million, or 0.49% of total loans.
Looking forward to 2018, the challenges facing the Bank remain much the same as I have articulated throughout 2017: a competitive marketplace for loan originations and deposits, and a relatively flat yield curve that depresses net interest margins. In addition, maintaining compliance with loan concentration guidelines set by the Banks primary regulator has required Broadway to complete periodic loan sales, which has hampered the Banks efforts to increase the size of the loan portfolio to generate earnings growth and capture economies of scale. Specifically, during 2017, Broadway profitably sold almost $97 million of performing multi-family loans, including over $15 million in the fourth quarter, which represented approximately 84% of the Banks originations for the year. However, based on the pristine quality of the
The following information was filed by Broadway Financial Corp De (BYFC) on Monday, February 26, 2018 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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