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FOR IMMEDIATE RELEASE
Broadway Financial Corporation Announces Results for 3rd Quarter 2019
LOS ANGELES, CA (BUSINESS WIRE) November 4, 2019 Broadway Financial Corporation (the Company) (The Nasdaq Stock Market LLC: BYFC), parent company of Broadway Federal Bank, f.s.b. (the Bank), today reported a net loss of $279 thousand, or ($0.01) per diluted share, for the third quarter of 2019, compared to net income of $751 thousand, or $0.03 per diluted share, for the third quarter of 2018.
Results declined primarily because of a change in the loan loss provision; during the third quarter of 2019 the Bank recorded a loan loss provision of $47 thousand whereas during the third quarter of 2018 the Bank recorded a loan loss provision recapture of $1.0 million. In addition, during the third quarter of 2019, the Company recorded an increase of $343 thousand in non-interest expense, primarily due to higher professional services fees and stock related compensation costs, and a decrease of $112 thousand in net interest income, primarily due to the flat yield curve, which compressed net interest margins. The effects of these changes were partially offset by a decrease of $508 thousand in income tax expense.
For the nine months ended September 30, 2019, the Company reported a net loss of $137 thousand, or ($0.01) per diluted share, compared to net income of $540 thousand, or $0.02 per diluted share, for the nine months ended September 30, 2018.
The results declined for the nine months ended September 30, 2019 primarily because of a decrease of $699 thousand in the loan loss provision recapture. Also, results for the nine months were impacted by an increase of $470 thousand in non-interest expense, and a decrease of $183 thousand in net interest income compared to the prior year period. The effects of these changes were partially offset by a decrease of $497 thousand in income tax expense. The increase in non-interest expense was primarily due to increases in professional services fees of $412 thousand, $360 thousand of which were related to non-recurring matters, and compensation costs of $256 thousand, primarily related to stock related compensation, offset by a decline in REO expense of $106 thousand, a decrease in marketing expense of $88 thousand, and a decline in other categories of expenses. The decrease in net interest income was primarily caused by the flat yield curve, which compressed margins.
Chief Executive Officer, Wayne Bradshaw, commented, Results in the third quarter and year-to-date have continued to be impacted by the difficult interest rate environment, which has exacerbated the competitive conditions for both loan originations and acquisition and retention of deposits. As rates have declined and the yield curve has continued to flatten throughout the year, benchmark rates for loan maturing or adjusting in three to five years, which maturities represent over 70% of our loan portfolio, have declined significantly more than short-term rates. As a result, for most of 2019 rates have been inverted for maturities less than ten years, which has compressed the Banks net interest margins to extremely low levels.
Within this difficult environment, Broadway has achieved some notable accomplishments:
Interest income on loans receivable increased for both the third quarter and year-to-date;
Loan originations increased in the third quarter;
The following information was filed by Broadway Financial Corp De (BYFC) on Tuesday, November 5, 2019 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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