<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB
(Mark One)
/X/ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1997
/ / TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For transition period from__________ to___________
Commission file number 0-27464
BROADWAY FINANCIAL CORPORATION
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(Exact Name of Small Business Issuer as Specified in its Charter)
Delaware 95-4547287
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(State of Incorporation) (IRS Employer Identification No.)
4835 WEST VENICE BOULEVARD, LOS ANGELES, CALIFORNIA 90019
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(Address of Principal Executive Offices)
(213) 931-1886
--------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes /X/ No / /
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 830,834 shares of the
Company's Common Stock, par value $.01 per share, were issued and oustanding
as of October 31, 1997.
Transitional Small Business Disclosure Format (Check one):
Yes / / No /X/
1
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INDEX
PART I-- FINANCIAL INFORMATION
Item 1. Financial Statements Page
Consolidated Statement of
Condition as of September 30, 1997
(unaudited) and December 31, 1996 3
Consolidated Statement of
Operations (unaudited) for
the three months and nine months
ended September 30, 1997 and 1996 4
Consolidated Statement of
Cash Flows (unaudited) for the
three months and nine months
ended September 30, 1997 and 1996 5
Notes to Consolidated Financial
Statements 7
Item 2. Management's Discussion and
Analysis of Operations 9
2
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30,
1997 DECEMBER 31,
(UNAUDITED) 1996
------------- -----------
<S> <C> <C>
ASSETS:
Cash and Federal funds sold. . . . . . . . . . . . . . . . . . . . $ 3,621 $ 5,180
Investment securities, held to maturity. . . . . . . . . . . . . . 10,309 10,371
Loans receivable, net. . . . . . . . . . . . . . . . . . . . . . . 102,303 96,260
Loans receivable held for sale . . . . . . . . . . . . . . . . . . 1,350 -
Accrued interest receivable. . . . . . . . . . . . . . . . . . . . 777 733
Real estate acquired through foreclosure . . . . . . . . . . . . . 1,048 933
Investments in capital stock of Federal Home Loan Bank, at cost. . 916 876
Office properties & equipment, net . . . . . . . . . . . . . . . . 4,073 2,052
Income tax receivable. . . . . . . . . . . . . . . . . . . . . . . 66 426
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 277 265
----------- -----------
Total Assets. . . . . . . . . . . . . . . . . . . . . . . . . $124,740 $117,096
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Savings deposits . . . . . . . . . . . . . . . . . . . . . . . . . $107,322 $101,994
Advance from Federal Home Loan Bank. . . . . . . . . . . . . . . . 2,500 -
Advance payments by borrowers for taxes and insurance. . . . . . . 316 161
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . . 409 452
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . . 1,009 845
----------- -----------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . 111,556 103,452
Stockholders' equity:
Preferred nonconvertible, non-cumulative, and non-voting
stock, $.01 par value, authorized 1,000,000 shares;
issued and outstanding 91,073 shares at
September 30, 1997 . . . . . . . . . . . . . . . . . . . . 1 1
Additional paid-in capital. . . . . . . . . . . . . . . . . . . 910 910
Common Stock, $.01 par value, authorized 3,000,000 shares; . .
issued and outstanding 830,834 shares at
September 30, 1997. . . . . . . . . . . . . . . . . . . . 9 9
Additional paid-in capital. . . . . . . . . . . . . . . . . . . 8,239 8,207
Retained Earnings-substantially restricted . . . . . . . . . 5,228 5,080
Treasury Stock, at cost . . . . . . . . . . . . . . . . . . . . (672) -
Unearned Employee Stock Ownership Plan shares . . . . . . . . . (531) (563)
----------- -----------
Total stockholders' equity. . . . . . . . . . . . . . . . . . 13,184 13,644
----------- -----------
Total liabilities and stockholders' equity. . . . . . . . $124,740 $117,096
----------- -----------
----------- -----------
</TABLE>
See Notes to Consolidated Financial Statements
3
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
-------------------- ---------------------
1997 1996 1997 1996
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Interest Income:
Interest on loans receivable. . . . . . . . . . . . . . . . . $ 2,068 $ 2,018 $ 6,195 $ 5,855
Interest on investment securities . . . . . . . . . . . . . . 142 140 459 514
Interest on mortgage backed securities. . . . . . . . . . . . 56 53 88 127
Other interest income . . . . . . . . . . . . . . . . . . . . 15 14 44 37
-------- -------- -------- ---------
Total interest income. . . . . . . . . . . . . . . . . . . 2,281 2,225 6,786 6,533
Interest expense:
Interest on savings deposits. . . . . . . . . . . . . . . . . 1,007 864 2,923 2,592
Interest on borrowings. . . . . . . . . . . . . . . . . . . . 2 - 2 -
-------- -------- -------- ---------
Total interest expense . . . . . . . . . . . . . . . . . . 1,009 864 2,925 2,592
Net interest income before provision for loan losses . . . 1,272 1,361 3,861 3,941
Provision for loan losses. . . . . . . . . . . . . . . . . . . . . 75 255 152 498
-------- -------- -------- ---------
Net interest income after provision for loan losses. . . . 1,197 1,106 3,709 3,443
Noninterest income:
Service charges . . . . . . . . . . . . . . . . . . . . . . . 101 77 302 225
Real estate operations, net . . . . . . . . . . . . . . . . . (43) (114) (98) (266)
Recovery (write-down) on valuation of loans held for sale . . - 13 - (43)
Other noninterest income . . . . . . . . . . . . . . . . . 158 17 197 58
-------- -------- -------- ---------
216 (7) 401 (26)
-------- -------- -------- ---------
Noninterest expense:
Compensation and benefits . . . . . . . . . . . . . . . . . . 605 522 1,804 1,510
Occupancy expense, net. . . . . . . . . . . . . . . . . . . . 256 203 704 637
Advertising and promotional expense . . . . . . . . . . . . . 52 78 121 174
Professional services . . . . . . . . . . . . . . . . . . . . 8 6 44 47
Federal insurance premiums. . . . . . . . . . . . . . . . . . 24 679 60 811
Insurance bond premiums . . . . . . . . . . . . . . . . . . . 29 27 85 78
Other noninterest expense . . . . . . . . . . . . . . . . . . 263 226 756 691
-------- -------- -------- ---------
1,237 1,741 3,574 3,948
-------- -------- -------- ---------
Earnings before income taxes. . . . . . . . . . . . . . . . . 176 (642) 536 (531)
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 74 (264) 226 (213)
-------- -------- -------- ---------
Net earnings (loss) . . . . . . . . . . . . . . . . . . . . . $ 102 $ (378) $ 310 $ (318)
-------- -------- -------- ---------
-------- -------- -------- ---------
Per share information
Number of shares. . . . . . . . . . . . . . . . . . . . . . . 833,248 892,688 858,426 892,688
Earnings per share. . . . . . . . . . . . . . . . . . . . . . $ .11 $ (.42) $ .32 $ (.31)
</TABLE>
See Notes to Consolidated Financial Statements
4
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1997 1996
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $310 ($318)
-------- --------
Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Depreciation 120 129
Amortization of net deferred loan origination fees (37) 30
Amortization of discounts and premium on securities 68 10
Federal Home Loan Bank stock dividends (40) (35)
Gain on sale of real estate owned (21) (46)
Write-down on valuation of loans held for sale - 45
Provision for loan losses 152 498
Provision for write-downs and losses on real estate 41 204
Proceeds from sale of loans receivable 1,083 -
Increase in accrued interest receivable (44) (66)
Decrease in income tax receivable 360 91
Increase in other assets (12) (418)
Decrease in deferred income taxes (43) -
Increase in other liabilities 125 706
Other - (7)
-------- --------
Total adjustments 1,752 1,141
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Net cash provided by operating activities 2,062 823
-------- --------
Cash flows provided by (used in) investing activities:
Loans originated, net of refinances (9,101) (10,946)
Loans purchased (6,755) (2,510)
Principal repayment on loans 7,369 4,673
Increase in loans in process 224 49
Increase in mortgage-backed securities - (3,475)
Increase in loan receivable held for sale (1,350) (30)
Purchases of investment securities held to maturity (5,004) (4,992)
Proceeds from maturities of investment securities held to
maturity 4,998 2,500
Proceeds from sale of loans held for sale - 1,186
Capital expenditures for office properties and equipment (2,141) (536)
Proceeds from sale of real estate acquired through foreclosure 926 1,410
-------- --------
Net cash used in investing activities (10,834) (12,671)
-------- --------
</TABLE>
(Continued)
5
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30, September 30,
1997 1996
------------ -------------
<S> <C> <C>
Net increase (decrease) in savings deposits 5,328 (9,260)
Increase in advance from Federal Home Loan Bank 2,500 -
Preferred stock subscribed - 911
Additional paid-in capital 33 -
Common stock subscribed - 8,163
Dividends declared (162) (168)
Unearned Employee Stock Ownership Plan 31 (609)
Treasury stock (672) -
Increase in advances by borrowers
for taxes and insurance 155 129
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Net cash provided by (used in) financing activities 7,213 (834)
-------- --------
Net decrease in cash and cash equivalents (1,559) (12,682)
Cash and cash equivalents at beginning of year 5,180 17,761
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Cash and cash equivalents at end of year $3,621 $5,079
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-------- --------
Supplemental disclosure of cash flow information:
Cash paid for interest expense $2,923 $2,550
Cash paid for income taxes 1 371
-------- --------
-------- --------
Supplemental disclosure of noncash investing and financing activities:
Additions to real estate acquired through foreclosure 1,192 835
Loans to facilitate the sale of real estate acquired through
foreclosure - 1,000
</TABLE>
See Notes to Consolidated Financial Statements
6
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BROADWAY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
1. In the opinion of management of Broadway Financial Corporation (the
"Company"), the preceding unaudited consolidated financial statements
contain all material adjustments (consisting solely of recurring
accruals and standard allowance for loan losses) necessary to present
fairly the consolidated financial position of the Company at September
30, 1997 and the results of its operations for the three months and nine
months ended September 30, 1997 and 1996, and its cash flows for the
nine months ended September 30, 1997 and 1996. These consolidated
financial statements do not include all disclosures associated with the
Company's annual financial statements included in its annual report on
Form 10-KSB for the year ended December 31, 1996 and, accordingly,
should be read in conjunction with such audited statements.
2. The results of operations for the three months and nine months ended
September 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
3. RECENT ACCOUNTING PRONOUNCEMENTS
7
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EARNINGS PER SHARE - In February 1997, the Financial Accounting
Standards Board issued Statement No. 128, "Earnings per Share" ("SFAS
No. 128"). SFAS No. 128 establishes standards for computing and
presenting earnings per share (EPS) and applies to entities with
publicly held common stock. SFAS No. 128 simplifies the standards for
computing earnings per share previously found in APB Opinion No. 15 and
makes them comparable to international EPS standards. It replaces the
presentation of primary EPS with a presentation of basic EPS. It also
requires dual presentation of basic and diluted EPS on the face of the
statement of earnings for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the
basic EPS computation to the numerator and denominator of the diluted
EPS computation. SFAS No. 128 is effective for financial statements
issued for periods ending after December 15, 1997, earlier application
is not permitted. The pro forma basic and diluted EPS calculated under
SFAS No. 128 were not materially different from the primary and
fully-diluted earnings per share calculated for the periods ended
September 30, 1997 and 1996.
COMPREHENSIVE INCOME - In June 1997, the Financial Accounting Standards
Board issued Statement No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"). SFAS No. 130 establishes new rules for the reporting and
display of comprehensive income and its components in a full set of
general purpose financial statements. SFAS No. 130 requires companies
to (a) display items of other comprehensive income either below the
total for net income in the income statement, or in a statement of
changes in equity, and (b) disclose the accumulated balance of other
comprehensive income separately from retained earnings and additional
paid-in-capital in the equity section of the balance sheet. Other
comprehensive income includes unrealized gains and losses on
available-for-sale securities and foreign currency translation
adjustments. SFAS No. 130 is effective for the fiscal years beginning
after December 15, 1997, although earlier application is permitted.
Reclassification of financial statements for earlier periods provided
for comparative purposes is required. Disclosure of total comprehensive
income is required in interim period financial statements. The Company
believes that such adoption has little or no impact on its financial
statement presentation.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS
GENERAL
Broadway Financial Corporation (the "Company") was incorporated under
Delaware law on September 25, 1995 for the purpose of acquiring and holding
all of the outstanding capital stock of Broadway Federal Bank, f.s.b.
("Broadway Federal" or "Bank") as part of the Bank's conversion from a
federally chartered mutual savings association to a federally chartered stock
savings bank (the "Conversion"). The Conversion was completed, and the Bank
became a wholly owned subsidiary of the Company, on January 8, 1996.
The Company's principal business is serving as a holding company for Broadway
Federal. The Company's results of operations are dependent primarily on
Broadway Federal's 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 Federal also generates recurring
non-interest income such as transactional fees on its loan and deposit
portfolios. The Company's operating results are also affected by the amount
of the Bank's general and administrative expenses, which consist principally
of employee compensation and benefits, occupancy expense, and federal deposit
insurance premiums, and by its periodic provisions for loan losses. More
generally, the results of operations of thrift and banking institutions are
also affected by prevailing economic conditions, competition, and the
monetary and fiscal policies of governmental agencies.
COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS AND NINE MONTHS ENDED
SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
General
The Company recorded net earnings of $102,000 for the three months ended
September 30, 1997, as compared to a net loss of $378,000 for the three
months ended September 30, 1996. For the nine months ended September 30,
1997 the Company recorded net earnings of $310,000, as compared to a net loss
of $318,000 for the same period ended September 30, 1996. The third quarter
and year-to-date net earnings as of September 30, 1997 resulted from a number
of offsetting factors which included higher interest income, higher interest
expense on savings deposits, lower provisions for loan losses, higher
noninterest income, lower noninterest expense and higher income taxes.
9
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INTEREST INCOME
Interest income increased by $56,000 during the three months ended September
30, 1997 as compared to the same period a year ago. For the nine months
ended September 30, 1997, interest income increased by $253,000 as compared
to the same period a year ago. These increases were primarily the result of
increases in average assets of $6.8 million and $5.9 million for the
three-month and nine-month periods ended September 30, 1997, respectively, as
compared to the same respective periods in the prior year. The increases in
assets during the three-month and nine-month periods ended September 30, 1997
were funded by increases in savings deposits and Federal Home Loan Bank
borrowings. The increase in average assets primarily resulted from the
Company's focus on increasing its loan portfolio.
INTEREST ON SAVINGS DEPOSITS
Interest on savings deposits increased by $145,000 during the three months
ended September 30, 1997 as compared to the same period a year ago. For the
nine months ended September 30, 1997, interest on savings deposits increased
by $333,000 as compared to the same period in the prior year. The increase
in interest on savings deposits was due to increases in average deposits of
$7.2 million and $5.2 million for the three and nine months ended September
30, 1997, respectively, as compared to the same respective periods a year
ago. The increase in interest on savings deposits also reflects the rising
and more competitive interest rate environment as the average cost of
deposits increased 16-basis points, from 3.53% for the nine months ended
September 30, 1996 to 3.69% for the nine months ended September 30, 1997.
PROVISION FOR LOAN LOSSES
The provision for loan losses decreased by $180,000, from $255,000 for the
three months ended September 30, 1996 to $75,000 for the three months ended
September 30, 1997. For the nine months ended September 30, 1997, the
provision for loan losses decreased by $346,000, from $498,000 to $152,000.
For the three-month and nine-month periods ended September 30, 1997, the
decreases in the provision for loan losses were due primarily to improved
asset quality and the improved Southern California real estate market.
Total non-performing assets, consisting of non-accrual loans and real estate
acquired through foreclosure ("REO"), decreased by $594,000, from $2.6
million at September 30, 1996 to $2.0 million at September 30, 1997. The
$594,000 decrease resulted from a decrease in non-accrual loans of $555,000
and a decrease in REO of $39,000. Non-performing assets at December 31, 1996
totaled $2.8 million, consisting of $1.9 million in non-accrual loans and
$933,000 in REO properties. As a percentage of total assets, non-performing
assets were 1.66% at September 30, 1997, compared to
10
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2.24% and 2.39% at September 30, 1996 and December 31, 1996, respectively.
Since December 1996, non-accrual loans have decreased by $895,000, to $1.0
million and REO has increased by $116,000, to $1.0 million. Non-accrual loans
at September 30, 1997 included seven loans totaling $679,000 secured by one-
to four-unit properties and two loans totaling $300,000 secured by
multi-family properties. REO at September 30, 1997 included six one- to
four-unit properties totaling $744,000, one multi-family property totaling
$166,000 and one parcel of land totaling $265,000.
As of September 30, 1997 the Company's allowance for loan losses totaled $1.1
million, representing a $103,000 decrease from the balance at December 31,
1996. The allowance for loan losses represented 1.01% of total loans at
September 30, 1997, as compared to 1.19% of total loans at December 31, 1996.
The allowance for loan losses was 109.38% of non-accrual loans at September
30, 1997, compared to 62.65% at December 31, 1996. Net charge-offs as a
percentage of the beginning allowance for loan losses in 1997 represented
28.96% annualized, as compared to 34.38% for 1996. As of September 30, 1997
management believes that given the improved asset quality the allowance for
loans losses is adequate to cover inherent losses in its loan portfolio.
There can be no assurance, however, that such losses will not exceed the
estimated amounts.
NONINTEREST INCOME
Noninterest income increased by $223,000, from a $7,000 expense for the three
months ended September 30, 1996 to $216,000 in income for the same period
during 1997. For the nine months ended September 30, 1997, noninterest
income increased by $427,000, from a $26,000 expense during 1996 to $401,000
in income for the same period in 1997. The increase was due to a number of
offsetting factors. Service charges increased by $24,000 and $77,000 during
the three-month and nine-month periods ended September 30, 1997,
respectively, as compared to the same periods a year ago. The increase
resulted primarily from increased fees charged on various savings products
and from a greater number of checking accounts at September 30, 1997 as
compared to September 30, 1996, resulting in more fees earned. In addition,
write-downs, expenses and write-offs related to the operation and sale of REO
decreased by $71,000 and $168,000, respectively, during the three-month and
nine-month periods ended September 30, 1997, as compared to the same periods
a year ago. The higher 1996 loss was the result of a direct write-off to
reduce the carrying amount of REO to the fair market value of the real
estate.
At September 30, 1997 loans held for sale totaled $1.3 million, as compared
to zero at September 30, 1996, and were recorded at the lower of cost or
market value. The Company had a $13,000 recovery and a $43,000 write-down,
respectively, on the "Valuation of Loans Held For Sale" for the three-month
and nine-month periods ended September 30, 1996. Finally, other noninterest
income increased by $141,000, from $17,000 for the three months ended
September 30, 1996 to $158,000 for the same period in 1997. For the nine
months ended September 30, 1997, other noninterest income increased by
$139,000, from $58,000 during 1996 to $197,000 for the same
11
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period in 1997. The increases primarily resulted from the recognition of
$85,000 in income from insurance proceeds received in settlement of a
burglary that occurred at one of the Bank's branches in early 1997, the
recognition of income from the sale of mortgage loans totaling $29,000 and
the recognition of income resulting from a severance benefit accrual
adjustment of $27,000.
NONINTEREST EXPENSE
Noninterest expense decreased by $504,000 and $374,000, respectively, during
the three-month and nine-month periods ended September 30, 1997, as compared
to the corresponding periods in 1996. The decrease in noninterest expense
was due primarily to increases in compensation and benefits, occupancy
expense and other noninterest expense, offset by decreases in advertising
expense and federal deposit insurance premiums. Compensation and benefits
increased by $83,000 and $294,000, respectively, for the three-month and
nine-month periods ended September 30, 1997 as compared to the same
respective periods a year ago. The increases result from general salary
increases during the year and an increase in the number of staff. Occupancy
expense, including depreciation and repair and maintenance costs on fixed
assets, increased by $53,000 and $67,000, respectively, for the three-month
and nine-month periods ended September 30, 1997, as compared to the
corresponding periods during 1996. The increases were primarily due to
increases in computer expenses and property taxes on office buildings.
Other noninterest expense increased by $37,000 and $65,000, respectively, for
the three-month and nine-month periods ended September 30, 1997 as compared
to the corresponding periods during 1996. The increases were caused by
several offsetting factors, including a loss from an employee defalcation,
higher legal, security, office supplies, telephone and postage expenses
incurred in 1997. Advertising and promotional expense decreased by $26,000
and $53,000, respectively, for the three months and nine months ended
September 30, 1997. The decrease was mainly due to higher expenses in 1996
associated with various business activities, including the Conversion.
Federal deposit insurance premiums decreased by $655,000 and $751,000,
respectively, for the three-month and nine-month periods ended September 30,
1997, as compared to the same periods a year ago, due to an insurance rate
reduction and a one-time assessment fee imposed by FDIC in 1996.
INCOME TAXES
Income tax expense increased by $338,000 and $439,000, respectively, for the
three-month and nine-month periods ended September 30, 1997, as compared to
the same periods in 1996. The increase in income taxes was the result of
higher earnings before income taxes during 1997 as compared to the same
periods during 1996.
12
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COMPARISON OF FINANCIAL CONDITION AT SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
Total assets at September 30, 1997 were $124.7 million compared to $117.1
million at December 31, 1996, representing an increase of $7.6 million. Net
loans receivable increased from $96.3 million at December 31, 1996 to $103.7
million at September 30, 1997 as a result of $10.4 million in new loan
originations and $6.8 million in loan purchases, offset by $7.4 million in
principal repayments, $1.0 million in loans transferred to foreclosure, $1.1
million in loans sold, $200,000 in loans in process and $100,000 in allowance
for loan losses. Loans held for sale at September 30, 1997 totaled $1.3
million as compared to zero at December 31, 1996, as no loans were classified
as held for sale at December 31, 1996. Office properties and equipment
increased from $2.0 million at December 31, 1996 to $4.1 million at September
30, 1997 primarily as a result of the purchase of a $1.6 million office
building located at 4800 Wilshire Boulevard, Los Angeles, California and
renovation costs incurred at the Bank's branch and loan facility located in
the City of Inglewood. The new Wilshire Boulevard facility was acquired to
replace the Bank's administrative office lost by fire in 1992 during the
civil disturbance in Los Angeles. Since that time Bank administrative
operations have been operated from Broadway Federal's branch office sites.
Total liabilities at September 30, 1997 were $111.6 million compared to
$103.5 million at December 31, 1996. The $8.1 million increase is primarily
attributable to the increase in savings deposits and an advance from Federal
Home Loan Bank which were used to fund the increase in total assets.
Total capital at September 30, 1997 was $13.2 million as compared to $13.6
million at December 31, 1996, representing a decrease of $460,000. This
decrease resulted from the combination of: 1) the purchase of outstanding
Common stock totaling $672,000; 2) dividends declared totaling $162,000; 3) net
earnings of $310,000 for nine months ended September 30, 1997; 4) additional
paid-in-capital totaling $33,000, resulting from interest earned on a loan to
the employee stock ownership plan ("ESOP"); and 5) a decrease of $31,000 in
the unearned ESOP account resulting from principal payments received on the
loan to the ESOP.
13
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BROADWAY FINANCIAL CORPORATION
Date: NOVEMBER 7, 1997 By: /s/ PAUL C. HUDSON
------------------------ ---------------------------
Paul C. Hudson
President and Chief Executive Officer
By: /s/ BOB ADKINS
---------------------------
Bob Adkins
Secretary and Chief Financial Officer
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PROCEEDING CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 2,689
<INT-BEARING-DEPOSITS> 32
<FED-FUNDS-SOLD> 900
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 10,309
<INVESTMENTS-MARKET> 10,291
<LOANS> 104,724
<ALLOWANCE> (1,071)
<TOTAL-ASSETS> 124,740
<DEPOSITS> 107,322
<SHORT-TERM> 2,500
<LIABILITIES-OTHER> 1,734
<LONG-TERM> 0
0
911
<COMMON> 8,248
<OTHER-SE> (1,203)
<TOTAL-LIABILITIES-AND-EQUITY> 124,740
<INTEREST-LOAN> 6,195
<INTEREST-INVEST> 547
<INTEREST-OTHER> 44
<INTEREST-TOTAL> 6,786
<INTEREST-DEPOSIT> 2,923
<INTEREST-EXPENSE> 2,925
<INTEREST-INCOME-NET> 3,861
<LOAN-LOSSES> 152
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 536
<INCOME-PRE-EXTRAORDINARY> 536
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 310
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0
<YIELD-ACTUAL> .080
<LOANS-NON> 979
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,174
<CHARGE-OFFS> 249
<RECOVERIES> 1
<ALLOWANCE-CLOSE> (1,071)
<ALLOWANCE-DOMESTIC> (1,071)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 169
</TABLE>
