<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 June 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
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(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: 835,188 shares of the Company's
Common Stock, par value $.01 per share, were issued and oustanding as of
JULY 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 Balance Sheets as
of June 30, 1997 (unaudited)
and December 31, 1996 3
Consolidated Statements of
Operations (unaudited) for
the three months and six months ended
June 30, 1997 and June 30, 1996 4
Consolidated Statements of
Cash Flows (unaudited) for the
three months and six months ended
June 30, 1997 and June 30, 1996 5
Notes to Consolidated Financial
Statements 7
Item 2. Management's Discussion and
Analysis of Operations 9
PART II-- OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote
of Security Holders 14
Item 5. Other Information 14
Item 6. Exhibits and Reports on Form 8-K 14
2
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------- ------------
(Unaudited)
<S> <C> <C>
ASSETS:
Cash and Federal funds sold. . . . . . . . . . . . . . . . . . . $ 6,439 $ 5,180
Investment securities, held to maturity. . . . . . . . . . . . . 11,870 10,371
Loans receivable, net. . . . . . . . . . . . . . . . . . . . . . 97,861 96,260
Accrued interest receivable. . . . . . . . . . . . . . . . . . . 768 733
Investment in real estate. . . . . . . . . . . . . . . . . . . . 113 0
Real estate acquired through foreclosure . . . . . . . . . . . . 1,485 933
Investments in capital stock of Federal Home Loan Bank, at cost. 903 876
Office properties & equipment, net . . . . . . . . . . . . . . . 2,359 2,052
Income taxes receivable. . . . . . . . . . . . . . . . . . . . . 183 426
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . 264 265
-------- --------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $122,245 $117,096
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Savings deposits . . . . . . . . . . . . . . . . . . . . . . . . $107,550 $101,994
Advance payments by borrowers for taxes and insurance. . . . . . 147 161
Deferred income taxes. . . . . . . . . . . . . . . . . . . . . . 409 452
Other liabilities. . . . . . . . . . . . . . . . . . . . . . . . 995 845
-------- --------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . $109,101 $103,452
Stockholders' equity:
Preferred nonconvertible, non-cumultive, and non-voting stock,
$.01 par value, authorized 1,000,000 shares; issued and
outstanding 91,073 shares at June 30, 1997. . . . . . . . . . 1 1
Additional paid-in capital . . . . . . . . . . . . . . . . . . 910 910
Common Stock, $.01 par value, authorized 3,000,000 shares;
issued and outstanding 835,188 shares at June 30, 1997. . . . 9 9
Additional paid-in capital. . . . . . . . . . . . . . . . . . 8,221 8,207
Retained Earnings-substantially restricted . . . . . . . . . . 5,176 5,080
Treasury Stock, at cost. . . . . . . . . . . . . . . . . . . . (626) 0
Unearned Employee Stock Ownership Plan shares. . . . . . . . . (547) (563)
-------- --------
Total stockholders' equity. . . . . . . . . . . . . . . . . . 13,144 13,644
-------- --------
Total liabilities and stockholders' equity. . . . . . . . . $122,245 $117,096
-------- --------
-------- --------
</TABLE>
See Notes to Consoldiated Financial Statements
3
<PAGE>
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ----------------
1997 1996 1997 1996
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Interest Income:
Interest on loans receivable . . . . . . . . . . . . . . . . $ 2,088 $ 1,930 $ 4,127 $ 3,837
Interest on investment securities. . . . . . . . . . . . . . 160 161 317 374
Interest on mortgage backed securities . . . . . . . . . . . 26 58 32 74
Other interest income. . . . . . . . . . . . . . . . . . . . 15 12 29 23
-------- -------- -------- --------
Total interest income . . . . . . . . . . . . . . . . . . 2,289 2,161 4,505 4,308
Interest on savings deposits . . . . . . . . . . . . . . . . . . 981 865 1,916 1,728
-------- -------- -------- --------
Net interest income before provision for loan losses. . . 1,308 1,296 2,589 2,580
Provision for loan losses. . . . . . . . . . . . . . . . . . . . 47 188 77 243
-------- -------- -------- --------
Net interest income after provision for loan losses.. . . 1,261 1,108 2,512 2,337
Noninterest income:
Service charges. . . . . . . . . . . . . . . . . . . . . . . 118 73 201 148
Real estate operations, net. . . . . . . . . . . . . . . . .. (40) (112) (55) (152)
Recovery (write-down) on valuation of loans held for sale. . - (40) - (56)
Other noninterest income . . . . . . . . . . . . . . . . . . 34 23 39 41
-------- -------- -------- --------
112 (56) 185 (19)
-------- -------- -------- --------
Noninterest expense:
Compensation and benefits. . . . . . . . . . . . . . . . . . 624 500 1,199 988
Occupancy expense, net . . . . . . . . . . . . . . . . . . . 226 206 448 434
Advertising and promotional expense. . . . . . . . . . . . . 24 31 69 96
Professional services. . . . . . . . . . . . . . . . . . . . 13 30 36 41
Federal insurance premiums.. . . . . . . . . . . . . . . . . 24 68 36 132
Insurance bond premiums. . . . . . . . . . . . . . . . . . . 27 27 56 51
Other noninterest expense. . . . . . . . . . . . . . . . . . 186 257 493 465
-------- -------- -------- --------
1,124 1,119 2,337 2,207
-------- -------- -------- --------
Earnings before income taxes . . . . . . . . . . . . . . . . 249 (67) 360 111
Income taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . 104 (13) 152 51
-------- -------- -------- --------
Net earnings (Loss). . . . . . . . . . . . . . . . . . . . . $ 145 $ (54) $ 208 $ 60
-------- -------- -------- --------
-------- -------- -------- --------
Per share information
Number of shares.. . . . . . . . . . . . . . . . . . . . . . 849,996 892,688 871,224 892,688
Earnings per share.. . . . . . . . . . . . . . . . . . . . . $.16 $(.06) $.21 $.07
</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>
Six Months Ended
June 30, June 30,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 208 $ 60
------- -------
Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Depreciation 82 86
Amortization of net deferred loan origination fees 40 5
Amortization of discounts and premium on securities 6 (6)
Federal Home Loan Bank stock dividends (27) (22)
Loss (Gain) on sale of real estate owned 2 (31)
Write-down on valuation of loans held for sale -- 56
Provision for loan losses 77 243
Provision for write-downs and losses on real estate 13 97
Proceeds from sale of loans receivable 229 221
Increase in accrued interest receivable (35) (100)
Decrease in income tax receivable 243 91
Decrease (Increase) in other assets 1 (95)
Decrease in deferred income taxes (43) --
Increase in other liabilities 121 50
Other -- 24
------- -------
Total adjustments 709 619
------- -------
Net cash provided by operating activities 917 679
Cash flows provided by (used in) investing activities:
Loans originated, net of refinances (7,127) (5,531)
Loans purchased (1,833) (541)
Principal repayment on loans 5,839 3,060
Increase in loans in process 299 105
Increase in mortgage-backed securities -- (3,590)
Increase in loan receivable held for sale -- (485)
Increase in investment in real estate (113) --
Purchases of investment securities held to maturity (4,004) (4,982)
Proceeds from maturities of investment securities held to
maturity 2,499 2,500
Capital expenditures for office properties and equipment (389) (127)
Proceeds from sale of real estate acquired through foreclosure 337 946
------- -------
Net cash used in investing activities (4,492) (8,645)
------- -------
</TABLE>
(Continued)
5
<PAGE>
BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
-----------------------
1997 1996
-------- --------
<S> <C> <C>
Net increase (decrease) in savings deposits 5,556 (14,255)
Preferred stock subscribed -- 911
Additional paid-in capital 14 --
Common stock subscribed -- 8,163
Dividends declared (112) (112)
Unearned Employee Stock Ownership Plan 16 (609)
Treasury stock (626) --
Decrease in advances by borrowers
for taxes and insurance (14) (49)
------- -------
Net cash provided by (used in) financing activities 4,834 (5,951)
------- -------
Net increase (decrease) in cash and cash equivalents 1,259 (13,917)
Cash and cash equivalents at beginning of year 5,180 17,761
------- -------
Cash and cash equivalents at end of year $6,439 $3,844
------- -------
------- -------
Supplemental disclosure of cash flow information:
Cash paid for interest expense $1,912 $1,740
Cash paid for income taxes -- 284
------- -------
------- -------
Supplemental disclosure of noncash investing and
financing activities:
Additions to real estate acquired through foreclosure 1,036 678
Loans to facilitate the sale of real estate acquired through
foreclosure -- 729
</TABLE>
See Notes to Consoldiated Financial Statements
6
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BROADWAY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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 of recurring accruals and
standard allowance for loan losses) necessary to present fairly the
consolidated financial position of the Company at June 30, 1997 and the
results of its operations for the three months and six months ended June
30, 1997 and 1996, and its cash flows for the six months ended June 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 six months ended June
30, 1997 are not necessarily indicative of the results to be expected for
the full year.
3. RECENT ACCOUNTING PRONOUNCEMENTS
ACCOUNTING FOR STOCK-BASED COMPENSATION -- In October 1995, the FASB issued
SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123").
SFAS No. 123 provides a choice of accounting methods and requires
additional disclosures for stock-based employee compensation plans. SFAS
No. 123 defines a fair value-based method of accounting for an employee
stock option or similar equity instrument. However, it also allows for the
continued use of the intrinsic value-based method of accounting as
prescribed by Accounting Principles Board Opinion (APB) No. 25, "Accounting
for Stock Issued to Employees." Regardless of the method used to account
for stock-based compensation, SFAS No. 123 requires all financial
statements to include disclosures of the fair value of such compensation.
SFAS No. 123 must be adopted for financial statements for fiscal years
beginning after December 15, 1995. In connection with the conversion of
the Company's principal subsidiary from mutual to stock form , the Board of
Directors of the Company has adopted certain stock-based compensation
plans. Stockholder approval of the plans was obtained at the Company's
Annual Meeting held on July 3, 1996. The Company will account for such
plans under APB Opinion 25 and make the appropriate disclosures required
under SFAS No. 123. The Company does not believe that such adoption and
accounting has any adverse impact on its financial condition or results of
operations.
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"),
which is required to be adopted on December 31, 1997. At that time, the
Company will be required to change the method currently used to compute
earnings per share ("EPS") and, if applicable, restate all prior periods.
Under the new requirements for calculating primary EPS, the dilutive effect
of common stock equivalents (i.e. options, warrants and convertible
securities) will be excluded. Thus, the basic EPS calculation under the
guidance of SFAS No. 128 will be to divide net income available to common
stockholders by the weighted average common shares outstanding. As the
company does not have any outstanding common stock equivalents, there is no
impact on the Company's calculation of primary and fully diluted EPS based
on the method outlined in SFAS No. 128 for the three months and six months
ended June 30, 1997 and 1996.
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 SIX MONTHS ENDED JUNE
30, 1997 AND JUNE 30, 1996
GENERAL
The Company recorded net earnings of $145,000 for the three months ended June
30, 1997, as compared to a net loss of $(54,000) for the three months ended June
30, 1996. For the six months ended June 30, 1997 the Company recorded net
earnings of $208,000, as compared to net earnings of $60,000 for the same period
ended June 30, 1996. The second quarter and year-to-date net earnings as of
June 30, 1997 resulted from a number of offsetting factors which included higher
interest income, higher interest on savings deposits, lower provision for loan
losses, higher noninterest income, higher noninterest expense and higher income
taxes.
INTEREST INCOME
Interest income increased by $128,000 during the three months ended June 30,
9
<PAGE>
1997 as compared to the same period a year ago. For the six months ended
June 30, 1997, interest income increased by $197,000 as compared to the same
period a year ago. These increases were primarily the result of increases in
average assets of $7.2 million and $6.0 million for the three-month and
six-month periods ended June 30, 1997, respectively, as compared to the same
periods in the prior year. The increases in assets during the three-month
and six-month periods ended June 30, 1997 were funded by increases in savings
deposits. The increase in average assets resulted from the Company's focus
on increasing its loan portfolio, as well as a planned increase in its
investment securities.
INTEREST ON SAVINGS DEPOSITS
Interest on savings deposits increased by $116,000 during the three months
ended June 30, 1997 as compared to the same period a year ago. For the six
months ended June 30, 1997, interest on savings deposits increased by
$188,000 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 $8.4
million and $4.9 million for the three and six months ended June 30, 1997,
respectively, as compared to the same 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 12-basis
points, from 3.55% for the six months ended June 30, 1996 to 3.67% for the
six months ended June 30, 1997.
PROVISION FOR LOAN LOSSES
The provision for loan losses decreased by $141,000, from $188,000 for the
three months ended June 30, 1996 to $47,000 for the three months ended June
30, 1997. For the six months ended June 30, 1997, the provision for loan
losses decreased by $166,000, from $243,000 to $77,000. For the three-month
and six-month periods ended June 30, 1996, higher general and specific
reserves were established for problem loans. The decreases in the provision
for loan losses were due primarily to improved asset quality.
Total non-performing assets, consisting of non-accrual loans and real estate
acquired through foreclosure ("REO"), decreased by $160,000, from $2.7
million at June 30, 1996 to $2.5 million at June 30, 1997. The $160,000
decrease resulted from a decrease in non-accrual loans of $159,000 and a
decrease in REO of $1,000. Non-performing assets at December 31, 1996
totalled $2.8 million, consisting of $1.9 million in non-accrual loans and
$933,000 in REO properties. As a percentage of total assets, nonperforming
assets were 2.06% at June 30, 1997, compared to 2.40% and 2.39% at June 30,
1996 and December 31, 1996, respectively. Since December 1996, non-accrual
loans have decreased by $835,000 to $1.0 million and REO has increased by
$552,000 to $1.5 million. Non-accrual loans at June 30, 1997
10
<PAGE>
included four loans totalling $379,000 secured by one- to four-unit
properties and three loans totalling $660,000 secured by multi-family
properties.
As of June 30, 1997 the Company's allowance for loan losses totalled $1.0
million, representing a $172,000 decrease from the balance at December 31,
1996. The allowance for loan losses represents 1.00% of total loans at June
30, 1997, as compared to 1.19% of total loans at December 31, 1996. During
the quarter ended June 30, 1997 the allowance for loan losses was decreased by
$191,000, including the effects of $238,000 in write-offs and write-downs on
loans, as partially offset by the $47,000 loss provision for the quarter.
The decrease of $238,000 included write-offs of three fully reserved loans
totalling $100,000, secured by second trust deeds, and write-downs totalling
$138,000 on loans that were transferred to REO. The allowance for loan
losses was 96.51% of non-accrual loans at June 30, 1997, compared to 62.65%
at December 31, 1996. As of June 30, 1997 management believes that the
allowance for loans losses is adequate to cover inherent losses in its loan
portfolio, however, there can be no assurance that such losses will not
exceed the estimated amounts.
NONINTEREST INCOME
Noninterest income increased by $168,000, from a $56,000 expense for the
three months ended June 30, 1996 to $112,000 in income for the same period
during 1997. For the six months ended June 30, 1997, noninterest income
increased by $204,000, from a $19,000 expense during 1996 to $185,000 in
income for the same period in 1997. The increases were due to a number of
offsetting factors. Service charges increased by $45,000 and $53,000 during
the three-month and six-month periods ended June 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 June 30, 1997 as compared to June 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 $72,000 and
$97,000, respectively, during the three-month and six-month periods ended
June 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. The "Recovery (write-down)
on Valuation of Loans Held For Sale" decreased by $40,000 and $56,000,
respectively, for the three and six months ended June 30, 1997, as compared
to the same periods during 1996, as the Company had no loans classified as
held for sale since December 31, 1996. Finally, other noninterest income
increased from $23,000 for the three months ended June 30, 1996 to $34,000
for the same period in 1997, primarily as a result of the recognition of a
$10,000 gain on the sale of real estate. For the six months ended June 30,
1997, other noninterest income decreased from $41,000 during 1996 to $39,000
for the same period in 1997, primarily as a result of the recognition of
nonrecurring income, including recoveries during the first quarter of 1996
offset by gain on sale of real estate investment during the second quarter of
1997.
11
<PAGE>
NONINTEREST EXPENSE
Noninterest expense increased by $5,000 and $130,000, respectively, during
the three-month and six-month periods ended June 30, 1997, as compared to the
same periods in 1996. The increase in noninterest expense was due primarily
to increases in compensation and benefits, occupancy expense and other
noninterest expense, offset by decreases in professional services,
advertising and promotional expense, and federal insurance premiums.
Compensation and benefits increased by $124,000 and $211,000, respectively,
for the three-month and six-month periods ended June 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 $20,000 and $14,000, respectively, for the
three-month and six-month periods ended June 30, 1997, as compared to the
same periods during 1996. The increases were primarily due to an increase in
computer expenses offset by a decrease in repair and maintenance costs.
Other noninterest expense decreased from $257,000 for three months ended June
30, 1996 to $186,000 for three months ended June 30, 1997. The decrease was
caused by several offsetting factors, including the 1996 recognition of a
loss from an employee defalcation and higher security, telephone and postage
expenses incurred in 1997. For the six months ended June 30, 1997, other
noninterest expense increased by $28,000, from $465,000 for the six months
ended June 30, 1996 to $493,000. The increase was primarily attributable to
the $135,000 burglary loss incurred in February 1997 and the increase in
security, stationary, telephone and postage expenses. Professional service
expense decreased by $17,000 and $5,000, respectively, for the three and six
months ended June 30, 1997. The decrease was due to a reduction in the use
of outside consultants and other professionals. Federal insurance premiums
decreased by $44,000 and $96,000, respectively, for the three and six months
ended June 30, 1997 as compared to the same periods a year ago due to an
insurance rate reduction after the payment of a one-time assessment fee
imposed by FDIC in 1996.
INCOME TAXES
Income tax expense increased by $117,000 and $101,000, respectively, for the
three month and six month periods ended June 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.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1997 AND DECEMBER 31, 1996
12
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Total assets at June 30, 1997 were $122.2 million compared to $117.1 million at
December 31, 1996, representing an increase of $5.1 million. The increase in
total assets was funded primarily from additional savings deposits made during
the period. Net loans receivable increased from $96.3 million at December 31,
1996 to $97.9 million at June 30, 1997 as a result of $7.1 million in new loan
originations and a $1.8 million loan purchase, offset by $5.8 million in
principal repayments, $900,000 in loans transferred to foreclosure, $200,000 in
loans sold, $300,000 in loans in process and $100,000 in allowance for loan
losses.
Total liabilities at June 30, 1997 were $109.1 million compared to $103.5
million at December 31, 1996. The $5.6 million increase is primarily
attributable to the increase in savings deposits.
Total capital at June 30, 1997 was $13.1 million as compared to $13.6 million
at December 31, 1996, representing a decrease of $500,000. This decrease
resulted from: 1) the purchase of outstanding Common stock totalling
$626,000; 2) dividends declared totalling $112,000; 3) net earnings of
$208,000 for six months ended June 30, 1997; 4) additional paid-in-capital
totalling $14,000, resulting from interest earned on a loan to the employee
stock ownership plan ("ESOP"); and 5) a decrease of $16,000 in the unearned
ESOP account resulting from principal payments received on the loan to the
ESOP.
During the quarter the Bank entered into an agreement to purchase for $1.6
million an office building located at 4800 Wilshire Boulevard, Los Angeles,
California. The new facility contains approximately 11,200 square feet and
was formerly operated as a branch office by Bank of America. Broadway
Federal is acquiring the site to replace its 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.
13
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PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
The Annual Meeting of the Company was held on June 18, 1997
for the purpose of electing three directors to serve until
the Annual Meeting to be held in the year 2000 or until
their successors are elected and have been qualified.
The stockholders reelected Mr. Paul C. Hudson, Mr. Kellogg
Chan and Mr. Larkin Teasley to serve as directors for terms
of three years each. The number of votes FOR and those
WITHHELD for each of the directors is detailed below:
MR. PAUL C. HUDSON
For 701,292
Withheld 500
MR. KELLOGG CHAN
For 692,021
Withheld 6,801
MR. LARKIN TEASLEY
For 701,166
Withheld 626
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
None
14
<PAGE>
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: August 08, 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
15
<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 2,059
<INT-BEARING-DEPOSITS> 130
<FED-FUNDS-SOLD> 4,250
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 11,870
<INVESTMENTS-MARKET> 11,745
<LOANS> 98,864
<ALLOWANCE> (1,003)
<TOTAL-ASSETS> 122,245
<DEPOSITS> 107,550
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,551
<LONG-TERM> 0
0
911
<COMMON> 8,230
<OTHER-SE> (1,173)
<TOTAL-LIABILITIES-AND-EQUITY> 122,245
<INTEREST-LOAN> 4,127
<INTEREST-INVEST> 349
<INTEREST-OTHER> 29
<INTEREST-TOTAL> 4,505
<INTEREST-DEPOSIT> 1,916
<INTEREST-EXPENSE> 1,916
<INTEREST-INCOME-NET> 2,589
<LOAN-LOSSES> 77
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 360
<INCOME-PRE-EXTRAORDINARY> 360
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 208
<EPS-PRIMARY> 0.21
<EPS-DILUTED> 0
<YIELD-ACTUAL> 0.82
<LOANS-NON> 1,039
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,174
<CHARGE-OFFS> 249
<RECOVERIES> 1
<ALLOWANCE-CLOSE> (1,003)
<ALLOWANCE-DOMESTIC> (1,003)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 208
</TABLE>
