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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
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For transition period from__________ to___________
Commission file number 0-27464
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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.)
4800 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90010
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(Address of Principal Executive Offices)
(213) 634-1700
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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: 863,447 shares of the Company's
Common Stock, par value $.01 per share, were issued and outstanding as of July
31, 1998.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [x]
1
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INDEX
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<CAPTION>
PART I-- FINANCIAL INFORMATION
Item 1. Financial Statements Page
<S> <C>
Consolidated Balance Sheets
as of June 30, 1998 (unaudited)
and December 31, 1997 3
Consolidated Statements of
Operations (unaudited) for
the three months and six month ended
June 30, 1998 and June 30, 1997 4
Consolidated Statement of
Cash Flows (unaudited) for the
six months ended June 30, 1998
and June 30, 1997 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 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote
Of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
</TABLE>
2
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BROADWAY FINANCIAL CORPORATION
AND SUBSIDIARY
Consolidated Balance Sheets
(Dollars in thousands)
<TABLE>
<CAPTION>
June 30,
1998 December 31,
(Unaudited) 1997
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<S> <C> <C>
Assets:
Cash and Federal funds sold............... $ 3,624 $ 4,831
Investment securities, held to maturity... 15,278 9,207
Loans receivable, net..................... 109,600 103,689
Loans receivable held for sale............ 1,702 222
Accrued interest receivable............... 996 834
Real estate acquired through foreclosure.. 682 1,144
Investments in capital stock of Federal
Home Loan Bank, at cost................. 958 931
Office properties & equipment, net........ 4,485 3,995
Other assets.............................. 317 263
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Total Assets......................... $ 137,642 $ 125,116
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Liabilities and stockholders' equity
Savings deposits ......................... $ 117,351 $ 109,867
Advance from Federal Home Loan Bank....... 5,500 -
Advance payments by borrowers for taxes
and insurance............................ 153 199
Deferred income taxes..................... 428 463
Other liabilities......................... 587 1,148
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Total Liabilities.................... 124,019 111,677
Stockholders' equity:
Preferred nonconvertible,
non-cumulative, and non-voting
stock, $.01 par value, authorized
1,000,000 shares; issued and
outstanding 55,199 shares at
June 30, 1998....................... 1 1
Common Stock, $.01 par value, authorized
3,000,000 shares; issued and
outstanding 863,447 shares at
June 30, 1998....................... 9 9
Additional paid-in capital............. 8,845 8,820
Retained Earnings-substantially
restricted.......................... 5,555 5,427
Treasury Stock, at cost................ (318) (318)
Unearned Employee Stock Ownership
Plan shares......................... (469) (500)
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Total stockholders' equity........... 13,623 13,439
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Total liabilities and stockholders'
equity............................... $ 137,642 $ 125,116
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</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 Six Months Ended
June 30, June 30,
------------------------ -------------------------
1998 1997 1998 1997
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<S> <C> <C> <C> <C>
Interest Income:
Interest on loans receivable...................................... $ 2,251 $ 2,088 $ 4,423 $ 4,127
Interest on investment securities................................. 187 160 278 317
Interest on mortgage backed securities............................ 58 26 107 32
Other interest income............................................. 15 15 30 29
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Total interest income.......................................... 2,511 2,289 4,838 4,505
Interest expense:
Interest on savings deposits...................................... 1,083 981 2,125 1,916
Interest on borrowings............................................ 10 - 13 -
---------- ---------- ----------- ----------
Total interest expense......................................... 1,093 981 2,138 1,916
Net interest income before provision for loan losses........... 1,418 1,308 2,700 2,589
Provision for loan losses.............................................. 75 47 150 77
---------- ---------- ----------- ----------
Net interest income after provision for loan losses............ 1,343 1,261 2,550 2,512
Noninterest income:
Service charges................................................... 95 118 197 201
Gain (loss) on sale of mortgage loans............................. (5) - 14 -
Gain on sale of office properties and equipment................... - - 6 -
Other noninterest income......................................... 10 34 191 39
---------- ---------- ----------- ----------
100 152 408 240
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Noninterest expense:
Compensation and benefits......................................... 648 624 1,341 1,199
Occupancy expense, net............................................ 302 226 582 448
Advertising and promotional expense............................... 42 24 79 69
Professional services............................................. 12 13 34 36
Federal insurance premiums........................................ 25 24 50 36
Insurance bond premiums........................................... 24 27 50 56
Real estate operations, net....................................... (1) 40 5 55
Contracted security services...................................... 41 31 77 58
Net operational losses............................................ 14 14 24 152
Other noninterest expense......................................... 193 141 323 283
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1,300 1,164 2,565 2,392
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Earnings before income taxes ..................................... 143 249 393 360
Income taxes........................................................... 59 104 164 152
Net earnings ..................................................... $ 84 $ 145 $ 229 $ 208
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---------- ---------- ----------- ----------
Per share information
Number of shares.................................................. 863,477 849,996 863,477 871,224
Earnings per share................................................ $0.09 $0.16 $0.25 $0.21
Earnings per share -assuming dilution............................. 0.09 0.16 0.24 0.21
</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,
1998 1997
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<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $ 229 $ 208
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Adjustments to reconcile net earnings to net cash provided by
(used in) operating activities:
Depreciation 87 82
Amortization of net deferred loan origination fees (43) 40
Amortization of discounts and premium on securities 3 6
Federal Home Loan Bank stock dividends (27) (27)
Loss (Gain) on sale of real estate owned (25) 2
Gain on sale of loans receivable held for sale (14) -
Changes in operating assets and liabilities:
Provision for loan losses 150 77
Provision for write-downs and losses on real estate 17 13
Loans originated for sale, net of refinances (3,171) -
Proceeds from sale of loans receivable 1,705 229
Accrued interest receivable (162) (35)
Income tax receivable - 243
Other assets (54) 1
Deferred income taxes (35) (43)
Other liabilities (594) 121
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Total adjustments (2,163) 709
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Net cash (used in) provided by operating activities (1,934) 917
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INVESTING ACTIVITIES
Loans originated, net of refinances (3,018) (6,828)
Loans purchased (14,687) (1,833)
Premium on loans purchased (253) -
Principal repayment on loans 11,495 5,839
Increase in investment in real estate - (113)
Proceeds from sale of office properties and equipment 132 -
Gain on sale of office properties and equipment (6) -
Purchases of investment securities held to maturity (10,065) (4,004)
Proceeds from maturities of investment securities held to
maturity 3,991 2,499
Capital expenditures for office properties and equipment (703) (389)
Proceeds from sale of real estate acquired through foreclosure 948 337
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Net cash used in investing activities (12,166) (4,492)
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(Continued)
5
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<TABLE>
<CAPTION>
Six Months Ended
June 30, June 30,
1998 1997
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<S> <C> <C>
FINANCING ACTIVITIES
Net increase in savings deposits 7,484 5,556
Increase in advance from Federal Home Loan Bank 5,500 -
Additional paid-in capital 24 14
Dividends declared (101) (112)
Unearned Employee Stock Ownership Plan 32 16
Treasury stock - (626)
Increase in advances by borrowers
for taxes and insurance (46) (14)
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Net cash provided by financing activities 12,893 4,834
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Net (decrease) increase in cash and cash equivalents (1,207) 1,259
Cash and cash equivalents at beginning of period 4,831 5,180
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Cash and cash equivalents at end of period $ 3,624 $6,439
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Supplemental disclosure of cash flow information:
Cash paid for interest expense $ 2,144 $1,912
Cash paid for income taxes 312 -
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Supplemental disclosure of noncash investing and financing activities:
Additions to real estate acquired through foreclosure 561 1,036
Loans to facilitate the sale of real estate acquired through
foreclosure - -
See Notes to Consolidated Financial Statements
</TABLE>
6
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BROADWAY FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
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 normal recurring
accruals and standard allowance for loan losses) necessary to present
fairly the consolidated financial position of the Company at June 30, 1998
and the results of its operations for the three months and six months ended
June 30, 1998 and 1997, and its cash flows for the six months ended June
30, 1998 and 1997. 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, 1997 and, accordingly, should be read in conjunction with such audited
statements.
2. The results of operations for the six months ended June 30, 1998 are not
necessarily indicative of the results to be expected for the full year.
3. RECENT ACCOUNTING PRONOUNCEMENTS
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.
The Company adopted SFAS No. 128 effective December 31, 1997. Adoption had
no impact on the basic EPS computation. The EPS-assuming dilution
computation was impacted only by stock-based employee compensation. All
EPS amounts for all periods have been presented, and where appropriate,
restated, to conform to the SFAS No. 128 requirements.
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
7
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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. 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 does not
believe that such adoption has any adverse impact on its financial
condition or results of operations.
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 its 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, 1998 AND JUNE 30, 1997
GENERAL
The Company recorded net earnings of $84,000 for the three months ended June
30, 1998, as compared to net earnings of $145,000 for the three months ended
June 30, 1997. The second quarter net earnings as of June 30, 1998
resulted from a number of offsetting factors which included higher interest
income, higher interest expense on savings deposits and borrowings, higher
provision for loan losses, lower noninterest income, higher noninterest
expense and lower income taxes. For the six months ended June 30, 1998 the
Company recorded net earnings of $229,000 as compared to net earnings of
$208,000 for the same period ended June 30, 1997. The year-to-date net
earnings as of June 30, 1998 resulted from a number of offsetting factors
which included higher interest income, higher interest expense on savings
deposits and borrowings, higher provision for loan losses, higher noninterest
income, higher noninterest expense and higher income taxes.
9
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INTEREST INCOME
Interest income increased by $222,000 during the three months ended June 30,
1998 as compared to the same period a year ago. For the six months ended
June 30, 1998 interest income increased by $333,000 as compared to the same
period in the prior year. These increases were primarily the result of
increases in average assets of $12.9 million and $11.1 million for the three
months and six months ended June 30, 1998, respectively, as compared to the
same periods a year ago. The increases in assets during the three months
and six months ended June 30, 1998 were funded by increases in savings
deposits and Federal Home Loan Bank advances . The increases in average
assets primarily resulted from the Company's continued focus on increasing
its loan portfolio, as well as a planned increase in its investment
securities.
INTEREST ON SAVINGS DEPOSITS
Interest on savings deposits and borrowings increased by $112,000 during the
three months ended June 30, 1998 as compared to the same period a year ago.
For the six months ended June 30, 1998 interest on savings deposits and
borrowings increased by $222,000 as compared to the same period in the prior
year. The increase in interest on savings deposits and borrowings was due
to increases in average deposits and borrowings of $12.7 million and $11.0
million for the three and six months ended June 30, 1998, respectively, as
compared to the same periods a year ago. The increase in interest on savings
deposits also reflects the more competitive interest rate environment as the
average cost of deposits increased 3-basis points, from 3.67% for the six
months ended June 30, 1997 to 3.70% for the six months ended June 30, 1998.
PROVISION FOR LOAN LOSSES
The provision for loan losses increased by $28,000, from $47,000 for the
three months ended June 30, 1997 to $75,000 for the three months ended June
30, 1998. For the six months ended June 30, 1998, the provision for loan
losses increased by $73,000, from $77,000 to $150,000.
Total non-performing assets, consisting of non-accrual loans and real estate
acquired through foreclosure ("REO"), decreased by $940,000 , from $2.5
million at June 30, 1997 to $1.6 million at June 30, 1998. The $940,000
decrease resulted from a decrease in non-accrual loans of $137,000 and a
decrease in REO of $803,000. As a percentage of total assets, non-performing
assets were 1.15% at June 30, 1998, compared to 2.06% and 1.65% at June 30,
1997 and December 31, 1997, respectively. Since December 1997, non-accrual
loans have decreased by $19,000,
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to $902,000, and REO has decreased by $462,000, to $682,000. Non-accrual
loans at June 30, 1998 included eight loans totaling $686,000 secured by one-
to four-unit properties, one loan totaling $214,000 secured by a multi-family
property and one unsecured loan totaling $2,000. REO at June 30, 1998
included two one- to four-unit properties totaling $181,000, one multi-family
property totaling $279,000, one commercial property totaling $93,000 and one
parcel of land totaling $265,000.
As of June 30, 1998 the Company's allowance for loan losses totaled $1.1
million, representing a $32,000 increase from the balance at December 31,
1997. The allowance for loan losses represents 0.96% of total loans at June
30, 1998, as compared to 1.00% at December 31, 1997. The allowance for loan
losses was 120.44% of non-accrual loans at June 30, 1998, compared to 114.44%
at December 31, 1997. Net charge-offs as a percentage of the beginning
allowance for loan losses in 1998 represented 22.39% annualized, as compared
to 32.28% for 1997. As of June 30, 1998 management believes that, given the
improved asset quality, the allowance for loan 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 decreased by $52,000, from $152,000 for the three months
ended June 30, 1997 to $100,000 for the same period during 1998. For the six
months ended June 30, 1988, noninterest income increased by $168,000, from
$240,000 during 1997 to $408,000 for the same period in 1998. Service
charges decreased by $23,000 and $4,000 during the three-month and six-month
periods ended June 30, 1998 as compared to the same periods a year ago. The
decrease resulted primarily from lower appraisal fees offset by increased
fees charged on various savings products and from a greater number of
checking accounts at June 30, 1998 as compared to June 30, 1997. The
Company reported a loss on sale of mortgage loans of $5,000 for the three
months ended June 30, 1998. For the six months ended June 30, 1998, the
Company reported a net gain on sale of mortgage loans of $14,000. At June
30, 1998 loans held for sale totaled $1.7 million, and, which are recorded
at the lower of amortized cost or market value; there were no loans held for
sale at June 30, 1997. The Company realized a gain on sale of office
properties and equipment of $6,000 for the six months ended June 30, 1998
which was attributable to the sale of property located at 8467 South Van Ness
Avenue, Inglewood, California. There were no comparable sales in the three
months ended June 30, 1998. Finally, other noninterest income decreased by
$24,000, from $34,000 for the three months ended June 30, 1997 to $10,000 for
the same period in 1998. The decrease principally resulted from the gain on
sale of real estate and recognition of nonrecurring income during second
quarter of 1997. For the six months ended June 30, 1998, other noninterest
income increased by $152,000 from $39,000 during 1997 to
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$191,000 for the same period in 1998, primarily as a result of the reversal
of an accrual that had been set up for interest and penalties on funds
escheated to the State of California in 1992. It was determined that interest
and penalties are not due.
NONINTEREST EXPENSE
Noninterest expense increased by $136,000 and $173,000, respectively, during
the three-month and six-month periods ended June 30, 1998 as compared to the
same periods in 1997. The increase in noninterest expense was due primarily
to increases in compensation and benefits, occupancy expense, advertising
expense, federal insurance premiums, contracted security services and other
noninterest expense, offset by decreases in professional services, insurance
bond premiums, real estate operations and operational losses. Compensation
and benefits increased by $24,000 and $142,000, respectively, for the
three-month and six-month periods ended June 30, 1998 as compared to the same
periods a year ago. The increases resulted 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 $76,000 and $134,000, respectively, for the three-month and
six-month periods ended June 30, 1998, as compared to the same periods during
1997. The increases were primarily due to increases in computer expenses,
rent and utilities, maintenance and repair and property taxes on office
buildings. Advertising and promotional expense increased by $18,000 and
$10,000, respectively, for the three-month and six-month periods ended June
30, 1998. The increases were primarily attributable to the grand opening of
the Wilshire office. Contracted security services increased by $10,000 and
$19,000, respectively, for the three-month and six-month periods ended June
30, 1998 as compared to the same periods during 1997. The increases were due
to security services provided to the new branch office at 4800 Wilshire
Boulevard. Real estate operations decreased by $41,000 and $50,000,
respectively, for the three-month and six-month periods ended June 30, 1998
as compared to the same periods a year ago. The decreases were mainly due to
gain on sale of REO offset by loss provisions and other carrying costs. Net
operational losses decreased by $128,000 for the six-month period ended June
30, 1998 as compared to the same period during 1997. The first half of 1997
included losses resulting from a branch burglary in February, 1997. Other
noninterest expense increased by $52,000 and $40,000, respectively, for the
three-month and six-month periods ended June 30, 1998 as compared to the same
periods during 1997. The increases were primarily caused by the increase in
legal fees, office supplies and loan expense. Federal deposit insurance
premiums increased by $1,000 and $14,000, respectively, for the three-month
and six-month periods ended June 30, 1998 as compared to the same periods a
year ago, due to an increase in savings deposits.
INCOME TAXES
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Income tax expense decreased by $45,000 for the three-month period ended
June 30, 1998, as compared to the same period in 1997. The decrease in
income taxes was the result of lower earnings before income taxes during the
second quarter of 1998 as compared to the same period during 1997. For the
six-month period ended June 30, 1998, income tax expense increased by $12,000
as compared to the same period a year ago. The increase in income taxes was
due to higher earnings before income taxes during the first half of 1998
as compared to the same period in 1997.
COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 1998 AND DECEMBER 31, 1997
Total assets at June 30, 1998 were $137.6 million compared to $125.1 million
at December 31, 1997, representing an increase of $12.5 million. Net loans
receivable increased from $103.7 million at December 31, 1997 to $109.6
million at June 30, 1998 as a result of $6.2 million in new loan originations
and $15.0 million in loan purchases, including premiums, offset by $11.5
million in principal repayments, $500,000 in loans transferred to foreclosure
and $3.2 million in loans transferred to held for sale. Loans held for
sale at June 30, 1998 totaled $1.7 million as compared to $200,000 at
December 31, 1997. Office properties & equipment increased from $4.0 million
at December 31, 1997 to $4.5 million at June 30, 1998, primarily as a result
of renovation costs incurred for the Bank's branch and administrative office
located in the City of Los Angeles. 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 June 30, 1998 were $124.0 million compared to $111.7
million at December 31, 1997. The $12.3 million increase is primarily
attributable to the increase in savings deposits and Federal Home Loan Bank
advances offset by the decrease in advance payments by borrowers, deferred
income taxes and other liabilities.
Total capital at June 30, 1998 was $13.6 million as compared to $13.4 million
at December 31, 1997, representing an increase of $184,000. This increase
resulted from the net of: 1) dividends declared totaling $101,000; 2) net
earnings of $229,000 for six months ended June 30, 1998; 3) additional
paid-in-capital totaling $24,000, resulting from interest earned on a loan to
the employee stock ownership plan ("ESOP"); and 4) a decrease of $32,000 in
the unearned ESOP account resulting from principal payments received on the
loan to the ESOP.
SUBSEQUENT EVENT
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The Company will issue an 8% stock dividend to shareholders of record as of
August 7, 1998. The distribution date will be August 25, 1998. As a result
of this stock dividend, the Company 's outstanding stock will increase from
863,447 shares to 932,523 shares.
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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 17,
1998 for the following purposes:
(a) To elect three directors to serve until the Annual Meeting
to be held in the year 2001 or until their successors are
elected and have been qualified.
The stockholders reelected Mr. Elbert T. Hudson, Mr. Willis
K. Duffy and Ms. Rosa M. Hill 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. ELBERT T. HUDSON
For 692,177
Withheld 10,927
MR. WILLIS K. DUFFY
For 691,372
Withheld 11,732
MS. ROSA M. HILL
For 691,372
Withheld 11,732
(b) To ratify the appointment of Ernst & Young LLP as the
Company's independent auditing firm for 1998.
The stockholders ratified the appointment of independent
auditors based upon total votes FOR of 702,999 and total
ABSTENTIONS of 105. There were no votes AGAINST.
Item 5. OTHER INFORMATION
None
15
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Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 27.1 - Financial Data Schedule.
(b) Reports on Form 8-K
None
16
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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: AUGUST 7, 1998 By: /S/ PAUL C. HUDSON
------------------- -----------------------
Paul C. Hudson
President and Chief Executive Officer
By: /S/ BOB ADKINS
--------------------
Bob Adkins
Secretary and Chief Financial Officer
17
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<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
PRECEDING 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-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,422
<INT-BEARING-DEPOSITS> 2
<FED-FUNDS-SOLD> 1,200
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 15,278
<INVESTMENTS-MARKET> 15,217
<LOANS> 112,388
<ALLOWANCE> (1,086)
<TOTAL-ASSETS> 137,642
<DEPOSITS> 117,351
<SHORT-TERM> 5,500
<LIABILITIES-OTHER> 1,168
<LONG-TERM> 0
0
552
<COMMON> 8,303
<OTHER-SE> (787)
<TOTAL-LIABILITIES-AND-EQUITY> 137,642
<INTEREST-LOAN> 4,423
<INTEREST-INVEST> 385
<INTEREST-OTHER> 30
<INTEREST-TOTAL> 4,838
<INTEREST-DEPOSIT> 2,125
<INTEREST-EXPENSE> 2,138
<INTEREST-INCOME-NET> 2,700
<LOAN-LOSSES> 150
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 0
<INCOME-PRETAX> 393
<INCOME-PRE-EXTRAORDINARY> 393
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 229
<EPS-PRIMARY> 0.25
<EPS-DILUTED> 0.24
<YIELD-ACTUAL> 0.076
<LOANS-NON> 902
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> (1,054)
<CHARGE-OFFS> 118
<RECOVERIES> 0
<ALLOWANCE-CLOSE> (1,086)
<ALLOWANCE-DOMESTIC> (1,086)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 255
</TABLE>
