Broadway Financial Corporation Announces Revised Net Earnings for First Quarter Ended March 31, 2012

Broadway Financial Corporation Announces Revised Net Earnings for First Quarter Ended March 31, 2012

LOS ANGELES--(BUSINESS WIRE)-- Broadway Financial Corporation (the "Company") (NAS: BYFC) , parent company of Broadway Federal Bank, f.s.b. (the "Bank"), today announced its revised results for the quarter ended March 31, 2012.

Our previously reported results for the quarter have been revised because some of the provisions that we had included in the results for the first quarter of 2012 are now reflected in our restated results for 2011. In addition, the revision to the results for the first quarter of 2012 reflect conclusions regarding our valuation allowances reached by the Office of the Controller of Currency during its recently completed supervisory examination of the Bank.


Based on these changes, we are reporting net earnings of $154,000 for the first quarter of 2012, whereas previously we had reported a loss of $60,000. In contrast, we reported a net loss of $129,000 for the first quarter of 2011. After deducting preferred dividends and related discount accretion on the Series D and E Perpetual Cumulative Preferred Stock held by the U.S. Department of the Treasury, we are now reporting a loss to common stockholders of $132,000, as compared to a previously announced loss of $346,000 for the first quarter of 2012 and a loss of $412,000 for the first quarter of 2011.

A summary of the effects of these corrections on the Company's consolidated balance sheet as of March 31, 2012 and consolidated statement of operations for the quarter then ended is included with this release. More detailed information regarding our financial condition at March 31, 2012 and our results of operations for the three months then ended will be contained in our report on Form 10-Q for the first quarter of 2012 to be filed shortly with the Securities and Exchange Commission.

About Broadway Financial Corporation

Broadway Financial Corporation conducts its operations through its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which is the leading community-oriented savings bank in Southern California serving low to moderate income communities. We offer a variety of residential and commercial real estate loan products for consumers, businesses, and non-profit organizations, other loan products, and a variety of deposit products, including checking, savings and money market accounts, certificates of deposits and retirement accounts. The Bank operates three full service branches, two in the city of Los Angeles, and one located in the nearby city of Inglewood, California.

Shareholders, analysts and others seeking information about the Company are invited to write to: Broadway Financial Corporation, Investor Relations, 4800 Wilshire Blvd., Los Angeles, CA 90010, or visit our website at www.broadwayfederalbank.com.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based upon our management's current expectations, and involve risks and uncertainties. Actual results or performance may differ materially from those suggested, expressed, or implied by the forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, the real estate market, competitive conditions in the business and geographic areas in which the Company conducts its business, regulatory actions or changes and other risks detailed in the Company's reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to publicly revise any forward-looking statement to reflect any future events or circumstances, except to the extent required by law.

BROADWAY FINANCIAL CORPORATION

AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollars in thousands)

As Originally Announced

As Revised

As Restated

March 31,

March 31,

December 31,

2012

Adjustments

2012

2011

(Unaudited)

(Unaudited)

ASSETS

Cash

$

13,572

$

-

$

13,572

$

12,127

Federal funds sold

31,605

-

31,605

19,470

Cash and cash equivalents

45,177

-

45,177

31,597

Securities available for sale, at fair value

18,027

-

18,027

18,979

Loans receivable held for sale, net

13,277

(369

)

12,908

12,983

Loans receivable, net of allowance of $17,752 and $17,299

313,276

(3,698

)

309,578

322,770

Accrued interest receivable

1,601

-

1,601

1,698

Federal Home Loan Bank (FHLB) stock, at cost

3,901

-

3,901

4,089

Office properties and equipment, net

4,548

-

4,548

4,626

Real estate owned (REO)

4,335

(377

)

3,958

6,699

Bank owned life insurance

2,629

-

2,629

2,609

Investment in affordable housing partnership

1,629

-

1,629

1,675

Deferred tax assets

828

(56

)

772

850

Other assets

4,155

(23

)

4,132

5,162

Total assets

$

413,383

$

(4,523

)

$

408,860

$

413,737

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits

$

290,352

$

-

$

290,352

$

294,686

Federal Home Loan Bank advances

83,000

-

83,000

83,000

Junior subordinated debentures

6,000

-

6,000

6,000

Other borrowings

5,000

-

5,000

5,000

Advance payments by borrowers for taxes and insurance

335

-

335

813

Other liabilities

5,904

-

5,904

5,962

Total liabilities

390,591

-

390,591

395,461

Stockholders' Equity:

Senior preferred, cumulative and non-voting stock, $0.01 par value, authorized, issued and outstanding 9,000 shares of Series D at March 31, 2012 and December 31, 2011; liquidation preference of $9,844 at March 31, 2012 and $9,731 at December 31, 2011

8,963

-

8,963

8,963

Senior preferred, cumulative and non-voting stock, $0.01 par value, authorized, issued and outstanding 6,000 shares of Series E at March 31, 2012 and December 31, 2011; liquidation preference of $6,563 at March 31, 2012 and $6,488 at December 31, 2011

5,974

-

5,974

5,974

Preferred, non-cumulative and non-voting stock, $.01 par value, authorized 985,000 shares; issued and outstanding 55,199 shares of Series A, 100,000 shares of Series B and 76,950 shares of Series C at March 31, 2012 and December 31, 2011; liquidation preference of $552 for Series A, $1,000 for Series B and $1,000 for Series C at March 31, 2012 and December 31, 2011

3,657

-

3,657

3,657

Preferred stock discount

(896

)

-

(896

)

(994

)

Common stock, $.01 par value, authorized 8,000,000 shares at March 31, 2012 and December 31, 2011; issued 2,013,942 shares at March 31, 2012 and December 31, 2011; outstanding 1,744,565 shares at March 31, 2012 and December 31, 2011

20

-

20

20

Additional paid-in capital

10,844

-

10,844

10,824

Accumulated deficit

(2,904

)

(4,523

)

(7,427

)

(7,295

)

Accumulated other comprehensive income, net of taxes of $400 at March 31, 2012 and December 31, 2011

578

-

578

571

Treasury stock-at cost, 269,377 shares at March 31, 2012 and December 31, 2011

(3,444

)

-

(3,444

)

(3,444

)

Total stockholders' equity

22,792

(4,523

)

18,269

18,276

Total liabilities and stockholders' equity

$

413,383

$

(4,523

)

$

408,860

$

413,737

BROADWAY FINANCIAL CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Earnings (Loss)

(Dollars in thousands, except per share amounts)

(Unaudited)

Three Months Ended March 31,

As Originally Announced

As Revised

2012

Adjustments

2012

2011

Interest and fees on loans receivable

$

5,330

$

-

$

5,330

$

6,384

Interest on securities

148

-

148

181

Other interest income

16

-

16

9

Total interest income

5,494

-

5,494

6,574

Interest on deposits

975

-

975

1,239

Interest on borrowings

833

-

833

989

Total interest expense

1,808

-

1,808

2,228

Net interest income before provision for loan losses

3,686

-

3,686

4,346

Provision for loan losses

427

532

959

1,240

Net interest income after provision for loan losses

3,259

(532

)

2,727

3,106

Non-interest income:

Service charges

153

-

153

182

Net losses on mortgage banking activities

(166

)

-

(166

)

(25

)

Net gains (losses) on sales of REO

272

140

412

(15

)

Other

24

-

24

39

Total non-interest income

283

140

423

181

Non-interest expense:

Compensation and benefits

1,589

-

1,589

1,809

Occupancy expense, net

287

-

287

354

Information services

213

-

213

227

Professional services

108

-

108

168

Provision for losses on loans held for sale

503

(505

)

(2

)

20

Provision for losses on REO

160

(179

)

(19

)

80

FDIC insurance

217

-

217

283

Office services and supplies

109

-

109

142

Other

419

-

419

419

Total non-interest expense

3,605

(684

)

2,921

3,502

Earnings (loss) before income taxes

(63

)

292

229

(215

)

Income tax expense (benefit)

(3

)

78

75