Broadway Financial Corporation Announces Results for First Quarter 2024
During the first quarter of 2024, net interest income decreased by
First Quarter 2024 Highlights:
-
Total interest income increased for the twelfth consecutive quarter since the merger of
CFBanc Corporation with the Company onApril 1, 2021 (the “Merger”). During the first quarter of 2024, interest income increased by$3.6 million , or 32.4%, compared to the first quarter of 2023, and by$2.3 million , or 18.5%, compared to the fourth quarter of 2023. - The yield on average interest-earning assets increased by 46 basis points to 4.45% for the first quarter of 2024, compared to 3.99% for the first quarter of 2023. This increase was driven largely by growth in the yield on average loan balances of 41 basis points during that period.
-
Total gross loans receivable increased by
$46.2 million , or 5.2%, to$934.8 million atMarch 31, 2024 , compared to$887.6 million atDecember 31, 2023 . Total loans have grown 43.7% since theUnited States Department of the Treasury invested$150 million in Broadway’s preferred stock pursuant to the Emergency Capital Investment Program (“ECIP”) inJune 2022 , and 57.9% since the Merger. -
The Bank had only one non-performing loan, totaling
$401 thousand , atMarch 31, 2024 and total delinquencies remained at less than$800 thousand . -
Total deposits increased by
$12.9 million during the first quarter of 2024 to$695.5 million , representing growth of$38 million , or 5.8%, since the first quarter of 2023.
Chief Executive Officer,
“Notwithstanding the growth in our balance sheet and interest income, our overall performance has continued to suffer from higher costs of deposits and borrowings, which are a direct result of the rate hikes implemented by the Federal Reserve.”
“In addition, our results for the first quarter of 2024 were adversely affected by substantial non-recurring costs of almost
“Also, results for the first quarter of 2024 were impacted by the investments in people that we have been undertaking over the past twelve months to support our operational capabilities to professionally manage our business, improve our efficiency, and promote our continued growth.”
“We remain optimistic in our ability to continue growing and improving profitability and are focused on serving low-to-moderate income communities within our target markets. The Company has a strong base of equity capital to execute its plans, which is being complemented by the increase in the Bank’s deposits during each of the past three consecutive quarters. At the end of
“Finally, I wish to thank our employees for their tremendous dedication to our mission and operating performance, and our stockholders and depositors for their continued support of our broader strategy and growth. Your efforts and financial support are fundamental to our ability to expand, serve, and support our communities, customers, and broader stakeholders.”
Net Interest Income
Net interest income before loan loss provision for the first quarter of 2024 totaled
The following table sets forth the average balances, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances. The yields set forth below include the effect of deferred loan fees, and discounts and premiums that are amortized or accreted to interest income or expense.
For the Three Months Ended |
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|
|
|
|||||||||||||||||||
(Dollars in thousands) |
|||||||||||||||||||||
Average
|
|
Interest |
|
Average
|
|
Average
|
|
Interest |
|
Average
|
|||||||||||
Assets |
|
|
|
|
|
|
|||||||||||||||
Interest-earning assets: |
|||||||||||||||||||||
Interest-earning deposits |
$ |
99,103 |
|
$ |
1,344 |
|
5.42 |
% |
|
$ |
17,044 |
|
$ |
119 |
|
2.79 |
% |
||||
Securities |
|
305,615 |
|
|
|
2,075 |
|
|
2.72 |
% |
|
|
328,767 |
|
|
|
2,180 |
|
|
2.65 |
% |
Loans receivable (1) |
|
909,965 |
|
|
|
11,129 |
|
|
4.89 |
% |
|
|
762,669 |
|
|
|
8,535 |
|
|
4.48 |
% |
FRB and FHLB stock (2) |
|
13,733 |
|
|
|
245 |
|
|
7.14 |
% |
|
|
10,665 |
|
|
|
209 |
|
|
7.84 |
% |
Total interest-earning assets |
|
1,328,416 |
|
|
$ |
14,793 |
|
|
4.45 |
% |
|
|
1,119,145 |
|
|
$ |
11,174 |
|
|
3.99 |
% |
Non-interest-earning assets |
|
52,561 |
|
|
|
|
|
|
|
67,947 |
|
|
|
|
|
||||||
Total assets |
$ |
1,380,977 |
|
|
|
|
|
|
$ |
1,187,092 |
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market deposits |
$ |
125,704 |
|
|
$ |
1,444 |
|
|
4.59 |
% |
|
$ |
134,047 |
|
|
$ |
771 |
|
|
2.30 |
% |
Savings deposits |
|
59,056 |
|
|
|
102 |
|
|
0.69 |
% |
|
|
61,317 |
|
|
|
13 |
|
|
0.08 |
% |
Interest checking and other demand deposits |
|
227,504 |
|
|
|
143 |
|
|
0.25 |
% |
|
|
239,024 |
|
|
|
77 |
|
|
0.13 |
% |
Certificate accounts |
|
163,116 |
|
|
|
1,110 |
|
|
2.72 |
% |
|
|
147,260 |
|
|
|
442 |
|
|
1.20 |
% |
Total deposits |
|
575,380 |
|
|
|
2,799 |
|
|
1.95 |
% |
|
|
581,648 |
|
|
|
1,303 |
|
|
0.90 |
% |
FHLB advances |
|
209,299 |
|
|
|
2,598 |
|
|
4.97 |
% |
|
|
145,201 |
|
|
|
1,454 |
|
|
4.01 |
% |
Bank Term Funding Program borrowing |
|
100,000 |
|
|
|
1,203 |
|
|
4.81 |
% |
|
|
- |
|
|
|
- |
|
|
- |
% |
Other borrowings |
|
77,601 |
|
|
|
669 |
|
|
3.45 |
% |
|
|
69,618 |
|
|
|
143 |
|
|
0.82 |
% |
Total borrowings |
|
386,900 |
|
|
|
4,470 |
|
|
4.62 |
% |
|
|
214,819 |
|
|
|
1,597 |
|
|
2.97 |
% |
Total interest-bearing liabilities |
|
962,280 |
|
|
$ |
7,269 |
|
|
3.02 |
% |
|
|
796,467 |
|
|
$ |
2,900 |
|
|
1.46 |
% |
Non-interest-bearing liabilities |
|
137,035 |
|
|
|
|
|
|
|
109,955 |
|
|
|
|
|
||||||
Stockholders’ equity |
|
281,662 |
|
|
|
|
|
|
|
280,670 |
|
|
|
|
|
||||||
Total liabilities and stockholders’ equity |
$ |
1,380,977 |
|
|
|
|
|
|
$ |
1,187,092 |
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
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Net interest rate spread (3) |
|
|
$ |
7,524 |
|
|
1.43 |
% |
|
|
|
$ |
8,274 |
|
|
2.54 |
% |
||||
Net interest rate margin (4) |
|
|
|
|
2.27 |
% |
|
|
|
|
|
2.96 |
% |
||||||||
Ratio of interest-earning assets to interest-bearing liabilities |
|
138.05 |
% |
|
|
|
|
|
140.51 |
% |
(1) |
Amount is net of deferred loan fees, loan discounts and loans in process, and includes deferred origination costs and loan premiums. |
|
(2) |
FHLB is |
|
(3) |
Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
|
(4) |
Net interest rate margin represents net interest income as a percentage of average interest-earning assets. |
Credit Loss Provision
For the three months ended
Non-interest Income
Non-interest income for the first quarter of 2024 totaled
Non-interest Expense
Total non-interest expense was
The increase in compensation and benefits expense was primarily attributable to the addition of full-time employees during 2023 in various production and administrative positions as part of the Bank’s efforts to expand it operational capabilities to grow its balance sheet and fulfill the intersecting lending objectives of the Company’s mission and the ECIP funding received in
Income Taxes
Income taxes are computed by applying the statutory federal income tax rate of 21% and the combined
Balance Sheet Summary
Total assets decreased by
Loans held for investment, net of the ACL, increased by
Deposits increased by
Total borrowings decreased by
Stockholders’ equity was
About
About the City First Branded Family
Stockholders, analysts, and others seeking information about the Company are invited to write to:
Cautionary Statement Regarding Forward-Looking Information
This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations or financial condition, business strategy and plans and objectives of management for future operations and capital allocation and structure, are forward-looking statements. Forward‑looking statements typically include the words “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” “poised,” “optimistic,” “prospects,” “ability,” “looking,” “forward,” “invest,” “grow,” “improve,” “deliver” and similar expressions, but the absence of such words or expressions does not mean a statement is not forward-looking. These forward‑looking statements are subject to risks and uncertainties, including those identified below, which could cause actual future results to differ materially from historical results or from those anticipated or implied by such statements. The following factors, among others, could cause future results to differ materially from historical results or from those indicated by forward‑looking statements included in this press release: (1) the level of demand for mortgage and commercial loans, which is affected by such external factors as general economic conditions, market interest rate levels, tax laws, and the demographics of our lending markets; (2) the direction and magnitude of changes in interest rates and the relationship between market interest rates and the yield on our interest‑earning assets and the cost of our interest‑bearing liabilities; (3) the rate and amount of loan losses incurred and projected to be incurred by us, increases in the amounts of our nonperforming assets, the level of our loss reserves and management’s judgments regarding the collectability of loans; (4) changes in the regulation of lending and deposit operations or other regulatory actions, whether industry-wide or focused on our operations, including increases in capital requirements or directives to increase allowances for credit losses or make other changes in our business operations; (5) legislative or regulatory changes, including those that may be implemented by the current administration in
Forward-looking statements in this press release speak only as of the date they are made, and we undertake no obligation, and do not intend, to update these forward-looking statements to reflect events or circumstances occurring after the date of this press release, except to the extent required by law. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
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Investor Relations
Investor.relations@cityfirstbroadway.com
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