-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QURoXFuM+4QA01tiQk7q8gc4ED3/ImFt+PVrbJB2jdyhtrUGGLrUy/PN0k/TM1di lPk6Q+tjChn7P4GjeyM35g== /in/edgar/work/20000814/0001092388-00-000567/0001092388-00-000567.txt : 20000921 0001092388-00-000567.hdr.sgml : 20000921 ACCESSION NUMBER: 0001092388-00-000567 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20000814 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BROADWAY FINANCIAL CORP \DE\ CENTRAL INDEX KEY: 0001001171 STANDARD INDUSTRIAL CLASSIFICATION: [6035 ] IRS NUMBER: 954547287 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-27464 FILM NUMBER: 700390 BUSINESS ADDRESS: STREET 1: 4800 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90010 BUSINESS PHONE: 2136341700 MAIL ADDRESS: STREET 1: 4800 WILSHIRE BLVD CITY: LOS ANGELES STATE: CA ZIP: 90010 10QSB 1 0001.txt FORM 10QSB 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, 2000 [ ] 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 (Exact Name of Small Business Issuer as Specified in its Charter) DELAWARE 95-4547287 -------- ---------- (State of Incorporation) (IRS Employer Identification No.) 4800 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90010 - ------------------------------------------------------------------------------- (Address of Principal Executive Offices) (323) 634-1700 - ------------------------------------------------------------------------------- (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: 901,333 shares of the Company's Common Stock, par value $0.01 per share, were issued and outstanding as of July 21, 2000. Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x] 1 INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Balance Sheets (unaudited) as of June 30, 2000 and December 31, 1999 3 Consolidated Statements of Operations (unaudited) for the three months and six months ended June 30, 2000 and June 30, 1999 4 Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2000 and June 30, 1999 5 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults on Senior Securities 13 Item 4. Submission of Matters to a Vote of Security Holders 13 Item 5. Other Information 13 Item 6 Exhibits and Report on Form 8-K 14 2 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS) (UNAUDITED)
JUNE 30, 2000 DECEMBER 31, 1999 ------------------- ------------------------ ASSETS: Cash $ 4,156 $ 3,135 Investment securities held to maturity 10,623 10,623 Mortgage-backed securities held to maturity 11,802 13,210 Loans receivable, net 125,726 126,871 Loans receivable held for sale, at lower of cost or fair value -- 2,458 Accrued interest receivable 1,060 1,013 Real estate acquired through foreclosure, net 297 515 Investments in capital stock of Federal Home Loan Bank, at cost 1,272 1,229 Office properties and equipment, net 6,394 6,533 Other assets 783 717 ------------------- ------------------------ Total assets $ 162,113 $ 166,304 =================== ======================== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $ 131,462 $ 133,984 Advances from Federal Home Loan Bank 15,100 16,900 Advance payments by borrowers for taxes and insurance 169 192 Other liabilities 1,479 1,427 ------------------- ------------------------ Total liabilities 148,210 152,503 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, 2000 and December 31, 1999 1 1 Common stock, $.01 par value, authorized 3,000,000 shares; issued and outstanding 901,333 shares at June 30, 2000 and 932,494 shares 10 10 at December 31, 1999 Additional paid-in capital 9,692 9,674 Retained earnings-substantially restricted 5,098 4,809 Treasury stock, at cost - 60,402 shares at June 30, 2000 (554) (318) and 29,241 shares at December 31, 1999 Unearned Employee Stock Ownership Plan shares (344) (375) ------------------- ------------------------ Total stockholders' equity 13,903 13,801 ------------------- ------------------------ Total liabilities and stockholders' equity $ 162,113 $ 166,304 =================== ========================
See Notes to Unaudited Consolidated Financial Statements 3 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES Consolidated Statements of Operations (Dollars in thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ------------------------ ------------------------ 2000 1999 2000 1999 ---------- ----------- ---------- ----------- Interest on loans receivable $ 2,682 $ 2,349 $ 5,368 $ 4,604 Interest on investment securities held-to-maturity 158 149 323 317 Interest on mortgage-backed securities held-to-maturity 190 234 389 438 Other interest income 26 14 42 29 ---------- ----------- ---------- ----------- Total interest income 3,056 2,746 6,122 5,388 Interest on deposits 1,182 1,075 2,327 2,158 Interest on borrowings 195 122 440 179 ---------- ----------- ---------- ----------- Total interest expense 1,377 1,197 2,767 2,337 ---------- ----------- ---------- ----------- Net interest income before provision for loan losses 1,679 1,549 3,355 3,051 Provision for loan losses 90 75 180 150 ---------- ----------- ---------- ----------- Net interest income after provision for loan losses 1,589 1,474 3,175 2,901 Noninterest income: Service charges 137 147 261 266 Loss on loans receivable held for sale (110) (116) (116) (116) Other 35 15 53 27 ---------- ----------- ---------- ----------- Total noninterest income 62 46 198 177 ---------- ----------- ---------- ----------- Noninterest expense: Compensation and benefits 747 649 1,415 1,426 Occupancy expense, net 315 340 605 597 Advertising and promotional expense 51 55 84 101 Professional services 72 151 158 228 Real estate operations, net (54) 13 (42) 24 Contracted security services 39 40 77 78 Telephone and postage 40 36 85 75 Stationary, printing and supplies 40 34 67 64 Other 16 314 259 450 ---------- ----------- ---------- ----------- Total noninterest expense 1,266 1,632 2,708 3,043 ---------- ----------- ---------- ----------- Earnings before income taxes 385 (112) 665 35 Income taxes 157 (47) 270 13 ---------- ----------- ---------- ----------- Net earnings $ 228 $ (65) $ 395 $ 22 ========== =========== ========== =========== Earnings applicable to common shareholder: Net earnings 228 (65) 395 22 Dividends paid on preferred stock (7) (7) (14) (14) ---------- ----------- ---------- ----------- $ 221 $ (72) $ 381 $ 8 ========== =========== ========== =========== Earnings per share-basic $ 0.24 ($ 0.08) $ 0.41 $ 0.01 Earnings per share-diluted $ 0.24 ($ 0.08) $ 0.41 $ 0.01 Dividend declared per share-common stock $ 0.05 $ 0.05 $ 0.10 $ 0.10
See Notes to Unaudited Consolidated Financial Statements 4 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (DOLLARS IN THOUSANDS) (UNAUDITED)
Six months ended June 30, 2000 1999 ----------- --------- CASH FLOWS FROM OPERATING ACTIVITIES Net earnings $395 $22 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Depreciation 179 186 Amortization of premium on loans purchased 2 59 Amortization of net deferred loan origination fees (36) (3) Amortization of discounts and premium on securities 63 56 Amortization of deferred compensation 49 53 Gain on sale of real estate acquired through foreclosure (59) - Loss on sale of loans receivable held for sale 116 116 Gain on sale of office properties and equipment - (2) Provision for loan losses 180 150 Provision for write-downs and losses on real estate acquired through foreclosure - 6 Loans originated for sale, net of refinances (3,055) (8,461) Proceeds from sale of loans receivable held for sale 5,397 1,205 Changes in operating assets and liabilities: Accrued interest receivable (47) (104) Other assets (66) (240) Other liabilities 37 (76) ----------- --------- Total adjustments 2,760 (7,055) ----------- --------- Net cash provided by (used in) operating activities 3,155 (7,033) ----------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Loans originated, net of refinances (6,234) (16,858) Principal repayment on loans 7,008 11,165 Proceeds from sale of office properties and equipment - 3 Purchases of investment securities held-to-maturity - (4,500) Purchases of mortgage-backed securities held-to-maturity - (4,595) Proceeds from maturities of investment securities held-to-maturity - 2,500 Proceeds from maturities of mortgage-backed securities held-to-maturity 1,345 1,902 Purchase of Federal Home Loan stock (43) (36) Capital expenditures for office properties and equipment (40) (865) Proceeds from sale of real estate acquired through foreclosure 517 - ----------- --------- Net cash provided by (used in) investing activities 2,553 (11,284) ----------- ---------
See Notes to Unaudited Consolidated Financial Statements 5 BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) (DOLLARS IN THOUSANDS) (UNAUDITED)
Six months ended June 30, 2000 1999 ----------- --------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in deposits (2,522) 2,735 Increase (decrease) in advances from Federal Home Loan Bank (1,800) 13,500 Dividends paid (106) (107) Increase in treasury stock (236) - Decrease in advances by borrowers for taxes and insurance (23) (42) ----------- --------- Net cash provided by (used in) financing activities (4,687) 16,086 ----------- --------- Net increase (decrease) in cash and cash equivalents 1,021 (2,231) Cash and cash equivalents at beginning of period 3,135 7,205 ----------- --------- Cash and cash equivalents at end of period $ 4,156 $ 4,974 =========== ========= SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 2,727 $ 2,291 Cash paid for income taxes 255 315 =========== ========= SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES Transfers of real estate acquired through foreclosure from loans receivable 225 500
See Notes to Unaudited Consolidated Financial Statements 6 BROADWAY FINANCIAL CORPORATION NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2000 1. In the opinion of management of Broadway Financial Corporation (the "Company"), the preceding unaudited consolidated financial statements contain all material adjustments, necessary to present fairly the consolidated financial position of the Company at June 30, 2000 and the results of its operations for the three months and six months ended June 30, 2000 and 1999, and its cash flows for the six months ended June 30, 2000 and 1999. These consolidated financial statements do not include all disclosures associated with the Company's consolidated annual financial statements included in its annual report on Form 10-KSB for the year ended December 31, 1999 and, accordingly, should be read in conjunction with such audited statements. The results of operations for the three and six months ended June 30, 2000 are not necessarily indicative of the results to be expected for the full year. 2. RECENT ACCOUNTING PRONOUNCEMENTS In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities". SFAS No. 133 establishes accounting and reporting standards for derivative instruments and hedging activities. SFAS No. 133 is effective for fiscal years beginning after June 15, 2000. In June 1999, the FASB issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities - Deferral of the Effective Date of FASB Statement No. 133", which extended the effective date of the fiscal years beginning after June 15, 2000. In June 2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative Instruments and Certain Hedging Activities", which also amends SFAS No. 133. The Company has not adopted early implementation and management does not believe that the implementation will have a material impact on the Company's financial condition or results of operations. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL Broadway Financial Corporation ("the Company") is primarily engaged in the savings and loan business through its wholly owned subsidiary, Broadway Federal Bank, f.s.b. ("Broadway Federal" or "the Bank"). Broadway Federal's business is that of a financial intermediary and consists primarily of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to make mortgage loans secured by residential real estate located in Southern California. At June 30, 2000, Broadway Federal operated five retail banking offices including a loan processing center, in Southern California. Broadway Federal is subject to significant competition from other financial institutions, and is also subject to regulation by federal agencies and undergoes periodic examinations by those regulatory agencies. The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Broadway Federal and BankSmart, Inc. All significant inter-company balances and transactions have been eliminated in consolidation. 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 paid 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 non-interest 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. The Company's management considers its operations to be segregated into two operating segments - (i) banking, through Broadway Federal and (ii) retail services, through its newly established subsidiary, BankSmart, Inc. ("BankSmart"). BankSmart currently includes a postal and copy center. In August 1999, BankSmart opened its first center inside Broadway Federal's Exposition Park branch. During the second quarter of 2000 BankSmart opened a post office inside Broadway Federal's Midtown branch. As of June 30, 2000, the operations of BankSmart are insignificant to the operations of the Company and, as such, do not constitute a separately reportable segment, under applicable accounting standards. 8 COMPARISON OF OPERATING RESULTS FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000 AND JUNE 30, 1999 GENERAL The Company recorded net earnings of $228,000 and $395,000, respectively, or $0.24 and $0.41 per diluted share, for the three months and six months ended June 30, 2000, as compared to a net loss of $65,000, and net earnings of $22,000, respectively, or ($0.08) and 0.01 per diluted share, for the three months and six months ended June 30, 1999. The increase in net earnings from 1999 to 2000 resulted primarily from higher net interest income and lower non-interest expense. INTEREST INCOME Interest income increased by $310,000 and $734,000, respectively, during the three months and six months ended June 30, 2000 as compared to the same periods in 1999. The increases were primarily the result of an increase in average assets of $8.7 million and $14.0 million to $163.8 million and $165.7 million, respectively, for the three months and six months ended June 30, 2000, from $155.0 million and $151.6 million, respectively, for the same periods in 1999. The increase in average assets during the three months and six months ended June 30, 2000 was funded by an increase in savings deposits and advances from the Federal Home Loan Bank. The increase in average assets primarily resulted from the Company's continued focus on increasing its loan portfolio reduced by a small decrease in its investment in mortgage-backed securities. INTEREST EXPENSE Interest expense increased by $180,000 and $430,000, respectively, during the three months and six months ended June 30, 2000 as compared to the same periods in 1999. The increase in interest expense is due to an increase in interest on deposits and on borrowings. The increases in interest on deposits were due to an increase in average deposits of $5.4 million and $6.1 million, to $134.5 million, for both the three months and six months ended June 30, 2000 from $129.0 million and $128.4 million, respectively, during the same periods in 1999. The increase in interest on deposits also reflected by the current interest rate environment as the average cost of deposits increased 7-basis points and 1-basis point, respectively, from 3.42% and 3.44% for the three months and six months ended June 30, 1999 to 3.49% and 3.45% for the same periods in 2000. Average borrowings also increased by $2.7 million and $7.3 million for the three months and six months ended June 30, 2000 as compared to the same periods in 1999. PROVISION FOR LOAN LOSSES The provision for loan losses increased by $15,000 and $30,000, from $75,000 and $150,000, respectively, for three months and six months ended June 30, 1999 to $90,000 and $180,000, respectively, for the same periods in 2000. Total non-performing assets, consisting of non-accrual loans and real estate acquired through foreclosure ("REO"), decreased by $1.3 million, from $2.1 million at June 30, 1999 to $880,000 at June 30, 2000. The decrease resulted from a decrease in non-accrual loans of $834,000 and a 9 decrease in REO of $433,000. As a percentage of total assets, non-performing assets were 0.54% at June 30, 2000, compared to 1.33% and 1.15% at March 31, 1999 and December 31, 1999, respectively. Since December 1999, non-accrual loans decreased by $812,000, to $583,000, and REO decreased by $218,000, to $297,000. Non-accrual loans at June 30, 2000 included four loans totaling $275,000 secured by one- to four-unit properties, two loans totaling $289,000 secured by multi-family properties. and one unsecured loan for $19,000. REO at June 30, 2000 included one multifamily property for $216,000 and one parcel of land having a net balance of $82,000. As of June 30, 2000 the Company's allowance for loan losses totaled $1.5 million, representing a $30,000 increase from the balance at December 31, 1999. The allowance for loan losses represents 1.15% of gross loans at June 30, 2000 compared to 1.09% at December 31, 1999. The allowance for loan losses was 251.97% of non-accrual loans at June 30, 2000, compared to 103.14% at December 31, 1999. Loan charge-offs for the six months ended June 30, 2000 totaled $149,000, consisting of a $132,000 charge-off on a multi-family loan secured by a 15-unit property and a $17,000 charge-off on a loan secured by a one-to four- unit property, both of which were sold at foreclosure during the first quarter. Management believes that the allowance for loan losses is adequate to cover inherent losses in its loan portfolio as of June 30, 2000, but there can be no assurance that actual losses will not exceed the estimated amounts. In addition, the Office of Thrift Supervision and the Federal Deposit Insurance Corporation periodically review the Company's allowance for loan losses as an integral part of their examination process. These agencies may require the Company to increase the allowance for loan losses based on their judgements of the information available to them at the time of the examination. NON-INTEREST EXPENSE Non-interest expense decreased by $366,000 and $335,000, respectively, during the three-month and six-month periods ended June 30, 2000 as compared to the same periods in 1999. The decreases in non-interest expense were due primarily to decreases in professional services, real estate operations and other non-interest expense. Professional services decreased by $79,000 and $70,000, respectively, during the three months and six months ended June 30, 2000, as compared to the same periods in 1999. The decreases were principally attributable to a reduction in legal expenses. Real estate operations decreased by $67,000 and $66,000, respectively, for three months and six months ended June 30, 2000, as compared to the same periods in 1999. The decreases in expense were primarily due to gains on sales of real estate acquired through foreclosure during the second quarter of the current year. Other non-interest expense decreased by $298,000 and $191,000 for the three-month and six-month periods ended June 30, 2000, as compared to the same periods during 1999. The decreases were primarily caused by a reduction in costs associated with litigation settlements. 10 INCOME TAXES The Company's effective tax rate was approximately 41% for both the three months and six months ended June 30, 2000 and June 30, 1999. Broadway Federal computed income taxes by applying the statutory federal income tax rate of 34% and California income tax rate of 10.84% to earnings before income taxes. COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2000 AND DECEMBER 31, 1999 Total assets at June 30, 2000 were $162.1 million compared to $166.3 million at December 31, 1999, representing a decrease of $4.2 million. Net loans receivable decreased from $126.9 million at December 31, 1999 to $125.7 million at June 30, 2000 as a result of $9.3 million in new loan originations, offset by $7.0 million in principal repayments, $225,000 in loans transferred to foreclosure, $180,000 of provision for loan losses and sales of $3.0 million of the loans originated. Loans held for sale at June 30, 2000 was zero as compared to $2.5 million at December 31, 1999. During the period, loans originated that were classified as held-for-sale totaled $3.0 million and loans sold totaled $5.5 million. Total liabilities at June 30, 2000 were $148.2 million compared to $152.5 million at December 31, 1999. The $4.3 million decrease was primarily attributable to the decrease in deposits, advances from Federal Home Loan Bank and advance payments by borrowers for taxes and insurance, partially offset by an increase in other liabilities. Total capital at June 30, 2000 was $13.9 million compared to $13.8 million at December 31, 1999. The $102,000 increase was primarily due to net earnings for the period and payments received on the ESOP loan, offset by common stock repurchased and cash dividends declared. Common stock repurchased totaled $236,000 since December 31, 1999. LIQUIDITY, CAPITAL RESOURCES AND MARKET RISK Sources of liquidity and capital for the Company on a stand-alone basis include distributions from the Bank and borrowings such as securities sold under agreements to repurchase. Dividends and other capital distributions from the Bank are subject to regulatory restrictions. The Bank's primary sources of funds are Bank deposits, principal and interest payments on loans and, to a lesser extent, proceeds from the sale of loans and advances from the FHLB. While maturities and scheduled amortization of Bank loans are predictable sources of funds, deposit flows and mortgage prepayments are greatly influenced by general interest rates, economic conditions, and competition. Broadway Federal's average liquidity ratios were 11.14% and 11.52%, respectively, for the three-month and six-month periods ended June 30, 2000 as compared to 20.52% and 20.93% for the same periods during 1999. The decreases are due to the fact that at June 30, 2000 liquid assets, which are a component of the liquidity calculation, excluded $11.2 million in assets pledged to secure deposits and borrowings. At June 30, 1999 there were no excluded pledged assets. Management currently maintains its liquidity ratio in a range of 10% to 12% as part of its investment strategy. The Bank's liquidity ratio included qualifying unpledged marketable securities being held to maturity. 11 The Bank has other sources of liquidity in the event that a need for additional funds arises, including FHLB advances to the Bank. At June 30, 2000 and 1999 FHLB advances totaled $15.1 million and $18.0 million, respectively. Broadway Federal had borrowed from the FHLB to meet its short-term loan funding needs. Other sources of liquidity include principal repayments on mortgage-backed securities. As of June 30, 2000 there has been no material change in the Company's interest rate sensitivity. Information concerning the Company's interest rate sensitivity is contained in conjunction with the financial statements and notes thereto contained in the Company's annual report for the year ended December 31, 1999. REGULATORY CAPITAL The OTS capital regulations include three separate minimum capital requirements for savings institutions that are subject to OTS supervision. First, the tangible capital requirement mandates that the Bank's stockholder's equity, less intangible assets, be at least 1.50% of adjusted total assets as defined in the capital regulations. Second, the core capital requirement currently mandates core capital (tangible capital) be at least 4.00% of adjusted total assets as defined in the capital regulations. Third, the risk-based capital requirement presently mandates that core capital plus supplemental capital as defined by the OTS be at least 8.00% of risk-weighted assets as prescribed in the capital regulations. The capital regulations assign specific risk weightings to all assets and off-balance sheet items. Broadway Federal was in compliance with all capital requirements in effect at June 30, 2000, and meets all standards necessary to be considered "well-capitalized" under the prompt corrective action regulations adopted by the OTS pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991 (FDICIA). The following table reflects the required and actual regulatory capital ratios of Broadway Federal at the date indicated:
FIRREA FDICIA Actual Regulatory Capital Ratios Minimum "Well-capitalized" At June 30, for Broadway Federal Requirement Requirement 2000 - ------------------------------------- ------------------ -------------------------- -------------------- Tangible capital 1.50% N/A 7.45% Core capital 4.00% 5.00% 7.45% Risk-based capital 8.00% 10.00% 12.74% Tier 1 Risk-based capital N/A 6.00% 11.51%
12 PART II. OTHER INFORMATION Item 1. LEGAL PROCEEDINGS None Item 2. CHANGES IN SECURITIES None Item 3. DEFAULTS ON SENIOR SECURITIES None Item 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS The Annual Meeting of Stockholders of the Company was held on June 21, 2000 for the following purposes: (a) To elect three directors to serve until the Annual Meeting to be held in the year 2003 and until their successors are elected and have been qualified. The Stockholders re-elected Messrs. Paul C. Hudson, Kellogg Chan and Larkin Teasley to serve as directors. The number of votes FOR and WITHHELD for each of the directors is detailed below: Mr. Paul C. Hudson For 696,261 Withheld 5,267 Mr. Kellogg Chan For 695,640 Withheld 5,888 Mr. Larkin Teasley For 696,288 Withheld 5,240 (b) To ratify the appointment of KPMG LLP as the Company's independent auditing firm for 2000. The Stockholders ratified the appointment of KPMG LLP as the Company's independent auditors based upon total votes FOR of 700,238, AGAINST of 74 and total ABSTENTIONS of 1,216. Item 5. OTHER INFORMATION None 13 Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits Exhibit 27.1 - Financial Data Schedule (b) Reports on Form 8-K None 14 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 11, 2000 By: /s/ PAUL C. HUDSON -------------------------------------- Paul C. Hudson President and Chief Executive Officer By: /s/ BOB ADKINS -------------------------------------- Bob Adkins Chief Financial Officer 15 EX-27.1 2 0002.txt FINANCIAL DATA SCHEDULE
9 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE PRECEDING FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR DEC-31-2000 JAN-01-2000 JUN-30-2000 4,156 109 0 0 0 23,697 23,033 127,195 (1,469) 162,113 131,462 15,100 1,648 0 0 552 9,151 (898) 162,113 5,368 712 42 6,122 2,327 2,767 3,355 180 0 0 665 665 0 0 395 0.41 0.41 0.082 583 0 0 0 (1,439) 149 0 (1,469) (1,469) 0 382
-----END PRIVACY-ENHANCED MESSAGE-----