Broadway Financial Reports Strong Growth in Q3 Earnings Release
Broadway Financial Corporation Reports Q3 2024 Results
Broadway Financial Corporation (NASDAQ: BYFC) has announced its financial results for the recently completed third quarter of 2024. The company, parent to City First Bank, has experienced a notable increase in net income, marking a significant improvement compared to the previous year.
Net Income Growth
For the third quarter of 2024, Broadway reported net income of $522 thousand, showcasing a substantial increase of $431 thousand from the net income of $91 thousand recorded during the same period in 2023. However, net loss attributable to common shareholders amounted to $228 thousand after accounting for preferred dividends, contrasting starkly with the net income of $91 thousand reported last year.
Analysis of Earnings Per Share
The diluted loss per common share for the third quarter was reported at $0.03, compared to an earning of $0.01 per share in Q3 2023. The current figures for diluted losses account for preferred dividends set at $0.09 per share. This shift highlights the financial environment and expenses the company is currently navigating.
Interest Income and Loan Portfolio Growth
Broadway Financial showed robust growth in net interest income, which rose to $8.3 million—a 23% increase when compared to $6.8 million in the similar quarter of the previous year. This increase is primarily attributed to a heightened interest income of $4.2 million, stemming from increased earnings on loans and deposits. However, corresponding interest expenses saw an uptick of $2.7 million due to heightened costs of funding and deposits.
Loan Portfolio Increase
The total gross loans receivable saw an impressive rise of $87.5 million, equating to a 9.9% growth, resulting in a total of $975.3 million in loans by the end of September 2024. This growth trend underscores Broadway’s commitment to expanding its lending capabilities.
Non-interest Income and Operations
In addition to interest income, non-interest income for the quarter stood at $416 thousand compared with $331 thousand for the same quarter last year, indicating a healthy growth in operational income.
Total non-interest expense came to $7.6 million, increasing by 8.8% from the $7.0 million recorded in the prior year, largely influenced by expenses linked to professional and accounting services. This investment is associated with ongoing improvements in internal controls.
Credit Losses and Asset Quality
The company recorded a provision for credit losses of $399 thousand for Q3 2024, contrasting with a recovery of $2 thousand for the previous year's quarter. The increase is primarily driven by the expansion of the loan portfolio.
The allowance for credit losses reached $8.5 million by September 30, 2024, a rise from $7.3 million as of the end of 2023. This increase reflects the institution's focus on managing credit risk amid a growing loan base.
Balance Sheet Summary
As of September 30, 2024, total assets reflected a slight decrease of $2.3 million compared to the end of 2023, largely due to a dip in the securities available-for-sale and cash equivalents, although there was a notable increase in net loans that cushioned the impact.
Deposits fell to $672.2 million from $682.6 million earlier in the year, attributed to declines in liquid deposits and savings accounts. Meanwhile, borrowings increased marginally, reflecting the bank’s strategic decisions to manage liquidity effectively.
Conclusion and Future Outlook
Broadway Financial’s leadership indicated optimism regarding the ongoing growth and recovery strategies. CEO Brian Argrett expressed gratitude toward team members and stakeholders, reinforcing the bank's mission to enhance financial services to communities.
About Broadway Financial Corporation
Broadway Financial Corporation operates through City First Bank, a banking institution dedicated to serving low-to-moderate income neighborhoods, promoting community development through tailored financial products and services.
Frequently Asked Questions
What were Broadway Financial's key financial results for Q3 2024?
Broadway Financial reported a net income of $522 thousand, an increase compared to the previous year, with total net interest income reaching $8.3 million.
How has the loan portfolio changed?
The loan portfolio grew by $87.5 million to total $975.3 million, indicating a 9.9% increase in gross loans.
What is Broadway Financial's approach to credit losses?
Broadway recorded a provision for credit losses of $399 thousand to manage risks associated with its expanding loan portfolio.
How has the company managed its expenses?
Total non-interest expense increased to $7.6 million, primarily due to investments in professional services aimed at strengthening internal controls.
What is the strategic goal of Broadway Financial?
The company's goal is to enhance service delivery to low-to-moderate income communities through expanded lending and financial services.
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