Broadway Financial Corporation Announces Results for 3rd Quarter 2013

  Broadway Financial Corporation Announces Results for 3rd Quarter 2013

               Improved Balance Sheet Reflects Recapitalization

Business Wire

LOS ANGELES -- November 14, 2013

Broadway Financial Corporation (the “Company”) (NASDAQ Capital Market: BYFC),
parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today reported
net income of $584 thousand for the third quarter ended September 30, 2013,
which reflected a gain of $1.2 million on the restructuring of debt, compared
to a net loss of $613 thousand for the comparable period in 2012. After
accumulated dividends and discount accretion on preferred stock, the income
available to common stockholders was $457 thousand, or $0.05 per diluted
common share, for the third quarter of 2013 compared to a loss available to
common stockholders of $900 thousand, or $(0.48) per diluted common share, for
the third quarter of 2012.

For the nine months ended September 30, 2013, the Company reported a net loss
of $260 thousand compared to net income of $1.2 million for the same period in
2012, which reflected a gain of $2.5 million from the sale of our former
headquarters building. Loss available to common stockholders for the nine
months ended September 30, 2013 was $1.0 million, or $(0.23) per diluted
common share, compared to earnings of $380 thousand, or $0.21 per diluted
common share, for the same period in 2012.

Chief Executive Officer, Wayne Bradshaw stated, “During the third quarter we
completed the recapitalization of the Company, which represents a major
milestone in our efforts to strengthen both the Company and the Bank and
position the organization for future growth. As a result of the
recapitalization, we simplified the Company’s capital structure and reduced
the Company’s liabilities by over $7.3 million, including a reduction of the
principal amount of the Company’s senior debt by $2.6 million, elimination of
all accrued interest of $1.8 million on our senior debt and all cumulative
dividends of $2.6 million on our preferred stock, and reduction of other
liabilities by approximately $340 thousand. In addition, the recapitalization
allowed us to increase the Bank’s capital and repay all inter-company
liabilities owed to the Bank by the Company. We have also proposed that our
stockholders approve resolutions at our Annual Meeting on November 27, 2013
that will convert all the Series F and Series G preferred stock issued in the
recapitalization into common stock or non-voting common stock, which will
further simplify our capital structure and enhance our ability to access
additional capital in the future.

“In addition, during the third quarter we continued to make improvements in
our asset quality and internal controls, which allowed us to begin rebuilding
our loan portfolio to generate growth in net interest income.

“Looking ahead, we are planning to continue rebuilding our loan portfolio to
grow net interest income, as well as begin the process of negotiating an
extension of the maturity of our subordinated debentures that mature in March
2014. In conjunction with that extension we plan to raise additional equity
capital to strengthen the balance sheets of both the Company and the Bank, and
provide capital for growth.

“We wish to thank our stockholders for their continued support, particularly
during the lengthy process of completing the recapitalization, and are focused
on continuing our efforts to resume growth for the Company and increase value
for our stockholders.”

Third Quarter Earnings Summary

Interest income decreased $912 thousand, or 19%, to $3.8 million for the third
quarter of 2013 from $4.7 million for the third quarter of 2012. The decrease
in interest income was primarily due to a decrease of $59.3 million in average
interest-earning assets, primarily reflecting a decrease of $68.6 million in
the average balance of loans receivable, and a decrease of $4.2 million in the
average balance of securities available-for-sale, offset by an increase of
$16.2 million in the average balance of federal funds sold. The decrease of
$68.6 million in average loans receivable from $319.3 million for the third
quarter of 2012 to $250.8 million for the third quarter of 2013 resulted in a
reduction of $994 thousand in interest income. The average yield on loans
increased from 5.76% for the third quarter of 2012 to 5.80% for the third
quarter of 2013 primarily due to a lower level of non-accrual loans as $15.5
million of non-performing loans were sold and $1.9 million were paid off
during 2013. The average yield on total interest-earning assets decreased from
4.96% for the third quarter of 2012 to 4.74% for the third quarter of 2013, as
a higher percentage of our total interest-earning assets were invested in
lower yielding federal funds sold. Recently we have begun refocusing on loan
originations and rebuilding our loan portfolio to improve the yield on
interest-earning assets and grow total interest income. We intend to finance
loan growth in the near term by using excess federal funds sold. Our loan
portfolio increased by $17.8 million during the third quarter of 2013
primarily due to loan originations of $16.3 million and loan purchases of
$10.9 million, which were partially offset by loan repayments of $9.2 million.

Interest expense decreased $323 thousand, or 22%, to $1.2 million for the
third quarter of 2013 from $1.5 million for the third quarter of 2012. The
decrease in interest expense was primarily attributable to a decrease of $44.2
million in the average balance of deposits from $265.4 million for the third
quarter of 2012 to $221.2 million for the third quarter of 2013, which
resulted in a reduction of $140 thousand in interest expense. Additionally,
the average cost of deposits decreased 13 basis points from 1.07% for the
third quarter of 2012 to 0.94% for the third quarter of 2013, which resulted
in a reduction of $45 thousand in interest expense. The decreases in the
average balance and average cost of deposits reflect the maturities of
certificates of deposit bearing higher rates. Also contributing to the
decrease in interest expense during 2013 was a lower average balance and
average cost of FHLB advances. The average balance of FHLB advances decreased
$3.4 million, from $83.0 million for the third quarter of 2012 to $79.6
million for the third quarter of 2013, which resulted in a decrease of $24
thousand in interest expense. The average cost of FHLB advances decreased 39
basis points, from 2.90% for the third quarter of 2012 to 2.51% for the third
quarter of 2013, which resulted in a decrease of $78 thousand in interest
expense. The decrease in the average cost of FHLB advances was primarily due
to the restructurings of $20.0 million of higher costing FHLB advances in the
second and fourth quarters of 2012 and another $28 million in the second
quarter of 2013.

Net interest income before provision for loan losses for the third quarter of
2013 was $2.6 million, which represented a decrease of $589 thousand, or 18%,
from the third quarter of 2012. The decrease in net interest income was
primarily attributable to the net decrease of $59.3 million in average
interest-earning assets described above.

The provision for loan losses for the third quarter of 2013 totaled $414
thousand, compared to $129 thousand for the same period a year ago. The
provision for loan losses for the third quarter of 2013 was primarily due to
loan growth resulting from loan originations and loan purchases. During the
third quarter of 2013, loan charge-offs also contributed to the increased
provision for loan losses, which was partially offset by recoveries on
previously charged-off loans and a decrease in the general valuation
allowance. The decrease in the general valuation allowance reflected lower
historical loss reserve factors because periods with higher loan losses are
beginning to be replaced with periods with lower loan losses as part of our
rolling three-year look back analysis.

Non-interest income for the third quarter of 2013 increased $1.6 million from
the third quarter of 2012 primarily due to a gain of $1.2 million from the
restructuring of our $5.0 million of senior line of credit. This gain
represents a portion of the accrued interest expense of $1.8 million that was
forgiven on this debt as part of the recapitalization. The balance of the
interest forgiven, $535 thousand, was added to the amount of the obligation
reported on the Company’s balance sheet at September 30, 2013 in accordance
with Accounting Standards Codification (“ASC”) 470-60 - Troubled Debt
Restructurings by Debtors. Also contributing to higher non-interest income in
the third quarter of 2013 was a reduction of $99 thousand in net losses on
sales of REO compared to the third quarter of 2012. Also, during the third
quarter of 2012, we incurred $280 thousand of net losses on sales of loans.

Non-interest expense for the third quarter of 2013 decreased $485 thousand
from $3.5 million for the third quarter of 2012 to $3.0 million for the third
quarter of 2013. The decrease of $485 thousand in non-interest expense was
primarily due to a decrease of $106 thousand in the provision for losses on
REO, a decrease of $89 thousand in occupancy expense, a decrease of $55
thousand in compensation and benefits expense, a decrease of $48 thousand in
FDIC insurance premium expense, a decrease of $97 thousand in other expenses,
primarily REO and appraisal expenses, and an increase of $48 thousand in the
recapture of losses on loans held for sale.

Balance Sheet Summary

Total assets were $345.7 million at September 30, 2013, which represented a
decrease of $28.0 million, or 7%, from December 31, 2012, but an increase of
approximately $500 thousand from the end of the second quarter. During the
first nine months of 2013, net loans held for investment decreased by $219
thousand, loans receivable held for sale decreased by $18.0 million,
securities decreased by $3.2 million, cash and cash equivalents decreased by
$4.1 million, REO decreased by $1.6 million and other assets decreased by $955
thousand.

Our gross loan portfolio held for investment decreased by $2.3 million to
$260.8 million at September 30, 2013 from $263.1 million at December 31, 2012,
but increased by $25.4 million from the balance of $235.4 million at June 30,
2013. The decrease of $2.3 million in our loan portfolio since the end of 2012
consisted of a decrease of $7.4 million in our one-to-four family residential
real estate loan portfolio, a decrease of $8.2 million in our commercial real
estate loan portfolio, a decrease of $5.5 million in our church loan
portfolio, a decrease of $301 thousand in our construction loan portfolio and
a decrease of $1.8 million in our commercial loan portfolio, which were
partially offset by an increase of $21.0 million in our multi-family
residential real estate loan portfolio.

During the third quarter, we began to refocus on increasing interest income by
rebuilding our loan portfolio. Loan originations, including loan purchases of
$10.9 million, for the nine months ended September 30, 2013 totaled $35.3
million, compared to $18.2 million for the nine months ended September 30,
2012. Loan repayments for the nine months ended September 30, 2013 totaled
$33.4 million, compared to $53.2 million for the nine months ended September
30, 2012. Loan charge-offs during the first nine of 2013 totaled $2.6 million,
compared to charge-offs of $1.9 million during the first nine months of 2012.
Loans transferred to REO during the first nine months of 2013 totaled $1.8
million, compared to $3.5 million during the first nine months of 2012. Loans
transferred to loans receivable held for sale during the first nine months of
2013 totaled $7.3 million, which primarily represented multi-family and
commercial real estate loans that we sold in a bulk sale consummated in the
second quarter. During the first nine months of 2012, two non-performing
loans, which had a total carrying amount of $616 thousand and were secured by
commercial real estate, were transferred to held-for-sale. During the third
quarter of 2013, $7.4 million of loans receivable held for sale were
transferred to held for investment as these loans are no longer to be marketed
for sale. All of these transferred loans were performing loans.

Loans receivable held for sale decreased from $19.1 million at December 31,
2012 to $1.1 million at September 30, 2013. The $18.0 million decrease during
the first nine months of 2013 was primarily due to sales of non-performing and
classified loans totaling $15.5 million. In addition, we transferred $7.4
million of loans receivable held for sale to held for investment, transferred
$753 thousand to REO and received repayments of $1.5 million. These reductions
in loans receivable held for sale were partially offset by the transfer of
$7.3 million of non-performing classified multi-family and commercial real
estate loans from the held for investment loan portfolio to the held for sale
portfolio in connection with their subsequent sale during the nine months
ended September 30, 2013.

Deposits totaled $218.6 million at September 30, 2013, down $38.5 million, or
15%, from December 31, 2012. During the first nine months of 2013,
certificates of deposit (“CDs”) decreased by $36.2 million and represented 61%
of total deposits at September 30, 2013, compared to 66% of total deposits at
December 31, 2012. Of the $36.2 million decrease in CDs during the first nine
months of 2013, $29.2 million represented higher rate deposits from QwickRate,
a deposit listing service, and $599 thousand were from brokered deposits.
Additionally, core deposits (NOW, demand, money market and passbook accounts)
decreased by $2.3 million during the first nine months of 2013 and represented
39% of total deposits at September 30, 2013, compared to 34% of total deposits
at December 31, 2012. Brokered deposits represented 1% of total deposits at
September 30, 2013 and December 31, 2012.

At September 30, 2013, borrowings consisted of advances from the FHLB of $87.5
million, junior subordinated debentures of $6.0 million and other borrowings
of $3.0 million. At December 31, 2012, borrowings consisted of advances from
the FHLB of $79.5 million, junior subordinated debentures of $6.0 million and
other borrowings of $5.0 million. Other borrowings decreased by $2.0 million
in connection with the restructuring (described below) of our senior line of
credit during the third quarter of 2013, which reflects a reduction in the
principal amount of $2.6 million, offset by the deferral of $535 thousand of
the gain on restructuring (described above).

At September 30, 2013 and December 31, 2012, FHLB advances were 25% and 21%,
respectively, of total assets. The weighted average cost of advances decreased
42 basis points from 2.67% at December 31, 2012 to 2.25% at September 30, 2013
primarily because we restructured $28.0 million of advances in June 2013.

During the third quarter we completed a recapitalization that strengthened and
simplified the Company’s capital structure through completion of the following
transactions:

      
          The issuance of 8,776 shares of Series F Common Stock Equivalents
          (the “Common Stock Equivalents”) in exchange for the five series of
          the Company’s formerly outstanding preferred stock with an aggregate
          liquidation value or preference of $17.6 million, including the TARP
  (1)     Preferred Stock that was issued to the Treasury Department pursuant
          to the Capital Purchase Program component of the Treasury
          Department’s Troubled Asset Relief Program, which the parties agreed
          to value at $8.8 million based on the price at which shares of the
          Common Stock were sold in the Subscription Offering referred to
          below;
          
          The issuance of 2,646 shares of Common Stock Equivalents in exchange
  (2)     for all of the accumulated dividends on the TARP Preferred Stock,
          totaling $2.6 million as of the date of the exchange;
          
          The issuance of 2,575 shares of Common Stock Equivalents in exchange
  (3)     for $2.6 million principal amount of the Company’s bank debt (the
          “Debt Exchange”);
          
          The modification of the terms of the remaining $2.4 million
  (4)     principal amount of the senior line of credit to, among other
          matters, extend the maturity and terminate application of the
          default rate thereon;
          
          The forgiveness of the $1.8 million of accrued interest on the
  (5)     entire amount of the Company’s bank debt as of the date of the
          exchange;
          
          The exchange of 698 shares of Common Stock Equivalents issued in the
  (6)     Debt Exchange for 6,982 shares of Series G Non-Voting Preferred
          Stock; and
          
          The issuance of 4,235,500 shares of Common Stock in private sales
          (the “Subscription Offering”) at a price of $1.00 per share,
          yielding $4.2 million in gross proceeds. Of the $4.2 million in
          gross proceeds, $1.2 million were used to invest additional capital
  (7)     into the Bank and to repay all of the inter-company payables due to
          the Bank from the Company. As a result, the Bank’s capital ratios
          increased on a pro forma basis as of June 30, 2013 from 9.48% to
          9.75% for Tier 1 Capital, from 14.98% to 15.51% for Tier 1 Risk
          Based Capital and from 16.27% to 16.80% for Total Risk Based
          Capital.
          

The Common Stock Equivalents are a new series of preferred stock of the
Company that will automatically convert into shares of the Company’s common
stock, at the rate of 1,000 shares of common stock for each of the shares of
Common Stock Equivalents upon stockholder approval of an amendment to the
Company’s certificate of incorporation increasing the number of shares of
common stock the Company is authorized to issue so as to permit such
conversion. The Series G Non-Voting Preferred Stock will automatically convert
into shares of non-voting common stock of the Company upon approval by the
stockholders of an amendment of the Company’s certificate of incorporation
authorizing the Company to issue non-voting common stock. The board of
directors of the Company will present the amendments required to effect such
conversions at the Company’s Annual Meeting of Stockholders, which will be
held on November 27, 2013. Management believes that the conversions will
improve the Company’s ability to raise additional capital.

As a result of the recapitalization, stockholders' equity was $25.6 million,
or 7.40% of the Company’s total assets, at September 30, 2013, compared to
$18.0 million, or 4.82% of the Company’s total assets, at December 31, 2012.
The increase in stockholders’ equity during 2013 was due to the completion of
the recapitalization. At September 30, 2013, the Bank’s Total Risk-Based
Capital ratio was 16.08%, its Tier 1 Risk-Based Capital ratio was 14.79%, and
its Core Capital and Tangible Capital ratios were 9.75%.

Asset Quality

Non-performing assets (“NPAs”) include loans that are 90 days or more
delinquent and still accruing, non-accrual loans and REO. NPAs at September
30, 2013 were $26.7 million, or 7.74% of total assets, compared to $45.3
million, or 12.11% of total assets, at December 31, 2012.

At September 30, 2013, non-accrual loans were $20.1 million compared to $37.1
million at December 31, 2012. These loans consist of delinquent loans that are
90 days or more past due and troubled debt restructurings that do not qualify
for accrual status. The $17.0 million decrease in non-accrual loans was
primarily due to the sale of $15.5 million of non-performing loans and the
transfer of $2.6 million to REO. The non-accrual loans at September 30, 2013
included 20 church loans totaling $13.8 million, six multi-family residential
real estate loans totaling $3.0 million, ten one-to-four family residential
real estate loans totaling $1.7 million, two commercial real estate loans
totaling $1.5 million and two commercial loans totaling $162 thousand.

During the first nine months of 2013, REO decreased by $1.6 million to $6.6
million at September 30, 2013, from $8.2 million at December 31, 2012. At
September 30, 2013 the Bank’s REO consisted of ten commercial real estate
properties, seven of which are church buildings. During the first nine months
of 2013, five church loans totaling $2.6 million were foreclosed and
transferred to REO and eight REO properties were sold for net proceeds of $3.6
million and a net loss of $10 thousand.

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, 5055
Wilshire Blvd., Suite 500, Los Angeles, CA 90036, 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, including the
Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. The
Company undertakes no obligation to 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 Statements of Financial Condition
(In thousands, except share and per share amounts)
                                                             
                                                September 30,     December 31,
                                                2013              2012
                                                (Unaudited)       
Assets
Cash                                            $  8,964          $  13,420
Federal funds sold                                51,260          50,940  
Cash and cash equivalents                          60,224            64,360
                                                                  
Securities available-for-sale, at fair             10,148            13,378
value
Loans receivable held-for-sale, at lower of        1,085             19,051
cost or fair value
Loans receivable held for investment, net          251,504           251,723
of allowance of $10,339 and $11,869
Accrued interest receivable                        1,116             1,250
Federal Home Loan Bank (FHLB) stock                4,113             3,901
Office properties and equipment, net               2,688             2,617
Real estate owned (REO)                            6,611             8,163
Bank owned life insurance                          2,739             2,688
Investment in affordable housing limited           1,364             1,528
partnership
Other assets                                      4,079           5,034   
Total assets                                    $  345,671       $  373,693 
                                                                  
Liabilities and stockholders' equity
Liabilities:
Deposits                                        $  218,569        $  257,071
FHLB advances                                      87,500            79,500
Junior subordinated debentures                     6,000             6,000
Other borrowings                                   2,960             5,000
Accrued interest payable                           674               1,941
Dividends payable                                  -                 2,104
Advance payments by borrowers for taxes and        1,034             711
insurance
Other liabilities                                 3,350           3,359   
Total liabilities                                 320,087         355,686 
                                                                  
Stockholders' Equity:
Preferred stock, $0.01 par value,
authorized 1,000,000 shares:
Preferred, non-cumulative and non-voting
stock, no shares issued and outstanding at
September 30, 2013 and 55,199 shares of                           
Series A, 100,000 shares of Series B and
76,950 shares of Series C issued and               -                 2,457
outstanding at December 31, 2012
Senior preferred, cumulative and non-voting
stock, Series D, no shares issued and
outstanding at September 30, 2013 and 9,000
shares issued and outstanding at December          -                 8,963
31, 2012
Senior preferred, cumulative and non-voting
stock, Series E, no shares issued and
outstanding at September 30, 2013 and 6,000
shares issued and outstanding at December          -                 5,974
31, 2012
Preferred non-cumulative voting stock,
Series F, 13,997 shares issued and 13,299
shares outstanding at September 30, 2013
and no shares authorized, issued or                13,299
outstanding or at December 31, 2012
Preferred non-cumulative non-voting stock,
Series G, 6,982 shares issued and
outstanding at September 30, 2013 and no
shares authorized, issued or outstanding or        698
at December 31, 2012
Preferred stock discount                           -                 (598    )
Common stock, $.01 par value, authorized
8,000,000 shares at September 30, 2013 and
December 31, 2012; issued 6,249,442 shares
at September 30, 2013 and 2,013,942 shares                        
at December 31, 2012; outstanding 6,145,451
shares at September 30, 2013 and 1,917,422         62                20
shares at December 31, 2012
Additional paid-in capital                         21,785            10,095
Accumulated deficit                                (9,027   )        (7,988  )
Accumulated other comprehensive income, net
of taxes of $400 at September 30, 2013 and         96                318
December 31, 2012
Treasury stock-at cost, 103,991 shares at
September 30, 2013 and 96,520 shares at           (1,329   )       (1,234  )
December 31, 2012
Total stockholders' equity                        25,584          18,007  
                                                                  
Total liabilities and stockholders' equity      $  345,671       $  373,693 
                                                                             


BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Income (Loss)
(Unaudited)
                                                            
                      Three Months ended September     Nine Months ended
                      30,                              September 30,
                      2013              2012           2013         2012
                      (In thousands, except share and per share)
Interest income:
Interest and fees
on loans              $  3,637          $ 4,595        $ 11,420     $ 14,955
receivable
Interest on
mortgage backed          71               109            240          392
and other
securities
Other interest          103            19           237        55     
income
Total interest          3,811          4,723        11,897     15,402 
income
                                                                    
Interest expense:
Interest on              522              707            1,728        2,562
deposits
Interest on             651            789          2,075      2,437  
borrowings
Total interest          1,173          1,496        3,803      4,999  
expense
                                                                    
Net interest
income before            2,638            3,227          8,094        10,403
provision for
loan losses
Provision for           414            129          414        1,190  
loan losses
Net interest
income after            2,224          3,098        7,680      9,213  
provision for
loan losses
                                                                    
Non-interest
income:
Service charges          132              149            403          440
Loan servicing           8                (6    )        18           (168   )
fees, net
Net gains
(losses) on sales        -                (280  )        97           (280   )
of loans
Net gains
(losses) on sales        (8     )         (107  )        (10    )     288
of REO
Gain on sale of
office properties        -                -              -            2,523
and equipment
Gain on sale of          -                -              -            50
securities
Gain on
restructuring of         1,221            -              1,221        -
debt
Other                   14             27           113        77     
Total
non-interest            1,367          (217  )       1,842      2,930  
income
                                                                    
Non-interest
expense:
Compensation and         1,479            1,534          4,428        4,661
benefits
Occupancy                269              358            932          942
expense, net
Information              213              212            636          664
services
Professional             225              246            558          530
services
Provision for
(recapture of)           (315   )         (267  )        153          (81    )
losses on loans
held for sale
Provision for            321              427            544          739
losses on REO
FDIC insurance           181              229            573          662
Office services          91               113            312          330
and supplies
Other                   543            640          1,640      1,609  
Total
non-interest            3,007          3,492        9,776      10,056 
expense
                                                                    
Income (loss)
before income            584              (611  )        (254   )     2,087
taxes
Income tax              -              2            6          849    
expense
Net income (loss)     $  584           $ (613  )      $ (260   )   $ 1,238  
                                                                    
Other
comprehensive
income (loss),
net of tax:
Unrealized gain
(loss) on
securities            $  (76    )       $ 7            $ (222   )   $ (72    )
available for
sale
Reclassification
of net gains             -                -              -            (50    )
included in net
income
Income tax effect       -              -            -          -      
Other
comprehensive           (76    )        7            (222   )    (122   )
income (loss),
net of tax
                                                                    
Comprehensive         $  508           $ (606  )      $ (482   )   $ 1,116  
income (loss)
                                                                    
Net income (loss)     $  584            $ (613  )      $ (260   )   $ 1,238
Dividends and
discount              $  (127   )       $ (287  )      $ (779   )   $ (858   )
accretion on
preferred stock
Income (loss)
available to          $  457           $ (900  )      $ (1,039 )   $ 380    
common
stockholders
                                                                    
Earnings (loss)
per common            $  0.05           $ (0.48 )      $ (0.23  )   $ 0.21
share-basic
Earnings (loss)
per common            $  0.05           $ (0.48 )      $ (0.23  )   $ 0.21
share-diluted
Dividends
declared per          $  0.00           $ 0.00         $ 0.00       $ 0.00
share-common
stock
                                                                             

                                                                           
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Selected Ratios and Data
(Dollars in thousands)
(Unaudited)
                                                 
                      As of September 30,
                      2013           2012
Regulatory Capital
Ratios:
                                                                           
  Core Capital          9.75   %       8.65   %
  Ratio
  Tangible Capital      9.75   %       8.65   %
  Ratio
  Tier 1 Risk-Based     14.79  %       12.61  %
  Capital Ratio
  Total Risk-Based      16.08  %       13.92  %
  Capital Ratio
                                                                           
Asset Quality
Ratios and Data:
                                                                           
  Non-performing
  loans as a
  percentage
    of total gross
    loans,              7.42   %       13.13  %
    excluding loans
    held for sale
                                                                           
  Non-performing
  assets as a
  percentage
    of total assets     7.74   %       11.75  %
                                                                           
  Allowance for
  loan losses as a
  percentage
    of total gross
    loans,              3.96   %       5.68   %
    excluding loans
    held for sale
                                                                           
  Allowance for
  loan losses as a
  percentage
    of
    non-performing
    loans,              53.43  %       43.21  %
    excluding loans
    held for sale
                                                                           
  Allowances for
  losses as a
  percentage
    of
    non-performing      39.86  %       38.59  %
    assets
                                                                           
  Net loan
  charge-offs as a
  percentage of
    average loans
    for nine months     1.00   % (A)   0.60   % (A)
    ended September
    30
                                                                           
Non-performing
assets:
  Non-accrual loans
    Loans
    receivable held   $ 19,350       $ 37,788
    for investment
    Loans
    receivable held    785          3,568  
    for sale
    Total
    non-accrual         20,135         41,356
    loans
  Loans delinquent
  90 days or more       -              1,518
  and still
  accruing
  Real estate
  acquired through     6,611        2,292  
  foreclosure
    Total
    non-performing    $ 26,746      $ 45,166 
    assets
                                                                           
                                                                           
                      Three Months ended              Nine Months ended
                      September 30,                   September 30,
                      2013           2012             2013         2012
Performance Ratios:
                                                                           
  Return on average     0.69   % (A)   -0.64  % (A)   -0.10  % (A) 0.41  % (A)
  assets
  Return on average     11.04  % (A)   -12.52 % (A)   -1.83  % (A) 8.76  % (A)
  equity
  Average equity to     6.26   %       5.08   %       5.33   %     4.72  %
  average assets
  Non-interest
  expense to            3.55   % (A)   3.45   % (A)   3.41   % (A) 3.14  % (A)
  average assets
  Efficiency ratio      107.79 %       110.70 %       104.18 %     86.94 %
  (1)
  Net interest rate     3.22   % (A)   3.29   % (A)   3.14   % (A) 3.45  % (A)
  spread (2)
  Net interest rate     3.28   % (A)   3.39   % (A)   3.19   % (A) 3.53  % (A)
  margin (3)
                                                                           

    
(1)   Efficiency ratio represents non-interest expense (less provision for
      losses) divided by net interest income
      before provision for loan losses plus non-interest income.
(2)   Net interest rate spread represents the difference between the yield on
      average interest-earning assets and the
      cost of average interest-bearing liabilities.
(3)   Net interest rate margin represents net interest income as a percentage
      of average interest-earning assets.
      
(A)   Annualized
      

                                                            
BROADWAY FINANCIAL CORPORATION AND SUBSIDIARIES
Support for Calculations
(Dollars in thousands)
(Unaudited)
                                                                       
                     Three Months ended                Nine Months ended September
                     September 30,                     30,
                     2013            2012              2013            2012
Total assets         $ 345,671       $ 384,280         $ 345,671       $ 384,280
Total gross
loans, excluding     $ 260,824       $ 299,276         $ 260,824       $ 299,276
loans held for
sale
Total equity         $ 25,584        $ 19,040          $ 25,584        $ 19,040
Average assets       $ 337,690       $ 385,860         $ 354,607       $ 399,318
Average loans        $ 250,787       $ 319,340         $ 259,217       $ 333,086
Average equity       $ 21,152        $ 19,586          $ 18,895        $ 18,842
Average
interest-earning     $ 321,926       $ 381,249         $ 338,361       $ 392,675
assets
Average
interest-bearing     $ 310,474       $ 359,372         $ 328,242       $ 373,963
liabilities
Net income           $ 584           $ (613    )       $ (260    )     $ 1,238
(loss)
Total income         $ 2,784         $ 3,010           $ 8,715         $ 10,810
Non-interest         $ 3,001         $ 3,332           $ 9,079         $ 9,398
expense
Efficiency ratio       107.79  %       110.70  %         104.18  %       86.94   %
Non-accrual          $ 20,135        $ 41,356          $ 20,135        $ 41,356
loans
REO, net             $ 6,611         $ 2,292           $ 6,611         $ 2,292
ALLL                 $ 10,339        $ 16,984          $ 10,339        $ 16,984
Allowance for
loss on loans        $ -             $ 321             $ -             $ 321
held for sale
REO-Allowance        $ 321           $ 123             $ 321           $ 123
Interest income      $ 3,811         $ 4,723           $ 11,897        $ 15,402
Interest expense     $ 1,173         $ 1,496           $ 3,803         $ 4,999
Net interest         $ 2,638         $ 3,227           $ 8,094         $ 10,403
income
Net loan             $ 654           $ 1,001           $ 1,944         $ 1,505
charge-offs

Contact:

Broadway Financial Corporation
Wayne-Kent A. Bradshaw, Chief Executive Officer, (323) 556-3248
Brenda J. Battey, Chief Financial Officer, (323) 556-3264
investor.relations@broadwayfederalbank.com
 
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