Broadway Financial in L.A. Slips to a Loss

Broadway Financial (BYFC) in Los Angeles reported a quarterly loss as its lending income fell.

The $345 million-asset Broadway lost $228,000 in the second quarter, it announced Monday. It earned $1.7 million in the second quarter of 2012, when it recorded a $2.5 million profit from the sale of its former headquarters.

Net interest income fell 21%, to $2.8 million, as net interest margin fell by 26 basis points, to 3.27%. Broadway's average loans fell 24%, to $253 million.

Broadway's nonperforming assets fell 49%, to $24.8 million, thanks in part to its sales of soured loans. It sold $16 million of loans in February and $9 million of loans in May.

It recorded no provision for loan losses for the quarter, after recording a $102,000 provision in the second quarter of 2012. It recovered $129,000 of charged-off loans in the most recent quarter, after recovering $2,000 of loans in the same period in 2012.

Noninterest income fell by 90%, to $254,000, because of the gain on the sale of the company's headquarters a year earlier. Noninterest expense fell 11%, to $3.2 million.

In June, Broadway Financial was given six months to meet Nasdaq's minimum-bid requirements and avoid being delisted from the exchange. Shares on Nasdaq must trade at $1 or more; Broadway's stock was trading at 76 cents as of Tuesday morning.