Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 08, 2019 | Jun. 30, 2018 | |
Entity Registrant Name | BROADWAY FINANCIAL CORP \DE\ | ||
Entity Central Index Key | 0001001171 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Public Float | $ 55,598,000 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Shell Company | false | ||
Common Stock, Voting | |||
Entity Common Stock, Shares Outstanding | 19,133,366 | ||
Common Stock, Non-Voting | |||
Entity Common Stock, Shares Outstanding | 8,756,396 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 4,124 | $ 3,420 |
Interest-bearing deposits in other banks | 12,527 | 18,799 |
Cash and cash equivalents | 16,651 | 22,219 |
Investment securities available-for-sale, at fair value | 14,722 | 17,494 |
Loans receivable held for sale, at lower of cost or fair value | 6,231 | 22,370 |
Loans receivable held for investment, net of allowance of $2,929 and $4,069 | 355,556 | 334,851 |
Accrued interest receivable | 1,143 | 1,073 |
Federal Home Loan Bank (FHLB) stock | 2,916 | 2,916 |
Office properties and equipment, net | 2,242 | 2,406 |
Bank owned life insurance | 3,047 | 2,994 |
Deferred tax assets, net | 5,045 | 5,110 |
Investment in affordable housing limited partnership | 342 | 537 |
Real estate owned (REO) | 833 | 878 |
Other assets | 669 | 856 |
Total assets | 409,397 | 413,704 |
Liabilities: | ||
Deposits | 281,414 | 291,290 |
FHLB advances | 70,000 | 65,000 |
Junior subordinated debentures | 5,100 | 5,100 |
Advance payments by borrowers for taxes and insurance | 1,055 | 1,071 |
Accrued expenses and other liabilities | 3,392 | 3,512 |
Total liabilities | 360,961 | 365,973 |
Commitments and Contingencies (Note 14) | ||
Stockholders' Equity: | ||
Preferred stock, $.01 par value, authorized 1,000,000 shares; none issued or outstanding | ||
Additional paid-in capital | 46,141 | 46,117 |
Retained earnings | 8,631 | 7,816 |
Unearned Employee Stock Ownership Plan (ESOP) shares | (1,027) | (1,095) |
Accumulated other comprehensive loss | (283) | (81) |
Treasury stock-at cost, 2,617,826 shares at December 31, 2018 and at December 31, 2017 | (5,326) | (5,326) |
Total stockholders' equity | 48,436 | 47,731 |
Total liabilities and stockholders' equity | 409,397 | 413,704 |
Common Stock | ||
Stockholders' Equity: | ||
Total stockholders' equity | 300 | 300 |
Common Stock | Common Stock, Voting | ||
Stockholders' Equity: | ||
Common stock | 213 | 213 |
Common Stock | Common Stock, Non-Voting | ||
Stockholders' Equity: | ||
Common stock | $ 87 | $ 87 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for loan losses (in dollars) | $ 2,929 | $ 4,069 |
Stockholders' Equity: | ||
Treasury stock, shares | 2,617,826 | 2,617,826 |
Preferred stock | ||
Stockholders' Equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common Stock | ||
Stockholders' Equity: | ||
Common stock, shares issued | 30,036,624 | 30,069,045 |
Common Stock | Common Stock, Voting | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 21,280,228 | 21,312,649 |
Common stock, shares outstanding | 18,662,402 | 18,694,823 |
Common Stock | Common Stock, Non-Voting | ||
Stockholders' Equity: | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 25,000,000 | 25,000,000 |
Common stock, shares issued | 8,756,396 | 8,756,396 |
Common stock, shares outstanding | 8,756,396 | 8,756,396 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interest Income: | ||
Interest and fees on loans receivable | $ 14,279 | $ 15,397 |
Interest on mortgage-backed securities and other securities | 413 | 318 |
Other interest income | 545 | 572 |
Total interest income | 15,237 | 16,287 |
Interest Expense: | ||
Interest on deposits | 3,089 | 2,398 |
Interest on borrowings | 1,840 | 1,950 |
Total interest expense | 4,929 | 4,348 |
Net interest income before loan loss provision recapture | 10,308 | 11,939 |
Loan loss provision recapture | 1,254 | 1,100 |
Net interest income after loan loss provision recapture | 11,562 | 13,039 |
Non-Interest Income: | ||
Service charges | 449 | 446 |
Net gain on sales of loans | 70 | 560 |
CDFI grant | 233 | 227 |
Income from litigation settlement | 1,183 | |
Other | 113 | 114 |
Total non-interest income | 865 | 2,530 |
Non-Interest Expense: | ||
Compensation and benefits | 7,055 | 7,092 |
Occupancy expense | 1,278 | 1,278 |
Information services | 822 | 818 |
Professional services | 653 | 716 |
Office services and supplies | 289 | 302 |
Loan related expenses | 167 | 205 |
Corporate insurance | 147 | 196 |
Amortization of investment in affordable housing limited partnership | 195 | 195 |
Other | 950 | 1,035 |
Total non-interest expense | 11,556 | 11,837 |
Income before income taxes | 871 | 3,732 |
Income tax expense | 56 | 1,863 |
Net income | 815 | 1,869 |
Other comprehensive loss, net of tax: | ||
Unrealized losses on securities available-for-sale arising during the period | (292) | (98) |
Income tax benefit | 90 | 54 |
Other comprehensive loss, net of tax | (202) | (44) |
Comprehensive income | $ 613 | $ 1,825 |
Earnings per common share-basic (in dollars per share) | $ 0.03 | $ 0.07 |
Earnings per common share-diluted (in dollars per share) | $ 0.03 | $ 0.07 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Unearned ESOP shares | Accumulated Other Comprehensive Loss, Net | Treasury Stock | Total |
Balance at Dec. 31, 2016 | $ 299 | $ 45,819 | $ 6,013 | $ (1,176) | $ (103) | $ (5,326) | $ 45,526 |
Balance (in shares) at Dec. 31, 2016 | 30,039,043 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 1,869 | 1,869 | |||||
Common stock issued for services | $ 1 | 52 | 53 | ||||
Common stock issued for services (in shares) | 30,002 | ||||||
Release of unearned ESOP shares | 23 | 81 | 104 | ||||
Change in unrealized loss on securities available-for-sale, net of tax | (44) | (44) | |||||
Reclassification from accumulated other comprehensive loss to retained earnings | (66) | 66 | |||||
Restricted stock compensation expense | 184 | 184 | |||||
Stock-based compensation expense | 39 | 39 | |||||
Balance at Dec. 31, 2017 | $ 300 | 46,117 | 7,816 | (1,095) | (81) | (5,326) | 47,731 |
Balance (in shares) at Dec. 31, 2017 | 30,069,045 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 815 | 815 | |||||
Common stock issued for services | 45 | 45 | |||||
Common stock issued for services (in shares) | 18,906 | ||||||
Common stock repurchased for tax withholdings | (108) | (108) | |||||
Common stock repurchased for tax withholdings (in shares) | (51,327) | ||||||
Release of unearned ESOP shares | 12 | 68 | 80 | ||||
Change in unrealized loss on securities available-for-sale, net of tax | (202) | (202) | |||||
Restricted stock compensation expense | 36 | 36 | |||||
Stock-based compensation expense | 39 | 39 | |||||
Balance at Dec. 31, 2018 | $ 300 | $ 46,141 | $ 8,631 | $ (1,027) | $ (283) | $ (5,326) | $ 48,436 |
Balance (in shares) at Dec. 31, 2018 | 30,036,624 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 815 | $ 1,869 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Loan loss provision recaptures | (1,254) | (1,100) |
Provision for losses on REO | 45 | 80 |
Depreciation | 241 | 256 |
Net amortization of deferred loan origination costs | 605 | 306 |
Net amortization of premiums on mortgage-backed securities | 36 | 34 |
Amortization of investment in affordable housing limited partnership | 195 | 195 |
ESOP compensation expense | 80 | 104 |
Earnings on bank owned life insurance | (53) | (54) |
Originations of loans receivable held for sale | (20,288) | (110,829) |
Proceeds from sales and repayments of loans receivable held for sale | 19,626 | 98,356 |
Gain on sale of loans receivable held for sale | (70) | (560) |
Changes in operating assets and liabilities | ||
Net change in deferred taxes | 155 | 1,851 |
Net change in accrued interest receivable | (70) | 105 |
Net change in other assets | 187 | 332 |
Net change in advance payments by borrowers for taxes and insurance | (16) | 243 |
Net change in accrued expenses and other liabilities | (120) | (1,690) |
Net cash provided by (used in) operating activities | 234 | (10,226) |
Cash flows from investing activities: | ||
Net change in loans receivable held for investment | (3,185) | 59,742 |
Purchase of loans receivable held for investment | 0 | (24,640) |
Purchase of available-for-sale securities | (6,677) | |
Principal payments on available-for-sale securities | 2,444 | 2,253 |
Purchase of FHLB stock | (343) | |
Additions to office properties and equipment | (77) | (183) |
Net cash (used in) provided by investing activities | (818) | 30,152 |
Cash flows from financing activities: | ||
Net change in deposits | (9,876) | 3,863 |
Proceeds from FHLB advances | 32,500 | 29,500 |
Repayments of FHLB advances | (27,500) | (49,500) |
Payment for tax withholding for vesting of restricted stock | (108) | |
Net cash used in financing activities | (4,984) | (16,137) |
Net change in cash and cash equivalents | (5,568) | 3,789 |
Cash and cash equivalents at beginning of the year | 22,219 | 18,430 |
Cash and cash equivalents at end of the year | 16,651 | 22,219 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 4,898 | 4,199 |
Cash paid for income taxes | 20 | |
Supplemental disclosures of non-cash investing and financing activities: | ||
Transfers of loans receivable held for investment to REO | 958 | |
Transfers of loans receivable held for investment to loans receivable held for sale | 9,337 | |
Transfers of loans receivable held for sale to loans receivable held for investment | 16,871 | |
Employees, excluding Directors | ||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Stock-based compensation expense | 75 | 223 |
Directors | ||
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Stock-based compensation expense | $ 45 | $ 53 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Nature of Operations and Principles of Consolidation Broadway Financial Corporation (the “Company”) is a Delaware corporation primarily engaged in the savings and loan business through its wholly owned subsidiary, Broadway Federal Bank, f.s.b. (the “Bank”). The Bank’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 and commercial real estate located in Southern California. At December 31, 2018, the Bank operated two retail-banking offices in Los Angeles, California and one in the nearby city of Inglewood, California. The Bank is subject to significant competition from other financial institutions, and is also subject to regulation by certain federal agencies and undergoes periodic examinations by those regulatory authorities. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Broadway Federal Bank, f.s.b. All significant inter-company transactions and balances have been eliminated in consolidation. Use of Estimates To prepare consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and the disclosures provided, and actual results could differ from these estimates. The allowance and provision for loan losses, specific reserves for impaired loans, fair value of real estate owned, deferred tax asset valuation allowance, and fair values of investment securities and other financial instruments are particularly subject to change. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash items in the process of collection, amounts due from correspondent banks and the Federal Reserve Bank, and interest-bearing deposits in other banks with initial terms of ninety days or less. The Company may be required to maintain reserve and clearing balances with the Federal Reserve Bank under the Federal Reserve Act. The reserve and clearing requirement balance was $0 at December 31, 2018. Net cash flows are reported for customer loan and deposit transactions, interest-bearing deposits in other banks, deferred income taxes and other assets and liabilities. Investment Securities Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost, and the intent and ability of management to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. Loans Receivable Held for Sale The Bank originates loans for sale, but may, from time-to-time, decide to sell certain loans that are held for investment in order to manage loan concentrations. When a decision is made to sell a loan(s), such loan(s) is transferred from held-for-investment portfolio to held-for-sale portfolio at the lower of cost or fair value. If a reduction in value is required at time of the transfer, a charge-off is recorded against the allowance for loan losses (“ALLL”). Any subsequent decline in value of the loan(s) is recorded as a valuation allowance with a corresponding charge to non-interest expense. Transfers of loans are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right), to pledge or exchange the transferred assets, and provides no more than a trivial benefit to the Bank, and (3) the Bank does not maintain effective control over the transferred assets. Loans receivable held for sale are generally sold with servicing rights released. Gains and losses on sales of loans are based on the difference between the selling price and the carrying value of the related loan sold. When loans receivable held for sale are sold, existing deferred loan fees or costs are an adjustment of the gain or loss on sale. Loans Receivable Held for Investment Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of allowance for loan losses, deferred loan fees and costs and unamortized premiums and discounts. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, premiums and discounts are deferred, and recognized in income using the level-yield method without anticipating prepayments. Interest income on all loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Concentration of Credit Risk Concentrations of credit risk arise when a number of customers are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company’s lending activities are predominantly in real estate loans that are secured by properties located in Southern California and many of the borrowers reside in Southern California. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy and real estate market in the Southern California area. The Company has a significant concentration of deposits with a long-time customer that accounted for approximately 11% of its deposits as of December 31, 2018. The Company expects to maintain this relationship with the customer for the near term. Loans Purchased The Bank purchases or participates in loans originated by other institutions from time to time. Subject to regulatory restrictions applicable to savings institutions, the Bank’s current loan policies allow all loan types to be purchased. The determination to purchase specific loans or pools of loans is based upon the Bank’s investment needs and market opportunities and is subject to the Bank’s underwriting policies, which require consideration of the financial condition of the borrower and the appraised value of the property, among other factors. Premiums or discounts incurred upon the purchase of loans are recognized in income using the interest method over the estimated life of the loans, adjusted for actual prepayments. No loans were purchased during 2018 compared to the purchases of $24.6 million of single family loans at par in 2017. Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent cash recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, could be charged off. In addition, the OCC and FDIC periodically review the allowance for loan losses as an integral part of their examination process. These agencies may require an increase in the allowance for loan losses based on their judgments of the information available to them at the time of their examinations. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, either a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or alternatively a charge-off is taken to record the loan at the fair value of the collateral, less estimated selling costs, if repayment is expected solely from the collateral. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of any necessary additional charge-off based on internal analyses and appraisals of the underlying collateral securing these loans. The general component covers loans that are collectively evaluated for impairment and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment with the use of a loss migration analysis and is based on the actual loss history experienced by the Company over the most recent five years. This actual loss experience is supplemented with information about other current economic factors based on the risks present for each portfolio segment. These current economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: one-to-four units (“single family”), five or more units (“multi-family”), commercial real estate, church, construction, commercial loans, and consumer loans. The risks in our various portfolio segments are as follows: Single Family – Subject to adverse employment conditions in the local economy leading to increased default rate; decreased market values from oversupply in a geographic area; impact on borrowers’ ability to maintain payments in the event of incremental rate increases on adjustable rate mortgages. Multi-Family – Subject to adverse various market conditions that cause a decrease in market value or lease rates; change in personal funding sources for tenants; oversupply of units in a specific region; a shift in population; reputational risks. Commercial Real Estate – Subject to adverse conditions in the local economy which may lead to reduced cash flows due to vacancies and reduced rental rates; decreases in the value of underlying collateral. Church – Subject to adverse economic and employment conditions leading to reduced cash flows from members’ donations and offerings; the stability, quality and popularity of church leadership. Construction – Subject to adverse conditions in the local economy which may lead to reduced demand for new commercial, multi-family or single family buildings or reduced lease or sale opportunities once the building is complete. Commercial – Subject to industry and economic conditions including decreases in product demand. Consumer – Subject to adverse employment conditions in the local economy, which may lead to higher default rates. Real Estate Owned Assets acquired through, or instead of, loan foreclosure are initially recorded at fair value less estimated costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through a provision that is charged to non-interest expense. Operating costs after acquisition are expensed as incurred. Office Properties and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 10 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 10 years. Leasehold improvements are amortized over the lease term or the estimated useful life of the asset, whichever is shorter. Federal Home Loan Bank (FHLB) stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income when declared. Bank-Owned Life Insurance The Bank has purchased life insurance policies on a former key executive. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. Investment in Affordable Housing Limited Partnership The Bank owns a less than 5% interest in an affordable housing limited partnership. The investment is recorded using the cost method and is being amortized over the life of the related tax credits. The tax credits are being recognized in income tax expense in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investment is reviewed for impairment on an annual basis or on an interim basis if an event occurs that would trigger potential impairment. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. Revenue Recognition ASC 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires the Company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans and investment securities, as these activities are subject to other GAAP discussed elsewhere within our disclosures. The Company’s revenue stream that is within the scope of Topic 606 is primarily service charges on deposit accounts, which consist of monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transaction based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. Restricted Stock Units The Company may grant cash-settled restricted stock units (“RSUs”) to its employees. Compensation cost is recognized over the vesting period based on the fair value of the award, which is re-measured at each reporting period. The fair value of the award is classified as a liability in the consolidated statements of financial condition. Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur. Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest related to income tax matters in interest expense and penalties related to tax matters in income tax expense. Retirement Plans Employee 401(k) expense is the amount of matching contributions made by the Company. Employee Stock Ownership Plan The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of shareholders’ equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. Earnings Per Common Share Basic earnings per share of common stock is computed pursuant to the two-class method by dividing net income available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed earnings attributable to participating securities by the weighted average common shares outstanding during the period. The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per share of common stock includes the dilutive effect of unvested stock awards and additional potential common shares issuable under stock options. Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available-for-sale, net of tax, which are also recognized as separate components of equity. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that any such matters existed as of the balance sheet date that will have a material effect on the consolidated financial statements. Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Fair values are estimated using relevant market information and other assumptions, as more fully disclosed in Note 5. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. Operating Segments The Company operates as a single segment. The operating information used by management to assess performance and make operating decisions about the Company is the consolidated financial data presented in these financial statements. For the years ended 2018 and 2017, the Company had one active operating subsidiary, Broadway Federal Bank, f.s.b. The Company has determined that banking is its one reportable business segment. Reclassifications Some items in the prior year consolidated financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year consolidated net income or stockholders’ equity. Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. On January 1, 2018, the Company adopted ASU No. 2014-09 and all subsequent ASUs that modified Topic 606. The adoption did not have a material impact on the measurement or recognition of revenue; as such, a modified retrospective cumulative effect adjustment to beginning retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to non-interest revenue streams such as trust and asset management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. The Company’s revenue streams that are within the scope of Topic 606 are primarily services charges on deposit accounts, which consist of monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 (i) amends existing guidance that requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables). It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These amendments are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In accordance with this standard, the Company measured the fair value of its financial assets and financial liabilities as of December 31, 2018 using an exit price notion (see Note 5 Fair Value). In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance on the classification of certain cash receipts and payments on the consolidated statement of cash flows in order to reduce diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the consolidated statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, where the guidance should be applied using a retrospective transition method to each period presented. Early adoption is permitted. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)”, which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. The standard requires an entity to state if an election to reclassify the tax effect to retained earnings is made along with the description of other income tax effects that are reclassified from AOCI. The guidance is effective for public business entities for annual periods beginning on or after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company early adopted this amendment and has elected to reclassify $66 thousand from AOCI to retained earnings at December 31, 2017. Recent Accounting Pronouncements Yet to Be Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which is intended to increase transparency and comparability in the accounting for lease transactions. Under ASU 2016-02, lessees will be required to recognize all leases longer than twelve months on the Consolidated Statements of Financial Condition as lease assets and lease liabilities and make quantitative and qualitative disclosures regarding key information about leasing arrangements. Under the new guidance, lessor accounting is largely unchanged. These amendments are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. ASU 2016-02 will be effective for us on January 1, 2019 and will require transition using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated |
Securities
Securities | 12 Months Ended |
Dec. 31, 2018 | |
Securities | |
Securities | Note 2 – Securities The following table summarizes the amortized cost and fair value of the available-for-sale investment securities portfolios at December 31, 2018 and December 31, 2017 and the corresponding amounts of unrealized gains (losses) which are recognized in accumulated other comprehensive income: Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value (In thousands) December 31, 2018: Federal agency mortgage-backed securities $ 9,575 $ 88 $ (155) $ 9,508 Federal agency debt 5,317 — (103) 5,214 Total available-for-sale securities $ 14,892 $ 88 $ (258) $ 14,722 December 31, 2017: Federal agency mortgage-backed securities $ 11,877 $ 168 $ (37) $ 12,008 Federal agency debt 5,495 2 (11) 5,486 Total available-for-sale securities $ 17,372 $ 170 $ (48) $ 17,494 At December 31, 2018, the Bank had three federal agency debt securities with total amortized cost of $5.3 million and estimated total fair value of $5.2 million and an estimated average remaining life of 3.9 years. The Bank also had 24 federal agency mortgage-backed securities with total amortized cost of $9.6 million, estimated total fair value of $9.5 million and an estimated average remaining life of 4.5 years. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. At December 31, 2018, there were no securities pledged to secure public deposits since those public deposits are under $250 thousand which are fully insured by FDIC. At December 31, 2017, securities pledged to secure public deposits had a carrying amount of $526 thousand. At December 31, 2018 and 2017, there were no holdings of securities by any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of stockholders’ equity. There were no sales of securities during the years ended December 31, 2018 and 2017. The Bank held ten securities with unrealized losses at December 31, 2018, compared to six securities with unrealized losses at December 31, 2017. Securities in unrealized loss positions are analyzed as part of our ongoing assessment of other-than-temporary impairment. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost, and our intent and ability to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. All of the Bank’s securities were issued by the federal government or its agencies. The unrealized losses on our available-for-sale securities at December 31, 2018 were primarily caused by movements in market interest rates subsequent to the purchase of such securities. We do not consider these unrealized losses to be other than temporary impairment. |
Loans Receivable Held for Sale
Loans Receivable Held for Sale | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable Held for Sale | |
Loans Receivable Held for Sale | |
Loans Receivable Held for Sale | Note 3 – Loans Receivable Held for Sale Loans receivable held for sale at December 31, 2018 totaled $6.2 million and consisted of multi-family loans. As part of the Bank’s loan concentration risk management program, $16.9 million of multi-family loans were transferred from the held-for-sale portfolio to the held-for-investment portfolio during the year ended December 31, 2018. The Bank also allocated $20.2 million, or 20%, of its total loan originations as held-for-sale and completed sales of $19.3 million of multi-family loans during the year ended December 31, 2018 for a total gain of $81 thousand. Loan repayments totaled $159 thousand during the year 2018. There were $22.4 million loans held for sale at December 31, 2017. |
Loans Receivable Held for Inves
Loans Receivable Held for Investment | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable Held for Investment | |
Loans Receivable Held for Investment | |
Loans Receivable Held for Investment | Note 4 – Loans Receivable Held for Investment Loans receivable held for investment were as follows as of the periods indicated: December 31, 2018 December 31, 2017 (In thousands) Real estate: Single family $ 91,835 $ 111,085 Multi-family 231,870 187,455 Commercial real estate 5,802 6,089 Church 25,934 30,848 Construction 1,876 1,678 Commercial – other 226 192 Consumer 5 7 Gross loans receivable before deferred loan costs and premiums 357,548 337,354 Unamortized net deferred loan costs and premiums 937 1,566 Gross loans receivable 358,485 338,920 Allowance for loan losses (2,929) (4,069) Loans receivable, net $ 355,556 $ 334,851 The following tables present the activity in the allowance for loan losses by loan type for the periods indicated: For the year ended December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Beginning balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Provision for (recapture of) loan losses (225) (420) (19) (592) 2 — — (1,254) Recoveries — — — 114 — — — 114 Loans charged off — — — — — — — — Ending balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 For the year ended December 31, 2017 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Beginning balance $ 367 $ 2,659 $ 215 $ 1,337 $ 8 $ 17 $ — $ 4,603 Provision for (recapture of) loan losses 197 (359) (144) (792) 9 (11) — (1,100) Recoveries 30 — — 536 — — — 566 Loans charged off — — — — — — — — Ending balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 The following tables present the balance in the allowance for loan losses and the recorded investment (unpaid contractual principal balance less charge-offs, less interest applied to principal, plus unamortized deferred costs and premiums) by loan type and based on impairment method as of and for the periods indicated: December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 53 $ — $ — $ 170 $ — $ 4 $ — $ 227 Collectively evaluated for impairment 316 1,880 52 433 19 2 — 2,702 Total ending allowance balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 610 $ 323 $ — $ 5,383 $ — $ 64 $ — $ 6,380 Loans collectively evaluated for impairment 91,567 232,986 5,800 19,713 1,872 162 5 352,105 Total ending loans balance $ 92,177 $ 233,309 $ 5,800 $ 25,096 $ 1,872 $ 226 $ 5 $ 358,485 December 31, 2017 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 100 $ 1 $ — $ 479 $ — $ 5 $ — $ 585 Collectively evaluated for impairment 494 2,299 71 602 17 1 — 3,484 Total ending allowance balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Loans: Loans individually evaluated for impairment $ 627 $ 333 $ — $ 8,280 $ — $ 65 $ — $ 9,305 Loans collectively evaluated for impairment 110,897 188,585 6,096 22,232 1,671 127 7 329,615 Total ending loans balance $ 111,524 $ 188,918 $ 6,096 $ 30,512 $ 1,671 $ 192 $ 7 $ 338,920 The following table presents information related to loans individually evaluated for impairment by loan type as of the periods indicated: December 31, 2018 December 31, 2017 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (In thousands) With no related allowance recorded: Multi-family $ 323 $ 323 $ — $ — $ — $ — Church 4,666 2,803 — 5,140 3,291 — With an allowance recorded: Single family 610 610 53 627 627 100 Multi-family — — — 333 333 1 Church 2,580 2,580 170 5,028 4,989 479 Commercial – other 64 64 4 65 65 5 Total $ 8,243 $ 6,380 $ 227 $ 11,193 $ 9,305 $ 585 The recorded investment in loans excludes accrued interest receivable due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for net charge-offs. The following tables present the monthly average of loans individually evaluated for impairment by loan type and the related interest income for the periods indicated: For the year ended December 31, 2018 For the year ended December 31, 2017 Cash Basis Cash Basis Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized (In thousands) Single family $ 618 $ 30 $ 636 $ 28 Multi-family 329 23 589 44 Commercial real estate — — 305 104 Church 7,893 398 9,363 693 Commercial – other 64 4 65 6 Total $ 8,904 $ 455 $ 10,958 $ 875 Cash-basis interest income recognized represents cash received for interest payments on accruing impaired loans and interest recoveries on non-accrual loans that were paid off. Interest payments collected on non-accrual loans are characterized as payments of principal rather than payments of the outstanding accrued interest on the loans until the remaining principal on the non-accrual loans is considered to be fully collectible or paid off. When a loan is returned to accrual status, the interest payments that were previously applied to principal are deferred and amortized over the remaining life of the loan. Foregone interest income that would have been recognized had loans performed in accordance with their original terms amounted to $280 thousand and $126 thousand for the years ended December 31, 2018 and 2017, respectively, and were not included in the consolidated results of operations. The following tables present the aging of the recorded investment in past due loans by loan type as of the periods indicated: December 31, 2018 30-59 60-89 Greater than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ 35 $ — $ — $ 35 $ 92,142 $ 92,177 Multi-family — — — — 233,309 233,309 Commercial real estate — — — — 5,800 5,800 Church — — — — 25,096 25,096 Construction — — — — 1,872 1,872 Commercial – other — — — — 226 226 Consumer — — — — 5 5 Total $ 35 $ — $ — $ 35 $ 358,450 $ 358,485 December 31, 2017 30-59 60-89 Greater than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ — $ 50 $ — $ 50 $ 111,474 $ 111,524 Multi-family — — — — 188,918 188,918 Commercial real estate — — — — 6,096 6,096 Church 341 — — 341 30,171 30,512 Construction — — — — 1,671 1,671 Commercial – other — — — — 192 192 Consumer — — — — 7 7 Total $ 341 $ 50 $ — $ 391 $ 338,529 $ 338,920 The following table presents the recorded investment in non-accrual loans by loan type as of the periods indicated: December 31, 2018 December 31, 2017 (In thousands) Loans receivable held for investment: Church $ 911 $ 1,766 Total non-accrual loans $ 911 $ 1,766 There were no loans 90 days or more delinquent that were accruing interest as of December 31, 2018 or December 31, 2017. Troubled Debt Restructurings At December 31, 2018, loans classified as troubled debt restructurings (“TDRs”) totaled $6.4 million, of which $591 thousand were included in non-accrual loans and $5.8 million were on accrual status. At December 31, 2017, loans classified as TDRs totaled $8.9 million, of which $1.4 million were included in non-accrual loans and $7.5 million were on accrual status. The Company has allocated $227 thousand and $585 thousand of specific reserves for accruing TDRs as of December 31, 2018 and 2017, respectively. TDRs on accrual status are comprised of loans that were accruing at the time of restructuring or loans that have complied with the terms of their restructured agreements for a satisfactory period of time and for which the Bank anticipates full repayment of both principal and interest. TDRs that are on non-accrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments, as modified. A well-documented credit analysis that supports a return to accrual status based on the borrower’s financial condition and prospects for repayment under the revised terms is also required. As of December 31, 2018 and 2017, the Company had no commitment to lend additional amounts to customers with outstanding loans that are classified as TDRs. No loans were modified during the years ended December 31, 2018 and 2017. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For single family residential, consumer and other smaller balance homogenous loans, a credit grade is established at inception, and generally only adjusted based on performance. Information about payment status is disclosed elsewhere herein. The Company analyzes all other loans individually by classifying the loans as to credit risk. This analysis is performed at least on a quarterly basis. The Company uses the following definitions for risk ratings: · Watch. Loans classified as watch exhibit weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing and are not more than 59 days past due. A watch rating is used when a material deficiency exists but correction is anticipated within an acceptable time frame. · Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. · Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. · Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. · Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Pass rated loans are generally well protected by the current net worth and paying capacity of the obligor and/or by the value of the underlying collateral. Pass rated loans are not more than 59 days past due and are generally performing in accordance with the loan terms. Based on the most recent analysis performed, the risk categories of loans by loan type as of the periods indicated were as follows: December 31, 2018 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 92,132 $ — $ 35 $ 10 $ — $ — Multi-family 232,642 — — 667 — — Commercial real estate 5,800 — — — — — Church 19,678 672 — 4,746 — — Construction 1,872 — — — — — Commercial – other 162 — — 64 — — Consumer 5 — — — — — Total $ 352,291 $ 672 $ 35 $ 5,487 $ — $ — December 31, 2017 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 111,513 $ — $ — $ 11 $ — $ — Multi-family 187,946 — — 972 — — Commercial real estate 5,974 122 — — — — Church 24,474 691 — 5,347 — — Construction 1,671 — — — — — Commercial – other 127 — — 65 — — Consumer 7 — — — — — Total $ 331,712 $ 813 $ — $ 6,395 $ — $ — |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value | |
Fair Value | Note 5 – Fair Value The Company used the following methods and significant assumptions to estimate fair value: The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair value of impaired loans that are collateral dependent is generally based upon the fair value of the collateral, which is obtained from recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Impaired loans are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Assets acquired through or by transfer in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at the lower of cost or fair value less estimated costs to sell. Fair value is commonly based on recent real estate appraisals which are updated every nine months. These appraisals may utilize a single valuation approach or a combination of approaches, including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Real estate owned properties are evaluated on a quarterly basis for additional impairment and adjusted accordingly. Appraisals for collateral-dependent impaired loans are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. Once received, an independent third-party licensed appraiser reviews the appraisals for accuracy and reasonableness, reviewing the assumptions and approaches utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Assets Measured on a Recurring Basis Assets measured at fair value on a recurring basis are summarized below: Fair Value Measurement Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total (In thousands) At December 31, 2018: Securities available-for-sale – federal agency mortgage-backed $ — $ 9,508 $ — $ 9,508 Securities available-for-sale – federal agency debt 1,979 3,235 — 5,214 At December 31, 2017: Securities available-for-sale – federal agency mortgage-backed $ — $ 12,008 $ — $ 12,008 Securities available-for-sale – federal agency debt 1,976 3,510 — 5,486 There were no transfers between Level 1, Level 2, or Level 3 during the years ended December 31, 2018 and 2017. Assets Measured on a Non-Recurring Basis Assets are considered to be reflected at fair value on a non-recurring basis if the fair value measurement of the instrument does not necessarily result in a change in the amount recorded on the statement of condition. Generally, a non-recurring valuation is the result of the application of other accounting pronouncements that require assets to be assessed for impairment or recorded at the lower of cost or fair value. The following table provides information regarding the carrying values of our assets measured at fair value on a non-recurring basis as of the periods indicated. The fair value measurement for all of these assets falls within Level 3 of the fair value hierarchy. December 31, 2018 December 31, 2017 (In thousands) Impaired loans carried at fair value of collateral $ 591 $ 742 Real estate owned 833 878 The following table provides information regarding losses recognized on assets measured at fair value on a non-recurring basis for the years ended December 31, 2018 and 2017. For the year ended December 31, 2018 2017 (In thousands) Impaired loans carried at fair value of collateral $ — $ — Real estate owned 45 80 Total $ 45 $ 80 The following table presents the valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis as of December 31, 2018 and 2017: Weighted Valuation Technique(s) Unobservable Input(s) Range Average December 31, 2018: Impaired loans Third Party Appraisals Adjustment for differences between the comparable sales -3% to -1% -2.83% Real estate owned – church Third Party Appraisals Adjustment for differences between the comparable sales -11% -10.85% December 31, 2017: Impaired loans Third Party Appraisals Adjustment for differences between the comparable sales -16% to 7% -4% Real estate owned – church Third Party Appraisals Adjustment for differences between the comparable sales -6% -6% Fair Values of Financial Instruments The carrying amounts and estimated fair values of financial instruments as of the periods indicated were as follows: Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Cash and cash equivalents $ 16,651 $ 16,651 $ — $ — $ 16,651 Securities available-for-sale 14,722 1,979 12,743 — 14,722 Loans receivable held for sale 6,231 — 6,270 — 6,270 Loans receivable held for investment (1) 355,556 — — 354,792 354,792 Accrued interest receivable 1,143 78 43 1,022 1,143 Financial Liabilities: Deposits $ 281,414 $ — $ 269,418 $ — $ 269,418 Federal Home Loan Bank advances 70,000 — 69,933 — 69,933 Junior subordinated debentures 5,100 — — 4,481 4,481 Accrued interest payable 334 — 324 10 334 Fair Value Measurements at December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Cash and cash equivalents $ 22,219 $ 22,219 $ — $ — $ 22,219 Securities available-for-sale 17,494 1,976 15,518 — 17,494 Loans receivable held for sale 22,370 — 22,626 — 22,626 Loans receivable held for investment 334,851 — — 333,231 333,231 Accrued interest receivable 1,073 58 91 924 1,073 Federal Home Loan Bank stock 2,916 2,916 — — 2,916 Financial Liabilities: Deposits $ 291,290 $ — $ 280,761 $ — $ 280,761 Federal Home Loan Bank advances 65,000 — 64,887 — 64,887 Junior subordinated debentures 5,100 — — 4,503 4,503 Accrued interest payable 304 — 296 8 304 (1) The estimated value of loans held for investment for December 31, 2018 reflects an exit price assumption. The December 31, 2017 fair value estimate is not based on an exit price assumption. |
Office Properties and Equipment
Office Properties and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Office Properties and Equipment, net | |
Office Properties and Equipment, net | Note 6 – Office Properties and Equipment, net Year-end office properties and equipment were as follows: 2018 2017 (In thousands) Land $ 572 $ 572 Office buildings and improvements 3,264 3,203 Furniture, fixtures and equipment 1,794 1,786 5,630 5,561 Less accumulated depreciation (3,388) (3,155) Office properties and equipment, net $ 2,242 $ 2,406 Depreciation expense was $241 thousand and $256 thousand for the years 2018 and 2017, respectively. At December 31, 2018, the Company was obligated through 2021 under various non-cancelable operating leases on buildings and land used for office space and banking purposes. These operating leases contain escalation clauses which provide for increased rental expense, based primarily on increases in real estate taxes and cost-of-living-indices. The Company also leases certain office equipment. Rent expense under the operating leases was $593 thousand for 2018 and $587 thousand for 2017. Minimum noncancelable lease commitments, before considering renewal options that generally are present, are as follows: Premises Equipment Total (In thousands) Year ending December 31: 2019 $ 481 $ 35 $ 516 2020 494 35 529 2021 167 15 182 Total $ 1,142 $ 85 $ 1,227 |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2018 | |
Deposits | |
Deposits | Note 7 – Deposits Deposits are summarized as follows: December 31, 2018 2017 (In thousands) NOW account and other demand deposits $ 10,307 $ 11,982 Non-interest bearing demand deposits 22,877 22,469 Money market deposits 29,948 68,019 Passbook 45,718 38,031 Certificates of deposit 172,564 150,789 Total $ 281,414 $ 291,290 The Bank accepts two types of deposits from a deposit placement service called the Certificate of Deposit Account Registry Service (“CDARS”). Reciprocal deposits are the Bank’s own retail deposits in amounts in excess of the insured limits. The CDARS program allows banks to place their customers’ funds in FDIC-insured certificates of deposit at other banks and, at the same time, receive an equal sum of funds from the customers of other banks in the CDARS Network. These deposits totaled $33.7 million and $9.5 million at December 31, 2018 and 2017, respectively and are not considered to be brokered deposits. One-way deposits are also available using the CDARS program. With the one-way program, the Bank accepts deposits from CDARS even though there is no customer account involved. These deposits totaled $32.6 million and $43.3 million at December 31, 2018 and 2017, respectively. Brokered deposits (non-CDARS) totaled $9.9 million at December 31, 2018. The Bank did not have any brokered deposits at December 31, 2017. Scheduled maturities of certificates of deposit for the next five years are as follows: Maturity Amount (In thousands) 2019 $ 133,654 2020 34,819 2021 2,120 2022 1,712 2023 218 Thereafter 41 $ 172,564 Certificates of deposit of $250 thousand or more totaled $33.9 million and $16.7 million at December 31, 2018 and 2017, respectively. Deposits from principal officers, directors, and their affiliates totaled $1.8 million and $1.6 million at December 31, 2018 and 2017, respectively. |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances | 12 Months Ended |
Dec. 31, 2018 | |
Federal Home Loan Bank Advances | |
Federal Home Loan Bank Advances | Note 8 – Federal Home Loan Bank Advances The following table summarizes information relating to FHLB advances at or for the periods indicated: At or For the Year Ended 2018 2017 (Dollars in thousands) FHLB Advances: Average balance outstanding during the year $ 74,729 $ 89,279 Maximum amount outstanding at any month-end during the year $ 98,000 $ 104,000 Balance outstanding at end of year $ 70,000 $ 65,000 Weighted average interest rate at end of year 2.51 % 1.86 % Average cost of advances during the year 2.13 % 1.97 % Weighted average contractual maturity (in months) 24 18 Each advance is payable at its maturity date, with a prepayment penalty. The advances were collateralized by $151.0 million and $128.4 million of first mortgage loans at year-end 2018 and 2017, respectively, under a blanket lien arrangement. Based on this collateral, the Company’s holdings of FHLB stock and a general borrowing limit of 30% of total assets, the Company is eligible to borrow up to an additional $54.6 million at year-end 2018. Required payments over the next five years are as follows: Amount (In thousands) 2019 $ 8,000 2020 29,500 2021 22,500 2022 5,000 2023 5,000 $ 70,000 |
Junior Subordinated Debentures
Junior Subordinated Debentures | 12 Months Ended |
Dec. 31, 2018 | |
Junior Subordinated Debentures | |
Junior Subordinated Debentures | Note 9 – Junior Subordinated Debentures On March 17, 2004, the Company issued $6.0 million of Floating Rate Junior Subordinated Debentures (the “Debentures”) in a private placement to a trust that was capitalized to purchase subordinated debt and preferred stock of multiple community banks. Interest on the Debentures is payable quarterly at a rate per annum equal to the 3-Month LIBOR plus 2.54%. The interest rate is determined as of each March 17, June 17, September 17, and December 17, and was 5.34% at December 31, 2018. On October 16, 2014, the Company made payments of $900 thousand of principal on Debentures, executed a Supplemental Indenture for the Debentures that extended the maturity of the Debentures to March 17, 2024, and modified the payment terms of the remaining $5.1 million principal amount thereof. The modified terms of the Debentures require quarterly payments of interest only through March 2019 at the original rate of 3-Month LIBOR plus 2.54%. Starting in June 2019, the Company will be required to make quarterly payments of equal amounts of principal, plus interest, until the Debentures are fully amortized on March 17, 2024. The Debentures may be called for redemption at any time by the Company. Scheduled principal repayments of junior subordinated debentures over the next six years are as follows: Amount (In thousands) 2019 $ 765 2020 1,020 2021 1,020 2022 1,020 2023 1,020 2024 255 $ 5,100 |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Employee Benefit Plans | Note 10 – Employee Benefit Plans Broadway Federal 401(k) Plan A 401(k) benefit plan allows employee contributions for substantially all employees up to 15% of their compensation, which are matched at a rate equal to 50% of the first 6% of the compensation contributed. Expense totaled $131 thousand and $132 thousand for 2018 and 2017. ESOP Plan Employees participate in an Employee Stock Option Plan (“ESOP”) after attaining certain age and service requirements. In December 2016, the ESOP purchased 1,493,679 shares of the Company’s common stock at $1.59 per share, for a total cost of $2.4 million, of which $1.2 million was funded with a loan from the Company. The loan will be repaid from the Bank’s annual discretionary contributions to the ESOP, net of dividends paid, over a period of 20 years. Shares of the Company’s common stock purchased by the ESOP are held in a suspense account until released for allocation to participants. When loan payments are made, shares are allocated to each eligible participant based on the ratio of each such participant’s compensation, as defined in the ESOP, to the total compensation of all eligible plan participants. As the unearned shares are released from the suspense account, the Company recognizes compensation expense equal to the fair value of the ESOP shares during the periods in which they become committed to be released. To the extent that the fair value of the ESOP shares released differs from the cost of such shares, the difference is charged or credited to equity as additional paid-in capital. Dividends on allocated shares increase participant accounts. Dividends on unallocated shares will be used to repay the loan. At the end of employment, participants will receive shares for their vested balance. Compensation expense related to the ESOP was $80 thousand for 2018 and $104 thousand for 2017. Shares held by the ESOP were as follows: December 31, 2018 December 31, 2017 (Dollars in thousands) Allocated to participants 1,036,809 1,108,382 Committed to be released 10,580 10,752 Suspense shares 646,033 688,870 Total ESOP shares 1,693,422 1,808,004 Fair value of unearned shares $ 678 $ 1,626 During 2018 and 2017, 43,009 and 40,126 of ESOP shares were released for allocation to participants, respectively. The outstanding balance of unearned ESOP shares at December 31, 2018 and 2017 were $1.0 million and $1.1 million, respectively, which is shown as Unearned ESOP shares in the equity section of the consolidated statements of financial condition. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 11 – Income Taxes The Company and its subsidiary are subject to U.S. federal and state income taxes. Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Income tax expense was as follows: 2018 2017 (In thousands) Current Federal $ (110) $ — State 12 12 Deferred Federal 68 1,455 State 86 396 Change in valuation allowance — — Total $ 56 $ 1,863 Effective tax rates differ from the federal statutory rate of 21% for the year ended December 31, 2018 and 34% for the year ended December 31, 2017 applied to income before income taxes due to the following: 2018 2017 (In thousands) Federal statutory rate times financial statement net income $ 183 $ 1,269 Effect of: State taxes, net of federal benefit 77 268 Change in federal rate — 519 Earnings from bank owned life insurance (16) (22) Low income housing credits (212) (212) Change in valuation allowance — — Other, net 24 41 Total $ 56 $ 1,863 On December 22, 2017, the Tax Cuts and Jobs Act was signed into law. Among other items, the Tax Cuts and Jobs Act reduces the federal corporate tax rate to 21% from the existing maximum rate of 35%, effective January 1, 2018. As a result, the Company has recorded a decrease related to its deferred tax assets of $519 thousand, with a corresponding increase to deferred income tax expense of $519 thousand for the year ended December 31, 2017. Year-end deferred tax assets and liabilities were due to the following: 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 799 $ — Real estate owned 65 5 Accrued liabilities 150 173 State income taxes 34 33 Stock compensation 165 182 Net operating loss carryforward 3,887 4,367 Non-accrual loan interest 3 4 Partnership investment 140 101 General business credit 1,661 1,458 Alternative minimum tax credit 151 256 Unrealized appreciation AFS 50 — Other 28 14 Total deferred tax assets 7,133 6,593 Deferred tax liabilities: Section 481 Adjustments to bad debts (980) — Deferred loan fees/costs (775) (817) Allowance for loan losses — (276) Basis difference on fixed assets (35) (49) Net unrealized appreciation on available-for-sale securities — (36) FHLB stock dividends (266) (266) Mortgage servicing rights (5) (7) Prepaid expenses (27) (32) Total deferred tax liabilities (2,088) (1,483) Net deferred tax assets $ 5,045 $ 5,110 Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluated both positive and negative evidence, including the existence of cumulative losses in the current year and the prior two years, the amount of taxes paid in available carry-back years, the forecasts of future income and tax planning strategies. Based on this analysis, the Company determined that as of December 31, 2018, no valuation allowance was required on its deferred tax assets, which totaled $5.0 million. As of December 31, 2017, the Company recorded no valuation allowance on its deferred tax assets of $5.1 million. As of December 31, 2018, the Company has federal net operating loss carryforwards of $8.2 million and California net operating loss carryforwards of $25.3 million, which begin expiring in 2031 through 2037 and 2031 through 2036, respectively. The Company also has federal general business credits of $1.5 million, expiring beginning in 2030 through 2037, and alternative minimum tax credit carryforwards of $119 thousand, which can be carried forward indefinitely. Federal income tax laws previously allowed the Company additional bad debt deductions based on the reserve method of computing the federal bad debt deduction. This method of computing the Company’s federal bad debt deduction was permitted to be used by the Company until the end of 1987. As of December 31, 1987, the tax bad debt reserve balance totaled $3.0 million. Accounting standards do not require a deferred tax liability to be recorded on this amount, which otherwise would total approximately $632 thousand at year end 2018 and 2017. If the Bank were liquidated, or otherwise ceases to be a bank, the $3.0 million tax bad debt reserve may need to be recaptured into taxable income and income tax expense would need to be provided. Prior to 2018, the Company computed its bad debt deduction for income tax purposes under the reserve method. In 2018, the Company requested a change in accounting method used for computing its tax bad debt deduction from the reserve method to the charge-off method as defined under Internal Revenue Code Section 166. Once the IRS has consented to the requested change in accounting method, the Company would compute its tax bad debt deduction under the new method and would recapture its tax bad debt reserve of $4.3 million into taxable income evenly over the next 4 years starting in 2018. At December 31, 2018 and 2017, the Company had $475 thousand in unrecognized tax benefits. This amount, if recognized, would favorably affect the income tax provision in future periods. The Company expects that the total amount of unrecognized tax benefits may decrease significantly within the next twelve months due to expected settlement with the state taxing authorities. During 2018 and 2017, $5 thousand was accrued during each period for potential interest related to these unrecognized tax benefits. Federal tax years 2015 through 2018 remain open for the assessment of Federal income tax. With the exception of the issues under protest for the years listed below, California tax years 2014 through 2018 remain open for the assessment of California income tax. The Company is currently under examination by the California Franchise Tax Board (“FTB”) for the 2009, 2010, and 2011 tax years. The FTB has proposed adjustments to the Company’s California net operating loss carryforwards for items which the Company has established an unrecognized tax benefit. The Company has protested the FTB’s adjustments and does not expect that significant additional tax expense will result. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Stock-Based Compensation | Note 12 – Stock-Based Compensation Prior to July 25, 2018, the Company issued stock-based compensation awards to its directors and employees under the 2008 Long-Term Incentive Plan (“2008 LTIP”). The 2008 LTIP permitted the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards for up to 2,000,000 shares of common stock. As of July 25, 2018, the Company ceased granting awards under the 2008 LTIP. On July 25, 2018, the stockholders approved the 2018 Long-Term Incentive Plan (“2018 LTIP”). As with the 2008 LTIP, the 2018 LTIP permits the grant of non-qualified and incentive stock options, stock appreciation rights, full value awards and cash incentive awards. The plan will be in effect for ten years. The maximum number of shares that can be awarded under the plan is 1,293,109 shares of common stock. As of December 31, 2018, no shares had been awarded under the 2018 LTIP. No stock options were granted during the years ended December 31, 2018 and December 31, 2017. The following table summarizes stock option activity during the years ended December 31, 2018 and 2017: 2018 2017 Weighted Weighted Average Average Number Exercise Number Exercise Outstanding Price Outstanding Price Outstanding at beginning of year 537,500 $ 2.19 540,625 $ 2.18 Granted during the year — — — — Exercised during the year — — — — Forfeited or expired during the year — — (3,125) 4.80 Outstanding at end of year 537,500 $ 2.19 537,500 $ 2.19 Exercisable at end of year 267,500 $ 2.71 177,500 $ 3.26 For each year of 2018 and 2017, the Company recorded $39 thousand of stock-based compensation expense related to stock options. As of December 31, 2018, unrecognized compensation cost related to nonvested stock options granted under the plan was $84 thousand. The cost is expected to be recognized over a period of 2.15 years. Options outstanding and exercisable at year-end 2018 were as follows: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Aggregate Average Aggregate Number Contractual Exercise Intrinsic Number Exercise Intrinsic Grant Date Outstanding Life Price Value Outstanding Price Value January 21, 2009 7,500 0.05 years $ 4.00 7,500 $ 4.00 March 18, 2009 75,000 0.21 years $ 4.98 75,000 $ 4.98 January 21, 2010 5,000 1.05 years $ 6.00 5,000 $ 6.00 February 24, 2016 450,000 7.15 years $ 1.62 180,000 $ 1.62 537,500 6.02 years $ 2.19 $ — 267,500 $ 2.71 $ — In March 2016, the Company awarded 120,483 shares of restricted stock to its Chief Executive Officer (“CEO”) under the 2008 LTIP. A restricted stock award is valued at the closing price of the Company’s stock on the date of such award. Subject to certain performance restrictions, 100,000 shares of restricted stock fully vested over a two-year period in 2018 and the remaining 20,483 shares shall vest over a three-year period. Stock-based compensation expense is recognized on a straight-line basis over the vesting period. The Company recorded $36 thousand and $105 thousand of stock-based compensation expense related to this award during the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, unrecognized compensation cost related to non-vested restricted stock award was $3 thousand which is expected to be recognized over a period of 3 months. In January 2018 and April 2017, the Company awarded 18,906 and 30,002, respectively, shares of common stock to its directors under the 2008 LTIP, all of which are fully vested. The Company recorded $45 thousand and $53 thousand of compensation expense during the years ended December 31, 2018 and 2017, respectively, based on the fair value of the stock, which was determined using the average of the high and the low price of the stock on the date of the award. In February 2018 and April 2017, the Company also awarded 97,195 and 129,270 of cash-settled restricted stock units (“RSUs”) to its CEO under the 2008 LTIP. All RSUs vest at the end of two years from the date of the grant and are subject to forfeiture until vested. Each RSU entitles the CEO to receive cash equal to the fair market value of one share of common stock on the applicable payout date. Compensation expense is determined based on the fair value of the award and is re-measured at each reporting period and is classified as a liability in the consolidated statements of financial condition. The Company recorded $73 thousand and $102 thousand of compensation expense related to these awards during the years ended December 31, 2018 and 2017 , respectively. |
Capital and Regulatory Matters
Capital and Regulatory Matters | 12 Months Ended |
Dec. 31, 2018 | |
Capital and Regulatory Matters | |
Capital and Regulatory Matters | Note 13 – Capital and Regulatory Matters The Bank’s capital requirements are administered by the Office of the Comptroller of the Currency (“OCC”) and involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the OCC. Failure to meet capital requirements can result in regulatory action. The federal banking regulators approved final capital rules (“Basel III Capital Rules”) in July 2013 implementing the Basel III framework as well as certain provisions of the Dodd-Frank Act. The Basel III Capital Rules prescribe a standardized approach for calculating risk-weighted assets and revised the definition and calculation of Tier 1 capital and Total capital, and include a new Common Equity Tier 1 capital (“CET1”) measure. Under the Basel III Capital Rules, the currently effective minimum capital ratios are: · 4.5% CET1 to risk-weighted assets; · 6.0% Tier 1 capital (that is, CET1 plus Additional Tier 1 capital) to risk-weighted assets; · 8.0% Total capital (that is, Tier 1 capital plus Tier 2 capital) to risk-weighted assets; and · 4.0% Tier 1 capital to average consolidated assets (known as the “leverage ratio”). A new capital conservation buffer was also established above the regulatory minimum capital requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and will increase each subsequent year by an additional 0.625% until it reaches its final level of 2.5% on January 1, 2019. The Basel III Capital rules also contain revisions to the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels begin to show signs of weakness. Under the prompt corrective action requirements, which are designed to complement the capital conservation buffer, insured depository institutions are now required to meet the following increased capital level requirements in order to qualify as “well capitalized”: (i) a CET1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8% (increased from 6%); (iii) a total capital ratio of 10% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from previous rules). The Basel III Capital Rules became effective for the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). At December 31, 2018 and 2017, the Bank’s level of capital exceeded all regulatory capital requirements and its regulatory capital ratios were above the minimum levels required to be considered well capitalized for regulatory purposes. Actual and required capital amounts and ratios as of the periods indicated are presented below. Minimum Required To Be Well Capitalized Under Minimum Capital Prompt Corrective Actual Requirements Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018: Tier 1 (Leverage) $ 49,433 $ 16,439 $ 20,549 Common Equity Tier 1 $ 49,433 $ 18,494 $ 16,634 Tier 1 $ 49,433 $ 24,659 $ 20,472 Total Capital $ 52,417 $ 32,879 $ 25,590 December 31, 2017: Tier 1 (Leverage) $ 47,838 $ 16,798 $ 20,997 Common Equity Tier 1 $ 47,838 $ 11,557 $ 16,693 Tier 1 $ 47,838 $ 15,409 $ 20,545 Total Capital $ 51,059 $ 20,545 $ 25,681 |
Loan Commitments and Other Rela
Loan Commitments and Other Related Activities | 12 Months Ended |
Dec. 31, 2018 | |
Loan Commitments and Other Related Activities | |
Loan Commitments and Other Related Activities | Note 14 – Loan Commitments and Other Related Activities Some financial instruments, such as loan commitments, credit lines, letters of credit, and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or to support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance-sheet risk for credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The contractual amounts of financial instruments with off-balance-sheet risk at year-end were as follows: 2018 2017 (In thousands) Commitments to make loans $ 10,875 $ 1,493 Unused lines of credit – variable rates 1,491 2,582 Commitments to make loans are generally made for periods of 60 days or less. At year-end 2018, loan commitments consisted of six multi-family residential loans with initial five year interest rates ranging from 4.50% to 4.68%. |
Parent Company Only Condensed F
Parent Company Only Condensed Financial Information | 12 Months Ended |
Dec. 31, 2018 | |
Parent Company Only Condensed Financial Information | |
Parent Company Only Condensed Financial Information | Note 15 – Parent Company Only Condensed Financial Information Condensed financial information of Broadway Financial Corporation follows: Condensed Balance Sheet December 31, 2018 2017 (In thousands) Assets Cash and cash equivalents $ 156 $ 400 Investment in bank subsidiary 51,221 50,594 Other assets 2,225 2,015 Total assets $ 53,602 $ 53,009 Liabilities and stockholders’ equity Junior subordinated debentures $ 5,100 $ 5,100 Accrued expenses and other liabilities 66 178 Stockholders’ equity 48,436 47,731 Total liabilities and stockholders’ equity $ 53,602 $ 53,009 Condensed Statements of Income Years ended December 31, 2018 2017 (In thousands) Interest income $ 25 $ 28 Interest expense (243) (194) Other expense (469) (730) Loss before income tax and undistributed subsidiary income (687) (896) Income tax benefit (expense) 205 (326) Equity in undistributed subsidiary income 1,297 3,091 Net income $ 815 $ 1,869 Condensed Statements of Cash Flows Years ended December 31, 2018 2017 (In thousands) Cash flows from operating activities Net income $ 815 $ 1,869 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed subsidiary income (1,297) (3,091) Change in other assets (210) 330 Change in accrued expenses and other liabilities (112) (183) Net cash used in operating activities (804) (1,075) Cash flows from investing activities Dividends from bank subsidiary 600 500 Net cash provided by investing activities 600 500 Cash flows from financing activities Common stock repurchased for tax withholdings (108) — Proceeds from repayment of ESOP loan 68 80 Net cash (used in) provided by financing activities (40) 80 Net change in cash and cash equivalents (244) (495) Beginning cash and cash equivalents 400 895 Ending cash and cash equivalents $ 156 $ 400 |
Earnings Per Common Share
Earnings Per Common Share | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Common Share | |
Earnings Per Common Share | Note 16 – Earnings Per Common Share The factors used in the earnings per common share computation follow: 2018 2017 (Dollars in thousands, except share and per share) Net income $ 815 $ 1,869 Less net income attributable to participating securities (3) (5) Income available to common stockholders $ 812 $ 1,864 Weighted average common shares outstanding for basic earnings per common share 26,755,405 26,678,917 Add: dilutive effects of assumed exercises of stock options — 27,117 Add: dilutive effects of unvested restricted stock awards 7,044 49,448 Weighted average common shares outstanding for diluted earnings per common share 26,762,449 26,755,482 Earnings per common share – basic $ 0.03 $ 0.07 Earnings per common share – diluted $ 0.03 $ 0.07 Stock options for 267,500 shares and 87,500 shares of common stock for the years ended December 31, 2018 and 2017, respectively, were not considered in computing diluted earnings per common share because they were anti-dilutive. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | Note 17 – Subsequent Events There was no major subsequent event to be disclosed as of March 29, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Nature of Operations and Principles of Consolidation | Nature of Operations and Principles of Consolidation Broadway Financial Corporation (the “Company”) is a Delaware corporation primarily engaged in the savings and loan business through its wholly owned subsidiary, Broadway Federal Bank, f.s.b. (the “Bank”). The Bank’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 and commercial real estate located in Southern California. At December 31, 2018, the Bank operated two retail-banking offices in Los Angeles, California and one in the nearby city of Inglewood, California. The Bank is subject to significant competition from other financial institutions, and is also subject to regulation by certain federal agencies and undergoes periodic examinations by those regulatory authorities. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Broadway Federal Bank, f.s.b. All significant inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates To prepare consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the consolidated financial statements and the disclosures provided, and actual results could differ from these estimates. The allowance and provision for loan losses, specific reserves for impaired loans, fair value of real estate owned, deferred tax asset valuation allowance, and fair values of investment securities and other financial instruments are particularly subject to change. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash items in the process of collection, amounts due from correspondent banks and the Federal Reserve Bank, and interest-bearing deposits in other banks with initial terms of ninety days or less. The Company may be required to maintain reserve and clearing balances with the Federal Reserve Bank under the Federal Reserve Act. The reserve and clearing requirement balance was $0 at December 31, 2018. Net cash flows are reported for customer loan and deposit transactions, interest-bearing deposits in other banks, deferred income taxes and other assets and liabilities. |
Investment Securities | Investment Securities Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available-for-sale when they might be sold before maturity. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income (loss), net of tax. Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments. Gains and losses on sales are recorded on the trade date and determined using the specific identification method. Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. Consideration is given to the financial condition and near-term prospects of the issuer, the length of time and the extent to which the fair value has been less than the cost, and the intent and ability of management to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. In analyzing an issuer’s financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies have occurred, and the results of reviews of the issuer’s financial condition. |
Loans Receivable Held for Sale | Loans Receivable Held for Sale The Bank originates loans for sale, but may, from time-to-time, decide to sell certain loans that are held for investment in order to manage loan concentrations. When a decision is made to sell a loan(s), such loan(s) is transferred from held-for-investment portfolio to held-for-sale portfolio at the lower of cost or fair value. If a reduction in value is required at time of the transfer, a charge-off is recorded against the allowance for loan losses (“ALLL”). Any subsequent decline in value of the loan(s) is recorded as a valuation allowance with a corresponding charge to non-interest expense. Transfers of loans are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been legally isolated from the Bank, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right), to pledge or exchange the transferred assets, and provides no more than a trivial benefit to the Bank, and (3) the Bank does not maintain effective control over the transferred assets. Loans receivable held for sale are generally sold with servicing rights released. Gains and losses on sales of loans are based on the difference between the selling price and the carrying value of the related loan sold. When loans receivable held for sale are sold, existing deferred loan fees or costs are an adjustment of the gain or loss on sale. |
Loans Receivable Held for Investment | Loans Receivable Held for Investment Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of allowance for loan losses, deferred loan fees and costs and unamortized premiums and discounts. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct loan origination costs, premiums and discounts are deferred, and recognized in income using the level-yield method without anticipating prepayments. Interest income on all loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on non-accrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on non-accrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. |
Concentration of Credit Risk | Concentration of Credit Risk Concentrations of credit risk arise when a number of customers are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company’s lending activities are predominantly in real estate loans that are secured by properties located in Southern California and many of the borrowers reside in Southern California. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy and real estate market in the Southern California area. The Company has a significant concentration of deposits with a long-time customer that accounted for approximately 11% of its deposits as of December 31, 2018. The Company expects to maintain this relationship with the customer for the near term. |
Loans Purchased | Loans Purchased The Bank purchases or participates in loans originated by other institutions from time to time. Subject to regulatory restrictions applicable to savings institutions, the Bank’s current loan policies allow all loan types to be purchased. The determination to purchase specific loans or pools of loans is based upon the Bank’s investment needs and market opportunities and is subject to the Bank’s underwriting policies, which require consideration of the financial condition of the borrower and the appraised value of the property, among other factors. Premiums or discounts incurred upon the purchase of loans are recognized in income using the interest method over the estimated life of the loans, adjusted for actual prepayments. No loans were purchased during 2018 compared to the purchases of $24.6 million of single family loans at par in 2017. |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectability of a loan balance is confirmed. Subsequent cash recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, could be charged off. In addition, the OCC and FDIC periodically review the allowance for loan losses as an integral part of their examination process. These agencies may require an increase in the allowance for loan losses based on their judgments of the information available to them at the time of their examinations. The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. If a loan is impaired, either a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or alternatively a charge-off is taken to record the loan at the fair value of the collateral, less estimated selling costs, if repayment is expected solely from the collateral. TDRs are individually evaluated for impairment and included in the separately identified impairment disclosures. TDRs are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of any necessary additional charge-off based on internal analyses and appraisals of the underlying collateral securing these loans. The general component covers loans that are collectively evaluated for impairment and is based on historical loss experience adjusted for current factors. The historical loss experience is determined by portfolio segment with the use of a loss migration analysis and is based on the actual loss history experienced by the Company over the most recent five years. This actual loss experience is supplemented with information about other current economic factors based on the risks present for each portfolio segment. These current economic factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. The following portfolio segments have been identified: one-to-four units (“single family”), five or more units (“multi-family”), commercial real estate, church, construction, commercial loans, and consumer loans. The risks in our various portfolio segments are as follows: Single Family – Subject to adverse employment conditions in the local economy leading to increased default rate; decreased market values from oversupply in a geographic area; impact on borrowers’ ability to maintain payments in the event of incremental rate increases on adjustable rate mortgages. Multi-Family – Subject to adverse various market conditions that cause a decrease in market value or lease rates; change in personal funding sources for tenants; oversupply of units in a specific region; a shift in population; reputational risks. Commercial Real Estate – Subject to adverse conditions in the local economy which may lead to reduced cash flows due to vacancies and reduced rental rates; decreases in the value of underlying collateral. Church – Subject to adverse economic and employment conditions leading to reduced cash flows from members’ donations and offerings; the stability, quality and popularity of church leadership. Construction – Subject to adverse conditions in the local economy which may lead to reduced demand for new commercial, multi-family or single family buildings or reduced lease or sale opportunities once the building is complete. Commercial – Subject to industry and economic conditions including decreases in product demand. Consumer – Subject to adverse employment conditions in the local economy, which may lead to higher default rates. |
Real Estate Owned | Real Estate Owned Assets acquired through, or instead of, loan foreclosure are initially recorded at fair value less estimated costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less estimated costs to sell. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through a provision that is charged to non-interest expense. Operating costs after acquisition are expensed as incurred. |
Office Properties and Equipment | Office Properties and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 10 to 40 years. Furniture, fixtures and equipment are depreciated using the straight-line method with useful lives ranging from 3 to 10 years. Leasehold improvements are amortized over the lease term or the estimated useful life of the asset, whichever is shorter. |
Federal Home Loan Bank (FHLB) stock | Federal Home Loan Bank (FHLB) stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income when declared. |
Bank-Owned Life Insurance | Bank-Owned Life Insurance The Bank has purchased life insurance policies on a former key executive. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. |
Investment in Affordable Housing Limited Partnership | Investment in Affordable Housing Limited Partnership The Bank owns a less than 5% interest in an affordable housing limited partnership. The investment is recorded using the cost method and is being amortized over the life of the related tax credits. The tax credits are being recognized in income tax expense in the consolidated financial statements to the extent they are utilized on the Company’s income tax returns. The investment is reviewed for impairment on an annual basis or on an interim basis if an event occurs that would trigger potential impairment. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. |
Revenue Recognition | Revenue Recognition ASC 606, Revenue from Contracts with Customers ("ASC 606"), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity's contracts to provide goods or services to customers. The core principle requires the Company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to ASC 606, including revenue generated from financial instruments, such as our loans and investment securities, as these activities are subject to other GAAP discussed elsewhere within our disclosures. The Company’s revenue stream that is within the scope of Topic 606 is primarily service charges on deposit accounts, which consist of monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transaction based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. |
Restricted Stock Units | Restricted Stock Units The Company may grant cash-settled restricted stock units (“RSUs”) to its employees. Compensation cost is recognized over the vesting period based on the fair value of the award, which is re-measured at each reporting period. The fair value of the award is classified as a liability in the consolidated statements of financial condition. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. The Company’s accounting policy is to recognize forfeitures as they occur. |
Income Taxes | Income Taxes Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest related to income tax matters in interest expense and penalties related to tax matters in income tax expense. |
Retirement Plans | Retirement Plans Employee 401(k) expense is the amount of matching contributions made by the Company. |
Employee Stock Ownership Plan | Employee Stock Ownership Plan The cost of shares issued to the ESOP, but not yet allocated to participants, is shown as a reduction of shareholders’ equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts. Dividends on allocated ESOP shares reduce retained earnings; dividends on unearned ESOP shares reduce debt and accrued interest. |
Earnings Per Common Share | Earnings Per Common Share Basic earnings per share of common stock is computed pursuant to the two-class method by dividing net income available to common stockholders less dividends paid on participating securities (unvested shares of restricted common stock) and any undistributed earnings attributable to participating securities by the weighted average common shares outstanding during the period. The weighted average common shares outstanding includes the weighted average number of shares of common stock outstanding less the weighted average number of unvested shares of restricted common stock. ESOP shares are considered outstanding for this calculation unless unearned. Diluted earnings per share of common stock includes the dilutive effect of unvested stock awards and additional potential common shares issuable under stock options. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income or loss. Other comprehensive income or loss includes unrealized gains and losses on securities available-for-sale, net of tax, which are also recognized as separate components of equity. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe that any such matters existed as of the balance sheet date that will have a material effect on the consolidated financial statements. |
Fair Value Measurements | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Fair values are estimated using relevant market information and other assumptions, as more fully disclosed in Note 5. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect the estimates. |
Operating Segments | Operating Segments The Company operates as a single segment. The operating information used by management to assess performance and make operating decisions about the Company is the consolidated financial data presented in these financial statements. For the years ended 2018 and 2017, the Company had one active operating subsidiary, Broadway Federal Bank, f.s.b. The Company has determined that banking is its one reportable business segment. |
Reclassifications | Reclassifications Some items in the prior year consolidated financial statements were reclassified to conform to the current presentation. Reclassifications had no effect on prior year consolidated net income or stockholders’ equity. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”. ASU 2014-09 supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for public business entities for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. On January 1, 2018, the Company adopted ASU No. 2014-09 and all subsequent ASUs that modified Topic 606. The adoption did not have a material impact on the measurement or recognition of revenue; as such, a modified retrospective cumulative effect adjustment to beginning retained earnings was not deemed necessary. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts were not adjusted and continue to be reported in accordance with our historic accounting under Topic 605. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to non-interest revenue streams such as trust and asset management income, deposit related fees, interchange fees, merchant income, and annuity and insurance commissions. The Company’s revenue streams that are within the scope of Topic 606 are primarily services charges on deposit accounts, which consist of monthly service fees, check orders, and other deposit account related fees. The Company’s performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Check orders and other deposit account related fees are largely transactional based, and therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) – Recognition and Measurement of Financial Assets and Financial Liabilities”. ASU 2016-01 (i) amends existing guidance that requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. It requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables). It eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. These amendments are effective for public business entities for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In accordance with this standard, the Company measured the fair value of its financial assets and financial liabilities as of December 31, 2018 using an exit price notion (see Note 5 Fair Value). In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments”. ASU 2016-15 provides guidance on the classification of certain cash receipts and payments on the consolidated statement of cash flows in order to reduce diversity in practice. ASU 2016-15 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash”. ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the consolidated statement of cash flows. ASU 2016-18 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, where the guidance should be applied using a retrospective transition method to each period presented. Early adoption is permitted. Adoption of this standard did not have a material impact on the Company’s consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update (“ASU”) 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220)”, which allows an entity to elect a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the stranded tax effects resulting from the Tax Cuts and Jobs Act. The amount of that reclassification should include the effect of changes of tax rate on the deferred tax amount, any related valuation allowance and other income tax effects on the items in AOCI. The standard requires an entity to state if an election to reclassify the tax effect to retained earnings is made along with the description of other income tax effects that are reclassified from AOCI. The guidance is effective for public business entities for annual periods beginning on or after December 15, 2018 and interim periods within those annual periods with early adoption permitted. The Company early adopted this amendment and has elected to reclassify $66 thousand from AOCI to retained earnings at December 31, 2017. Recent Accounting Pronouncements Yet to Be Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”, which is intended to increase transparency and comparability in the accounting for lease transactions. Under ASU 2016-02, lessees will be required to recognize all leases longer than twelve months on the Consolidated Statements of Financial Condition as lease assets and lease liabilities and make quantitative and qualitative disclosures regarding key information about leasing arrangements. Under the new guidance, lessor accounting is largely unchanged. These amendments are effective for public business entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. ASU 2016-02 will be effective for us on January 1, 2019 and will require transition using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the consolidated financial statements. Based on leases outstanding at September 30, 2018, the Company does not expect the standard to have a material impact on the Company’s Consolidated Statements of Income or Cash Flows, but does anticipate recording a liability of approximately $1.0 million as of March 31, 2019 for the remaining obligation under its lease agreements and a corresponding right-of-use asset in the Consolidated Statements of Financial Condition, which will have a minor impact on the Bank’s regulatory capital ratios. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016-13 replaces the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables, held-to-maturity debt securities, and reinsurance receivables. It also applies to off-balance sheet credit exposures not accounted for as insurance (such as loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor. For public business entities that meet the definition of an SEC filer, the standard will be effective for fiscal years beginning after Dec. 15, 2019, including interim periods in those fiscal years. All entities may early adopt for fiscal years beginning after Dec. 15, 2018, including interim periods in those fiscal years. For debt securities with other-than-temporary impairment, the guidance will be applied prospectively. Existing purchased credit impaired (PCI) assets will be grandfathered and classified as purchased credit deteriorated (PCD) assets at the date of adoption. The asset will be grossed up for the allowance for expected credit losses for all PCD assets at the date of adoption and will continue to recognize the noncredit discount in interest income based on the yield of such assets as of the adoption date. Subsequent changes in expected credit losses will be recorded through the allowance. For all other assets within the scope of CECL, a cumulative-effect adjustment will be recognized in retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company has begun its implementation efforts by identifying key interpretive issues, assessing its processes and identifying the system requirements against the new guidance to determine what modifications may be required. While the Company is still evaluating the overall impact on the new standard on its consolidated financial statements, the Company expects the adoption will result in an increase to the allowance for loan losses balance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The ASU was issued to improve the effectiveness of disclosures surrounding fair value measurements. The ASU removes numerous disclosures from Topic 820 including; transfers between level 1 and 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation process for level 3 fair value measurements. The ASU also modified and added disclosure requirements in regards to changes in unrealized gains and losses included in other comprehensive income, as well as the range and weighted average of unobservable inputs for level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019, with early adoption permitted. The guidance is not expected to have a significant impact on the Company's consolidated financial statements. |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Securities | |
Summary of amortized cost and fair value of available-for-sale investment securities portfolios and corresponding amounts of unrealized gains (losses) | Gross Gross Amortized Unrealized Unrealized Cost Gains Losses Fair Value (In thousands) December 31, 2018: Federal agency mortgage-backed securities $ 9,575 $ 88 $ (155) $ 9,508 Federal agency debt 5,317 — (103) 5,214 Total available-for-sale securities $ 14,892 $ 88 $ (258) $ 14,722 December 31, 2017: Federal agency mortgage-backed securities $ 11,877 $ 168 $ (37) $ 12,008 Federal agency debt 5,495 2 (11) 5,486 Total available-for-sale securities $ 17,372 $ 170 $ (48) $ 17,494 |
Loans Receivable Held for Inv_2
Loans Receivable Held for Investment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loans Receivable Held for Investment | |
Schedule of loans receivable held for investment | December 31, 2018 December 31, 2017 (In thousands) Real estate: Single family $ 91,835 $ 111,085 Multi-family 231,870 187,455 Commercial real estate 5,802 6,089 Church 25,934 30,848 Construction 1,876 1,678 Commercial – other 226 192 Consumer 5 7 Gross loans receivable before deferred loan costs and premiums 357,548 337,354 Unamortized net deferred loan costs and premiums 937 1,566 Gross loans receivable 358,485 338,920 Allowance for loan losses (2,929) (4,069) Loans receivable, net $ 355,556 $ 334,851 |
Schedule of activity in the allowance for loan losses by loan type | For the year ended December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Beginning balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Provision for (recapture of) loan losses (225) (420) (19) (592) 2 — — (1,254) Recoveries — — — 114 — — — 114 Loans charged off — — — — — — — — Ending balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 For the year ended December 31, 2017 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Beginning balance $ 367 $ 2,659 $ 215 $ 1,337 $ 8 $ 17 $ — $ 4,603 Provision for (recapture of) loan losses 197 (359) (144) (792) 9 (11) — (1,100) Recoveries 30 — — 536 — — — 566 Loans charged off — — — — — — — — Ending balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 |
Schedule of allowance for loan losses and recorded investment in loans by type of loans and based on impairment method | December 31, 2018 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 53 $ — $ — $ 170 $ — $ 4 $ — $ 227 Collectively evaluated for impairment 316 1,880 52 433 19 2 — 2,702 Total ending allowance balance $ 369 $ 1,880 $ 52 $ 603 $ 19 $ 6 $ — $ 2,929 Loans: Loans individually evaluated for impairment $ 610 $ 323 $ — $ 5,383 $ — $ 64 $ — $ 6,380 Loans collectively evaluated for impairment 91,567 232,986 5,800 19,713 1,872 162 5 352,105 Total ending loans balance $ 92,177 $ 233,309 $ 5,800 $ 25,096 $ 1,872 $ 226 $ 5 $ 358,485 December 31, 2017 Real Estate Single Multi- Commercial Commercial family family real estate Church Construction – other Consumer Total (In thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 100 $ 1 $ — $ 479 $ — $ 5 $ — $ 585 Collectively evaluated for impairment 494 2,299 71 602 17 1 — 3,484 Total ending allowance balance $ 594 $ 2,300 $ 71 $ 1,081 $ 17 $ 6 $ — $ 4,069 Loans: Loans individually evaluated for impairment $ 627 $ 333 $ — $ 8,280 $ — $ 65 $ — $ 9,305 Loans collectively evaluated for impairment 110,897 188,585 6,096 22,232 1,671 127 7 329,615 Total ending loans balance $ 111,524 $ 188,918 $ 6,096 $ 30,512 $ 1,671 $ 192 $ 7 $ 338,920 |
Schedule of loans individually evaluated for impairment by loan type | December 31, 2018 December 31, 2017 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (In thousands) With no related allowance recorded: Multi-family $ 323 $ 323 $ — $ — $ — $ — Church 4,666 2,803 — 5,140 3,291 — With an allowance recorded: Single family 610 610 53 627 627 100 Multi-family — — — 333 333 1 Church 2,580 2,580 170 5,028 4,989 479 Commercial – other 64 64 4 65 65 5 Total $ 8,243 $ 6,380 $ 227 $ 11,193 $ 9,305 $ 585 |
Schedule of average of loans individually evaluated for impairment by loan type and related interest income | For the year ended December 31, 2018 For the year ended December 31, 2017 Cash Basis Cash Basis Average Interest Average Interest Recorded Income Recorded Income Investment Recognized Investment Recognized (In thousands) Single family $ 618 $ 30 $ 636 $ 28 Multi-family 329 23 589 44 Commercial real estate — — 305 104 Church 7,893 398 9,363 693 Commercial – other 64 4 65 6 Total $ 8,904 $ 455 $ 10,958 $ 875 |
Schedule of aging of the recorded investment in past due loans by loan type | December 31, 2018 30-59 60-89 Greater than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ 35 $ — $ — $ 35 $ 92,142 $ 92,177 Multi-family — — — — 233,309 233,309 Commercial real estate — — — — 5,800 5,800 Church — — — — 25,096 25,096 Construction — — — — 1,872 1,872 Commercial – other — — — — 226 226 Consumer — — — — 5 5 Total $ 35 $ — $ — $ 35 $ 358,450 $ 358,485 December 31, 2017 30-59 60-89 Greater than Days Days 90 Days Total Past Due Past Due Past Due Past Due Current Total (In thousands) Loans receivable held for investment: Single family $ — $ 50 $ — $ 50 $ 111,474 $ 111,524 Multi-family — — — — 188,918 188,918 Commercial real estate — — — — 6,096 6,096 Church 341 — — 341 30,171 30,512 Construction — — — — 1,671 1,671 Commercial – other — — — — 192 192 Consumer — — — — 7 7 Total $ 341 $ 50 $ — $ 391 $ 338,529 $ 338,920 |
Schedule of recorded investment in non-accrual loans by loan type | December 31, 2018 December 31, 2017 (In thousands) Loans receivable held for investment: Church $ 911 $ 1,766 Total non-accrual loans $ 911 $ 1,766 |
Schedule of risk categories of loans by loan type | December 31, 2018 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 92,132 $ — $ 35 $ 10 $ — $ — Multi-family 232,642 — — 667 — — Commercial real estate 5,800 — — — — — Church 19,678 672 — 4,746 — — Construction 1,872 — — — — — Commercial – other 162 — — 64 — — Consumer 5 — — — — — Total $ 352,291 $ 672 $ 35 $ 5,487 $ — $ — December 31, 2017 Pass Watch Special Mention Substandard Doubtful Loss (In thousands) Single family $ 111,513 $ — $ — $ 11 $ — $ — Multi-family 187,946 — — 972 — — Commercial real estate 5,974 122 — — — — Church 24,474 691 — 5,347 — — Construction 1,671 — — — — — Commercial – other 127 — — 65 — — Consumer 7 — — — — — Total $ 331,712 $ 813 $ — $ 6,395 $ — $ — |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value | |
Summary of assets measured at fair value on a recurring basis | Fair Value Measurement Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs (Level 1) (Level 2) (Level 3) Total (In thousands) At December 31, 2018: Securities available-for-sale – federal agency mortgage-backed $ — $ 9,508 $ — $ 9,508 Securities available-for-sale – federal agency debt 1,979 3,235 — 5,214 At December 31, 2017: Securities available-for-sale – federal agency mortgage-backed $ — $ 12,008 $ — $ 12,008 Securities available-for-sale – federal agency debt 1,976 3,510 — 5,486 |
Schedule of carrying values of assets measured at fair value on non-recurring basis | December 31, 2018 December 31, 2017 (In thousands) Impaired loans carried at fair value of collateral $ 591 $ 742 Real estate owned 833 878 |
Schedule of losses recognized on assets measured at fair value on non-recurring basis | For the year ended December 31, 2018 2017 (In thousands) Impaired loans carried at fair value of collateral $ — $ — Real estate owned 45 80 Total $ 45 $ 80 |
Schedule of valuation methodology and unobservable inputs for Level 3 assets measured at fair value on a nonrecurring basis | Weighted Valuation Technique(s) Unobservable Input(s) Range Average December 31, 2018: Impaired loans Third Party Appraisals Adjustment for differences between the comparable sales -3% to -1% -2.83% Real estate owned – church Third Party Appraisals Adjustment for differences between the comparable sales -11% -10.85% December 31, 2017: Impaired loans Third Party Appraisals Adjustment for differences between the comparable sales -16% to 7% -4% Real estate owned – church Third Party Appraisals Adjustment for differences between the comparable sales -6% -6% |
Schedule of carrying amounts and estimated fair values of financial instruments | Fair Value Measurements at December 31, 2018 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Cash and cash equivalents $ 16,651 $ 16,651 $ — $ — $ 16,651 Securities available-for-sale 14,722 1,979 12,743 — 14,722 Loans receivable held for sale 6,231 — 6,270 — 6,270 Loans receivable held for investment (1) 355,556 — — 354,792 354,792 Accrued interest receivable 1,143 78 43 1,022 1,143 Financial Liabilities: Deposits $ 281,414 $ — $ 269,418 $ — $ 269,418 Federal Home Loan Bank advances 70,000 — 69,933 — 69,933 Junior subordinated debentures 5,100 — — 4,481 4,481 Accrued interest payable 334 — 324 10 334 Fair Value Measurements at December 31, 2017 Carrying Value Level 1 Level 2 Level 3 Total (In thousands) Financial Assets: Cash and cash equivalents $ 22,219 $ 22,219 $ — $ — $ 22,219 Securities available-for-sale 17,494 1,976 15,518 — 17,494 Loans receivable held for sale 22,370 — 22,626 — 22,626 Loans receivable held for investment 334,851 — — 333,231 333,231 Accrued interest receivable 1,073 58 91 924 1,073 Federal Home Loan Bank stock 2,916 2,916 — — 2,916 Financial Liabilities: Deposits $ 291,290 $ — $ 280,761 $ — $ 280,761 Federal Home Loan Bank advances 65,000 — 64,887 — 64,887 Junior subordinated debentures 5,100 — — 4,503 4,503 Accrued interest payable 304 — 296 8 304 (1) The estimated value of loans held for investment for December 31, 2018 reflects an exit price assumption. The December 31, 2017 fair value estimate is not based on an exit price assumption. |
Office Properties and Equipme_2
Office Properties and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Office Properties and Equipment, net | |
Schedule of office properties and equipment | 2018 2017 (In thousands) Land $ 572 $ 572 Office buildings and improvements 3,264 3,203 Furniture, fixtures and equipment 1,794 1,786 5,630 5,561 Less accumulated depreciation (3,388) (3,155) Office properties and equipment, net $ 2,242 $ 2,406 |
Schedule of minimum noncancelable lease commitments, before considering renewal options that generally are present | Premises Equipment Total (In thousands) Year ending December 31: 2019 $ 481 $ 35 $ 516 2020 494 35 529 2021 167 15 182 Total $ 1,142 $ 85 $ 1,227 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Deposits | |
Summary of deposits | December 31, 2018 2017 (In thousands) NOW account and other demand deposits $ 10,307 $ 11,982 Non-interest bearing demand deposits 22,877 22,469 Money market deposits 29,948 68,019 Passbook 45,718 38,031 Certificates of deposit 172,564 150,789 Total $ 281,414 $ 291,290 |
Schedule of maturities of certificates of deposit | Maturity Amount (In thousands) 2019 $ 133,654 2020 34,819 2021 2,120 2022 1,712 2023 218 Thereafter 41 $ 172,564 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Federal Home Loan Bank Advances | |
Schedule of advances from the FHLB | At or For the Year Ended 2018 2017 (Dollars in thousands) FHLB Advances: Average balance outstanding during the year $ 74,729 $ 89,279 Maximum amount outstanding at any month-end during the year $ 98,000 $ 104,000 Balance outstanding at end of year $ 70,000 $ 65,000 Weighted average interest rate at end of year 2.51 % 1.86 % Average cost of advances during the year 2.13 % 1.97 % Weighted average contractual maturity (in months) 24 18 |
Schedule of required payments of Federal Home Loan Bank advances | Amount (In thousands) 2019 $ 8,000 2020 29,500 2021 22,500 2022 5,000 2023 5,000 $ 70,000 |
Junior Subordinated Debentures
Junior Subordinated Debentures (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Junior Subordinated Debentures | |
Scheduled principal repayments of junior subordinated debentures | Amount (In thousands) 2019 $ 765 2020 1,020 2021 1,020 2022 1,020 2023 1,020 2024 255 $ 5,100 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans | |
Schedule of shares held by the ESOP | December 31, 2018 December 31, 2017 (Dollars in thousands) Allocated to participants 1,036,809 1,108,382 Committed to be released 10,580 10,752 Suspense shares 646,033 688,870 Total ESOP shares 1,693,422 1,808,004 Fair value of unearned shares $ 678 $ 1,626 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of income tax expense | 2018 2017 (In thousands) Current Federal $ (110) $ — State 12 12 Deferred Federal 68 1,455 State 86 396 Change in valuation allowance — — Total $ 56 $ 1,863 |
Schedule of difference in effective tax rates from federal statutory rate of 34% applied to income before income taxes | 2018 2017 (In thousands) Federal statutory rate times financial statement net income $ 183 $ 1,269 Effect of: State taxes, net of federal benefit 77 268 Change in federal rate — 519 Earnings from bank owned life insurance (16) (22) Low income housing credits (212) (212) Change in valuation allowance — — Other, net 24 41 Total $ 56 $ 1,863 |
Schedule of deferred tax assets and liabilities | 2018 2017 (In thousands) Deferred tax assets: Allowance for loan losses $ 799 $ — Real estate owned 65 5 Accrued liabilities 150 173 State income taxes 34 33 Stock compensation 165 182 Net operating loss carryforward 3,887 4,367 Non-accrual loan interest 3 4 Partnership investment 140 101 General business credit 1,661 1,458 Alternative minimum tax credit 151 256 Unrealized appreciation AFS 50 — Other 28 14 Total deferred tax assets 7,133 6,593 Deferred tax liabilities: Section 481 Adjustments to bad debts (980) — Deferred loan fees/costs (775) (817) Allowance for loan losses — (276) Basis difference on fixed assets (35) (49) Net unrealized appreciation on available-for-sale securities — (36) FHLB stock dividends (266) (266) Mortgage servicing rights (5) (7) Prepaid expenses (27) (32) Total deferred tax liabilities (2,088) (1,483) Net deferred tax assets $ 5,045 $ 5,110 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stock-Based Compensation | |
Summary of stock option activity | 2018 2017 Weighted Weighted Average Average Number Exercise Number Exercise Outstanding Price Outstanding Price Outstanding at beginning of year 537,500 $ 2.19 540,625 $ 2.18 Granted during the year — — — — Exercised during the year — — — — Forfeited or expired during the year — — (3,125) 4.80 Outstanding at end of year 537,500 $ 2.19 537,500 $ 2.19 Exercisable at end of year 267,500 $ 2.71 177,500 $ 3.26 |
Summary of options outstanding and exercisable | Options outstanding and exercisable at year-end 2018 were as follows: Outstanding Exercisable Weighted Average Weighted Weighted Remaining Average Aggregate Average Aggregate Number Contractual Exercise Intrinsic Number Exercise Intrinsic Grant Date Outstanding Life Price Value Outstanding Price Value January 21, 2009 7,500 0.05 years $ 4.00 7,500 $ 4.00 March 18, 2009 75,000 0.21 years $ 4.98 75,000 $ 4.98 January 21, 2010 5,000 1.05 years $ 6.00 5,000 $ 6.00 February 24, 2016 450,000 7.15 years $ 1.62 180,000 $ 1.62 537,500 6.02 years $ 2.19 $ — 267,500 $ 2.71 $ — |
Capital and Regulatory Matters
Capital and Regulatory Matters (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Capital and Regulatory Matters | |
Schedule of actual and required capital amounts and ratios | Minimum Required To Be Well Capitalized Under Minimum Capital Prompt Corrective Actual Requirements Action Provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) December 31, 2018: Tier 1 (Leverage) $ 49,433 $ 16,439 $ 20,549 Common Equity Tier 1 $ 49,433 $ 18,494 $ 16,634 Tier 1 $ 49,433 $ 24,659 $ 20,472 Total Capital $ 52,417 $ 32,879 $ 25,590 December 31, 2017: Tier 1 (Leverage) $ 47,838 $ 16,798 $ 20,997 Common Equity Tier 1 $ 47,838 $ 11,557 $ 16,693 Tier 1 $ 47,838 $ 15,409 $ 20,545 Total Capital $ 51,059 $ 20,545 $ 25,681 |
Loan Commitments and Other Re_2
Loan Commitments and Other Related Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loan Commitments and Other Related Activities | |
Schedule of contractual amounts of financial instruments with off-balance-sheet risk | 2018 2017 (In thousands) Commitments to make loans $ 10,875 $ 1,493 Unused lines of credit – variable rates 1,491 2,582 |
Parent Company Only Condensed_2
Parent Company Only Condensed Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Parent Company Only Condensed Financial Information | |
Schedule of condensed financial information of Broadway Financial Corporation | Condensed Balance Sheet December 31, 2018 2017 (In thousands) Assets Cash and cash equivalents $ 156 $ 400 Investment in bank subsidiary 51,221 50,594 Other assets 2,225 2,015 Total assets $ 53,602 $ 53,009 Liabilities and stockholders’ equity Junior subordinated debentures $ 5,100 $ 5,100 Accrued expenses and other liabilities 66 178 Stockholders’ equity 48,436 47,731 Total liabilities and stockholders’ equity $ 53,602 $ 53,009 Condensed Statements of Income Years ended December 31, 2018 2017 (In thousands) Interest income $ 25 $ 28 Interest expense (243) (194) Other expense (469) (730) Loss before income tax and undistributed subsidiary income (687) (896) Income tax benefit (expense) 205 (326) Equity in undistributed subsidiary income 1,297 3,091 Net income $ 815 $ 1,869 Condensed Statements of Cash Flows Years ended December 31, 2018 2017 (In thousands) Cash flows from operating activities Net income $ 815 $ 1,869 Adjustments to reconcile net income to net cash used in operating activities: Equity in undistributed subsidiary income (1,297) (3,091) Change in other assets (210) 330 Change in accrued expenses and other liabilities (112) (183) Net cash used in operating activities (804) (1,075) Cash flows from investing activities Dividends from bank subsidiary 600 500 Net cash provided by investing activities 600 500 Cash flows from financing activities Common stock repurchased for tax withholdings (108) — Proceeds from repayment of ESOP loan 68 80 Net cash (used in) provided by financing activities (40) 80 Net change in cash and cash equivalents (244) (495) Beginning cash and cash equivalents 400 895 Ending cash and cash equivalents $ 156 $ 400 |
Earnings Per Common Share (Tabl
Earnings Per Common Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Common Share | |
Schedule of basic and diluted earnings per share of common stock | 2018 2017 (Dollars in thousands, except share and per share) Net income $ 815 $ 1,869 Less net income attributable to participating securities (3) (5) Income available to common stockholders $ 812 $ 1,864 Weighted average common shares outstanding for basic earnings per common share 26,755,405 26,678,917 Add: dilutive effects of assumed exercises of stock options — 27,117 Add: dilutive effects of unvested restricted stock awards 7,044 49,448 Weighted average common shares outstanding for diluted earnings per common share 26,762,449 26,755,482 Earnings per common share – basic $ 0.03 $ 0.07 Earnings per common share – diluted $ 0.03 $ 0.07 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Nature of Operations and Principles of Consolidation (Details) | Dec. 31, 2018item |
Los Angeles, California | |
Nature of Operations and Principles of Consolidation | |
Number of retail-banking offices | 2 |
Inglewood, California | |
Nature of Operations and Principles of Consolidation | |
Number of retail-banking offices | 1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash Flows (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Federal Reserve Bank | |
Cash Flows | |
Amount of cash reserves with Federal Reserve Bank | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Loans Receivable Held for Investment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Delinquency period for interest income to be discontinued on loans | 90 days |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Deposits | Long-time Customer | |
Concentration of Credit Risk | |
Percentage of concentration of risk | 11.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Loans Purchased and Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Purchased | ||
Purchase of loans receivable held for investment | $ 0 | $ 24,640 |
Allowance for Loan Losses | ||
Length of period over which historical loss experience | 5 years | |
Single family | ||
Loans Purchased | ||
Purchase of loans receivable held for investment | $ 24,600 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Office Properties and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Office buildings and improvements | Minimum | |
Office Properties and Equipment | |
Useful life | 10 years |
Office buildings and improvements | Maximum | |
Office Properties and Equipment | |
Useful life | 40 years |
Furniture, fixtures and equipment | Minimum | |
Office Properties and Equipment | |
Useful life | 3 years |
Furniture, fixtures and equipment | Maximum | |
Office Properties and Equipment | |
Useful life | 10 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Investment in Affordable Housing Limited Partnership (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Affordable Housing Limited Partnership | Maximum | |
Investment in Affordable Housing Limited Partnership | |
Ownership interest (as a percent) | 5.00% |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Operating Segments (Details) - item | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Significant Accounting Policies | ||
Number of active operating subsidiaries | 1 | 1 |
Number of reportable business segments | 1 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Mar. 31, 2019 | |
ASU 2018-02 | ||
Recent Accounting Pronouncements | ||
Reclassification from accumulated other comprehensive income to retained earnings | $ 66 | |
ASU 2016-02 | Restatement Adjustment | ||
Recent Accounting Pronouncements | ||
Lease liability | $ 1,000 | |
Right-of-use asset | $ 1,000 |
Securities (Details)
Securities (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)security | Dec. 31, 2017USD ($)security | |
Securities | ||
Amortized Cost | $ 14,892 | $ 17,372 |
Gross Unrealized Gains | 88 | 170 |
Gross Unrealized Losses | (258) | (48) |
Fair Value | 14,722 | 17,494 |
Securities pledged to secure public deposits | $ 0 | $ 526 |
Securities pledged to secure public deposits | us-gaap:AssetPledgedAsCollateralMember | us-gaap:AssetPledgedAsCollateralMember |
Securities of any one issuer, other than U.S. Government, greater than 10% of stockholders' equity | $ 0 | $ 0 |
Sales of securities | $ 0 | $ 0 |
Number of securities held with unrealized losses | security | 10 | 6 |
Federal agency mortgage-backed securities | ||
Securities | ||
Amortized Cost | $ 9,575 | $ 11,877 |
Gross Unrealized Gains | 88 | 168 |
Gross Unrealized Losses | (155) | (37) |
Fair Value | $ 9,508 | 12,008 |
Number of securities held | security | 24 | |
Estimated remaining term | 4 years 6 months | |
Federal agency debt | ||
Securities | ||
Amortized Cost | $ 5,317 | 5,495 |
Gross Unrealized Gains | 2 | |
Gross Unrealized Losses | (103) | (11) |
Fair Value | $ 5,214 | $ 5,486 |
Number of securities held | security | 3 | |
Estimated remaining term | 3 years 10 months 24 days |
Loans Receivable Held for Sale
Loans Receivable Held for Sale (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Loans Receivable Held for Sale | ||
Loans receivable held for sale | $ 6,231 | $ 22,370 |
Transfers of loans receivable held for sale to loans receivable held for investment | 16,871 | |
Loans originated | 20,288 | $ 110,829 |
Loan repayments | 159 | |
Multi-family | ||
Loans Receivable Held for Sale | ||
Loans receivable held for sale | 6,200 | |
Transfers of loans receivable held for sale to loans receivable held for investment | 16,900 | |
Loans originated | $ 20,200 | |
Loans originated as held-for-sale, percentage | 20.00% | |
Loan sales | $ 19,300 | |
Gain on sale of loans | $ 81 |
Loans Receivable Held for Inv_3
Loans Receivable Held for Investment - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | $ 357,548 | $ 337,354 | |
Unamortized net deferred loan costs and premiums | 937 | 1,566 | |
Gross loans receivable after deferred loan costs and premiums | 358,485 | 338,920 | |
Allowance for loan losses | (2,929) | (4,069) | $ (4,603) |
Loans receivable, net | 355,556 | 334,851 | |
Single family | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 91,835 | 111,085 | |
Gross loans receivable after deferred loan costs and premiums | 92,177 | 111,524 | |
Allowance for loan losses | (369) | (594) | (367) |
Multi-family | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 231,870 | 187,455 | |
Gross loans receivable after deferred loan costs and premiums | 233,309 | 188,918 | |
Allowance for loan losses | (1,880) | (2,300) | (2,659) |
Commercial real estate | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 5,802 | 6,089 | |
Gross loans receivable after deferred loan costs and premiums | 5,800 | 6,096 | |
Allowance for loan losses | (52) | (71) | (215) |
Church | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 25,934 | 30,848 | |
Gross loans receivable after deferred loan costs and premiums | 25,096 | 30,512 | |
Allowance for loan losses | (603) | (1,081) | (1,337) |
Construction | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 1,876 | 1,678 | |
Gross loans receivable after deferred loan costs and premiums | 1,872 | 1,671 | |
Allowance for loan losses | (19) | (17) | (8) |
Commercial - other | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 226 | 192 | |
Gross loans receivable after deferred loan costs and premiums | 226 | 192 | |
Allowance for loan losses | (6) | (6) | $ (17) |
Consumer | |||
Loans Receivable Held for Investment | |||
Gross loans receivable before deferred loan costs and premiums | 5 | 7 | |
Gross loans receivable after deferred loan costs and premiums | $ 5 | $ 7 |
Loans Receivable Held for Inv_4
Loans Receivable Held for Investment - Activity in the Allowance for Loan Losses by Loan Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for loan losses: | ||
Beginning balance | $ 4,069 | $ 4,603 |
Provision for (recapture of) loan losses | (1,254) | (1,100) |
Recoveries | 114 | 566 |
Ending balance | 2,929 | 4,069 |
Single family | ||
Allowance for loan losses: | ||
Beginning balance | 594 | 367 |
Provision for (recapture of) loan losses | (225) | 197 |
Recoveries | 30 | |
Ending balance | 369 | 594 |
Multi-family | ||
Allowance for loan losses: | ||
Beginning balance | 2,300 | 2,659 |
Provision for (recapture of) loan losses | (420) | (359) |
Ending balance | 1,880 | 2,300 |
Commercial real estate | ||
Allowance for loan losses: | ||
Beginning balance | 71 | 215 |
Provision for (recapture of) loan losses | (19) | (144) |
Ending balance | 52 | 71 |
Church | ||
Allowance for loan losses: | ||
Beginning balance | 1,081 | 1,337 |
Provision for (recapture of) loan losses | (592) | (792) |
Recoveries | 114 | 536 |
Ending balance | 603 | 1,081 |
Construction | ||
Allowance for loan losses: | ||
Beginning balance | 17 | 8 |
Provision for (recapture of) loan losses | 2 | 9 |
Ending balance | 19 | 17 |
Commercial - other | ||
Allowance for loan losses: | ||
Beginning balance | 6 | 17 |
Provision for (recapture of) loan losses | (11) | |
Ending balance | $ 6 | $ 6 |
Loans Receivable Held for Inv_5
Loans Receivable Held for Investment - Allowance for Loan Losses and Recorded Investment in Loans by Type of Loans and Based on Impairment Method (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Ending allowance balance attributable to loans: | |||
Individually evaluated for impairment | $ 227 | $ 585 | |
Collectively evaluated for impairment | 2,702 | 3,484 | |
Total ending allowance balance | 2,929 | 4,069 | $ 4,603 |
Loans: | |||
Loans individually evaluated for impairment | 6,380 | 9,305 | |
Loans collectively evaluated for impairment | 352,105 | 329,615 | |
Gross loans receivable after deferred loan costs and premiums | 358,485 | 338,920 | |
Single family | |||
Ending allowance balance attributable to loans: | |||
Individually evaluated for impairment | 53 | 100 | |
Collectively evaluated for impairment | 316 | 494 | |
Total ending allowance balance | 369 | 594 | 367 |
Loans: | |||
Loans individually evaluated for impairment | 610 | 627 | |
Loans collectively evaluated for impairment | 91,567 | 110,897 | |
Gross loans receivable after deferred loan costs and premiums | 92,177 | 111,524 | |
Multi-family | |||
Ending allowance balance attributable to loans: | |||
Individually evaluated for impairment | 1 | ||
Collectively evaluated for impairment | 1,880 | 2,299 | |
Total ending allowance balance | 1,880 | 2,300 | 2,659 |
Loans: | |||
Loans individually evaluated for impairment | 323 | 333 | |
Loans collectively evaluated for impairment | 232,986 | 188,585 | |
Gross loans receivable after deferred loan costs and premiums | 233,309 | 188,918 | |
Commercial real estate | |||
Ending allowance balance attributable to loans: | |||
Collectively evaluated for impairment | 52 | 71 | |
Total ending allowance balance | 52 | 71 | 215 |
Loans: | |||
Loans collectively evaluated for impairment | 5,800 | 6,096 | |
Gross loans receivable after deferred loan costs and premiums | 5,800 | 6,096 | |
Church | |||
Ending allowance balance attributable to loans: | |||
Individually evaluated for impairment | 170 | 479 | |
Collectively evaluated for impairment | 433 | 602 | |
Total ending allowance balance | 603 | 1,081 | 1,337 |
Loans: | |||
Loans individually evaluated for impairment | 5,383 | 8,280 | |
Loans collectively evaluated for impairment | 19,713 | 22,232 | |
Gross loans receivable after deferred loan costs and premiums | 25,096 | 30,512 | |
Construction | |||
Ending allowance balance attributable to loans: | |||
Collectively evaluated for impairment | 19 | 17 | |
Total ending allowance balance | 19 | 17 | 8 |
Loans: | |||
Loans collectively evaluated for impairment | 1,872 | 1,671 | |
Gross loans receivable after deferred loan costs and premiums | 1,872 | 1,671 | |
Commercial - other | |||
Ending allowance balance attributable to loans: | |||
Individually evaluated for impairment | 4 | 5 | |
Collectively evaluated for impairment | 2 | 1 | |
Total ending allowance balance | 6 | 6 | $ 17 |
Loans: | |||
Loans individually evaluated for impairment | 64 | 65 | |
Loans collectively evaluated for impairment | 162 | 127 | |
Gross loans receivable after deferred loan costs and premiums | 226 | 192 | |
Consumer | |||
Loans: | |||
Loans collectively evaluated for impairment | 5 | 7 | |
Gross loans receivable after deferred loan costs and premiums | $ 5 | $ 7 |
Loans Receivable Held for Inv_6
Loans Receivable Held for Investment - Loans Individually Evaluated for Impairment by Loan Type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Impaired loans | ||
Unpaid Principal Balance | $ 8,243 | $ 11,193 |
Recorded Investment | 6,380 | 9,305 |
Allowance for Loan Losses Allocated, With an allowance recorded | 227 | 585 |
Single family | ||
Impaired loans | ||
Unpaid Principal Balance, With an allowance recorded | 610 | 627 |
Recorded Investment, With an allowance recorded | 610 | 627 |
Allowance for Loan Losses Allocated, With an allowance recorded | 53 | 100 |
Multi-family | ||
Impaired loans | ||
Unpaid Principal Balance, With no related allowance recorded | 323 | |
Unpaid Principal Balance, With an allowance recorded | 333 | |
Recorded Investment, With no related allowance recorded | 323 | |
Recorded Investment, With an allowance recorded | 333 | |
Allowance for Loan Losses Allocated, With an allowance recorded | 1 | |
Church | ||
Impaired loans | ||
Unpaid Principal Balance, With no related allowance recorded | 4,666 | 5,140 |
Unpaid Principal Balance, With an allowance recorded | 2,580 | 5,028 |
Recorded Investment, With no related allowance recorded | 2,803 | 3,291 |
Recorded Investment, With an allowance recorded | 2,580 | 4,989 |
Allowance for Loan Losses Allocated, With an allowance recorded | 170 | 479 |
Commercial - other | ||
Impaired loans | ||
Unpaid Principal Balance, With an allowance recorded | 64 | 65 |
Recorded Investment, With an allowance recorded | 64 | 65 |
Allowance for Loan Losses Allocated, With an allowance recorded | $ 4 | $ 5 |
Loans Receivable Held for Inv_7
Loans Receivable Held for Investment - Average of Loans Individually Evaluated for Impairment by Loan Type and Related Interest Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Impaired loans | ||
Average Recorded Investment | $ 8,904 | $ 10,958 |
Cash Basis Interest Income Recognized | 455 | 875 |
Foregone interest income if impaired loans had performed according to terms | 280 | 126 |
Single family | ||
Impaired loans | ||
Average Recorded Investment | 618 | 636 |
Cash Basis Interest Income Recognized | 30 | 28 |
Multi-family | ||
Impaired loans | ||
Average Recorded Investment | 329 | 589 |
Cash Basis Interest Income Recognized | 23 | 44 |
Commercial real estate | ||
Impaired loans | ||
Average Recorded Investment | 305 | |
Cash Basis Interest Income Recognized | 104 | |
Church | ||
Impaired loans | ||
Average Recorded Investment | 7,893 | 9,363 |
Cash Basis Interest Income Recognized | 398 | 693 |
Commercial - other | ||
Impaired loans | ||
Average Recorded Investment | 64 | 65 |
Cash Basis Interest Income Recognized | $ 4 | $ 6 |
Loans Receivable Held for Inv_8
Loans Receivable Held for Investment - Aging of Recorded Investment in Past Due Loans by Loan Type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Past due receivable | ||
Total Past Due | $ 35 | $ 391 |
Current | 358,450 | 338,529 |
Gross loans receivable after deferred loan costs and premiums | 358,485 | 338,920 |
30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 35 | 341 |
60-89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 50 | |
Single family | ||
Past due receivable | ||
Total Past Due | 35 | 50 |
Current | 92,142 | 111,474 |
Gross loans receivable after deferred loan costs and premiums | 92,177 | 111,524 |
Single family | 30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 35 | |
Single family | 60-89 Days Past Due | ||
Past due receivable | ||
Total Past Due | 50 | |
Multi-family | ||
Past due receivable | ||
Current | 233,309 | 188,918 |
Gross loans receivable after deferred loan costs and premiums | 233,309 | 188,918 |
Commercial real estate | ||
Past due receivable | ||
Current | 5,800 | 6,096 |
Gross loans receivable after deferred loan costs and premiums | 5,800 | 6,096 |
Church | ||
Past due receivable | ||
Total Past Due | 341 | |
Current | 25,096 | 30,171 |
Gross loans receivable after deferred loan costs and premiums | 25,096 | 30,512 |
Church | 30-59 Days Past Due | ||
Past due receivable | ||
Total Past Due | 341 | |
Construction | ||
Past due receivable | ||
Current | 1,872 | 1,671 |
Gross loans receivable after deferred loan costs and premiums | 1,872 | 1,671 |
Commercial - other | ||
Past due receivable | ||
Current | 226 | 192 |
Gross loans receivable after deferred loan costs and premiums | 226 | 192 |
Consumer | ||
Past due receivable | ||
Current | 5 | 7 |
Gross loans receivable after deferred loan costs and premiums | $ 5 | $ 7 |
Loans Receivable Held for Inv_9
Loans Receivable Held for Investment - Recorded Investment in Non-accrual Loans by Loan Type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Investment in non-accrual loans by type of loans | ||
Total non-accrual loans | $ 911 | $ 1,766 |
Loans 90 days or more delinquent that were accruing interest | 0 | 0 |
Church | ||
Investment in non-accrual loans by type of loans | ||
Total non-accrual loans | $ 911 | $ 1,766 |
Loans Receivable Held for In_10
Loans Receivable Held for Investment - Troubled Debt Restructurings (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 6,400 | $ 8,900 |
Specific reserves allocated to TDRs | $ 227 | 585 |
Timely payment period for return to accrual status | 6 months | |
Commitments to lend additional amounts to customers with TDRs | $ 0 | $ 0 |
Number of loans modified | loan | 0 | 0 |
Non-accrual status | ||
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 591 | $ 1,400 |
Accrual status | ||
Troubled debt restructuring | ||
Loans classified as Troubled Debt Restructurings | $ 5,800 | $ 7,500 |
Loans Receivable Held for In_11
Loans Receivable Held for Investment - Risk Category of Loans by Loan Type (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Credit Quality Indicators | ||
Loans receivable | $ 358,485 | $ 338,920 |
Single family | ||
Credit Quality Indicators | ||
Loans receivable | 92,177 | 111,524 |
Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 233,309 | 188,918 |
Commercial real estate | ||
Credit Quality Indicators | ||
Loans receivable | 5,800 | 6,096 |
Church | ||
Credit Quality Indicators | ||
Loans receivable | 25,096 | 30,512 |
Construction | ||
Credit Quality Indicators | ||
Loans receivable | 1,872 | 1,671 |
Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | 226 | 192 |
Consumer | ||
Credit Quality Indicators | ||
Loans receivable | 5 | 7 |
Pass | ||
Credit Quality Indicators | ||
Loans receivable | 352,291 | 331,712 |
Pass | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 92,132 | 111,513 |
Pass | Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 232,642 | 187,946 |
Pass | Commercial real estate | ||
Credit Quality Indicators | ||
Loans receivable | 5,800 | 5,974 |
Pass | Church | ||
Credit Quality Indicators | ||
Loans receivable | 19,678 | 24,474 |
Pass | Construction | ||
Credit Quality Indicators | ||
Loans receivable | 1,872 | 1,671 |
Pass | Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | 162 | 127 |
Pass | Consumer | ||
Credit Quality Indicators | ||
Loans receivable | 5 | 7 |
Watch | ||
Credit Quality Indicators | ||
Loans receivable | 672 | 813 |
Watch | Commercial real estate | ||
Credit Quality Indicators | ||
Loans receivable | 122 | |
Watch | Church | ||
Credit Quality Indicators | ||
Loans receivable | 672 | 691 |
Special Mention | ||
Credit Quality Indicators | ||
Loans receivable | 35 | |
Special Mention | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 35 | |
Substandard | ||
Credit Quality Indicators | ||
Loans receivable | 5,487 | 6,395 |
Substandard | Single family | ||
Credit Quality Indicators | ||
Loans receivable | 10 | 11 |
Substandard | Multi-family | ||
Credit Quality Indicators | ||
Loans receivable | 667 | 972 |
Substandard | Church | ||
Credit Quality Indicators | ||
Loans receivable | 4,746 | 5,347 |
Substandard | Commercial - other | ||
Credit Quality Indicators | ||
Loans receivable | $ 64 | $ 65 |
Fair Value - Assets Measured at
Fair Value - Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value | ||
Transfer between level 1 and level 2 | $ 0 | $ 0 |
Transfer between level 2 and level 1 | 0 | 0 |
Transfer into level 3 | 0 | 0 |
Transfer out of level 3 | 0 | 0 |
Recurring Basis | Federal agency mortgage-backed securities | ||
Fair Value | ||
Securities available-for-sale, at fair value | 9,508 | 12,008 |
Recurring Basis | Federal agency debt | ||
Fair Value | ||
Securities available-for-sale, at fair value | 5,214 | 5,486 |
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Federal agency debt | ||
Fair Value | ||
Securities available-for-sale, at fair value | 1,979 | 1,976 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Federal agency mortgage-backed securities | ||
Fair Value | ||
Securities available-for-sale, at fair value | 9,508 | 12,008 |
Recurring Basis | Significant Other Observable Inputs (Level 2) | Federal agency debt | ||
Fair Value | ||
Securities available-for-sale, at fair value | $ 3,235 | $ 3,510 |
Fair Value - Assets Measured _2
Fair Value - Assets Measured at Fair Value on Non-recurring Basis (Details) - Non-Recurring Basis - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value | ||
Total losses recognized on assets measured at fair value on a non-recurring basis | $ 45 | $ 80 |
Impaired loans carried at fair value of collateral | Significant Unobservable Inputs (Level 3) | ||
Fair Value | ||
Assets, fair value | 591 | 742 |
Real estate owned | ||
Fair Value | ||
Total losses recognized on assets measured at fair value on a non-recurring basis | 45 | 80 |
Real estate owned | Significant Unobservable Inputs (Level 3) | ||
Fair Value | ||
Assets, fair value | $ 833 | $ 878 |
Fair Value - Valuation Methodol
Fair Value - Valuation Methodology and Unobservable Inputs (Details) - Non-Recurring Basis - Significant Unobservable Inputs (Level 3) - item | Dec. 31, 2018 | Dec. 31, 2017 |
Impaired loans carried at fair value of collateral | ||
Fair Value | ||
Valuation Technique(s) | gaap:MeasurementInputAppraisedValueMember | us-gaap:MeasurementInputAppraisedValueMember |
Unobservable Input(s) | gaap:MarketApproachValuationTechniqueMember | us-gaap:MarketApproachValuationTechniqueMember |
Impaired loans carried at fair value of collateral | Minimum | ||
Fair Value | ||
Adjustment for differences between the comparable sales (as a percent) | (0.03) | (0.16) |
Impaired loans carried at fair value of collateral | Maximum | ||
Fair Value | ||
Adjustment for differences between the comparable sales (as a percent) | (0.01) | 0.07 |
Impaired loans carried at fair value of collateral | Weighted Average | ||
Fair Value | ||
Adjustment for differences between the comparable sales (as a percent) | (0.0283) | (0.04) |
Real estate owned | Church | ||
Fair Value | ||
Adjustment for differences between the comparable sales (as a percent) | (0.11) | (0.06) |
Valuation Technique(s) | gaap:MeasurementInputAppraisedValueMember | us-gaap:MeasurementInputAppraisedValueMember |
Unobservable Input(s) | gaap:MarketApproachValuationTechniqueMember | us-gaap:MarketApproachValuationTechniqueMember |
Real estate owned | Church | Weighted Average | ||
Fair Value | ||
Adjustment for differences between the comparable sales (as a percent) | (0.1085) | (0.06) |
Fair Value - Fair Values of Fin
Fair Value - Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial Assets: | ||
Investment securities available-for-sale, at fair value | $ 14,722 | $ 17,494 |
Carrying Value | ||
Financial Assets: | ||
Cash and cash equivalents | 16,651 | 22,219 |
Investment securities available-for-sale, at fair value | 14,722 | 17,494 |
Loans receivable held for sale | 6,231 | 22,370 |
Loans receivable held for investment | 355,556 | 334,851 |
Accrued interest receivable | 1,143 | 1,073 |
Federal Home Loan Bank stock | 2,916 | |
Financial Liabilities: | ||
Deposits | 281,414 | 291,290 |
Federal Home Loan Bank advances | 70,000 | 65,000 |
Junior subordinated debentures | 5,100 | 5,100 |
Accrued interest payable | 334 | 304 |
Fair Value | ||
Financial Assets: | ||
Cash and cash equivalents | 16,651 | 22,219 |
Investment securities available-for-sale, at fair value | 14,722 | 17,494 |
Loans receivable held for sale | 6,270 | 22,626 |
Loans receivable held for investment | 354,792 | 333,231 |
Accrued interest receivable | 1,143 | 1,073 |
Federal Home Loan Bank stock | 2,916 | |
Financial Liabilities: | ||
Deposits | 269,418 | 280,761 |
Federal Home Loan Bank advances | 69,933 | 64,887 |
Junior subordinated debentures | 4,481 | 4,503 |
Accrued interest payable | 334 | 304 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value | ||
Financial Assets: | ||
Cash and cash equivalents | 16,651 | 22,219 |
Investment securities available-for-sale, at fair value | 1,979 | 1,976 |
Accrued interest receivable | 78 | 58 |
Federal Home Loan Bank stock | 2,916 | |
Significant Other Observable Inputs (Level 2) | Fair Value | ||
Financial Assets: | ||
Investment securities available-for-sale, at fair value | 12,743 | 15,518 |
Loans receivable held for sale | 6,270 | 22,626 |
Accrued interest receivable | 43 | 91 |
Financial Liabilities: | ||
Deposits | 269,418 | 280,761 |
Federal Home Loan Bank advances | 69,933 | 64,887 |
Accrued interest payable | 324 | 296 |
Significant Unobservable Inputs (Level 3) | Fair Value | ||
Financial Assets: | ||
Loans receivable held for investment | 354,792 | 333,231 |
Accrued interest receivable | 1,022 | 924 |
Financial Liabilities: | ||
Junior subordinated debentures | 4,481 | 4,503 |
Accrued interest payable | $ 10 | $ 8 |
Office Properties and Equipme_3
Office Properties and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Office Properties and Equipment | ||
Office properties and equipment, gross | $ 5,630 | $ 5,561 |
Less accumulated depreciation | (3,388) | (3,155) |
Office properties and equipment, net | 2,242 | 2,406 |
Depreciation expense | 241 | 256 |
Rent expense | 593 | 587 |
Land | ||
Office Properties and Equipment | ||
Office properties and equipment, gross | 572 | 572 |
Office buildings and improvements | ||
Office Properties and Equipment | ||
Office properties and equipment, gross | 3,264 | 3,203 |
Furniture, fixtures and equipment | ||
Office Properties and Equipment | ||
Office properties and equipment, gross | $ 1,794 | $ 1,786 |
Office Properties and Equipme_4
Office Properties and Equipment, net - Lease Commitments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Lease commitments | |
2019 | $ 516 |
2020 | 529 |
2021 | 182 |
Total | 1,227 |
Premises | |
Lease commitments | |
2019 | 481 |
2020 | 494 |
2021 | 167 |
Total | 1,142 |
Equipment | |
Lease commitments | |
2019 | 35 |
2020 | 35 |
2021 | 15 |
Total | $ 85 |
Deposits - Summary (Details)
Deposits - Summary (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deposits | ||
NOW account and other demand deposits | $ 10,307 | $ 11,982 |
Non-interest bearing demand deposits | 22,877 | 22,469 |
Money market deposits | 29,948 | 68,019 |
Passbook | 45,718 | 38,031 |
Certificates of deposit | 172,564 | 150,789 |
Total | 281,414 | 291,290 |
Aggregate amount of certificates of deposits in denominations of $250,000 or more | 33,700 | 9,500 |
Brokered deposits | 9,900 | |
CDARS | ||
Deposits | ||
Aggregate amount of certificates of deposits in denominations of $250,000 or more | $ 32,600 | $ 43,300 |
Deposits - Certificate of Depos
Deposits - Certificate of Deposit Maturities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Scheduled maturities of certificates of deposit | ||
2019 | $ 133,654 | |
2020 | 34,819 | |
2021 | 2,120 | |
2022 | 1,712 | |
2023 | 218 | |
Thereafter | 41 | |
Total | 172,564 | $ 150,789 |
Aggregate amount of certificates of deposits in denominations of $250,000 or more | 33,900 | 16,700 |
Deposits | 281,414 | 291,290 |
Principal officers, directors and their affiliates | ||
Scheduled maturities of certificates of deposit | ||
Deposits | $ 1,800 | $ 1,600 |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
FHLB Advances: | ||
Average balance outstanding during the year | $ 74,729 | $ 89,279 |
Maximum amount outstanding at any month-end during the year | 98,000 | 104,000 |
Balance outstanding at end of year | $ 70,000 | $ 65,000 |
Weighted average interest rate at end of year | 2.51% | 1.86% |
Average cost of advances during the year | 2.13% | 1.97% |
Weighted average contractual maturity (in months) | 24 months | 18 months |
General borrowing limit | 30.00% | |
FHLB advances, remaining amount available to borrow | $ 54,600 | |
Required payments over the next five years | ||
2019 | 8,000 | |
2020 | 29,500 | |
2021 | 22,500 | |
2022 | 5,000 | |
2023 | 5,000 | |
Total | 70,000 | $ 65,000 |
First mortgage loans | ||
FHLB Advances: | ||
FHLB advances, collateral real estate loans | $ 151,000 | $ 128,400 |
Junior Subordinated Debenture_2
Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | Oct. 16, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 17, 2004 |
Junior Subordinated Debentures | ||||
Junior subordinated debentures | $ 5,100 | $ 5,100 | ||
Floating Rate Junior Subordinated Debentures | ||||
Junior Subordinated Debentures | ||||
Effective interest rate on debentures (as a percent) | 5.34% | |||
Payment of principal amount at face value required to extend maturity | $ 900 | |||
Junior subordinated debentures | $ 5,100 | |||
Scheduled principal repayments | ||||
2019 | $ 765 | |||
2020 | 1,020 | |||
2021 | 1,020 | |||
2022 | 1,020 | |||
2023 | 1,020 | |||
2024 | 255 | |||
Total | $ 5,100 | |||
Floating Rate Junior Subordinated Debentures | 3-month LIBOR | ||||
Junior Subordinated Debentures | ||||
Debt instrument interest rate description | 3-Month LIBOR | |||
Basis spread (as a percent) | 2.54% | |||
Floating Rate Junior Subordinated Debentures | Private Placement | ||||
Junior Subordinated Debentures | ||||
Junior subordinated debentures | $ 6,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Broadway Federal 401(k) Plan | |||
Employer match of employee contributions of the first 6% of eligible compensation (as a percent) | 50.00% | ||
401(k) benefit plan expense | $ 131 | $ 132 | |
ESOP Plan | |||
Number of common stock purchased by ESOP (in shares) | 1,493,679 | ||
Purchase price of common stock | $ 1.59 | ||
Total cost of shares purchased by ESOP | $ 2,400 | ||
Loan to ESOP | $ 1,200 | ||
Term of ESOP loan (in years) | 20 years | ||
Compensation expense | $ 80 | $ 104 | |
Allocated to participants | 1,036,809 | 1,108,382 | |
Committed to be released | 10,580 | 10,752 | |
Suspense shares | 646,033 | 688,870 | |
Total ESOP shares | 1,693,422 | 1,808,004 | |
Fair value of unearned shares | $ 678 | $ 1,626 | |
Shares released for allocation | 43,009 | 40,126 | |
Unearned ESOP shares | $ 1,027 | $ 1,095 | |
Maximum | |||
Broadway Federal 401(k) Plan | |||
Employee contributions as a percentage of their compensation | 15.00% | ||
Percentage of eligible compensation, matched 50% by employer | 6.00% |
Income Taxes - Summary (Details
Income Taxes - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current | ||
Federal | $ (110) | |
State | 12 | $ 12 |
Deferred | ||
Federal | 68 | 1,455 |
State | 86 | 396 |
Total | $ 56 | $ 1,863 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Reconciliation of Provision of Income Taxes | |||
Federal statutory rate (as a percent) | 21.00% | 21.00% | 34.00% |
Federal statutory rate times financial statement net income | $ 183 | $ 1,269 | |
State taxes, net of federal benefit | 77 | 268 | |
Change in federal rate | 519 | ||
Earnings from bank owned life insurance | (16) | (22) | |
Low income housing credits | (212) | (212) | |
Other, net | 24 | 41 | |
Total | $ 56 | 1,863 | |
Decrease in deferred tax assets | 519 | ||
Increase to deferred income tax expense | $ 519 | ||
Maximum | |||
Reconciliation of Provision of Income Taxes | |||
Federal statutory rate (as a percent) | 35.00% |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Deferred tax assets: | ||
Allowance for loan losses | $ 799 | |
Real estate owned | 65 | $ 5 |
Accrued liabilities | 150 | 173 |
State income taxes | 34 | 33 |
Stock compensation | 165 | 182 |
Net operating loss carryforward | 3,887 | 4,367 |
Non-accrual loan interest | 3 | 4 |
Partnership investment | 140 | 101 |
General business credit | 1,661 | 1,458 |
Alternative minimum tax credit | 151 | 256 |
Unrealized appreciation AFS | 50 | |
Other | 28 | 14 |
Total deferred tax assets | 7,133 | 6,593 |
Deferred tax liabilities: | ||
Section 481 Adjustments to bad debts | (980) | |
Deferred loan fees/costs | (775) | (817) |
Allowance for loan losses | (276) | |
Basis difference on fixed assets | (35) | (49) |
Net unrealized appreciation on available-for-sale securities | (36) | |
FHLB stock dividends | (266) | (266) |
Mortgage servicing rights | (5) | (7) |
Prepaid expenses | (27) | (32) |
Total deferred tax liabilities | (2,088) | (1,483) |
Net deferred tax assets | $ 5,045 | 5,110 |
Valuation allowance | ||
Period for which prior cumulative losses considered in assessing the realization of deferred tax assets | 2 years | |
Valuation allowance | $ 0 | $ 0 |
Income Taxes - Additional Tax D
Income Taxes - Additional Tax Disclosures (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 1987 | |
Income taxes | |||
Tax bad debt reserve | $ 3,000 | ||
Deferred tax liability not recorded on tax bad debt reserve balance | $ 632 | $ 632 | |
Tax bad debt deduction under the new method | $ 4,300 | ||
Taxable income evenly term | 4 years | ||
Unrecognized tax benefits if recognized would favorably affect income tax provision in future | $ 475 | 475 | |
Interest accrued during the period related to unrecognized tax benefits | 5 | $ 5 | |
Federal | |||
Income taxes | |||
Net operating loss carryforwards | 8,200 | ||
Federal | General Business Tax Credit Carryforward | |||
Income taxes | |||
Tax credit carryforward | 1,500 | ||
Federal | Alternative Minimum Tax Credit Carryforward | |||
Income taxes | |||
Tax credit carryforward | 119 | ||
California | |||
Income taxes | |||
Net operating loss carryforwards | $ 25,300 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 25, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 24, 2018 |
2008 LTIP | ||||
Stock-based compensation | ||||
Shares authorized to be granted under stock compensation plan | 2,000,000 | |||
2008 LTIP | Stock Options | ||||
Number Outstanding | ||||
Outstanding at beginning of year (in shares) | 537,500 | 540,625 | ||
Forfeited or expired during the year (in shares) | (3,125) | |||
Outstanding at end of year (in shares) | 537,500 | 537,500 | ||
Exercisable at end of year (in shares) | 267,500 | 177,500 | ||
Weighted Average Exercise Price | ||||
Outstanding at beginning of year (in dollars per share) | $ 2.19 | $ 2.18 | ||
Forfeited or expired during the year (in dollars per share) | 4.80 | |||
Outstanding at end of year (in dollars per share) | 2.19 | 2.19 | ||
Exercisable at end of year (in dollars per share) | $ 2.71 | $ 3.26 | ||
Additional disclosures | ||||
Stock based compensation expense (reversal of expense) | $ 39 | $ 39 | ||
Unrecognized compensation cost, options | $ 84 | |||
Period for recognizing unrecognized compensation cost | 2 years 1 month 24 days | |||
2018 LTIP | ||||
Stock-based compensation | ||||
Contractual term of option awards | 10 years | |||
Number Outstanding | ||||
Granted during the year (in shares) | 0 | |||
2018 LTIP | Stock Options | ||||
Number Outstanding | ||||
Granted during the year (in shares) | 0 | 0 | ||
2018 LTIP | Maximum | ||||
Stock-based compensation | ||||
Shares available for awards | 1,293,109 |
Stock-based Compensation - Op_2
Stock-based Compensation - Options Outstanding and Exercisable (Details) - 2008 LTIP - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Outstanding | |||
Number Outstanding | 537,500 | 537,500 | 540,625 |
Weighted Average Remaining Contractual Life | 6 years 7 days | ||
Weighted Average Exercise Price | $ 2.19 | $ 2.19 | $ 2.18 |
Exercisable | |||
Number Outstanding | 267,500 | 177,500 | |
Weighted Average Exercise Price | $ 2.71 | $ 3.26 | |
Grant Date January 21, 2009 | |||
Outstanding | |||
Number Outstanding | 7,500 | ||
Weighted Average Remaining Contractual Life | 18 days | ||
Weighted Average Exercise Price | $ 4 | ||
Exercisable | |||
Number Outstanding | 7,500 | ||
Weighted Average Exercise Price | $ 4 | ||
Grant Date March 18, 2009 | |||
Outstanding | |||
Number Outstanding | 75,000 | ||
Weighted Average Remaining Contractual Life | 2 months 16 days | ||
Weighted Average Exercise Price | $ 4.98 | ||
Exercisable | |||
Number Outstanding | 75,000 | ||
Weighted Average Exercise Price | $ 4.98 | ||
Grant Date January 21, 2010 | |||
Outstanding | |||
Number Outstanding | 5,000 | ||
Weighted Average Remaining Contractual Life | 1 year 18 days | ||
Weighted Average Exercise Price | $ 6 | ||
Exercisable | |||
Number Outstanding | 5,000 | ||
Weighted Average Exercise Price | $ 6 | ||
Grant Date February 24, 2016 | |||
Outstanding | |||
Number Outstanding | 450,000 | ||
Weighted Average Remaining Contractual Life | 7 years 1 month 24 days | ||
Weighted Average Exercise Price | $ 1.62 | ||
Exercisable | |||
Number Outstanding | 180,000 | ||
Weighted Average Exercise Price | $ 1.62 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2018 | Jan. 31, 2018 | Apr. 30, 2017 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock-based compensation | ||||||
Stock based compensation expense related to shares issued for services | $ 45 | $ 53 | ||||
Common Stock | ||||||
Stock-based compensation | ||||||
Shares issued for services | 18,906 | 30,002 | ||||
Stock based compensation expense related to shares issued for services | $ 1 | |||||
2008 LTIP | Common Stock | Directors | ||||||
Stock-based compensation | ||||||
Shares issued for services | 18,906 | 30,002 | ||||
Stock based compensation expense related to shares issued for services | $ 45 | 53 | ||||
2008 LTIP | Restricted stock | Chief Executive Officer | ||||||
Stock-based compensation | ||||||
Restricted stock award (in shares) | 120,483 | |||||
Stock based compensation expense (reversal of expense) | 36 | 105 | ||||
Unrecognized compensation cost, restricted stock | $ 3 | |||||
2008 LTIP | Restricted stock | Chief Executive Officer | Expected Recognition Period: 3 months | ||||||
Stock-based compensation | ||||||
Period for recognizing unrecognized compensation cost | 3 months | |||||
2008 LTIP | Restricted stock | Two-year period | Chief Executive Officer | ||||||
Stock-based compensation | ||||||
Restricted stock award (in shares) | 100,000 | |||||
Vesting period of stock award | 2 years | |||||
2008 LTIP | Restricted stock | Three-year period | Chief Executive Officer | ||||||
Stock-based compensation | ||||||
Restricted stock award (in shares) | 20,483 | |||||
Vesting period of stock award | 3 years | |||||
2008 LTIP | Cash-settled restricted stock units | Chief Executive Officer | ||||||
Stock-based compensation | ||||||
Restricted stock award (in shares) | 97,195 | 129,270 | ||||
Vesting period of stock award | 2 years | |||||
Stock based compensation expense (reversal of expense) | $ 73 | $ 102 |
Capital and Regulatory Matter_2
Capital and Regulatory Matters (Details) | Dec. 31, 2018 | Dec. 31, 2017 |
Capital and Regulatory Matters | ||
Common Equity Tier 1 required for capital adequacy purposes, ratio (as a percent) | 4.50% | 4.50% |
Tier 1 required for capital adequacy purposes, ratio (as a percent) | 6.00% | 6.00% |
Total capital required for capital adequacy purposes, ratio (as a percent) | 8.00% | 8.00% |
Leverage required for capital adequacy purposes, ratio (as a percent) | 4.00% | 4.00% |
Conservation Buffer Rule Starting January 2016 | ||
Capital and Regulatory Matters | ||
Capital conservation buffer (as a percent) | 0.625% | |
Conservation Buffer Rule Subsequent to 2016 | ||
Capital and Regulatory Matters | ||
Capital conservation buffer annual increase (as a percent) | 0.625% | |
Maximum | Conservation Buffer Rule | ||
Capital and Regulatory Matters | ||
Capital conservation buffer (as a percent) | 2.50% |
Capital and Regulatory Matter_3
Capital and Regulatory Matters - Schedule of Actual and Required Capital Amounts and Ratios (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Capital and Regulatory Matters | ||
Tier-1 Leverage | $ 49,433 | $ 47,838 |
Tier 1 Leverage, ratio (as a percent) | 12.03% | 11.39% |
Common Equity Tier 1 | $ 49,433 | $ 47,838 |
Common Equity Tier 1, ratio (as a percent) | 19.32% | 18.63% |
Tier 1 | $ 49,433 | $ 47,838 |
Tier 1, ratio (as a percent) | 19.32% | 18.63% |
Total Capital | $ 52,417 | $ 51,059 |
Total Capital, ratio (as a percent) | 20.48% | 19.88% |
Leverage required for capital adequacy purposes | $ 16,439 | $ 16,798 |
Leverage required for capital adequacy purposes, ratio (as a percent) | 4.00% | 4.00% |
Common Equity Tier 1 required for capital adequacy purposes | $ 18,494 | $ 11,557 |
Common Equity Tier 1 required for capital adequacy purposes, ratio (as a percent) | 4.50% | 4.50% |
Tier 1 required for capital adequacy purposes | $ 24,659 | $ 15,409 |
Tier 1 required for capital adequacy purposes, ratio (as a percent) | 6.00% | 6.00% |
Total capital required for capital adequacy purposes | $ 32,879 | $ 20,545 |
Total capital required for capital adequacy purposes, ratio (as a percent) | 8.00% | 8.00% |
Capital and Regulatory Matter_4
Capital and Regulatory Matters - Schedule of Actual and Required Capital Amounts and Ratios - Basel III and Dodd Frank Rules (Details) - Corrective Action Rules - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Basel III and Dodd Frank Rules | ||
Tier 1 Leverage required to be Well Capitalized | $ 20,549 | $ 20,997 |
Tier 1 Leverage required to be Well Capitalized (as a percent) | 5.00% | 5.00% |
Common Equity Tier I required to be Well Capitalized | $ 16,634 | $ 16,693 |
Common Equity Tier I required to be Well Capitalized (as a percent) | 6.50% | 6.50% |
Tier I Capital required to be Well Capitalized | $ 20,472 | $ 20,545 |
Tier I Capital required to be Well Capitalized (as a percent) | 8.00% | 8.00% |
Total Capital required to be Well Capitalized | $ 25,590 | $ 25,681 |
Total Capital required to be Well Capitalized (as a percent) | 10.00% | 10.00% |
Loan Commitments and Other Re_3
Loan Commitments and Other Related Activities (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) | |
Commitments to make loans | ||
Loan commitments and other related activities | ||
Contractual amounts of financial instruments - variable rate | $ 10,875 | $ 1,493 |
Commitments to make loans | Maximum | ||
Loan commitments and other related activities | ||
Period for which loan commitments are made | 60 days | |
Commitments to make loans | Multi-family | ||
Loan commitments and other related activities | ||
Number of loan commitments | loan | 6 | |
Period for which initial interest rate is applicable | 5 years | |
Commitments to make loans | Multi-family | Minimum | ||
Loan commitments and other related activities | ||
Initial interest rate (as a percent) | 4.50% | |
Commitments to make loans | Multi-family | Maximum | ||
Loan commitments and other related activities | ||
Initial interest rate (as a percent) | 4.68% | |
Unused lines of credit | ||
Loan commitments and other related activities | ||
Contractual amounts of financial instruments - variable rate | $ 1,491 | $ 2,582 |
Parent Company Only Condensed_3
Parent Company Only Condensed Financial Information - Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | |||
Cash and cash equivalents | $ 16,651 | $ 22,219 | |
Other assets | 669 | 856 | |
Total assets | 409,397 | 413,704 | |
Liabilities and stockholders' equity | |||
Junior subordinated debentures | 5,100 | 5,100 | |
Accrued expenses and other liabilities | 3,392 | 3,512 | |
Stockholders' equity | 48,436 | 47,731 | $ 45,526 |
Total liabilities and stockholders' equity | 409,397 | 413,704 | |
Broadway Financial Corporation | |||
Assets | |||
Cash and cash equivalents | 156 | 400 | |
Investment in bank subsidiary | 51,221 | 50,594 | |
Other assets | 2,225 | 2,015 | |
Total assets | 53,602 | 53,009 | |
Liabilities and stockholders' equity | |||
Junior subordinated debentures | 5,100 | 5,100 | |
Accrued expenses and other liabilities | 66 | 178 | |
Stockholders' equity | 48,436 | 47,731 | |
Total liabilities and stockholders' equity | $ 53,602 | $ 53,009 |
Parent Company Only Condensed_4
Parent Company Only Condensed Financial Information - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Condensed Statements of Income | ||
Interest expense | $ (4,929) | $ (4,348) |
Other expense | (950) | (1,035) |
Income tax benefit (expense) | (56) | (1,863) |
Net income | 815 | 1,869 |
Broadway Financial Corporation | ||
Condensed Statements of Income | ||
Interest income | 25 | 28 |
Interest expense | (243) | (194) |
Other expense | (469) | (730) |
Loss before income tax and undistributed subsidiary income | (687) | (896) |
Income tax benefit (expense) | 205 | (326) |
Equity in undistributed subsidiary income | 1,297 | 3,091 |
Net income | $ 815 | $ 1,869 |
Parent Company Only Condensed_5
Parent Company Only Condensed Financial Information - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net income | $ 815 | $ 1,869 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Change in other assets | 187 | 332 |
Change in accrued expenses and other liabilities | (120) | (1,690) |
Net cash provided by (used in) operating activities | 234 | (10,226) |
Cash flows from investing activities | ||
Net cash (used in) provided by investing activities | (818) | 30,152 |
Cash flows from financing activities | ||
Net cash used in financing activities | (4,984) | (16,137) |
Net change in cash and cash equivalents | (5,568) | 3,789 |
Cash and cash equivalents at beginning of the year | 22,219 | 18,430 |
Cash and cash equivalents at end of the year | 16,651 | 22,219 |
Broadway Financial Corporation | ||
Cash flows from operating activities | ||
Net income | 815 | 1,869 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Equity in undistributed subsidiary income | (1,297) | (3,091) |
Change in other assets | (210) | 330 |
Change in accrued expenses and other liabilities | (112) | (183) |
Net cash provided by (used in) operating activities | (804) | (1,075) |
Cash flows from investing activities | ||
Dividends from bank subsidiary | 600 | 500 |
Net cash (used in) provided by investing activities | 600 | 500 |
Cash flows from financing activities | ||
Common stock repurchased for tax withholdings | (108) | |
Proceeds from repayment of ESOP loan | 68 | 80 |
Net cash used in financing activities | (40) | 80 |
Net change in cash and cash equivalents | (244) | (495) |
Cash and cash equivalents at beginning of the year | 400 | 895 |
Cash and cash equivalents at end of the year | $ 156 | $ 400 |
Earnings Per Common Share (Deta
Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Common Share | ||
Net income | $ 815 | $ 1,869 |
Less net income attributable to participating securities | (3) | (5) |
Income available to common stockholders | $ 812 | $ 1,864 |
Weighted average common shares outstanding for basic earnings per common share | 26,755,405 | 26,678,917 |
Add: dilutive effects of assumed exercises of stock options | 27,117 | |
Add: dilutive effects of unvested restricted stock awards | 7,044 | 49,448 |
Weighted average common shares outstanding for diluted earnings per common share | 26,762,449 | 26,755,482 |
Earnings per common share - basic (in dollars per share) | $ 0.03 | $ 0.07 |
Earnings per common share - diluted (in dollars per share) | $ 0.03 | $ 0.07 |
Stock Options | ||
Earnings Per Common Share | ||
Anti-dilutive stock not considered in computing diluted earnings per common share | 267,500 | 87,500 |