BROOKLYN, N.Y., July 31 /PRNewswire-FirstCall/ -- Brooklyn Federal
Bancorp, Inc. (the "Company") (Nasdaq Global Market: BFSB), the holding
company of Brooklyn Federal Savings Bank (the "Bank"), today reported net
income of $1.4 million for the quarter ended June 30, 2008 compared to net
income of $1.2 million for the same period in 2007. The Company reported
basic and diluted earnings per common share of $0.11 for the quarter ended
June 30, 2008 compared to basic and diluted earnings per common share of $0.09
for the quarter ended June 30, 2007.
On July 15, 2008 the Company's Board of Directors approved a cash dividend
of $0.10 per share of common stock. The Company previously paid a cash
dividend of $0.07 per share of common stock on May 29, 2008. The dividend
will be paid to stockholders of record as of August 15, 2008, payable on
August 29, 2008.
The Company also reported net income of $4.1 million for the nine months
ended June 30, 2008, an increase of $1.5 million, or 59.0%, compared to $2.6
million for the same period ended June 30, 2007. Basic and diluted earnings
per common share were both $0.32 for the nine months ended June 30, 2008 and
$0.20 for the nine months ended June 30, 2007.
Total assets at June 30, 2008 were $453.1 million, an increase of $62.7
million, or 16.1%, compared to total assets of $390.4 million at September 30,
2007. The increase was primarily due to increases in loans held-for-sale of
$51.5 million, or 87.1%, to $110.7 million at June 30, 2008 from $59.2 million
at September 30, 2007, net loans receivable of $5.6 million, or 2.5%, to
$231.1 million at June 30, 2008 from $225.5 million at September 30, 2007,
cash and due from banks of $3.9 million, or 73.0%, to $9.3 millions at June
30, 2008 from $5.4 million at September 30, 2007, securities investments,
which include securities available-for-sale and held-to-maturity, of $2.2
million, or 2.9%, to $80.2 million at June 30, 2008 from $78.0 million at
September 30, 2007, Federal Home Loan Bank ("FHLB") of New York stock of
$934,000, or 90.5%, to $2.0 million at June 30, 2008 from $1.0 million at
September 30, 2007, other assets, which include accrued interest receivable,
premises and equipment, bank owned life insurance, prepaid and other assets of
$891,000, or 5.1% to $18.4 million at June 30, 2008 from $17.5 million at
September 30, 2007, offset in part by a decrease in investments in
certificates of deposit of $2.5 million, or 64.1%, to $1.4 million at June 30,
2008 from $3.9 million at September 30, 2007.
Total deposits increased by $45.7 million, or 15.9%, to $332.9 million at
June 30, 2008 from $287.2 million at September 30, 2007. The increase was
primarily due to increases in certificates of deposit of $32.3 million, or
19.8%, to $195.1 million at June 30, 2008 from $162.8 million at September 30,
2007, interest-bearing deposits, which includes savings accounts, NOW accounts
and money market accounts, of $10.9 million, or 10.1%, to $119.2 million at
June 30, 2008 from $108.3 million at September 30, 2007 and non-interest
bearing deposits of $2.5 million, or 15.9%, to $18.5 million at June 30, 2008
from $16.0 million at September 30, 2007. Total borrowings, which represent
short-term and long-term FHLB of New York advances, increased by $16.3
million, or 176.6%, to $25.6 million at June 30, 2008 from $9.3 million at
September 30, 2007. Advance payments by borrowers for taxes and insurance,
accrued expenses and other liabilities decreased by $342,000, or 3.9%, to $8.4
million at June 30, 2008 from $8.7 million at September 30, 2007.
Stockholders' equity increased by $959,000, or 1.1%, to $86.2 million at June
30, 2008 from $85.3 million at September 30, 2007. The increase was primarily
due to the addition of net income, offset in part by the implemented stock buy
back programs and the payments of cash dividends.
COMPARISON OF OPERATING RESULTS FOR THE QUARTERS ENDED
JUNE 30, 2008 AND 2007
Total net interest income before provision for loan losses increased
$339,000, or 8.0%, to $4.5 million for the quarter ended June 30, 2008
compared to $4.2 million for the quarter ended June 30, 2007. The primary
reasons for the increase was increased interest income for the quarter ended
June 30, 2008 of $149,000, or 2.2%, to $7.0 million compared to $6.9 million
for the comparable quarter in 2007 and decreased interest expense of $190,000,
or 7.2%, to $2.5 million for the quarter ended June 30, 2008 from $2.7 million
for the quarter ended June 30, 2007.
The average balance of net loans, including loans held-for-sale, increased
$38.6 million, or 13.4%, to $326.5 million for the quarter ended June 30, 2008
compared to $287.9 million for the quarter ended June 30, 2007. The total
average balance of the Company's securities and other interest-earning assets
decreased $8.0 million, or 8.4%, to $86.9 million for the quarter ended June
30, 2008 compared to $94.9 million for the comparable period in 2007. The
Company continued to deploy the funds from repayments in its securities
portfolio, net deposit inflows and borrowing proceeds primarily into mortgage
loan products. The average balance of total interest-earning assets increased
$30.6 million, or 8.0%, to $413.5 million for the quarter ended June 30, 2008
compared to $382.9 million for the comparable quarter in 2007. The average
yield on total interest-earning assets decreased 39 basis points to 6.79% for
the quarter ended June 30, 2008 compared to 7.18% for the comparable period in
2007. The average balance of deposits, which includes savings accounts, money
market, NOW accounts and certificates of deposit, increased by $34.3 million,
or 12.9%, to $300.7 million for the quarter ended June 30, 2008 compared to
$266.4 million for the same quarter in 2007. The average balance of
borrowings, which includes short and long term advances from the FHLB of New
York, decreased by $6.0 million, or 24.3%, to $18.8 million for the quarter
ended June 30, 2008 compared to $24.8 million for the quarter ended June 30,
2007. The average cost of total interest-bearing liabilities decreased 56
basis points to 3.09% for the quarter ended June 30, 2008 from 3.65% for the
same quarter in 2007.
The loan loss provision decreased by $7,000, to a recovery of $7,000 for
the quarter ended June 30, 2008 compared to no provision for the quarter ended
June 30, 2007.
Non-interest income decreased by $56,000, or 8.0%, to $640,000 for the
quarter ended June 30, 2008 from $696,000 for the same quarter in 2007. This
decrease was primarily due to an initial $582,000 impairment charge taken on
the Bank's investment in a mutual fund that invests primarily in agency and
private label mortgage backed securities. The market values of the fund's
holdings have been steadily decreasing which has caused a corresponding
decrease in the fund's net asset value. In addition, the fund has recently
implemented a temporary prohibition on cash redemptions, lessening the ability
of the Bank to dispose of its remaining $4.3 million investment in this asset.
The Company will continue to evaluate this investment and if the market value
of such investment declines further and remains depressed for a substantial
period of time, the Company will evaluate the investment for other-than-
temporary impairment at that time. The Company also experienced reductions in
loan servicing and miscellaneous loan fees of approximately $51,000 and
depositor related fees of $8,000, offset in part by increases in syndicated
loan fees of $331,000, bank owned life insurance income and proceeds of
$235,000, net gain on sale of loans held-for-sale of $3,000 and miscellaneous
income of $16,000.
Non-interest expense decreased by $45,000, or 1.5%. The Company's non-
interest expense for the quarters ended June 30, 2008 and 2007 was $3.0
million. The decrease was mainly due to decreases in compensation and benefit
expense of $239,000, professional fees of $106,000, offset in part by
increases in occupancy and equipment expense of $123,000, data processing fees
of $15,000 and other expense of $162,000.
Provision for income taxes increased by $107,000, or 16.1%, to $773,000
for the quarter ended June 30, 2008 compared to a $666,000 for the same
quarter in 2007. The primary reason for the increase was increased taxable
income before income taxes.
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED
JUNE 30, 2008 AND 2007
Net interest income before provision for loan losses decreased $99,000, or
0.8%, to $12.9 million for the nine months ended June 30, 2008 from $13.0
million for the same period in 2007. The primary reason for the decrease was
decreased interest income of $509,000, or 2.4%, to $20.6 million for the nine
months ended June 30, 2008 from $21.1 million for the same period in 2007,
offset by a decreased interest expense of $410,000, or 5.1%, to $7.7 million
for the nine months ended June 30, 2008 from $8.1 million for the same period
in 2007.
The average balance of net loans, including loans held-for-sale, increased
$20.1 million, or 7.0%, to $309.0 million for the nine months ended June 30,
2008 from $288.9 million for the same period in 2007. The Company continues to
utilize repayments on its securities portfolio and net deposit inflows
primarily into mortgage loan products. The total average balance of the
Company's securities and other interest-earning assets decreased $10.9
million, or 11.1% to $87.4 million for the nine months ended June 30, 2008
compared to $98.3 million for same period in 2007. The average yield on total
interest-earning assets decreased 34 basis points to 6.91% for the nine months
ended June 30, 2008 from 7.25% for the same period in 2007. The average
balance of interest-bearing deposits, which includes savings accounts, money
market accounts, NOW accounts and certificates of deposit, increased $24.3
million, or 9.3%, to $286.7 million for the nine months ended June 30, 2008
from $262.4 million for the same period in 2007. The average balance of
borrowings, which includes short and long term FHLB of New York advances,
decreased $16.7 million, or 50.2%, to $16.5 million for the nine months ended
June 30, 2008 from $33.2 million for the same period in 2007. The average
cost of total interest-bearing liabilities decreased 27 basis points to 3.38%
for the nine months ended June 30, 2008 from 3.65% for the same period in
2007.
The loan loss provision increased $109,000, to $113,000 for the nine
months ended June 30, 2008 from $4,000 for the same period in 2007. The
primary reasons for this increase were increased loan production in the one-
to four-family mortgage loan and commercial mortgage loan portfolios.
Non-interest income increased $125,000, or 6.0%, to $2.2 million for the
nine months ended June 30, 2008 from $2.1 million for the period ended in
2007. The primary reasons for the increase were the increases in the net gain
on sale of mortgage loans of approximately $214,000, loan syndication fees of
$378,000 and bank owned life insurance income and proceeds of $245,000 and
miscellaneous fees and other income of $8,000, offset in part by the initial
$582,000 other-than-temporary charge, previously discussed, on the Bank's
mutual fund investment and reductions in loan servicing and other loan fees of
$123,000 and depositor related fees of $15,000.
Non-interest expense decreased $2.7 million, or 24.1%, to $8.5 million for
the nine months ended June 30, 2008 from $11.2 million for the same period in
2007. The decrease is primarily due to expense reductions in compensation and
fringe benefits of $2.9 million, professional fees of $167,000, data
processing fees of $52,000, offset in part by an increase in occupancy and
equipment expense of $257,000 and other expense of $160,000.
Provision for income taxes increased $1.1 million, or 82.6%, to $2.4
million for the nine months ended June 30, 2008 from $1.3 million for the same
period in 2007. The primary reason for the increase is increased income before
income taxes. The effective income tax rate was 36.7% for the nine months
ended June 30, 2008 compared to 33.6% for the same period in 2007.
STOCK REPURCHASE PROGRAMS
In March 2008 the Company's Board of Directors authorized a $3.0 million
stock repurchase program. The Company is currently repurchasing shares and as
of June 30, 2008, the Company had repurchased 145,120 shares, at an average
cost of $12.46 per share, with a total cost of approximately $1.8 million as
part of this repurchase program.
Brooklyn Federal Savings Bank operates five banking offices, two located
in Brooklyn, one in Nassau County and two in Suffolk County, New York. The
Bank opened its fifth banking office, located in Commack, Suffolk County, New
York, on April 30, 2008. Additional financial data for the quarter and nine
months ended June 30, 2008 may be found in Brooklyn Federal Bancorp's
Quarterly Report on Form 10-Q, which will be filed with the Securities and
Exchange Commission.
This press release may contain certain "forward-looking statements" which
may be identified by the use of such words as "believe," "expect," "intend,"
"anticipate," "should," "planned," "estimated," and "potential." Examples of
forward-looking statements include, but are not limited to, estimates with
respect to our financial condition, results of operations and business that
are subject to various factors which could cause actual results to differ
materially from these estimates and most other statements that are not
historical in nature. These factors include, but are not limited to, general
and local economic conditions, changes in interest rates, deposit flows,
demand for mortgage and other loans, real estate values, and competition;
changes in accounting principles, policies or guidelines; changes in
legislation or regulation; and other economic, competitive, governmental,
regulatory, and technological factors affecting our operations, pricing,
products and services.
FINANCIAL HIGHLIGHTS
At June 30, At September 30,
2008 2007
(In thousands)
Selected Financial Condition Data:
Total assets $453,149 $390,434
Cash and due from banks 9,336 5,398
Certificates of deposit 1,397 3,890
Securities available-for-sale 4,300 4,601
Securities held-to-maturity 75,924 73,354
Loans held-for-sale 110,685 59,153
Loans receivable, net 231,111 225,467
Deposits 332,885 287,155
Borrowings 25,639 9,271
Stockholders' equity 86,218 85,259
For the Three For the Nine
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
(In thousands, (In thousands,
except per share except per share
data) data)
Selected Operating Data:
Interest income $7,022 $6,873 $20,555 $21,064
Interest expense 2,465 2,655 7,686 8,096
Net interest income before
provision for loan losses 4,557 4,218 12,869 12,968
Provision for (recovery of) loan
losses (7) - 113 4
Net interest income after provision
for loan losses 4,564 4,218 12,756 12,964
Non-interest income 640 696 2,205 2,080
Non-interest expense 2,993 3,038 8,474 11,158
Income (loss) before income taxes 2,211 1,876 6,487 3,886
Provision for (benefit of) income
taxes 773 666 2,383 1,305
Net income $1,438 $1,210 $4,104 $2,581
Basic earnings (loss) per common
share $0.11 $0.09 $0.32 $0.20
Diluted earnings (loss) per common
share $0.11 $0.09 $0.32 $0.20
At or For the Three At or For the Nine
Months Ended Months Ended
June 30, June 30,
2008 2007 2008 2007
Selected Financial Ratios:
Performance Ratios:
Return on average assets (1) 1.32 % 1.21 % 1.31 % 0.85 %
Return on average equity (1) 6.63 % 5.73 % 6.37 % 4.16 %
Interest rate spread (2) 3.70 % 3.53 % 3.53 % 3.60 %
Net interest margin (1)(3) 4.41 % 4.41 % 4.33 % 4.47 %
Efficiency ratio (4) 57.59 % 61.82 % 56.22 % 74.15 %
Non-interest expense to
average total assets (1) 2.76 % 3.03 % 2.71 % 3.68 %
Average interest-earning
assets to average
interest-bearing liabilities 129.37 % 131.44 % 130.70 % 130.98 %
Asset Quality Ratios:
Non-performing assets as a
percent of total assets 0.00 % (5) 0.02 %
Non-performing loans as a
percent of total loans 0.00 % (5) 0.02 %
Allowance for loan losses as a
percent of total loans 0.56 % 0.61 %
Other Data:
Number of full service offices 5 4 5 4
(1) Ratio is annualized.
(2) Represents the difference between the weighted-average yield on
interest-earning assets and the weighted-average cost of interest-
bearing liabilities for the period.
(3) Represents net interest income as a percent of average interest-
earning assets for the period.
(4) Represents non-interest expense divided by the sum of net interest
income and non-interest income.
(5) Less than 0.01%
SOURCE Brooklyn Federal Bancorp, Inc.