BROOKLYN, N.Y., July 30 /PRNewswire-FirstCall/ -- Brooklyn Federal
Bancorp, Inc. (the "Company") (Nasdaq Global Market: BFSB), the
parent company of Brooklyn Federal Savings Bank (the "Bank"), today
reported net income of $1.9 million, an increase of $0.5 million,
or 29.6%, for the quarter ended June 30, 2009 compared to net
income of $1.4 million for the same period in 2008. The Company
reported basic and diluted earnings per common share of $0.15 for
the quarter ended June 30, 2009 compared to basic and diluted
earnings per common share of $0.11 for the quarter ended June 30,
2008. On July 21, 2009 the Company's Board of Directors approved a
cash dividend of $0.10 per share of common stock. The dividend will
be paid to stockholders of record as of August 14, 2009, payable on
August 28, 2009. The Company also reported net income for the nine
months ended June 30, 2009 of $4.3 million, an increase of $0.2
million, or 4.5%, compared to $4.1 million for the same period
ended June 30, 2008. Basic and diluted earnings per common share
were $0.34 and $0.32 for the nine months ended June 30, 2009 and
2008, respectively. Financial Condition Highlights Total assets at
June 30, 2009 were $527.1 million, an increase of $43.3 million, or
8.9%, compared to total assets of $483.8 million at September 30,
2008. The increase was primarily due to increases in net loans
receivable of $52.6 million, or 22.0%, to $291.7 million at June
30, 2009 from $239.1 million at September 30, 2008 and other
assets, which include accrued interest receivable, premises and
equipment, bank owned life insurance, prepaid and other assets of
approximately $1.0 million, or 5.2% to $20.5 million at June 30,
2009 from $19.5 million at September 30, 2008, offset in part by
decreases in loans held-for-sale of $6.8 million, or 5.1%, to
$127.4 million at June 30, 2009 from $134.2 million at September
30, 2008; investment securities, which include securities
available-for-sale and held-to-maturity, of approximately $1.8
million, or 2.2%, to $79.9 million at June 30, 2009 from $81.7
million at September 30, 2008; investments in certificates of
deposit of $1.4 million, or 100.0%, to zero at June 30, 2009 from
$1.4 million at September 30, 2008; Federal Home Loan Bank ("FHLB")
of New York stock of $0.2 million, or 7.8%, to $2.6 million at June
30, 2009 from $2.8 million at September 30, 2008 and cash and due
from banks of $0.1 million, or 0.6%, to $5.0 million at June 30,
2009 from $5.1 million at September 30, 2008. Total deposits
increased by $51.9 million, or 15.2%, to $394.4 million at June 30,
2009 from $342.5 million at September 30, 2008. The increase was
due to increases in certificates of deposit of $35.5 million, or
16.9%, to $245.9 million at June 30, 2009 from $210.4 million at
September 30, 2008, interest-bearing deposits, which includes
savings accounts, NOW accounts and money market accounts, of $16.1
million, or 14.2%, to $129.4 million at June 30, 2009 from $113.3
million at September 30, 2008 and non-interest bearing deposits of
$0.3 million or 1.8%, to $19.1 million at June 30, 2009 from $18.8
million at September 30, 2008. Total borrowings, which represent
short-term and long-term FHLB of New York advances, decreased by
$12.2 million, or 27.7%, to $32.0 million at June 30, 2009 from
$44.2 million at September 30, 2008. Other liabilities, which
include advance payments by borrowers for taxes and insurance,
accrued expenses and other liabilities, increased by $1.3 million,
or 11.9%, to $12.1 million at June 30, 2009 from $10.8 million at
September 30, 2008. Stockholders' equity increased by $2.3 million,
or 2.7%, to $88.6 million at June 30, 2009 from $86.3 million at
September 30, 2008. The increase was primarily due to the addition
of net income, offset in part by the implemented stock buy back
program and the payment of cash dividends. Financial Results
Highlights: Comparison of Operating Results for the Quarters Ended
June 30, 2009 and 2008 Total net interest income before provision
for loan losses increased $1.8 million, or 41.4%, to $6.4 million
for the quarter ended June 30, 2009 compared to $4.6 million for
the quarter ended June 30, 2008. The primary reasons for the
increase were increased interest income of $1.8 million, or 25.6%,
to $8.8 million for the quarter ended June 30, 2009 from $7.0
million for the quarter ended June 30, 2008 and decreased interest
expense of $0.1 million, or 3.6%, to $2.4 million for the quarter
ended June 30, 2009 from $2.5 million for the quarter ended June
30, 2008. The average balance of net loans, including loans
held-for-sale, increased approximately $90.9 million, or 27.8%, to
$417.4 million for the quarter ended June 30, 2009 compared to
$326.5 million for the quarter ended June 30, 2008. The total
average balance of the Company's securities and other
interest-earning assets decreased $2.1 million, or 2.4%, to $84.8
million for the quarter ended June 30, 2009 compared to $86.9
million for the quarter ended June 30, 2008. The Company continued
to deploy the funds from repayments in its securities portfolio,
net deposit inflows and borrowings primarily into loan products and
to a lesser extent investments held-to-maturity. The average
balance of total interest-earning assets increased $88.8 million,
or 21.5%, to $502.3 million for the quarter ended June 30, 2009
compared to $413.5 million for the quarter ended June 30, 2008. The
average yield on total interest-earning assets increased 23 basis
points to 7.02% for the quarter ended June 30, 2009 compared to
6.79% for the quarter ended June 30, 2008. The average balance of
deposits, which includes savings accounts, money market, NOW
accounts and certificates of deposit, increased by $63.7 million,
or 21.2%, to $364.5 million for the quarter ended June 30, 2009
compared to $300.8 million for the quarter ended June 30, 2008. The
average balance of borrowings, which includes short and long term
advances from the FHLB of New York, increased by $18.3 million, or
97.1%, to $37.1 million for the quarter ended June 30, 2009
compared to $18.8 million for the quarter ended June 30, 2008. The
average cost of total interest-bearing liabilities decreased 72
basis points to 2.37% for the quarter ended June 30, 2009 from
3.09% for the quarter ended June 30, 2008. The loan loss provision
increased $0.4 million for the quarter ended June 30, 2009 compared
to the three months ended June 30, 2008. The primary reasons for
the increase were due to increases in higher risk loan
originations, including multi-family mortgage loans, construction
mortgage loans and land loans. Non-interest income increased by
$0.1 million, or 6.3%, to $0.7 million for the quarter ended June
30, 2009 from $0.6 million for the quarter June 30, 2008. The
increase was primarily due to an impairment charge of $0.6 million
not taken on the Bank's investment in a mutual fund that invests
primarily in agency and private label mortgage backed securities
for the quarter ended June 30, 2009. The market values of the
fund's holdings had been steadily decreasing through last quarter
ending March 31, 2009, which has caused a corresponding decrease in
the fund's net asset value, though it has stabilized this quarter.
In addition, the fund has continued the temporary prohibition on
cash redemptions, lessening the ability of the Bank to dispose of
its remaining $2.8 million investment in this asset. The Company
continues to evaluate this investment to determine if additional
write-downs will be necessary. The increase was also due to an
increase in the net gain on sale of loans held-for-sale of $39,000,
offset by decreases in banking fees and service charges of $0.3
million and other income of $0.2 million. Non-interest expense
increased by $0.6 million, or 18.9%, to $3.6 million for the three
months ended June 30, 2009, from $3.0 million for the three months
ended June 30, 2008. The increase is primarily due to the Bank's
accrual estimate for its Federal Deposit Insurance Corporation
("FDIC") assessment of $0.3 million and the banking industry-wide
special assessment of five (5) basis points on the Bank's reported
regulatory assets less its tier one (1) capital of approximately
$0.2 million. The Bank did not record any FDIC assessment charges
in fiscal year 2008 since the assessments were offset by utilizing
its one-time assessment credits, which have been fully utilized
this fiscal year. In addition, the Company experienced increases in
compensation and fringe benefits of $0.2 million, or 7.5%, to $2.1
million for the three months ended June 30, 2009, from $1.9 million
for the three months ended June 30, 2008 which includes increases
primarily in the supplemental executive retirement and pension
plans of approximately $0.1 million, and health care and other
employee costs of $0.1 million. The Company also experienced
increased costs in occupancy and equipment of $68,000 and a
decrease in other expenses of $0.2 million, or 36.1% to $0.3
million for the three months ended June 30, 2009, from $0.5 million
for the three months ended June 30, 2008. Income tax expense
increased $0.5 million, or 71.3%, to $1.3 million for the three
months ended June 30, 2009, from $0.8 million for the three months
ended June 30, 2008. The primary reason for this increase is the
increased income before provision for income taxes. The effective
income tax rate of the Company for the three months ended June 30,
2009 was 41.5%, compared to the effective income tax rate of 35.0%
for the three months ended June 30, 2008. The increase in the
effective income tax rate was primarily due to the increased
taxable income of the Company's Bank subsidiary. Comparison of
Operating Results for the Nine Months Ended June 30, 2009 and 2008
Net interest income before provision for loan losses increased by
$5.0 million, or 38.8%, to $17.9 million for the nine months ended
June 30, 2009, from $12.9 million for the nine months ended June
30, 2008. The increase in net interest income resulted primarily
from an increase in the average balance of interest-earning assets
of $93.8 million and an 81 basis point increase in the Bank's net
interest rate spread to 4.34% for the nine months ended June 30,
2009, from 3.53% for the nine months ended June 30, 2008. The
Bank's net interest margin increased 53 basis points to 4.86% for
the nine months ended June 30, 2009 compared to 4.33% for the nine
months ended June 30, 2008. The average balance of net loans,
including loans held-for-sale, increased $93.7 million, or 30.3%,
to $402.7 million for the nine months ended June 30, 2009 from
$309.0 million for the nine months ended June 30, 2008. The Company
continues to deploy repayments on its securities portfolio, net
deposit inflows and borrowings primarily into loan products and to
a lesser extent held-to-maturity investments. The total average
balance of the Company's securities and other interest-earning
assets increased $0.1 million, or 0.1% to $87.5 million for the
nine months ended June 30, 2009 compared to $87.4 million for nine
months ended June 30, 2008. The average balance of total
interest-earning assets increased approximately $93.8 million, or
23.7%, to $490.2 million for the nine months ended June 30, 2009
compared to $396.4 million for the nine months ended June 30, 2008.
The average yield on total interest-earning assets increased 1
basis point to 6.92% for the nine months ended June 30, 2009 from
6.91% for the nine months ended June 30, 2008. The average balance
of interest-bearing deposits, which includes savings accounts,
money market accounts, NOW accounts and certificates of deposit,
increased $59.0 million, or 20.6%, to $345.7 million for the nine
months ended June 30, 2009 from $286.7 million for the nine months
ended June 30, 2008. The average balance of borrowings, which
includes short and long term FHLB of New York advances, increased
$28.7 million, or 173.3%, to $45.2 million for the nine months
ended June 30, 2009 from $16.5 million for the nine months ended
June 30, 2008. The primary purpose for the increased borrowings was
to fund mortgage loan originations. The average cost of total
interest-bearing liabilities decreased 71 basis points to 2.58% for
the nine months ended June 30, 2009 from 3.39% for the nine months
ended June 30, 2008. The Bank's provision for loan losses increased
by $1.1 million, or 976.1%, to $1.2 million for the nine months
ended June 30, 2009 compared to $0.1 million for the nine months
ended June 30, 2008. The primary reasons for this increase were an
additional specific allowance of $435,000 established for a
non-accruing, vacant multi-family property loan and increases in
higher risk loan originations, including multi-family mortgage
loans, commercial real estate mortgage loans, construction mortgage
loans and land loans. The Bank continues to transfer loans from its
held-for-sale loan portfolio to its mortgage loan receivable
portfolio after reaching its internal limit in participating out
interests in certain loans to other financial institutions. The
allowance for loan losses as of June 30, 2009 represented 0.81% of
total loans, compared to 0.56% of total loans as of June 30, 2008.
Non-interest income decreased by approximately $1.3 million, or
60.6%, to $0.9 million for the nine months ended June 30, 2009 from
$2.2 million for the nine months ended June 30, 2008. The decrease
was primarily due to an additional impairment charge of $0.9
million taken on the Bank's investment in a mutual fund that
invests primarily in agency and private label mortgage backed
securities for the nine months ended June 30, 2009 compared to the
$0.6 million taken during the period end June 30, 2008. 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 continued the temporary prohibition on
cash redemptions, lessening the ability of the Bank to dispose of
its remaining $2.8 million investment in this asset. Based on these
factors, the loss was considered to be other than temporary. The
Company continues to evaluate this investment to determine if
additional write-downs will be necessary. The decrease was also due
to decreased banking fees and service charges of $0.7 million,
other income of $0.2 million and net gain on sale of loans
held-for-sale of $0.1 million. Non-interest expense increased by
approximately $2.0 million, or 23.8%, to $10.5 million for the nine
months ended June 30, 2009, from $8.5 million for the nine months
ended June 30, 2008. The increase resulted from increases of $1.1
million in compensation and fringe benefits, which includes
increases in the supplemental executive retirement and pension
plans of approximately $0.7 million, health care and other employee
costs of $0.2 million and employee and director compensation costs
of approximately $0.2 million. In addition, the Bank incurred an
increase in its FDIC insurance assessment. The increase consists of
its accrual estimate for its ongoing FDIC insurance assessment of
$0.3 million and the banking industry-wide special assessment of
five (5) basis points on the Bank's reported regulatory assets less
its tier one (1) capital of approximately $0.2 million. The Bank
did not record any FDIC assessment charges in fiscal year 2008
since the assessment was offset by utilizing its one-time
assessment credits, which have been fully utilized this fiscal
year. The Company also experienced increases in occupancy and
equipment of $0.2 million, professional fee expense of $0.1 million
and data processing fees of $0.1 million, offset by a decrease in
other expenses of $0.1 million, which include advertising, office
supplies, printing and insurance. Income tax expense increased $0.3
million, or 14.9%, to $2.7 million for the nine months ended June
30, 2009, from $2.4 million for the nine months ended June 30,
2008. The primary reason for this increase is the increase in
income before provision for income taxes. The effective income tax
rate of the Company for the nine months ended June 30, 2009 was
39.0%, compared to the effective income tax rate of 36.7% for the
nine months ended June 30, 2008. The increase in the effective
income tax rate was primarily due to the increased taxable income
of the Company's Bank subsidiary. Asset Quality At June 30, 2009,
non-performing assets totaled $1.9 million, or 0.36% of total
assets. The ratio of the allowance for loan losses to total loans
was 0.81% at June 30, 2009 compared to 0.56% at June 30, 2008. As
of July 23, 2009 one commercial real estate loan for $6.7 million
was placed on non-performing and in non-accrual status. This loan
has an appraised vale of $13.2 million as of October 2005. A new
appraisal is presently being performed. The Company believes that
the loan to value will still be sufficient to cover the loan
amount. Stock Repurchase Programs The Company's Board of Directors
authorized a fourth stock repurchase program for $2.0 million in
November 2008. The Company completed its third repurchase program
in October 2008 by repurchasing 238,483 shares at an average cost
of $12.58 per share, with a total cost of approximately $3.0
million. The Company continues to repurchase shares through its
$2.0 million repurchase plan, and as of June 30, 2009, the Company
had repurchased 104,364 shares at an average cost of $11.47 per
share, with a total cost of approximately $1.2 million. Brooklyn
Federal Savings Bank operates five banking offices, two located in
Brooklyn (Kings County), one in Nassau County and two in Suffolk
County, New York. Additional financial data for the quarter ended
June 30, 2009 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, 2009 2008
----------- ---------------- (In thousands) Selected Financial
Condition Data: Total assets $527,121 $483,833 Cash and due from
banks 5,025 5,053 Certificates of deposit - 1,397 Securities
available-for-sale 3,293 3,655 Securities held-to-maturity 76,617
78,086 Loans held-for-sale 127,389 134,171 Loans receivable, net
291,673 239,149 Deposits 394,408 342,475 Borrowings 32,000 44,239
Stockholders' equity 88,637 86,323 For the Three For the Nine
Months Ended Months Ended June 30, June 30, June 30, June 30,
-------- -------- -------- -------- 2009 2008 2009 2008 --------
-------- -------- -------- (In thousands, (In thousands, except per
share except per share data) data) Selected Operating Data:
Interest income $8,820 $7,022 $25,422 $20,555 Interest expense
2,377 2,465 7,554 7,686 ----- ----- ----- ----- Net interest income
before provision for loan losses 6,443 4,557 17,868 12,869
Provision for loan losses 376 (7) 1,216 113 ----- ----- ----- -----
Net interest income after provision for loan losses 6,067 4,564
16,652 12,756 Non-interest income 680 640 868 2,205 Non-interest
expense 3,560 2,993 10,495 8,474 ----- ----- ------ ----- Income
before income taxes 3,187 2,211 7,025 6,487 Provision for income
taxes 1,324 773 2,738 2,383 ----- --- ----- ----- Net income $1,863
$1,438 $4,287 $4,104 ====== ====== ====== ====== Basic earnings per
common share $0.15 $0.11 $0.34 $0.32 Diluted earnings per common
share $0.15 $0.11 $0.34 $0.32 At or For the At or For the Three
Months Nine Months Ended Ended June 30, June 30, June 30, June 30,
-------- -------- -------- -------- 2009 2008 2009 2008 --------
-------- -------- -------- Selected Financial Ratios: Performance
Ratios: Return on average assets (1) 1.43% 1.32% 1.12% 1.31% Return
on average equity (1) 8.48% 6.63% 6.56% 6.37% Interest rate spread
(2) 4.65% 3.70% 4.34% 3.53% Net interest margin (1)(3) 5.13% 4.41%
4.86% 4.33% Efficiency ratio (4) 49.98% 57.59% 56.02% 56.22%
Non-interest expense to average total assets (1) 2.73% 2.76% 2.75%
2.71% Average interest-earning assets to average interest-bearing
liabilities 125.06% 129.37% 125.38% 130.70% Asset Quality Ratios:
Non-performing assets as a percent of total assets 0.36% 0.00% (5)
Non-performing loans as a percent of total loans 0.45% 0.00% (5)
Allowance for loan losses as a percent of total loans 0.81% 0.56%
Other Data: Number of full service offices 5 5 (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% DATASOURCE: Brooklyn Federal Bancorp,
Inc. CONTACT: Richard A. Kielty, President and Chief Executive
Officer, or Ralph Walther, Vice President and Chief Financial
Officer, both of Brooklyn Federal Bancorp, Inc., +1-718-855-8500
Web Site: http://brooklynbank.com/
Copyright