CEO: Wayne Kent Bradshaw
FOCUS: African-American community, mostly in South Los Angeles
L.A. COUNTY BRANCHES: 3
Broadway Federal Bank, long the only sizable bank focusing on L.A.’s African-American community, might finally be emerging from one of the most painful periods in its 65-year history.
For decades, Broadway specialized in providing mortgage loans to African-American residents, churches and other non-profits in South Los Angeles, eventually becoming one of the largest black-owned financial institutions in the nation.
But it got into trouble a couple of years ago after many of its real estate-oriented loans – many to black churches – soured during the market collapse. The thrift, which has more than $400 million in assets, received a cease-and-desist notice from regulators in 2010 and last year lost more than $10 million.
Broadway has taken steps to stem the losses, including closing two of its five branches last year to cut costs. The board also brought in a new management team led by Chief Executive Wayne Kent Bradshaw to try to put the bank’s financial house back in order.
Finally, in late September, the bank managed to post a profit of nearly $2 million.
Institutional Risk Analytics, a consulting and analysis firm in Torrance that runs stress tests on banks, now gives Broadway an “A” rating – up from an earlier “F.”
But Broadway still has a long way to go. With nearly 15 percent of its loans still in the “troubled” category, the bank was told by regulators to raise more capital to improve its balance sheet.
Broadway executives have been working hard to raise that capital for much of this year. Bradshaw declined to comment for this article.
Broadway Federal Bank’s travails have weighed heavily on the local African-American community, which had come to rely on the bank’s willingness to make small loans to potential homeowners, entrepreneurs and churches.
“Broadway Bank has a long tradition with the community and has become an icon, both to the African-American business community and the African-American community in general,” said Gene Hale, chairman of the Greater Los Angeles African-American Chamber of Commerce. “It must survive.”
— Howard Fine
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