In yet another setback for Broadway Financial Corp., the beleaguered thrift holding company said it will restate earnings for last year and the first quarter of this year.
In a regulatory filing, the parent of L.A.’s Broadway Federal Bank said its financial statements for the time periods “should no longer be relied on” due to incorrect collateral appraisals and calculation errors related to certain troubled debt restructurings.
The problems, uncovered after a regulatory examination and subsequent discussions with auditor Crowe Horwath LLP, will result in about $3.7 million being added to Broadway’s loan loss allowance, Chief Executive Wayne-Kent Bradshaw told the Business Journal.
“If there was any doubt about anything, we have written it down to the lowest possible number,” Bradshaw said.
Due to the restatements, Broadway has yet to file its second quarter earnings, which put the company in violation of Nasdaq listing requirements. Broadway said it has received a notice from the stock exchange that it faces a possible delisting if the company does not file the report soon.
Bradshaw said he expects to release both the revised statements and the second quarter earnings by the end of this week.
Broadway’s thinly traded stock fell slightly after the announcement but bounced back to close Sept. 5 at $1.07.
Broadway, which was founded in 1946 to serve L.A.’s low-income and minority communities, has faced a series of troubles in recent years, particularly after its large portfolio of church loans began to sour.
The thrift, which has $413 million in assets, lost more than $10 million last year and has received a cease-and-desist notice from regulators. It closed two branches last year in an effort to cut costs.
Broadway is attempting to raise capital, which Bradshaw said he hopes to have by the end of the month.
“It’s a big step for us,” he said.
Gilbert-Krupin LLC, a 17-year-old Beverly Hills insurance advisory firm specializing in wealth transfer, has split into two.
However, the decision to launch Krupin Partners LLC and Gilbert Group does not represent a change in direction, said Bryan Krupin, managing director of Krupin.
“Partnerships sometimes just run their course,” he said.
The firms continue to share office space on Wilshire Boulevard – at least until new leases are signed.
“Right now we’re divorced but still living together,” Krupin said with a laugh.
Despite the negative press surrounding investment banks over the past year, some get credit for being good places to work. And one of the top-ranked names isn’t even on Wall Street.
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