Broadway Financial Corp., which has been working to clear its books of long-standing bad debt, has completed the sale of another $8.7 million worth of non-performing loans.
The Los Angeles holding company for Broadway Federal Bank said Wednesday that it sold about $4.6 million of multifamily residential loans, representing 70 percent of its non-performing loans in that category. The buyer was not identified. It also sold to the same buyer about $4.1 million in principal amount of commercial real estate loans, representing 54 percent of non-performing loans in that category.
Broadway said it expects to report a $471,000 charge against net income in its first quarter, which ended March 31, related to the loan sale.
No church loans, which have been a particular problem for the South L.A. institution, were included in the sale. Broadway in April announced it had sold $16 million in loans. Only $1.3 million of those were nonperforming church loans.
Chief Executive Wayne-Kent Bradshaw the two sales so far this year have reduced the company’s portfolio of non-performing loans to $20.7 million, or 5.7 percent of total estimated assets, compared with $37.1 million, or 9.9 percent of total assets, at the end of last year. The bank has been under regulatory scrutiny since 2010 and was ordered to raise capital and strengthen its loan portfolio.
“We believe that these sales represent another major step in addressing regulatory requirements,” Bradshaw said in a statement.
Shares on Thursday closed down 5 cents, or 6 percent, to 80 cents on the Nasdaq.
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