In response to current economic conditions, Broadway Financial Corporation (the “Company”) (NASDAQ Small-Cap:BYFC), parent company of Broadway Federal Bank, f.s.b. (the “Bank”), today announced it will be pursuing a broad recapitalization plan which includes the closing of two retail branch locations. Chairman and CEO Paul C. Hudson stated, “The recapitalization will strengthen the Bank’s capital base and lower fixed costs, which in turn will position the Company for future growth and improved profitability.”
On November 7, 2011, the Bank will close its Wilshire Boulevard and Leimart Park retail branch locations. All services previously offered at these locations will continue to be available at the Bank’s three other locations: Midtown, Inglewood and Exposition Park. All accounts with Broadway Federal Bank, f.s.b. are safe and insured by the Federal Deposit Insurance Corporation to at least $250,000. Additionally, the branch closings are not expected to have a material impact on the Bank’s deposit base.
Hudson explained, “We all must make difficult decisions during these challenging economic times to ensure long term viability and the Bank is not immune from the impact of high unemployment, low consumer confidence and government deficits.” Hudson went on to say, “These changes are designed to help insure that the Bank continues to be a leader in serving the financial needs of low-to-moderate income communities in the Los Angeles area by improving the Bank’s efficiency.”
Broadway Federal Bank f.s.b. will continue to set itself apart from other financial institutions by remaining dedicated to its core values and mission of serving the real estate, business and financial needs of customers in underserved urban communities with a commitment to excellent service, profitability and sustained growth. Furthermore, the recapitalization plan will reinvigorate the broader commitment to employ, train and mentor community residents, to contract for services with community businesses, and to encourage management and staff to serve as volunteers in civic, community and religious organizations.In addition to consolidating branches, the Company is pursuing a recapitalization plan to raise $10 million to increase the Bank’s capital to better weather the economic storm. With the additional capital, the Bank will be positioned to participate in the future economic growth of low to moderate markets in South Los Angeles. Currently, the low-to-moderate-income population represents more than half of the total population of both the City of Los Angeles and the City of Inglewood.