Broadway Financial (BYFC) in Los Angeles has unloaded a package of loans in an effort to boost its asset quality.
Broadway said Thursday that its Broadway Federal Bank sold $16 million in loans to a pair of unnamed buyers at an undisclosed price. The sales included $13.1 million of nonperforming loans.
The first sale consisted of $14.1 million of single-family residential mortgages, including $11.8 million in nonperforming loans, removing all nonperforming single-family residential loans from the company's balance sheet. The other sale involved five church loans for $1.8 million.
The $384 million-asset company reduced its nonperforming assets by roughly a third, to $23 million, with the sales. Broadway Financial and its bank have been operating under cease-and-desist orders since 2010, which require the bank to maintain adequate capital levels and reduce troubled assets. At Dec. 31, the bank held a Tier 1 capital ratio of 8.88% and a total risk-based ratio of 14.52%, according to the Federal Deposit Insurance Corp.
"The sales will allow us to refocus our efforts on improving operations, pursuing growth as permitted under our cease-and-desist orders, and completing our previously announced recapitalization," Wayne-Kent Bradshaw, the company's chief executive, said in a press release.
The company disclosed earlier this month that it had terminated its chief financial officer, Samuel Sarpong, on Jan. 31. Brenda Battey, a former senior controller at Bank of Manhattan, was named interim CFO.
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