Broadway Financial (BYFC) in Los Angeles continues to shed troubled loans.
The $394 million-asset company said Wednesday that its Broadway Federal Bank recently sold $8.7 million in loans to an unnamed buyer for an undisclosed price.
The sale consisted of roughly $4.6 million in multi-family residential loans and about $4.1 million of commercial real estate loans. The sales removed roughly 70% of nonperforming multi-family residential loans and about 54% of nonperforming commercial real estate loans from the company's balance sheet.
Broadway expects to incur a loss of roughly $471,000 in the first quarter because of the sales.
Separately, the company in April sold two church loans that had a combined balance of roughly $540,000. In February, Broadway sold $16 million in loans to a pair of undisclosed buyers.
The company has reduced its nonperforming assets to about $20.7 million, or about 5.7% of total assets, as result of the sales completed this year.
Broadway Financial and its bank have been operating under cease-and-desist orders since 2010 that require the bank to maintain a Tier 1 capital ratio of at least 8% and a total risk-based capital ratio of at least 12%. As of 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.
"These sales represent another material reduction in our nonperforming loans, which will significantly reduce the time and resources that we devote to managing and monitoring nonperforming loans," Wayne-Kent Bradshaw, Broadway's chief executive, said in a press release. "In addition, we believe that these sales represent another major step in addressing regulatory requirements to reduce our nonperforming loans materially."