Broadway Financial Corporation (the “Company”) (NASDAQ Capital
Market: BYFC), parent company of Broadway Federal Bank, f.s.b. (the
“Bank”), today reported that the United States Department of the
Treasury (the “Treasury”) has sold 4,702,860 shares of the
Company’s voting common stock, representing 46.35% of the
Treasury’s holdings, and 21.97% of the Company’s total voting
shares prior to the sale. These shares were sold at a price of
$1.59 per share.
The sales reduced the U.S. Treasury’s ownership from 47.40% of
the Company’s voting shares to 29.35% of the pro forma voting
shares, and from 34.89% of the Company’s total shares (voting plus
non-voting) to 19.94% of the pro forma total shares. As a result,
the Treasury is no longer the Company’s largest stockholder.
As part of the Treasury’s sales, First Republic Bank made a
minority investment of $2.5 million in a combination of voting and
non-voting shares of the Company’s common stock. The Company used
the proceeds from the sale of non-voting shares to finance a
portion of the shares it repurchased from the Treasury.
Chief Executive Officer Wayne Bradshaw commented, “I am pleased
to announce this major change in our stockholder mix, in which we
returned almost half of the capital invested by the U.S. Treasury
in 2008 and 2009. As I mentioned in our press release for the third
quarter results, we have completed the transition of Broadway
Financial Corporation from an institution that had been spending
considerable time and resources on improving internal processes and
loan quality to a healthy, sound financial institution that is
focused on growth, profits, and value creation for our
stockholders. Similarly, we are now transitioning our stockholder
base to return the capital invested by the U.S. Treasury, and
replace that capital with investments by private institutions and
individuals committed to supporting Broadway’s mission.
“Also, I am pleased to announce that the Bank’s ESOP now holds
almost 7% of the Company’s stock, which will provide meaningful
long-term incentives for our dedicated employees, and better align
their compensation with the interests of our stockholders.
“In addition, I am pleased to announce that we have obtained a
minority investment from First Republic Bank, a leading financial
institution based in California with a sterling reputation for
providing exceptional relationship-based service, and a proven
track record of supporting low-to-moderate income communities, such
as those served by Broadway. We are excited to have already begun
work on joint efforts to build a strong partnership that will fund
loans that benefit low-to-moderate income communities in Southern
California.
“Finally, I wish to thank the staff of the United States
Treasury for their patient support of Broadway over the past eight
years, in particular, during the Company’s transition period, and
more recently as we negotiated the repurchase and sales that we are
announcing today.”
Concurrently with the Company’s repurchase of shares from the
Treasury, three existing stockholders exercised rights to exchange
or sell a portion of their shares to maintain their ownership at or
below certain percentages of the Company’s voting shares. These
rights had been negotiated in connection with the Company’s
recapitalization in August 2013. In total, 347,015 voting shares
were exchanged for an equal number of newly issued non-voting
shares, 284,675 of which non-voting shares were issued to CJA
Private Equity Financial Restructuring Master Fund I, L.P. (“CJA”)
and 62,340 were issued to the National Community Investment Fund
(“NCIF”). In addition, the Company repurchased a total of 139,119
voting shares from Bank of Hope and NCIF at the repurchase price of
$1.59 per share.
In total, the Company repurchased 2,513,835 voting shares from
the Treasury, Bank of Hope, and NCIF at a total cost of just under
$4 million.
After considering the Company’s sale of non-voting shares, and
the exchange of voting shares for non-voting shares by CJA and
NCIF, the number of voting shares decreased by 2,860,850 shares,
the number of non-voting shares increased by 1,084,876 shares, and
the net change in the total number of shares outstanding was a
decrease of 1,775,974 shares.
About Broadway Financial Corporation
Broadway Financial Corporation conducts its operations through
its wholly-owned subsidiary, Broadway Federal Bank, f.s.b., which
is a leading community-oriented savings bank in Southern California
serving low-to-moderate income communities. We offer a variety of
residential and commercial real estate loan products for consumers,
businesses, and non-profit organizations, other loan products, and
a variety of deposit products, including checking, savings and
money market accounts, certificates of deposits and retirement
accounts. The Bank operates three full service branches, two in the
city of Los Angeles, and one located in the nearby city of
Inglewood, California.
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are based upon our
management’s current expectations, and involve risks and
uncertainties. Actual results or performance may differ materially
from those suggested, expressed, or implied by the forward-looking
statements due to a wide range of factors including, but not
limited to, the general business environment, the real estate
market, competitive conditions in the business and geographic areas
in which the Company conducts its business, regulatory actions or
changes, and other risks detailed in the Company’s reports filed
with the Securities and Exchange Commission, including the
Company’s Annual Reports on Form 10-K and Quarterly Reports on Form
10-Q. The Company undertakes no obligation to revise any
forward-looking statement to reflect any future events or
circumstances, except to the extent required by law.
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version on businesswire.com: http://www.businesswire.com/news/home/20161223005224/en/
Broadway Financial CorporationWayne-Kent A. BradshawChief
Executive Officer(323) 556-3248orBrenda J. BatteyChief Financial
Officer(323) 556-3264investor.relations@broadwayfederalbank.com
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